SB440: Bill Text

2015 Senate BILL 440

December 7, 2015 - Introduced by Senators Marklein and Gudex, cosponsored by Representatives Novak, Loudenbeck, Murphy, E. Brooks, Katsma, Knodl and Horlacher. Referred to Committee on Revenue, Financial Institutions, and Rural Issues.

SB440,2,3 An Act to repeal 76.02 (7) and subchapter V of chapter 76 [precedes 76.90]; to renumber and amend 71.05 (6) (b) 50., 71.26 (3) (ym), 71.34 (1k) (n) and 71.45 (2) (a) 19.; to amend 20.913 (1) (b), 71.04 (4) (intro.), 71.04 (8) (c), 71.13 (2) (a) 3., 71.13 (2) (b), 71.17 (3) (intro.), 71.25 (6) (intro.), 71.25 (10) (c), 71.26 (2) (b) 10. d., 71.26 (3) (f), 71.63 (3) (c), 71.78 (1), 71.78 (2), 71.78 (4) (o), 73.01 (4) (a), 73.01 (5) (a), 73.03 (50) (d), 73.09 (2), 73.09 (4) (b), 73.09 (7) (a), 74.23 (1) (a) 2., 74.25 (1) (a) 2., 74.25 (1) (a) 3., 74.30 (1) (b), 74.30 (1) (c), 76.01, 76.02 (2), 76.04 (1), 76.07 (1), 76.07 (2), 76.13 (1), 77.255, 77.52 (7), 77.54 (61) (intro.), 77.59 (3), 77.59 (4), 77.61 (11), 77.65 (2) (g), 77.71 (2), 77.71 (4), 78.80 (3), 139.11 (4) (a), 139.11 (4) (b) (intro.), 139.38 (6), 139.82 (6) and 227.03 (1); and to create 71.01 (6) (j) 3. g., 71.01 (6) (j) 3. h., 71.05 (6) (b) 50. b., 71.22 (4) (j) 3. g., 71.22 (4) (j) 3. h., 71.22 (4m) (j) 3. g., 71.22 (4m) (j) 3. h., 71.26 (3) (ym) 2., 71.34 (1g) (j) 3. g., 71.34 (1g) (j) 3. h., 71.34 (1k) (n) 2., 71.42 (2) (j) 3. g., 71.42 (2) (j) 3. h., 71.45 (2) (a) 19. b., 71.78 (4) (t), 76.30 (2) (j), 77.61 (5) (b) 13., 77.71 (5), 77.73 (2m), 78.005 (13d), 78.39 (5f), 78.55 (5p), 78.64 (4), 139.01 (5p), 139.30 (8p), 139.75 (5p) and 168.01 (2s) of the statutes; relating to: tax administration technical changes.

Analysis by the Legislative Reference Bureau

This bill makes technical changes to current law regarding tax administration, including all of the following:

1. The bill provides a definition for "person" for purposes of administering petroleum products inspections and the taxes imposed on motor vehicle fuel, alternate fuel, general aviation fuel, beverages, cigarettes, and tobacco products. The bill defines "person" to include any individual, sole proprietorship, partnership, limited liability company, corporation, or association. In addition, the bill specifies that a single-owner entity that is disregarded as a separate entity for income tax purposes is disregarded as a separate entity for purposes of administering the petroleum products inspections and the various taxes.

2. The bill allows a local assessor to receive information from the Department of Revenue (DOR) regarding utility property located in a taxing jurisdiction so that the assessor may determine whether the property is subject to the state imposed license fees or to local property taxes.

3. The bill removes obsolete references to the transitional adjustment fee, the gift tax, the woodland tax, and the license fees imposed on sleeping car companies and express companies.

4. The bill eliminates the requirement that a person who receives a conveyance of real property upon the death of the property owner file a real estate transfer fee return. Current law exempts such a conveyance from the real estate transfer fee.

5. The bill allows a person who has a material interest in a property to examine a tax warrant issued for that property in order to obtain the outstanding liability secured by the tax warrant.

