SB167,9,1515 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 5%.
SB167,9,1616 3. On all taxable income exceeding $10,000 but not exceeding $30,000, 6%.
SB167,9,1717 4. On all taxable income exceeding $30,000 but not exceeding $40,000, 7%.
SB167,9,1818 5. On all taxable income exceeding $40,000, 8%.
SB167, s. 16 19Section 16. 71.06 (2m) of the statutes is amended to read:
SB167,9,2320 71.06 (2m) Rate changes. If a rate under sub. (1) (1m) or (2) changes during
21a taxable year, the taxpayer shall compute the tax for that taxable year by the
22methods applicable to the federal income tax under section 15 of the internal revenue
23code.
SB167, s. 17 24Section 17. 71.07 (1) of the statutes is amended to read:
SB167,10,10
171.07 (1) Claim of right credit. Any natural person may credit against taxes
2otherwise due under this chapter the decrease in tax under this chapter for the prior
3taxable year that would be attributable to subtracting income taxed for that year
4under the claim of right doctrine but repaid, as calculated under section 1341 of the
5internal revenue code, if the income repaid is greater than $3,000 and the amount
6is not subtracted in computing Wisconsin adjusted gross income or used in
7computing the credit under sub. (5) (a). If the allowable amount of the claim exceeds
8the claimant's taxes due under this chapter the amount of the claim not used to offset
9those taxes shall be certified to the department of administration for payment to the
10claimant by check, share draft or other draft drawn on the general fund.
SB167, s. 18 11Section 18. 71.07 (5) (a) (intro.) of the statutes is amended to read:
SB167,10,1412 71.07 (5) (a) (intro.) Add For taxable years beginning before January 1, 1997,
13add
the amounts allowed as itemized deductions under the internal revenue code
14except:
SB167, s. 19 15Section 19. 71.07 (5) (am) of the statutes is created to read:
SB167,10,1816 71.07 (5) (am) For taxable years beginning after December 31, 1996, add the
17following amounts that are allowed as itemized deductions under the internal
18revenue code:
SB167,10,1919 1. Interest that is incurred to purchase or refinance a principal residence.
SB167,10,2120 2. Interest that is incurred to purchase or refinance a residence that is not a
21principal residence that is located in Wisconsin.
SB167,10,2222 3. Charitable contributions.
SB167, s. 20 23Section 20. 71.07 (5) (b) of the statutes is amended to read:
SB167,10,2524 71.07 (5) (b) Subtract the standard deduction under s. 71.05 (22) from the
25amount under par. (a) or the amount under par. (am).
SB167, s. 21
1Section 21. 71.07 (6) (c) of the statutes is created to read:
SB167,11,32 71.07 (6) (c) No new claim may be filed under this subsection for a taxable year
3that begins after December 31, 1996.
SB167, s. 22 4Section 22. 71.07 (8) (intro.) of the statutes is amended to read:
SB167,11,95 71.07 (8) Personal exemptions credit for natural persons. (intro.) On income
6of calendar year 1986 and corresponding fiscal years and thereafter, there may be
7deducted from the tax after it has been computed according to the rates of this section
8personal exemptions for natural persons as follows, except that no new claim may
9be filed under this subsection for a taxable year that begins after December 31, 1996
:
SB167, s. 23 10Section 23. 71.07 (9) (g) of the statutes is created to read:
SB167,11,1211 71.07 (9) (g) No new claim may be filed under this subsection for a taxable year
12that begins after December 31, 1996.
SB167, s. 24 13Section 24. 71.10 (7m) of the statutes is amended to read:
SB167,11,2114 71.10 (7m) Discharge of indebtedness; modifications. If a person excludes
15from gross income an amount of income from a discharge of indebtedness because of
16discharges of debts described under section 108 (a) of the internal revenue code, the
17person shall make the adjustments specified in section 108 (b) of the internal revenue
18code, but the net operating loss under s. 71.01 (14), not the federal net operating loss,
19and Wisconsin credits, not federal credits, and the capital loss carry-forward as
20limited under s. 71.05 (10) (c), not the federal capital loss carry-forward,
shall be
21applied, and the reduction rate for a credit carry-over is 6.93%, not 33 1/3%.
SB167, s. 25 22Section 25. 71.125 of the statutes is amended to read:
SB167,12,2 2371.125 Imposition of tax. The tax imposed by this chapter on individuals and
24the rates under s. 71.06 (1), (1m) and (2) shall apply to the Wisconsin taxable income

1of estates or trusts, except nuclear decommissioning trust or reserve funds, and that
2tax shall be paid by the fiduciary.
SB167, s. 26 3Section 26. 71.36 (1m) of the statutes is amended to read:
SB167,12,244 71.36 (1m) A tax-option corporation may deduct from its net income all
5amounts included in the Wisconsin adjusted gross income of its shareholders, the
6capital gain deduction under s. 71.05 (6) (b) 9.
and all amounts not taxable to
7nonresident shareholders under ss. 71.04 (1) and (4) to (9) and 71.362. For purposes
8of this subsection, interest on federal obligations, obligations issued under s. 66.066
9by a local professional baseball park district, obligations issued under ss. 66.40,
1066.431 and 66.4325, obligations issued under s. 234.65 to fund an economic
11development loan to finance construction, renovation or development of property
12that would be exempt under s. 70.11 (36) and obligations issued under subch. II of
13ch. 229 is not included in shareholders' income. The proportionate share of the net
14loss of a tax-option corporation shall be attributed and made available to
15shareholders on a Wisconsin basis but subject to the limitation and carry-over rules
16as prescribed by section 1366 (d) of the internal revenue code. Net operating losses
17of the corporation to the extent attributed or made available to a shareholder may
18not be used by the corporation for further tax benefit. For purposes of computing the
19Wisconsin adjusted gross income of shareholders, tax-option items shall be reported
20by the shareholders and those tax-option items, including capital gains and losses,
21shall retain the character they would have if attributed to the corporation, including
22their character as business income. In computing the tax liability of a shareholder,
23no credit against gross tax that would be available to the tax-option corporation if
24it were a nontax-option corporation may be claimed.
SB167, s. 27 25Section 27. 71.64 (9) (b) of the statutes is amended to read:
SB167,13,13
171.64 (9) (b) The department shall from time to time adjust the withholding
2tables to reflect any changes in income tax rates, any applicable surtax or any
3changes in dollar amounts in s. 71.06 (1) (1m) and (2) resulting from statutory
4changes. The tables shall be extended to cover from zero to 10 withholding
5exemptions, shall assume that the payment of wages in each pay period will, when
6multiplied by the number of pay periods in a year, reasonably reflect the annual wage
7of the employe from the employer and shall be based on the further assumption that
8the annual wage will be reduced for allowable deductions from gross income. The
9department may determine the length of the tables and a reasonable span for each
10bracket. In preparing the tables the department shall adjust all withholding
11amounts not an exact multiple of 10 cents to the next highest figure that is a multiple
12of 10 cents. The department shall also provide instructions with the tables for
13withholding with respect to quarterly, semiannual and annual pay periods.
SB167, s. 28 14Section 28. 71.67 (4) (a) of the statutes is amended to read:
SB167,13,1915 71.67 (4) (a) The administrator of the lottery division in the department under
16ch. 565 shall withhold from any lottery prize of $2,000 or more an amount determined
17by multiplying the amount of the prize by the highest rate applicable to individuals
18under s. 71.06 (1) (1m). The administrator shall deposit the amounts withheld, on
19a monthly basis, as would an employer depositing under s. 71.65 (3) (a).
SB167, s. 29 20Section 29. 71.67 (5) (a) of the statutes is amended to read:
SB167,14,221 71.67 (5) (a) Wager winnings. A person holding a license to sponsor and
22manage races under s. 562.05 (1) (b) or (c) shall withhold from the amount of any
23payment of pari-mutuel winnings under s. 562.065 (3) (a) or (3m) (a) an amount
24determined by multiplying the amount of the payment by the highest rate applicable

1to individuals under s. 71.06 (1) (a) to (c) (1m) if the amount of the payment is more
2than $1,000.
SB167, s. 30 3Section 30. Initial applicability.
SB167,14,44 (1) This act first applies to taxable years beginning on January 1, 1997.
SB167,14,55 (End)
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