Amendment ASA3-AB4

LRBs0007/2

MES&JK:jld:ch

2005 - 2006 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 3, TO 2005 ASSEMBLY BILL 4

January 27, 2005 - Offered by Representative Staskunas.

AB4-ASA3,1,3 An Act to create 71.83 (1) (ce) and subchapter XVI of chapter 71 [precedes 71.98] of the statutes; relating to: adopting federal law as it relates to health savings accounts for state income and franchise tax purposes and providing a penalty.

Analysis by the Legislative Reference Bureau

This substitute amendment adopts, for state income and franchise tax purposes, section 1201 of Public Law 108-173 as it relates to claiming a deduction for an amount that a person pays into a health savings account, except that it only applies to individuals who have not had health insurance within the 60 days previous to their claim for the deduction that this substitute amendment allows, and to businesses that have not provided health insurance to their employees within the 60 days previous to their claim for the deduction that this substitute amendment allows.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB4-ASA3, s. 1 Section 1. 71.83 (1) (ce) of the statutes is created to read:

AB4-ASA3,2,3 71.83 (1) (ce) Health savings accounts. Any person who is liable for a penalty for federal income tax purposes under section 223 (f) (4) of the Internal Revenue Code is liable for a penalty equal to 33 percent of that penalty. The department of revenue shall assess, levy, and collect the penalty under this paragraph as it assesses, levies, and collects taxes under this chapter.

AB4-ASA3, s. 2 Section 2. Subchapter XVI of chapter 71 [precedes 71.98] of the statutes is created to read:

AB4-ASA3,2,6 Chapter 71

AB4-ASA3,2,8 subchapter xvi Internal revenue code update

AB4-ASA3,2,10 71.98 Internal Revenue Code update. The following federal laws, to the extent that they apply to the Internal Revenue Code, apply to this chapter:

AB4-ASA3,2,12 (1) Health savings accounts. Section 1201 of P.L. 108-173, relating to health savings accounts, except that this subsection applies only to the following:

AB4-ASA3,2,15 (a) With regard to an individual, only an individual who was not covered by any kind of health insurance within the 60 days previous to the time he or she claims a deduction under this subsection.

AB4-ASA3,2,18 (b) With regard to a person other than an individual, only such a person that did not provide any kind of health insurance to its employees within the 60 days previous to the time the person claims a deduction under this subsection.

AB4-ASA3, s. 3 Section 3. Initial applicability.

AB4-ASA3,2,23 (1) This act first applies to taxable years beginning on January 1 of the year in which this subsection takes effect, except that if this subsection takes effect after July 31 this act first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

AB4-ASA3,2,24 (End)