6. The bill makes technical changes to county and special district sales and use taxes imposed on the lease or rental of motor vehicles, boats, recreational vehicles, and aircraft in order to comply with provisions of the multistate Streamlined Sales and Use Tax Agreement.

7. The bill allows the secretary of DOR to revoke or suspend an assessor's certification and to require an assessor to take corrective action in order to avoid the revocation or suspension of his or her certification. The bill also requires that an assessor whose certification has expired may be recertified if the assessor has attended at least four of the previous five annual assessor meetings called by DOR and has fulfilled all of the continuing education requirements determined by the department. In addition, DOR may revoke an assessor's certification if the assessor fails to attend more than one annual meeting or fails to meet all of the continuing education requirements.

8. The bill adopts, for state income tax purposes, changes made to the federal Internal Revenue Code that allow an income exclusion for amounts paid by the federal Department of Justice for survivor's or disability benefits for injuries sustained in the line of duty and penalty-free withdrawals from government retirement plans by federal law enforcement officers, firefighters, and air traffic controllers who are over the age of 50.

For further information see the state and local 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:

SB440,1 Section 1. 20.913 (1) (b) of the statutes is amended to read:

SB440,3,5 20.913 (1) (b) Excess tax payments. Taxes collected in excess of lawful taxation, when claims therefor have been established as provided in ss. 71.30 (4), 71.74 (13), 71.75, 71.89 (1), 72.24, 74.35, 74.37, 76.13 (3), 76.39, 76.84, 76.91, 78.19, 78.20, 78.68 (10), 78.75, 78.80 (1m), 139.092, 139.25 (1), 139.36, 139.365 and 139.39 (4).

SB440,2 Section 2. 71.01 (6) (j) 3. g. of the statutes is created to read:

SB440,3,7 71.01 (6) (j) 3. g. P.L. 114-14.

SB440,3 Section 3. 71.01 (6) (j) 3. h. of the statutes is created to read:

SB440,3,9 71.01 (6) (j) 3. h. P.L. 114-26.

SB440,4 Section 4. 71.04 (4) (intro.) of the statutes is amended to read:

SB440,4,9 71.04 (4) Nonresident allocation and apportionment formula. (intro.) Nonresident individuals and nonresident estates and trusts engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such nonresident individual or nonresident estate or trust within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies and car line companies there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

SB440,5 Section 5. 71.04 (8) (c) of the statutes is amended to read:

SB440,4,16 71.04 (8) (c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

SB440,6 Section 6. 71.05 (6) (b) 50. of the statutes is renumbered 71.05 (6) (b) 50. a. and amended to read:

SB440,4,25 71.05 (6) (b) 50. a. Starting Except as provided in subd. 50. b., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

SB440,7 Section 7. 71.05 (6) (b) 50. b. of the statutes is created to read:

SB440,5,6 71.05 (6) (b) 50. b. If any taxable year for which the modification under subd. 50. a. is required is a fractional year under s. 71.03 (3), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

SB440,8 Section 8. 71.13 (2) (a) 3. of the statutes is amended to read:

SB440,5,9 71.13 (2) (a) 3. Gift tax returns or reports, sales Sales and use tax returns, and withholding returns or reports that were required to be filed, if not previously filed.

SB440,9 Section 9. 71.13 (2) (b) of the statutes is amended to read:

SB440,5,24 71.13 (2) (b) Upon receipt of the returns described in par. (a), the department shall immediately determine the amount of taxes including interest, penalties, and costs to be payable, as well as any delinquent income, withholding, sales, and use, and gift taxes, penalties, interest, and costs due, and shall certify those amounts to the court. The court shall then enter an order directing the personal representative or trustee to pay the amounts found to be due by the department and take the department's receipt for the amount paid. The receipt shall be evidence of the payment and shall be filed with the court before a final distribution of the estate or trust is ordered and the personal representative or trustee is discharged. The filing of the receipt shall in no manner affect the obligation of the personal representative or trustee to file income, sales, and withholding returns covering transactions reportable during the final taxable year of the estate or trust and to pay income, sales, use and withholding taxes, penalties, interest, and costs due as the result of such transactions.

