Amendment ASA1-AB277

Analysis by the Legislative Reference Bureau

This substitute amendment eliminates the personal property tax in 2018. Under the substitute amendment, improvements on leased land will be assessed as real property.

Under current law, taxing jurisdictions are reimbursed by the state for the loss of personal property tax revenue as a result of the exemption for computers and computer-related equipment. Under the substitute amendment, taxing jurisdictions are reimbursed by the state for the loss of personal property tax revenue.

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

AB277-ASA1,1 Section 1. 20.835 (1) (f) of the statutes is created to read:

AB277-ASA1,2,3 20.835 (1) (f) State aid; personal property tax phase-out. A sum sufficient to make the state aid payments under s. 79.096.

AB277-ASA1,2 Section 2 . 66.0602 (2) of the statutes is renumbered 66.0602 (2) (a) and amended to read:

AB277-ASA1,2,14 66.0602 (2) (a) Except as provided in subs. (3), (4), and (5), no political subdivision may increase its levy in any year by a percentage that exceeds the political subdivision's valuation factor. The Except as provided in par. (b), the base amount in any year, to which the limit under this section applies, shall be the actual levy for the immediately preceding year. In determining its levy in any year, a city, village, or town shall subtract any tax increment that is calculated under s. 59.57 (3) (a), 60.85 (1) (L), or 66.1105 (2) (i). The base amount in any year, to which the limit under this section applies, may not include any amount to which sub. (3) (e) 8. applies.

AB277-ASA1,3 Section 3 . 66.0602 (2) (b) of the statutes is created to read:

AB277-ASA1,2,20 66.0602 (2) (b) For purposes of par. (a), in 2018, and in each year thereafter, the base amount to which the limit under this section applies is the actual levy for the immediately preceding year, plus the amount of the payment under s. 79.096, and the actual levy is the base amount multiplied by the valuation factor, minus the amount of the payment under s. 79.096.

AB277-ASA1,4 Section 4 . 70.042 of the statutes is created to read:

AB277-ASA1,3,5 70.042 Personal property tax sunset. No personal property is subject to taxation under this chapter beginning with the property tax assessments as of January 1, 2018. A taxing jurisdiction may include the most recent valuation of personal property located in the taxing jurisdiction for purposes of complying with debt limitations applicable to the jurisdiction.

AB277-ASA1,5 Section 5 . 70.11 (39) of the statutes is amended to read:

AB277-ASA1,3,16 70.11 (39) Computers. If the owner of the property fulfills the requirements under s. 70.35, mainframe Mainframe computers, minicomputers, personal computers, networked personal computers, servers, terminals, monitors, disk drives, electronic peripheral equipment, tape drives, printers, basic operational programs, systems software, and prewritten software. The exemption under this subsection does not apply to custom software, fax machines, copiers, equipment with embedded computerized components or telephone systems, including equipment that is used to provide telecommunications services, as defined in s. 76.80 (3). For the purposes of s. 79.095, the exemption under this subsection does not apply to property that is otherwise exempt under this chapter.

AB277-ASA1,6 Section 6 . 70.11 (39m) of the statutes is amended to read:

AB277-ASA1,3,20 70.11 (39m) If the owner of the property fulfills the requirements under s. 70.35, cash Cash registers and fax machines, excluding fax machines that are also copiers.

AB277-ASA1,7 Section 7 . 70.17 (1) of the statutes is amended to read:

AB277-ASA1,4,5 70.17 (1) Real property shall be entered in the name of the owner, if known to the assessor, otherwise to the occupant thereof if ascertainable, and otherwise without any name. The person holding the contract or certificate of sale of any real property contracted to be sold by the state, but not conveyed, shall be deemed the owner for such purpose. The undivided real estate of any deceased person may be entered to the heirs of such person without designating them by name. The real estate of an incorporated company shall be entered in the same manner as that of an individual. Improvements Except as provided in sub. (3), improvements on leased lands may be assessed either as real property or personal property.

AB277-ASA1,8 Section 8 . 70.17 (3) of the statutes is created to read:

AB277-ASA1,4,12 70.17 (3) Beginning with the property tax assessments as of January 1, 2018, improvements on leased lands shall be assessed as real property. If improvements, but not the underlying land, are leased to a person other than the landowner or if the improvements are owned by a person other than the landowner, the assessor may create a separate tax parcel for the improvements and assess the improvements as real property to the lessee or owner of the improvements.

AB277-ASA1,9 Section 9 . 70.35 of the statutes is repealed.

