Under current law, a taxpayer must pay interest on any amount owed to DOR
that is past due, but not delinquent, at the rate of 12 percent per year. Under the bill,
DOR must reduce the interest rate on such amounts by 0.5 percent each year until
the rate equals 1 percent plus the prime rate, as reported by the Federal Reserve
Board.

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:
AB226,1 1Section 1. 71.74 (16) of the statutes is created to read:
AB226,2,102 71.74 (16) Other audits. The department's audit of a person that has annual
3adjusted gross income of less than $5,000,000 may not last longer than 240 days
4unless the department and the person enter into a written agreement that extends
5the time for conducting the audit and specifies the date on which the audit shall end.
6Notwithstanding ss. 71.82 and 71.83, the department may not assess any interest
7and penalties on a person described under this subsection as result of the
8department's first audit of the person, except as provided under s. 71.83 (1) (b) and
9(2). For purposes of this subsection, an audit commences on the day on which the
10department sends notice of the audit to the person being audited.
AB226,2 11Section 2. 71.82 (1) (a) of the statutes is amended to read:
AB226,2,1512 71.82 (1) (a) In assessing taxes interest shall be added to such taxes at 12% the
13rate determined under s. 73.16 (3m)
per year from the date on which such taxes if
14originally assessed would have become delinquent if unpaid, to the date on which
15such taxes when subsequently assessed will become delinquent if unpaid.
AB226,3 16Section 3. 71.82 (1) (c) of the statutes is amended to read:
AB226,2,2117 71.82 (1) (c) Any assessment made as a result of the adjustment or disallowance
18of a claim for credit under s. 71.07, 71.28 or 71.47 or subch. VIII or IX, except as
19provided in sub. (2) (c), shall bear interest at 12% the rate determined under s. 73.16
20(3m)
per year from the due date of the claim, except that interest shall not accrue
21during the period in which the taxpayer is being audited under s. 71.74
.
AB226,4
1Section 4. 71.82 (2) (b) of the statutes is amended to read:
AB226,3,52 71.82 (2) (b) Department may reduce delinquent interest. The department shall
3provide by rule for reduction of interest under par. (a) to 12% the rate determined
4under s. 73.16 (3m)
per year in stated instances wherein the secretary of revenue
5determines that reduction is fair and equitable.
AB226,5 6Section 5. 71.82 (2) (d) of the statutes is amended to read:
AB226,3,247 71.82 (2) (d) Withholding tax. Of the amounts required to be withheld any
8amount not deposited or paid over to the department within the time required shall
9be deemed delinquent and deposit reports or withholding reports filed after the due
10date shall be deemed late. Delinquent deposits or payments shall bear interest at
11the rate of 1.5% per month from the date deposits or payments are required under
12this section until deposited or paid over to the department. The department shall
13provide by rule for reduction of interest on delinquent deposits to 12% the rate
14determined under s. 73.16 (3m)
per year in stated instances wherein the secretary
15of revenue determines reduction fair and equitable. In the case of a timely filed
16deposit or withholding report, withheld taxes shall become delinquent if not
17deposited or paid over on or before the due date of the report. In the case of no report
18filed or a report filed late, withheld taxes shall become delinquent if not deposited
19or paid over by the due date of the report. In the case of an assessment under s. 71.83
20(1) (b) 2., the amount assessed shall become delinquent if not paid on or before the
21first day of the calendar month following the calendar month in which the
22assessment becomes final, but if the assessment is contested before the tax appeals
23commission or in the courts, it shall become delinquent on the 30th day following the
24date on which the order or judgment representing final determination becomes final.
AB226,6 25Section 6. 71.84 (1) of the statutes is amended to read:
AB226,4,8
171.84 (1) Individuals and fiduciaries. Except as provided in s. 71.09 (11), in
2the case of any underpayment of estimated tax by an individual, estate or trust,
3except as provided under s. 71.09, there shall be added to the aggregate tax for the
4taxable year interest at the rate of 12% determined under s. 73.16 (3m) per year on
5the amount of the underpayment for the period of the underpayment. In this
6subsection, "the period of the underpayment" means the time period from the due
7date of the installment until either the 15th day of the 4th month beginning after the
8end of the taxable year or the date of payment, whichever is earlier.
AB226,7 9Section 7. 71.84 (2) (a) of the statutes is amended to read:
AB226,4,2010 71.84 (2) (a) Except as provided in s. 71.29 (7), in the case of any underpayment
11of estimated tax under s. 71.29 or 71.48 there shall be added to the aggregate tax for
12the taxable year interest at the rate of 12% determined under s. 73.16 (3m) per year
13on the amount of the underpayment for the period of the underpayment. For
14corporations, except as provided in par. (b), "period of the underpayment" means the
15time period from the due date of the installment until either the 15th day of the 3rd
16month beginning after the end of the taxable year or the date of payment, whichever
17is earlier. If 90% of the tax shown on the return is not paid by the 15th day of the 3rd
18month following the close of the taxable year, the difference between that amount
19and the estimated taxes paid, along with any interest due, shall accrue delinquent
20interest under s. 71.91 (1) (a).
AB226,8 21Section 8. 71.84 (2) (c) of the statutes is amended to read:
AB226,5,322 71.84 (2) (c) If a refund under s. 71.29 (3m) results in an income or franchise
23tax liability that is greater than the amount of estimated taxes paid in reduced by
24the amount of the refund, the taxpayer shall add to the aggregate tax for the taxable
25year interest at an annual rate of 12% determined under s. 73.16 (3m) on the amount