SB440,10 Section 10. 71.17 (3) (intro.) of the statutes is amended to read:

SB440,6,6 71.17 (3) Liability for payment of taxes due from decedent. (intro.) Any income, withholding, sales, or use, or gift taxes, penalties, interest, and costs found to be due from a decedent, an estate, or a trust for any of the years open to assessment under s. 71.77 and any delinquent income, withholding, sales, or use, or gift taxes, penalties, interest, and costs found to be due shall be assessed against and paid by one of the following:

SB440,11 Section 11. 71.22 (4) (j) 3. g. of the statutes is created to read:

SB440,6,8 71.22 (4) (j) 3. g. P.L. 114-14.

SB440,12 Section 12. 71.22 (4) (j) 3. h. of the statutes is created to read:

SB440,6,10 71.22 (4) (j) 3. h. P.L. 114-26.

SB440,13 Section 13. 71.22 (4m) (j) 3. g. of the statutes is created to read:

SB440,6,12 71.22 (4m) (j) 3. g. P.L. 114-14.

SB440,14 Section 14. 71.22 (4m) (j) 3. h. of the statutes is created to read:

SB440,6,14 71.22 (4m) (j) 3. h. P.L. 114-26.

SB440,15 Section 15. 71.25 (6) (intro.) of the statutes is amended to read:

SB440,7,7 71.25 (6) Allocation and separate accounting and apportionment formula. (intro.) Corporations engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such corporation within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies, car line companies and corporations or associations that are subject to a tax on unrelated business income under s. 71.26 (1) (a) there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

SB440,16 Section 16. 71.25 (10) (c) of the statutes is amended to read:

SB440,7,14 71.25 (10) (c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

SB440,17 Section 17. 71.26 (2) (b) 10. d. of the statutes, as created by 2015 Wisconsin Act 55, is amended to read:

SB440,7,22 71.26 (2) (b) 10. d. For purposes of subd. 10. a., "Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2013, except that "Internal Revenue Code" includes the provisions of P.L. 113-97, P.L. 113-159, P.L. 113-168, section 302901 of P.L. 113-287, sections 171, 172, and 201 to 221 of P.L. 113-295, and sections 102, 105, and 207 of division B of P.L. 113-295, P.L. 114-14, and P.L. 114-26.

SB440,18 Section 18. 71.26 (3) (f) of the statutes is amended to read:

SB440,8,2 71.26 (3) (f) Section 164 (a) is modified so that foreign taxes are not deductible unless the income on which the tax is based is taxable under this chapter and so that gross receipts taxes assessed in lieu of property taxes, the license fee under s. 76.28 and the taxes under ss. 70.375, and 76.81 and 76.91 are deductible.

SB440,19 Section 19. 71.26 (3) (ym) of the statutes is renumbered 71.26 (3) (ym) 1. and amended to read:

SB440,8,11 71.26 (3) (ym) 1. Starting Except as provided in subd. 2., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, a corporation shall subtract 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

SB440,20 Section 20. 71.26 (3) (ym) 2. of the statutes is created to read:

SB440,8,17 71.26 (3) (ym) 2. If any taxable year for which the modification under subd. 1. is required is a fractional year under s. 71.24 (6) (c), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

SB440,21 Section 21. 71.34 (1g) (j) 3. g. of the statutes is created to read:

SB440,8,19 71.34 (1g) (j) 3. g. P.L. 114-14.

SB440,22 Section 22. 71.34 (1g) (j) 3. h. of the statutes is created to read:

SB440,8,21 71.34 (1g) (j) 3. h. P.L. 114-26.

SB440,23 Section 23. 71.34 (1k) (n) of the statutes is renumbered 71.34 (1k) (n) 1. and amended to read:

SB440,9,5 71.34 (1k) (n) 1. Starting Except as provided in subd. 2., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, a subtraction shall be made in an amount equal to 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

SB440,24 Section 24. 71.34 (1k) (n) 2. of the statutes is created to read:

SB440,9,11 71.34 (1k) (n) 2. If any taxable year for which the modification under subd. 1. is required is a fractional year under s. 71.24 (6) (c), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

SB440,25 Section 25. 71.42 (2) (j) 3. g. of the statutes is created to read:

SB440,9,13 71.42 (2) (j) 3. g. P.L. 114-14.