AB277-ASA1,10 Section 10 . 70.36 (1) of the statutes is amended to read:

AB277-ASA1,4,23 70.36 (1) Any person in this state owning or holding any personal property that is subject to assessment, individually or as agent, trustee, guardian, personal representative, assignee, or receiver or in some other representative capacity, who intentionally makes a false statement to the assessor of that person's assessment district or to the board of review of the assessment district with respect to the property, or who omits any property from any return required to be made under s. 70.35, with the intent of avoiding the payment of the just and proportionate taxes on the property, shall forfeit the sum of $10 for every $100 or major fraction of $100 so withheld from the knowledge of the assessor or board of review.

AB277-ASA1,11 Section 11 . 70.36 (1m) of the statutes is repealed.

AB277-ASA1,12 Section 12 . 70.36 (2) of the statutes is amended to read:

AB277-ASA1,5,8 70.36 (2) It is hereby made the duty of the district attorney of any county, upon complaint made to the district attorney by the assessor or by a member of the board of review of the assessment district in which it is alleged that property has been so withheld from the knowledge of such assessor or board of review, or not included in any return required by s. 70.35, to investigate the case forthwith and bring an action in the name of the state against the person, firm or corporation so complained of. All forfeitures collected under the provisions of this section shall be paid into the treasury of the taxation district in which such property had its situs for taxation.

AB277-ASA1,13 Section 13 . 70.36 (3) of the statutes is amended to read:

AB277-ASA1,5,14 70.36 (3) The word assessor whenever used in ss. 70.35 and 70.36 this section shall, in 1st class cities, be deemed to refer also to the commissioner of assessments of any such city and, where applicable, shall be deemed also to refer to the department of revenue responsible for the manufacturing property assessment under s. 70.995.

AB277-ASA1,14 Section 14 . 70.47 (15) of the statutes is repealed.

AB277-ASA1,15 Section 15 . 70.995 (12) (a) of the statutes is amended to read:

AB277-ASA1,6,13 70.995 (12) (a) The department of revenue shall prescribe a standard manufacturing property report form that shall be submitted annually for each real estate parcel and each personal property account on or before March 1 by all manufacturers whose property is assessed under this section. The report form shall contain all information considered necessary by the department and shall include, without limitation, income and operating statements, fixed asset schedules and a report of new construction or demolition. Failure to submit the report shall result in denial of any right of redetermination by the state board of assessors or the tax appeals commission. If any property is omitted or understated in the assessment roll in any of the next 5 previous years, the assessor shall enter the value of the omitted or understated property once for each previous year of the omission or understatement. The assessor shall affix a just valuation to each entry for a former year as it should have been assessed according to the assessor's best judgment. Taxes shall be apportioned and collected on the tax roll for each entry, on the basis of the net tax rate for the year of the omission, taking into account credits under s. 79.10. In the case of omitted property, interest shall be added at the rate of 0.0267 percent per day for the period of time between the date when the form is required to be submitted and the date when the assessor affixes the just valuation. In the case of underpayments determined after an objection under s. 70.995 (8) (d), interest shall be added at the average annual discount interest rate determined by the last auction of 6-month U.S. treasury bills before the objection per day for the period of time between the date when the tax was due and the date when it is paid.

AB277-ASA1,16 Section 16 . 71.07 (5n) (a) 5. a. of the statutes is amended to read:

AB277-ASA1,6,22 71.07 (5n) (a) 5. a. “Manufacturing property factor" means a fraction, the numerator of which is the average value of the claimant's real and personal property assessed under s. 70.995 and personal property that would have been assessed under s. 70.995, 2015 stats., as determined by the department, owned or rented and used in this state by the claimant during the taxable year to manufacture qualified production property, and the denominator of which is the average value of all the claimant's real and personal property owned or rented during the taxable year and used by the claimant to manufacture qualified production property.

AB277-ASA1,17 Section 17 . 71.07 (5n) (a) 9. (intro.) of the statutes is amended to read:

AB277-ASA1,6,25 71.07 (5n) (a) 9. (intro.) “Qualified production property" means either any of the following:

AB277-ASA1,18 Section 18. 71.07 (5n) (a) 9. a. of the statutes is amended to read:

AB277-ASA1,7,4 71.07 (5n) (a) 9. a. Tangible personal property manufactured in whole or in part by the claimant on real property that is assessed as manufacturing property under s. 70.995.

AB277-ASA1,19 Section 19 . 71.07 (5n) (a) 9. am. of the statutes is created to read:

AB277-ASA1,7,9 71.07 (5n) (a) 9. am. Tangible personal property manufactured in whole or in part by the claimant on personal property that would have been assessed as manufacturing property under s. 70.995, 2015 stats., as determined by the department.

