AB906: Bill Text

LRB-4340/1

MES:jld:rs

2003 - 2004 LEGISLATURE

2003 Assembly BILL 906

February 25, 2004 - Introduced by Representative Sinicki. Referred to Joint Survey Committee on Tax Exemptions.

AB906,1,4 An Act to amend 71.05 (1) (a); and to create 71.85 (4) of the statutes; relating to: exempting from income taxation the pension benefits of certain national guard technicians and interest and penalty waivers for certain payments made to national guard technicians.

Analysis by the Legislative Reference Bureau

Under current law, the pension benefits of certain public employees are exempt from state taxation. The pensions that are exempt include payments received from the U.S. civil service retirement system, the U.S. military employee retirement system, the Milwaukee city and county retirement systems, the police officer's annuity and benefit fund of Milwaukee, the Milwaukee public school teachers' retirement fund, the Wisconsin state teachers' retirement fund, and the sheriff's annuity and benefit fund of Milwaukee County, which are paid on the account of persons who were members of or retired from the plans as of December 31, 1963.

This bill exempts from taxation payments received from the U.S. civil service retirement system on the account of a person who has a U.S. office of personnel management service computation date as of December 31, 1963, if the person was a national guard technician who worked as a technician for the Wisconsin national guard as of December 31, 1963, and was later recognized as a federal employee under the National Guard Technician Act of 1968.

Also under this bill, such technicians, or the surviving spouses of such technicians, are not liable for any interest or penalties on any outstanding tax liabilities owed on certain payments received from the U.S. civil service retirement system and may claim a refund for any interest or penalty payments that were made before the effective date of the bill if the claim is filed within one year after the bill takes effect.

This bill will be referred to the Joint Survey Committee on Tax Exemptions for a detailed analysis, which will be printed as an appendix to this bill.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

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

AB906, s. 1 Section 1. 71.05 (1) (a) of the statutes is amended to read:

AB906,2,16 71.05 (1) (a) Retirement systems. All payments received from the U.S. civil service retirement system, the U.S. military employee retirement system, the employee's retirement system of the city of Milwaukee, Milwaukee County employees' retirement system, sheriff's annuity and benefit fund of Milwaukee County, police officer's annuity and benefit fund of Milwaukee, fire fighter's annuity and benefit fund of Milwaukee, or the public employee trust fund as successor to the Milwaukee public school teachers' annuity and retirement fund and to the Wisconsin state teachers retirement system, which are paid on the account of any person who was a member of the paying or predecessor system or fund as of December 31, 1963, or was retired from any of the systems or funds as of December 31, 1963, or who has a U.S. office of personnel management service computation date as of December 31, 1963, if the person was a national guard technician who worked as a technician for the Wisconsin national guard as of December 31, 1963, and was later recognized as a federal employee under the National Guard Technician Act of 1968, but such exemption shall not exclude from gross income tax sheltered annuity benefits.

AB906, s. 2 Section 2. 71.85 (4) of the statutes is created to read:

AB906,3,14 71.85 (4) Abatement of interest and penalties; national guard technicians. No penalty or interest that has been imposed under this subchapter for taxable years beginning after December 31, 1988, and before January 1, 2002, on a taxpayer who was an employee of the Wisconsin national guard, who worked as a technician and who was recognized as a federal employee under P.L. 90-486, or who is the surviving spouse of such a person, to the extent that the penalty or interest or both relate to payments received from the U.S. civil service retirement system by such a person, is due and may not be collected or imposed by the department of revenue on or after the effective date of this subsection .... [revisor inserts date]. A person to whom this subsection applies, who has paid interest or penalties or both on payments that are described under this subsection before the effective date of this subsection .... [revisor inserts date], is eligible to claim a refund for the payment that he or she has made if the claim is filed within one year of the effective date of this subsection .... [revisor inserts date].

AB906, s. 3 Section 3. Initial applicability.

AB906,3,17 (1) The treatment of section 71.05 (1) (a) of the statutes first applies to pension payments that are made on the effective date of this subsection.

AB906,3,18 (End)