SB440,26 Section 26. 71.42 (2) (j) 3. h. of the statutes is created to read:

SB440,9,15 71.42 (2) (j) 3. h. P.L. 114-26.

SB440,27 Section 27. 71.45 (2) (a) 19. of the statutes is renumbered 71.45 (2) (a) 19. a. and amended to read:

SB440,9,24 71.45 (2) (a) 19. a. Starting Except as provided in subd. 19. b., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, by subtracting 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

SB440,28 Section 28. 71.45 (2) (a) 19. b. of the statutes is created to read:

SB440,10,5 71.45 (2) (a) 19. b. If any taxable year for which the modification under subd. 19. a. is required is a fractional year under s. 71.44 (2) (c), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

SB440,29 Section 29. 71.63 (3) (c) of the statutes is amended to read:

SB440,10,10 71.63 (3) (c) In regard to a single-owner entity that is disregarded as a separate entity under section 7701 of the Internal Revenue Code, the owner, not the entity, is an "employer," except that, if the entity elects to be an employer for federal withholding tax purposes, the entity is the employer for purposes of this subchapter.

SB440,30 Section 30. 71.78 (1) of the statutes is amended to read:

SB440,11,5 71.78 (1) Divulging information. Except as provided in subs. (4), (4m) and (10), no person may divulge or circulate or offer to obtain, divulge, or circulate any information derived from an income, franchise, withholding, fiduciary, partnership, or limited liability company or gift tax return or tax credit claim, including information which may be furnished by the department as provided in this section. This subsection does not prohibit publication by any newspaper of information lawfully derived from such returns or claims for purposes of argument or prohibit any public speaker from referring to such information in any address. This subsection does not prohibit the department from publishing statistics classified so as not to disclose the identity of particular returns, or claims or reports and the items thereof. This subsection does not prohibit employees or agents of the department of revenue from offering or submitting any return, including joint returns of a spouse or former spouse, separate returns of a spouse, individual returns of a spouse or former spouse, and combined individual income tax returns, or from offering or submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any information derived from, any of those documents as evidence into the record of any contested matter involving the department in proceedings or litigation on state tax matters if, in the department's judgment, that evidence has reasonable probative value.

SB440,31 Section 31. 71.78 (2) of the statutes is amended to read:

SB440,12,6 71.78 (2) Disclosure of net tax. The department shall make available upon suitable forms prepared by the department information setting forth the net Wisconsin income tax, or Wisconsin franchise tax, or Wisconsin gift tax reported as paid or payable in the returns filed by any individual or corporation, and any amount of delinquent taxes owed by any such individual or corporation, for any individual year upon request. When making available information setting forth the delinquent taxes owed by an individual or corporation, the information shall include interest, penalties, fees, and costs, which are unpaid for more than 90 days after all appeal rights have expired, except that such information may not be provided for any person who has reached an agreement or compromise with the department, or the department of justice, under s. 71.92 and is in compliance with that agreement, regarding the payment of delinquent taxes, or the name of any person who is protected by a stay that is in effect under the Federal Bankruptcy Code. Before the request is granted, the person desiring to obtain the information shall prove his or her identity and shall be required to sign a statement setting forth the person's address and reason for making the request and indicating that the person understands the provisions of this section with respect to the divulgement, publication, or dissemination of information obtained from returns as provided in sub. (1). The use of a fictitious name is a violation of this section. Within 24 hours after any information from any such tax return has been so obtained, the department shall mail to the person from whose return the information has been obtained a notification which shall give the name and address of the person obtaining the information and the reason assigned for requesting the information. The department shall collect from the person requesting the information a fee of $4 for each return.

SB440,32 Section 32. 71.78 (4) (o) of the statutes is amended to read:

SB440,12,11 71.78 (4) (o) A licensing department or the supreme court, if the supreme court agrees, for the purpose of denial, nonrenewal, discontinuation and revocation of a license based on tax delinquency under s. 73.0301 or unemployment insurance contribution delinquency under s. 108.227.