1of the unpaid tax liability for the period beginning on the date the refund is issued
2and ending on the 15th day of the 3rd month beginning after the end of the taxable
3year, or the date the tax liability is paid, whichever is earlier.
AB226,9 4Section 9. 71.91 (6) (e) 3. of the statutes is amended to read:
AB226,5,105 71.91 (6) (e) 3. For purposes of an adjudication under this paragraph, the
6assessment of the tax upon which the interest or lien of the department is based is
7conclusively presumed to be valid. Interest shall be allowed for judgments under this
8paragraph at the rate of 12% determined under s. 73.16 (3m) per year from the date
9the department receives the money wrongfully levied upon to the date of payment
10of the judgment or from the date of sale to the date of payment.
AB226,10 11Section 10. 71.91 (6) (f) 5. of the statutes is amended to read:
AB226,6,212 71.91 (6) (f) 5. Before the sale, the department shall determine a minimum
13price for which the property shall be sold. If no person offers for that property at the
14sale at least the amount of the minimum price, the state shall purchase the property
15for the minimum price; otherwise, the property shall be sold to the highest bidder.
16In determining the minimum price, the department shall take into account the
17expense of making the levy and sale in addition to the value of the property. If
18payment in full is required at the time of acceptance of a bid and is not paid then, the
19department shall sell the property in the manner provided under this paragraph.
20If the conditions of the sale permit part of the payment to be deferred and if that part
21is not paid within the prescribed period, the department may sue the purchaser in
22the circuit court for Dane County for the unpaid part of the purchase price and
23interest at the rate of 12% determined under s. 73.16 (3m) per year from the date of
24the sale or the department may declare the sale void and may sell the property again
25under this paragraph. If the property is sold again, the 2nd purchaser shall receive

1it free of any claim of the defaulting purchaser and the amount paid upon the bid
2price by the defaulting purchaser is forfeited.
AB226,11 3Section 11. 73.16 (3m) of the statutes is created to read:
AB226,6,94 73.16 (3m) Calculation of interest rates. Annually, the department shall
5determine and publish an interest rate that is applicable to amounts owed to the
6department during that calendar year. The rate in effect on January 1, 2016, is 11.5
7percent. The department shall reduce the rate by 0.5 percent on January 1 of each
8year until the rate equals 1 percent plus the prime rate in effect on January 1, as
9reported by the federal reserve board in federal reserve statistical release H. 15.
AB226,12 10Section 12. 77.59 (4m) of the statutes is created to read:
AB226,6,1911 77.59 (4m) The department's audit of a person that has annual Wisconsin
12adjusted gross income of less than $5,000,000 may not last longer than 240 days
13unless the department and the person enter into a written agreement that extends
14the time for conducting the audit and specifies the date on which the audit shall end.
15Notwithstanding s. 77.60, the department may not assess any interest and penalties
16on a person described under this subsection as result of the department's first audit
17of the person, except as provided under s. 77.60 (10) and (11). For purposes of this
18subsection, an audit commences on the day on which the department sends notice
19of the audit to the person being audited.
AB226,13 20Section 13. 77.60 (1) (a) of the statutes is amended to read:
AB226,7,421 77.60 (1) (a) Except as provided in par. (b), unpaid taxes shall bear interest at
22the rate of 12% determined under s. 73.16 (3m) per year from the due date of the
23return until paid or deposited with the department. Taxes refunded to the seller
24shall bear interest at 3 percent per year from the due date of the return to the date
25on which the refund is certified on the refund rolls. An extension of time within

1which to file a return shall not extend the due date of the return for purposes of
2interest computation. Taxes refunded to the buyer shall bear interest at 3 percent
3per year from the last day of the month following the month during which the buyer
4paid the tax to the date on which the refund is certified on the refund rolls.
AB226,14 5Section 14. 77.60 (1) (b) of the statutes is amended to read:
AB226,7,136 77.60 (1) (b) Any unpaid taxes for a calendar year or a fiscal year resulting from
7 a field an audit under s. 77.59 shall bear interest at the rate of 12% determined under
8s. 73.16 (3m)
per year from the due date of the taxpayer's Wisconsin income or
9franchise tax return for that calendar or fiscal year or, if exempt, from the 15th day
10of the 4th month of the year after the close of the calendar or fiscal year for which the
11taxes are due to the date on which the taxes are paid or, if unpaid, become delinquent,
12whichever is earlier, except that interest shall not accrue during the period in which
13the taxpayer is being audited under s. 77.59
.
AB226,15 14Section 15. 77.96 (5) of the statutes is amended to read:
AB226,7,1915 77.96 (5) Each person subject to a surcharge under s. 77.93 shall, on or before
16the due date, including extensions, for filing under ch. 71, file an accurate statement
17of its gross tax liability. Payments made after the due date under sub. (2) and on or
18before the due date under this subsection are not delinquent but are subject to
19interest at the rate of 12% determined under s. 73.16 (3m) per year.
AB226,16 20Section 16. 78.68 (1) of the statutes is amended to read:
AB226,7,2521 78.68 (1) Unpaid taxes shall bear interest at the rate of 12% determined under
22s. 73.16 (3m)
per year from the due date of the tax until paid or deposited with the
23department, and all refunded taxes bear interest at the rate of 3 percent per year
24from the due date of the return to the date on which the refund is certified on the
25refund rolls.
AB226,17
1Section 17. Initial applicability.
AB226,8,32 (1) This act first applies to an audit for which notice is sent to the person being
3audited on January 1, 2016.
AB226,8,44 (End)
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