For taxable years beginning after December 31, 2013, this bill lowers the rate
of taxation for the lowest tax bracket. Under the bill, the rate of taxation for the
lowest bracket for single individuals, certain fiduciaries, heads of households, and
married persons is 4.0 percent of taxable income.
technical college system
This bill provides property tax relief aid to technical college districts,
distributed annually to each district on the basis of its equalized value as compared
to the equalized value of all technical college districts as of January 2014. The first
distribution is in February 2015.
The bill eliminates the current limit on a technical college district's tax levy and
imposes, instead, a revenue limit. Under the bill, with certain exceptions, a district
board's revenue (defined as the sum of its tax levy for operations and the amount of
property tax relief aid it receives) in the 2014-15 school year or any school year
thereafter may not exceed its revenue in the previous school year increased by the
district's valuation factor, which is the percentage change in the district's equalized
value due to new construction, less improvements removed.
net operating losses
Under current law, for income tax purposes, under certain circumstances, a
taxpayer may claim a Wisconsin net operating loss against Wisconsin taxable income
of the two years preceding the year in which the taxpayer sustained the loss. This
bill clarifies that a taxpayer need not make an offset against Wisconsin modified
taxable income of the two years preceding the loss, if the taxpayer chooses not to
carry back the net operating loss to the two years preceding the loss.
Under current law, corporations and insurers may offset against their
Wisconsin net business income any Wisconsin net business loss sustained in any of
the 15 preceding taxable years. Under the bill, corporations and insurers may offset
against their Wisconsin net business income any Wisconsin net business loss
sustained in any of the 20 preceding taxable years.
DEPLETION
Under current law, the provisions of the federal Internal Revenue Code used for
computing depreciation, depletion, and amortization for state income and franchise
tax purposes are the provisions of the federal Internal Revenue Code in effect on
January 1, 2014. Under the bill, the provisions of the federal Internal Revenue Code
used for computing depletion are the provisions of the federal Internal Revenue Code
in effect for the year in which the property is placed in service.
SALES TAX
Under current law, municipalities, school districts, and certain nonprofit
organizations are exempt from paying the sales tax and the use tax on purchases of
tangible personal property. To receive the sales tax or use tax exemption, the
municipality, school district, or nonprofit organization must purchase the tangible
personal property. A construction contractor hired by the municipality, school
district, or nonprofit organization may not receive the exemption for property
purchased by the contractor to be used for a municipality, school district, or nonprofit
organization construction project.
Under this bill, the sale of tangible personal property that becomes a component
of a facility in this state that is owned by a municipality or nonprofit organization is
exempt from the sales tax and the use tax. The exemption applies to tangible
personal property purchased by a construction contractor who transfers the property
to the municipality or nonprofit organization as part of constructing the facility.
tax credits
Under current law, a person may claim the jobs tax credit if the Wisconsin
Economic Development Corporation certifies the person to receive the tax credit, the
person increases net employment in the person's business, and the person provides
certain wages or job training to its full-time employees. This bill specifies that to be
eligible for the jobs tax credit a person must increase net employment in the person's
business in this state. Therefore, under the bill, a person may qualify for the jobs tax
credit by relocating existing jobs to this state even if the number of individuals the
person's business employs nationwide does not increase. Similarly, under the bill,
a person does not qualify for the jobs tax credit by increasing the number of
individuals the person's business employs nationwide if the number of individuals
the person's business employs in this state does not increase.
Under current law, for income and franchise tax purposes, a taxpayer may not
claim a relocated business deduction or tax credit for taxable years beginning after
December 31, 2013. Under this bill, a taxpayer who is first eligible to claim a
relocated business deduction or tax credit for a taxable year beginning after
December 31, 2012, and before January 1, 2014, may claim the deduction or credit
in the following taxable year.
The bill also provides that the manufacturing and agriculture credit, the
research credit, and the state historic rehabilitation credit may be claimed against
the alternative minimum tax.
Finally, the bill makes technical changes to the electronic medical records tax
credit and to the sales and use tax exemption for tangible personal property used in
commercial printing.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB1-engrossed,1
1Section
1. 20.292 (1) (dp) of the statutes is created to read:
AB1-engrossed,4,42
20.292
(1) (dp)
Property tax relief aid. A sum sufficient equal to the amount
3necessary to distribute the property tax relief aid to technical college districts under
4s. 38.16 (4).
AB1-engrossed,2
5Section
2. 38.16 (title) of the statutes is amended to read:
AB1-engrossed,4,6
638.16 (title)
District tax levy; revenue limit; property tax relief aid.
AB1-engrossed,3
7Section
3. 38.16 (3) (a) 1m. of the statutes is created to read:
AB1-engrossed,4,98
38.16 (3) (a) 1m. "Equalized value" excludes the value of tax incremental
9districts.
AB1-engrossed,4,1312
38.16
(3) (a) 2. "Excess
levy
revenue" means the amount by which a district
13board's
tax levy revenue exceeds the limit under this subsection.
AB1-engrossed,5
1Section
5. 38.16 (3) (a) 2w. of the statutes is created to read:
AB1-engrossed,5,32
38.16
(3) (a) 2w. "Revenue" means the sum of the tax levy and property tax
3relief aid under sub. (4).
AB1-engrossed,5,107
38.16
(3) (be) Notwithstanding sub. (1), no district board may increase its
tax
8levy revenue in
2013 the 2014-15 school year or in any
school year thereafter by a
9percentage that exceeds the district's valuation factor, except as provided in pars.
10(bg) and (br).
AB1-engrossed,5,2013
38.16
(3) (bg) 2. If a district board's allowable
levy revenue under this
14subsection in
2013 the 2014-15 school year, or any
school year thereafter, is greater
15than its actual
levy revenue in that
school year, the limit otherwise applicable to the
16district board under this subsection in the succeeding
school year is increased by the
17difference between the prior
school year's allowable
levy revenue and the prior
school 18year's actual
levy revenue, as determined by the department of revenue, up to a
19maximum increase of 0.5 percent of the actual
levy
revenue in that prior
school year,
20if the district board approves the increase by a three-fourths vote.
AB1-engrossed,6,1023
38.16
(3) (br) 1. If a district board wishes to exceed the limit otherwise
24applicable to the district under this subsection, it shall adopt a resolution supporting
25inclusion in the final district budget of an amount equal to the proposed excess
levy
1revenue. The resolution shall be filed as provided in s. 8.37. Within 10 days after
2adopting the resolution, the district board shall notify the board of the scheduled date
3of the referendum and submit a copy of the resolution to the board. The district board
4shall call a special referendum for the purpose of submitting the resolution to the
5electors of the district for approval or rejection. In lieu of a special referendum, the
6district board may specify that the referendum be held at the next succeeding spring
7primary or election or partisan primary or general election, if such election is to be
8held not sooner than 70 days after the filing of the resolution of the district board.
9The district board shall certify the results of the referendum to the board within 10
10days after the referendum is held.
AB1-engrossed,10
11Section
10. 38.16 (3) (br) 2. of the statutes is amended to read:
AB1-engrossed,6,1612
38.16
(3) (br) 2. The district board shall publish type A, B, C, D, and E notices
13of the referendum under s. 10.01 (2). Notwithstanding s. 10.01 (2) (a), the type A
14notice shall include a statement of the amount of the excess
levy revenue specified
15in subd. 1. and a copy of the resolution under subd. 1. Section 5.01 (1) applies in the
16event of failure to comply with the notice requirements of this subdivision.
AB1-engrossed,6,2119
38.16
(3) (c) (intro.) Except as provided in par. (d), if the board determines that
20a district board
imposed an excess levy exceeded its limit under this subsection, the
21board shall do all of the following:
AB1-engrossed,12
22Section
12. 38.16 (3) (c) 1. of the statutes is amended to read:
AB1-engrossed,6,2523
38.16
(3) (c) 1. Reduce the amount of state aid payments to the district board
24in the school year in which the district board
imposed the excess levy exceeded its
25limit by an amount equal to the amount of the excess
levy revenue.
AB1-engrossed,7,53
38.16
(3) (c) 3. Ensure that the amount of the excess
levy revenue is not
4included in determining the limit under this subsection for the district board for the
5following year.
AB1-engrossed,14
6Section
14. 38.16 (3) (c) 4. of the statutes is amended to read:
AB1-engrossed,7,107
38.16
(3) (c) 4. Ensure that, if a district board's excess
levy revenue exceeds the
8amount of state aid that may be reduced under subd. 1., the excess amount is
9subtracted from state aid payments in the following years until the total amount of
10the excess
levy revenue is subtracted from the state aid payments.
AB1-engrossed,15
11Section
15. 38.16 (3) (d) of the statutes is amended to read:
AB1-engrossed,7,1512
38.16
(3) (d) The department may issue a finding that a district board is not
13liable for a penalty that would otherwise be imposed under par. (c) if the department
14determines that the district board's excess
levy
revenue is caused by one of the
15following clerical errors:
AB1-engrossed,7,1916
1. The department, through mistake or inadvertence, has assessed to any
17county or taxation district, in the current year or in the previous year, a greater or
18lesser valuation for any year than should have been assessed, causing the district
19board's levy to be erroneous in a way that directly causes an excess
levy revenue.
AB1-engrossed,7,2220
2. A taxation district clerk or a county clerk, through mistake or inadvertence
21in preparing or delivering the tax roll, causes a district board's levy to be erroneous
22in a way that directly causes an excess
levy revenue.
AB1-engrossed,8,3
138.16
(4) On February 20, 2015, and annually thereafter on the 3rd Friday in
2February, the board shall distribute to each district board, from the appropriation
3under s. 20.292 (1) (dp), the amount determined as follows:
AB1-engrossed,8,64
(a) For the payment in 2015, divide the district's equalized value as of January
51, 2014, by the total equalized value of all districts as of January 1, 2014, and
6multiply the quotient by $406,000,000.
AB1-engrossed,8,87
(b) For the payment in 2016 and annually thereafter, the amount determined
8under par. (a).
AB1-engrossed,8,1911
71.05
(6) (b) 47. am. For taxable years beginning after December 31, 2010, and
12before January 1, 2014, for 2 consecutive taxable years beginning with the taxable
13year in which the claimant's business locates to this state from another state or
14another country and begins doing business in this state, as defined in s. 71.22 (1r),
15and subject to the limitations provided under subd. 47. d.
, dm., and e., the profit or
16loss from a trade or business as reported on federal income tax return schedules C
17and F or their equivalents, plus ordinary gain or loss on the sale of business assets,
18as determined under s. 71.01 (6), but not less than zero, multiplied by the
19apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7).
AB1-engrossed,9,1722
71.05
(6) (b) 47. b. With respect to partners and members of limited liability
23companies, for taxable years beginning after December 31, 2010, and before January
241, 2014, for 2 consecutive taxable years beginning with the taxable year in which the
25partnership's or limited liability company's business locates to this state from
1another state or another country and begins doing business in this state, as defined
2in s. 71.22 (1r), and subject to the limitations provided under subd. 47. d.
, dm., and
3e., the partner's or member's distributive share of taxable income as calculated under
4section
703 of the Internal Revenue Code; plus the items of income and gain under
5section
702 of the Internal Revenue Code, including taxable state and municipal
6bond interest and excluding nontaxable interest income or dividend income from
7federal government obligations; minus the items of loss and deduction under section
8756702 702 of the Internal Revenue Code, except items that are not deductible under
9s. 71.21; plus guaranteed payments to partners under section
707 (c) of the Internal
10Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL),
11(2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t),
12(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), and (8r); and plus or minus, as
13appropriate, transitional adjustments, depreciation differences, and basis
14differences under s. 71.05 (13), (15), (16), (17), and (19), multiplied by the
15apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7) or by
16separate accounting. No amounts subtracted under this subd. 47. b. may be included
17in the modification under par. (b) 9. or 9m.
AB1-engrossed,9,2520
71.05
(6) (b) 47. c. With respect to shareholders of a tax-option corporation, for
21taxable years beginning after December 31, 2010, and before January 1, 2014, for 2
22consecutive taxable years beginning with the taxable year in which the tax-option
23corporation's business locates to this state from another state or another country and
24begins doing business in this state, as defined in s. 71.22 (1r), and subject to the
25limitations provided under subd. 47. d.
, dm., and e., the shareholder's distributive
1share of the entity's net income or loss as determined under this chapter, including
2interest income from federal, state, and municipal government obligations,
3multiplied by the apportionment fraction determined in s. 71.25 (6m) and subject to
4s. 71.25 (9) or by separate accounting. No amounts subtracted under this subdivision
5may be included in the modification under par. (b) 9. or 9m.
AB1-engrossed,20
6Section
20. 71.05 (6) (b) 47. dm. of the statutes is created to read:
AB1-engrossed,10,117
71.05
(6) (b) 47. dm. No person may claim a deduction under this subdivision
8for taxable years beginning after December 31, 2013, except that a claimant who is
9first eligible to claim a deduction under this subdivision for a taxable year beginning
10after December 31, 2012, and before January 1, 2014, may claim the deduction the
11following taxable year.
AB1-engrossed,22
14Section
22. 71.05 (8) (b) 2. of the statutes is created to read:
AB1-engrossed,10,1815
71.05
(8) (b) 2. The taxpayer need not make the offset against Wisconsin
16modified taxable income of the 2 years preceding the loss, as provided under subd.
171., if the taxpayer chooses not to carry back the net operating loss to the 2 years
18preceding the loss.
AB1-engrossed,23
19Section
23. 71.05 (8) (c) of the statutes is created to read:
AB1-engrossed,10,2120
71.05
(8) (c) The department shall not pay interest on any overpayment that
21results from the carry-back of a net operating loss.
AB1-engrossed,10,2524
71.06
(1q) (a) On all taxable income from $0 to $7,500, 4.40 percent
, except that
25for taxable years beginning after December 31, 2013, 4.0 percent.
AB1-engrossed,11,43
71.06
(2) (i) 1. On all taxable income from $0 to $10,000, 4.40 percent
, except
4that for taxable years beginning after December 31, 2013, 4.0 percent.