AB277-ASA1,20 Section 20 . 71.28 (5n) (a) 5. a. of the statutes is amended to read:

AB277-ASA1,7,18 71.28 (5n) (a) 5. a. “Manufacturing property factor" means a fraction, the numerator of which is the average value of the claimant's real and personal property assessed under s. 70.995 and personal property that would have been assessed under s. 70.995, 2015 stats., as determined by the department, owned or rented and used in this state by the claimant during the taxable year to manufacture qualified production property, and the denominator of which is the average value of all the claimant's real and personal property owned or rented during the taxable year and used by the claimant to manufacture qualified production property.

AB277-ASA1,21 Section 21 . 71.28 (5n) (a) 9. (intro.) of the statutes is amended to read:

AB277-ASA1,7,21 71.28 (5n) (a) 9. (intro.) “Qualified production property" means either any of the following:

AB277-ASA1,22 Section 22 . 71.28 (5n) (a) 9. a. of the statutes is amended to read:

AB277-ASA1,7,25 71.28 (5n) (a) 9. a. Tangible personal property manufactured in whole or in part by the claimant on real property that is assessed as manufacturing property under s. 70.995.

AB277-ASA1,23 Section 23. 71.28 (5n) (a) 9. am. of the statutes is created to read:

AB277-ASA1,8,5 71.28 (5n) (a) 9. am. Tangible personal property manufactured in whole or in part by the claimant on personal property that would have been assessed as manufacturing property under s. 70.995, 2015 stats., as determined by the department.

AB277-ASA1,24 Section 24. 79.095 (4) of the statutes is renumbered 79.095 (4) (a) and amended to read:

AB277-ASA1,8,16 79.095 (4) (a) The department shall calculate the payments due each taxing jurisdiction under this section by multiplying the full value as of the January 1 of the preceding year of the property that is exempt under s. 70.11 (39) and (39m) and that is located in the jurisdiction by the full-value gross tax rate of the jurisdiction for the preceding year. The Subject to par. (b), the department shall certify the amount of the payment due each taxing jurisdiction to the department of administration, which shall make the payments on or before the 4th Monday in July. For purposes of ch. 121, school districts shall treat the payments made in July under this subsection as if they had been received in the previous school year.

AB277-ASA1,25 Section 25. 79.095 (4) (b) of the statutes is created to read:

AB277-ASA1,8,20 79.095 (4) (b) Beginning in 2018, and in each year thereafter, each taxing jurisdiction shall receive a payment under this subsection equal to the amount determined under par. (a) for that taxing jurisdiction in 2017.

AB277-ASA1,26 Section 26. 79.096 of the statutes is created to read:

AB277-ASA1,8,25 79.096 State aid; personal property. (1) Beginning in 2018, and in each year thereafter, the department of revenue shall pay to each taxing jurisdiction an amount equal to the amount of revenue loss incurred by the taxing jurisdiction in 2018 as a result of s. 70.042, as determined by the department.

AB277-ASA1,9,3 (2) Each taxing jurisdiction shall report to the department of revenue, in the time and manner determined by the department, any information the department considers necessary to administer this section.

AB277-ASA1,9,7 (3) From the amount received under sub. (1), each taxing jurisdiction shall attribute to each tax incremental district within the taxing jurisdiction the revenue loss incurred by the district in 2018 as a result of s. 70.042, except that this subsection does not apply after the district closes.

AB277-ASA1,9,9 (4) The department of revenue shall make the payment under sub. (1) on the 4th Monday in July.

AB277-ASA1,27 Section 27. 121.004 (6) of the statutes is amended to read:

AB277-ASA1,9,15 121.004 (6) Net cost. The “net cost" of a fund means the gross cost of that fund minus all nonduplicative revenues and other financing sources of that fund except property taxes, general aid, and aid received under s. ss. 79.095 (4) and 79.096. In this subsection, “nonduplicative revenues" includes federal financial assistance under 20 USC 236 to 245, to the extent permitted under federal law and regulations.

AB277-ASA1,28 Section 28. 121.15 (4) (a) of the statutes is amended to read:

AB277-ASA1,9,19 121.15 (4) (a) In this subsection, “state aid" has the meaning given in s. 121.90 (2) except that it excludes aid paid to school districts under s. ss. 79.095 (4) and 79.096.

AB277-ASA1,29 Section 29. 121.90 (2) (am) 2. of the statutes is amended to read:

AB277-ASA1,9,22 121.90 (2) (am) 2. Amounts under s. ss. 79.095 (4) and 79.096 for the current school year.

AB277-ASA1,9,23 (End)