SB440,33 Section 33. 71.78 (4) (t) of the statutes is created to read:

SB440,12,17 71.78 (4) (t) For purposes of obtaining the outstanding liability secured by a tax warrant, any person, or authorized agent of any person, who provides satisfactory evidence to the department, as determined by the department, that the person has a material interest, or intends to obtain a material interest, in a property that is subject to a tax warrant filed by the department under s. 71.91 (5).

SB440,34 Section 34. 73.01 (4) (a) of the statutes is amended to read:

SB440,13,11 73.01 (4) (a) Subject to the provisions for judicial review contained in s. 73.015, the commission shall be the final authority for the hearing and determination of all questions of law and fact arising under sub. (5) and s. 72.86 (4), 1985 stats., and ss. 70.38 (4) (a), 70.397, 70.64, and 70.995 (8), s. 76.38 (12) (a), 1993 stats., ss. 76.39 (4) (c), 76.48 (6), 76.91, 77.26 (3), 77.59 (5m) and (6) (b), 78.01, 78.22, 78.40, 78.555, 139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76, 139.78, 341.405, and 341.45, subch. XIV of ch. 71, and subch. VII of ch. 77. Whenever with respect to a pending appeal there is filed with the commission a stipulation signed by the department of revenue and the adverse party, under s. 73.03 (25), or the department of transportation and the adverse party agreeing to an affirmance, modification, or reversal of the department of revenue's or department of transportation's position with respect to some or all of the issues raised in the appeal, the commission shall enter an order affirming or modifying in whole or in part, or canceling the assessment appealed from, or allowing in whole or in part or denying the petitioner's refund claim, as the case may be, pursuant to and in accordance with the stipulation filed. No responsibility shall devolve upon the commission, respecting the signing of an order of dismissal as to any pending appeal settled by the department of revenue or the department of transportation without the approval of the commission.

SB440,35 Section 35. 73.01 (5) (a) of the statutes is amended to read:

SB440,14,22 73.01 (5) (a) Any person who is aggrieved by a determination of the state board of assessors under s. 70.995 (8) or who has filed a petition for redetermination with the department of revenue and who is aggrieved by the redetermination of the department of revenue may, within 60 days of the determination of the state board of assessors or of the department of revenue or, in all other cases, within 60 days after the redetermination but not thereafter, file with the clerk of the commission a petition for review of the action of the department of revenue and the number of copies of the petition required by rule adopted by the commission. Any person who is aggrieved by a determination of the department of transportation under s. 341.405 or 341.45 may, within 30 days after the determination of the department of transportation, file with the clerk of the commission a petition for review of the action of the department of transportation and the number of copies of the petition required by rule adopted by the commission. If a municipality appeals, its appeal shall set forth that the appeal has been authorized by an order or resolution of its governing body and the appeal shall be verified by a member of that governing body as pleadings in courts of record are verified. The clerk of the commission shall transmit one copy to the department of revenue, or to the department of transportation, and to each party. In the case of appeals from manufacturing property assessments, the person assessed shall be a party to a proceeding initiated by a municipality. At the time of filing the petition, the petitioner shall pay to the commission a $25 filing fee. The commission shall deposit the fee in the general fund. Within 30 days after such transmission the department of revenue, except for petitions objecting to manufacturing property assessments, or the department of transportation, shall file with the clerk of the commission an original and the number of copies of an answer to the petition required by rule adopted by the commission and shall serve one copy on the petitioner or the petitioner's attorney or agent. Within 30 days after service of the answer, the petitioner may file and serve a reply in the same manner as the petition is filed. Any person entitled to be heard by the commission under s. 76.38 (12) (a), 1993 stats., or s. 76.39 (4) (c), or 76.48, or 76.91 may file a petition with the commission within the time and in the manner provided for the filing of petitions in income or franchise tax cases. Such papers may be served as a circuit court summons is served or by certified mail. For the purposes of this subsection, a petition for review is considered timely filed if mailed by certified mail in a properly addressed envelope, with postage duly prepaid, which envelope is postmarked before midnight of the last day for filing.

SB440,36 Section 36. 73.03 (50) (d) of the statutes is amended to read: