Amendment ASA1-AB910

LRBs0325/1

MES/JK/KRP:klm&wlj

2017 - 2018 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO ASSEMBLY BILL 910

February 20, 2018 - Offered by Representative Kooyenga.

AB910-ASA1,2,2 An Act to amend 71.01 (6) (k) 1., 71.01 (6) (k) 3., 71.05 (6) (b) 28. (intro.), 71.05 (6) (b) 49. a., 71.05 (6) (b) 49. b., 71.05 (10) (i) 1., 71.05 (23) (b) 2., 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06 (2) (j) (intro.), 71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.08 (1) (d), 71.125 (1), 71.125 (2), 71.17 (6), 71.22 (4) (k) 1., 71.22 (4) (k) 3., 71.22 (4m) (k) 1., 71.22 (4m) (k) 3., 71.26 (2) (b) 11. a., 71.26 (2) (b) 11. d., 71.26 (3) (j), 71.34 (1g) (k) 1., 71.34 (1g) (k) 3., 71.42 (2) (k) 1., 71.42 (2) (k) 3., 71.64 (9) (b) (intro.), 71.67 (5) (a), 71.67 (5m), 71.98 (3), 77.54 (9m) and 224.50 (2) (a); and to create 71.01 (6) (L), 71.05 (6) (b) 49. k., 71.06 (1r), 71.06 (2) (k), 71.06 (2) (L), 71.06 (2e) (bg), 71.22 (4) (L), 71.22 (4m) (L), 71.26 (2) (b) 12., 71.34 (1g) (L), 71.42 (2) (L), 71.98 (9) and 77.54 (9a) (fc) of the statutes; relating to: updating Internal Revenue Code references for state tax purposes, clarifying the duties of the College Savings Program Board, decreasing individual income tax rates, a sales and use tax exemption for title holding entities for certain tax-exempt charitable organizations, and computing depletion for income and franchise tax purposes.

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

AB910-ASA1,1 Section 1 . 71.01 (6) (k) 1. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:

AB910-ASA1,2,9 71.01 (6) (k) 1. For taxable years beginning after December 31, 2016, and before January 1, 2018, for individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2016, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.

AB910-ASA1,2 Section 2. 71.01 (6) (k) 3. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:

AB910-ASA1,2,15 71.01 (6) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97.

AB910-ASA1,3 Section 3 . 71.01 (6) (L) of the statutes is created to read:

AB910-ASA1,2,21 71.01 (6) (L) 1. For taxable years beginning after December 31, 2017, for individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2017, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.

AB910-ASA1,3,16 2. For purposes of this paragraph, “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L. 106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L. 109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L. 110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section 15351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L. 111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L. 111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011, 13201 (a) to (e) and (g), 13206, 13301, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.

AB910-ASA1,3,18 3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2017.

AB910-ASA1,3,21 4. For purposes of this paragraph, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this paragraph, apply for Wisconsin purposes at the same time as for federal purposes.

AB910-ASA1,4 Section 4. 71.05 (6) (b) 28. (intro.) of the statutes, as affected by 2017 Wisconsin Act 59, is amended to read:

AB910-ASA1,4,6 71.05 (6) (b) 28. (intro.) An amount paid by a claimant for tuition expenses and mandatory student fees for a student who is the claimant or who is the claimant's child and the claimant's dependent who is claimed under section 151 (c), as defined under section 152 of the Internal Revenue Code, to attend any university, college, technical college or a school approved under s. 440.52, that is located in Wisconsin or to attend a public vocational school or public institution of higher education in Minnesota under the Minnesota-Wisconsin reciprocity agreement under s. 39.47, calculated as follows:

AB910-ASA1,5 Section 5 . 71.05 (6) (b) 49. a. of the statutes is amended to read:

AB910-ASA1,4,12 71.05 (6) (b) 49. a. Subject to the definitions provided in subd. 49. b. to g. and the limitations specified in subd. 49. h. to j. for taxable years beginning after December 31, 2013, and subject to the limitation in subd. 49. k. for taxable years beginning after December 31, 2017, tuition expenses that are paid by a claimant for tuition for a pupil to attend an eligible institution.

AB910-ASA1,6 Section 6. 71.05 (6) (b) 49. b. of the statutes is amended to read:

AB910-ASA1,4,16 71.05 (6) (b) 49. b. In this subdivision, “claimant" means an individual who claims a pupil as a dependent under section 151 (c) , as defined under section 152 of the Internal Revenue Code, on his or her tax return.

AB910-ASA1,7 Section 7 . 71.05 (6) (b) 49. k. of the statutes is created to read:

AB910-ASA1,4,21 71.05 (6) (b) 49. k. For taxable years beginning after December 31, 2017, no modification may be claimed under this subdivision for an amount paid for tuition expenses, as described under this subdivision, if the source of the payment is an amount withdrawn from a college savings account, as described in s. 224.50.

AB910-ASA1,8 Section 8. 71.05 (10) (i) 1. of the statutes is amended to read:

AB910-ASA1,5,6 71.05 (10) (i) 1. Subject to the conditions in this paragraph, an individual may subtract up to $10,000 from federal adjusted gross income if he or she, or his or her dependent who is claimed under section 151 (c), as defined under section 152 of the Internal Revenue Code, while living, donates one or more of his or her human organs to another human being for human organ transplantation, as defined in s. 146.345 (1), except that in this paragraph, “human organ" means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract modification that is claimed under this paragraph may be claimed in the taxable year in which the human organ transplantation occurs.

AB910-ASA1,9 Section 9. 71.05 (23) (b) 2. of the statutes is amended to read:

AB910-ASA1,5,11 71.05 (23) (b) 2. An exemption of $700 for each individual for whom the taxpayer is entitled to an exemption for the taxable year under section 151 (c) dependent, as defined under section 152 of the Internal Revenue Code, of the taxpayer.

AB910-ASA1,10 Section 10 . 71.06 (1q) (intro.) of the statutes is amended to read:

AB910-ASA1,5,18 71.06 (1q) Fiduciaries, single individuals, and heads of households; after 2012 to 2017. (intro.) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2012, and before January 1, 2018:

AB910-ASA1,11 Section 11 . 71.06 (1r) of the statutes is created to read:

AB910-ASA1,5,24 71.06 (1r) Fiduciaries, single individuals, and heads of households; after 2017. The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2017:

AB910-ASA1,5,25 (a) On all taxable income from $0 to $7,500, 3.9 percent.

AB910-ASA1,6,2 (b) On all taxable income exceeding $7,500 but not exceeding $18,750, 5.74 percent.

AB910-ASA1,6,4 (c) On all taxable income exceeding $18,750 but not exceeding $225,000, 6.27 percent.

AB910-ASA1,6,5 (d) On all taxable income exceeding $225,000, 7.65 percent.

AB910-ASA1,12 Section 12 . 71.06 (2) (i) (intro.) of the statutes is amended to read:

AB910-ASA1,6,8 71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after December 31, 2012, and before January 1, 2018:

AB910-ASA1,13 Section 13 . 71.06 (2) (j) (intro.) of the statutes is amended to read:

AB910-ASA1,6,11 71.06 (2) (j) (intro.) For married persons filing separately, for taxable years beginning after December 31, 2012, and before January 1, 2018:

AB910-ASA1,14 Section 14 . 71.06 (2) (k) of the statutes is created to read:

AB910-ASA1,6,14 71.06 (2) (k) For joint returns, for taxable years beginning after December 31, 2017:

AB910-ASA1,6,15 1. On all taxable income from $0 to $10,000, 3.9 percent.

AB910-ASA1,6,17 2. On all taxable income exceeding $10,000 but not exceeding $25,000, 5.74 percent.

AB910-ASA1,6,19 3. On all taxable income exceeding $25,000 but not exceeding $300,000, 6.27 percent.

AB910-ASA1,6,20 4. On all taxable income exceeding $300,000,7.65 percent.

AB910-ASA1,15 Section 15 . 71.06 (2) (L) of the statutes is created to read:

AB910-ASA1,6,23 71.06 (2) (L) For married persons filing separately, for taxable years beginning after December 31, 2017:

AB910-ASA1,6,24 1. On all taxable income from $0 to $5,000, 3.9 percent.

AB910-ASA1,7,2 2. On all taxable income exceeding $5,000 but not exceeding $12,500, 5.74 percent.

AB910-ASA1,7,4 3. On all taxable income exceeding $12,500 but not exceeding $150,000, 6.27 percent.

AB910-ASA1,7,5 4. On all taxable income exceeding $150,000, 7.65 percent.

AB910-ASA1,16 Section 16 . 71.06 (2e) (a) of the statutes is amended to read:

AB910-ASA1,8,2 71.06 (2e) (a) For taxable years beginning after December 31, 1998, and before January 1, 2000, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1m) and (2) (c) and (d), and for taxable years beginning after December 31, 1999, and before January 1, 2018, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1n), (1p) (a) to (c), (1q) (a) and (b), and (2) (e), (f), (g) 1. to 3., (h) 1. to 3., (i) 1. and 2., and (j) 1. and 2., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1997, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2000, and before January 1, 2002, the dollar amount in the top bracket under subs. (1p) (c) and (d), (2) (g) 3. and 4. and (h) 3. and 4. shall be increased by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1999, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB910-ASA1,17 Section 17 . 71.06 (2e) (b) of the statutes is amended to read:

AB910-ASA1,8,15 71.06 (2e) (b) For taxable years beginning after December 31, 2009, and before January 1, 2018, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1p) (d), (1q) (c), and (2) (g) 4., (h) 4., (i) 3., and (j) 3., and the dollar amount in the top bracket under subs. (1p) (e), (1q) (d), and (2) (g) 5., (h) 5., (i) 4., and (j) 4., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2008, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB910-ASA1,18 Section 18 . 71.06 (2e) (bg) of the statutes is created to read:

AB910-ASA1,9,2 71.06 (2e) (bg) For taxable years beginning after December 31, 2017, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1r) and (2) (k) and (L) shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1997, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2018, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB910-ASA1,19 Section 19 . 71.06 (2m) of the statutes is amended to read:

AB910-ASA1,9,7 71.06 (2m) Rate changes. If a rate under sub. (1), (1m), (1n), (1p), (1q), (1r), or (2) changes during a taxable year, the taxpayer shall compute the tax for that taxable year by the methods applicable to the federal income tax under section 15 of the Internal Revenue Code.

AB910-ASA1,20 Section 20 . 71.06 (2s) (d) of the statutes is amended to read:

AB910-ASA1,9,22 71.06 (2s) (d) For taxable years beginning after December 31, 2000, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under subs. (1p), (1q), (1r), and (2) (g), (h), (i), and (j), (k), and (L) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately “ adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under subs. (1p), (1q), (1r), and (2) (g), (h), (i), and (j), (k), and (L) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.

AB910-ASA1,21 Section 21. 71.08 (1) (d) of the statutes is amended to read:

AB910-ASA1,9,25 71.08 (1) (d) Subtract from the amount under par. (c) the appropriate amount under section 55 (d) (1), (3), and (4) of the federal Internal Revenue Code in effect for the taxable year; except that surviving spouses shall be treated as single individuals; except that the amount under par. (c), not the federal alternative minimum taxable income, shall be used in calculating the phase-out and except that for nonresidents and part-year residents the amount under section 55 (d) (1), (3), and (4) of the federal Internal Revenue Code in effect for the taxable year shall be prorated on the basis of the ratio of Wisconsin adjusted gross income to federal adjusted gross income.

AB910-ASA1,22 Section 22 . 71.125 (1) of the statutes is amended to read:

AB910-ASA1,10,11 71.125 (1) Except as provided in sub. (2), the tax imposed by this chapter on individuals and the rates under s. 71.06 (1), (1m), (1n), (1p), (1q), (1r), and (2) shall apply to the Wisconsin taxable income of estates or trusts, except nuclear decommissioning trust or reserve funds, and that tax shall be paid by the fiduciary.

AB910-ASA1,23 Section 23 . 71.125 (2) of the statutes is amended to read:

AB910-ASA1,10,17 71.125 (2) Each electing small business trust, as defined in section 1361 (e) (1) of the Internal Revenue Code, is subject to tax at the highest rate under s. 71.06 (1), (1m), (1n), (1p), or (1q), or (1r), whichever taxable year is applicable, on its income as computed under section 641 of the Internal Revenue Code, as modified by s. 71.05 (6) to (12), (19) and (20).

AB910-ASA1,24 Section 24 . 71.17 (6) of the statutes is amended to read:

AB910-ASA1,10,22 71.17 (6) Funeral trusts. If a qualified funeral trust makes the election under section 685 of the Internal Revenue Code for federal income tax purposes, that election applies for purposes of this chapter and each trust shall compute its own tax and shall apply the rates under s. 71.06 (1), (1m), (1n), (1p), or (1q), or (1r).