AB1-engrossed,11,87
71.06
(2) (j) 1. On all taxable income from $0 to $5,000, 4.40 percent
, except that
8for taxable years beginning after December 31, 2013, 4.0 percent.
AB1-engrossed,12,511
71.07
(4k) (b) 1. Subject to the limitations provided in this subsection, and
12except as provided in subds. 2. and 3., for taxable years beginning after December
1331, 2012, an individual, a partner of a partnership, a shareholder of a tax-option
14corporation, or a member of a limited liability company may claim a credit against
15the tax imposed under s. 71.02
or 71.08, as allocated under par. (d), an amount equal
16to 5 percent of the amount obtained by subtracting from the individual's,
17partnership's, tax-option corporation's, or limited liability company's qualified
18research expenses, as defined in section
41 of the Internal Revenue Code, except that
19"qualified research expenses" includes only expenses incurred by the individual,
20partnership, tax-option corporation, or the limited liability company, incurred for
21research conducted in this state for the taxable year, except that a taxpayer may elect
22the alternative computation under section
41 (c) (4) of the Internal Revenue Code
23and that election applies until the department permits its revocation, except as
24provided in par. (c), and except that "qualified research expenses" does not include
25compensation used in computing the credit under subs. (2dj) and (2dx), the entity's
1base amount, as defined in section
41 (c) of the Internal Revenue Code, except that
2gross receipts used in calculating the base amount means gross receipts from sales
3attributable to Wisconsin under ss. 71.04 (7) (b) 1. and 2., (df), (dh), (dj), and (dk).
4Section
41 (h) of the Internal Revenue Code does not apply to the credit under this
5subdivision.
AB1-engrossed,28
6Section
28. 71.07 (5i) (c) 3. of the statutes is created to read:
AB1-engrossed,12,87
71.07
(5i) (c) 3. No credit may be claimed under this subsection based on an
8amount paid under par. (b) after December 31, 2013.
AB1-engrossed,29
9Section
29. 71.07 (5m) (a) 4. of the statutes is amended to read:
AB1-engrossed,12,1110
71.07
(5m) (a) 4. "Net tax liability" means a claimant's income tax liability after
11he or she completes the computations listed in s. 71.10 (4) (a) to
(dr) (d).
AB1-engrossed,30
12Section
30. 71.07 (5n) (b) (intro.) of the statutes is amended to read:
AB1-engrossed,12,1713
71.07
(5n) (b)
Filing claims. (intro.) Subject to the limitations provided in this
14subsection, a claimant may claim as a credit against the tax imposed under
s. ss. 1571.02
and 71.08, up to the amount of the tax, an amount equal to one of the following
16percentages of the claimant's eligible qualified production activities income in the
17taxable year:
AB1-engrossed,31
18Section
31. 71.07 (9r) (a) of the statutes is amended to read:
AB1-engrossed,13,319
71.07
(9r) (a) For taxable years beginning on or after August 1, 1988, any
20natural person may credit against taxes otherwise due under s. 71.02
or 71.08 an
21amount equal to 25% of the costs of preservation or rehabilitation of historic property
22located in this state, including architectural fees and costs incurred in preparing
23nomination forms for listing in the national register of historic places in Wisconsin
24or the state register of historic places, if the nomination is made within 5 years prior
25to submission of a preservation or rehabilitation plan under par. (b) 3. b., and if the
1physical work of construction or destruction in preparation for construction begins
2after December 31, 1988, except that the credit may not exceed $10,000, or $5,000
3for married persons filing separately, for any preservation or rehabilitation project.
AB1-engrossed,13,156
71.08
(1) Imposition. (intro.) If the tax imposed on a natural person, married
7couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
8ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
9(3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (5h), (5i), (5j),
(5n), (6), (6e),
10(8r), (9e), and (9m), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
11(3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
12(3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other
13states under s. 71.07 (7), is less than the tax under this section, there is imposed on
14that natural person, married couple filing jointly, trust or estate, instead of the tax
15under s. 71.02, an alternative minimum tax computed as follows:
AB1-engrossed,14,218
71.08
(1) Imposition. (intro.) If the tax imposed on a natural person, married
19couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
20ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
21(3q), (3r), (3rm), (3rn), (3s), (3t), (3w),
(4k), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6),
22(6e), (8r), (9e),
and (9m),
and (9r), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx),
23(1dy), (2m), (3), (3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx),
24(1dy), (2m), (3), (3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and
25payments to other states under s. 71.07 (7), is less than the tax under this section,
1there is imposed on that natural person, married couple filing jointly, trust or estate,
2instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
AB1-engrossed,34
3Section
34. 71.10 (4) (cr) of the statutes is renumbered 71.10 (4) (fn).
AB1-engrossed,35
4Section
35. 71.10 (4) (dr) of the statutes is renumbered 71.10 (4) (fp).