LRB-2550/2
JK&EHS:klm
2021 - 2022 LEGISLATURE
March 31, 2021 - Introduced by Senators Feyen and L. Taylor, cosponsored by
Representatives Sortwell, Armstrong, Brooks, Edming, Kuglitsch,
Murphy, Rozar, Skowronski, Tittl, Tusler and Thiesfeldt. Referred to
Committee on Financial Institutions and Revenue.
SB258,1,4
1An Act to create 71.05 (6) (a) 30., 71.05 (6) (b) 55., 71.26 (2) (a) 13., 71.26 (2) (a)
214., 71.34 (1k) (q), 71.34 (1k) (r), 71.45 (2) (a) 24. and 71.45 (2) (a) 25. of the
3statutes;
relating to: an income tax deduction for an arrearage paid on behalf
4of a tenant for municipal utility service.
Analysis by the Legislative Reference Bureau
Under current law, a municipal utility may collect arrearages for utility service
provided to lots or parcels of real estate by providing, on October 15, a written notice
to the owner or occupant of the amount owing and in arrears. If payment is not
received by November 15, the arrearage amount and late penalties become a lien on
the property that is collected as a tax on the property. Additional requirements apply
to a municipal utility that provides water or electric service to a tenant in a rental
dwelling unit. If the owner of the unit notifies the municipal utility that the tenant
has assumed responsibility for payment for the service, the municipal utility must
provide additional notices regarding past due amounts to both the tenant and the
owner in order to collect the arrearages through a lien. Also, current law gives the
municipality a lien on the assets of each tenant who is responsible for arrears in
payments for the water or electric service. If the owner pays off the arrearage, the
municipality's lien on the assets transfers to the owner. Under the bill, an owner who
pays off an arrearage on behalf of a tenant may deduct that amount when calculating
income for state tax purposes. However, if the tenant pays the owner for all or part
of the arrearage in a subsequent taxable year, the owner must add that amount to
the owner's taxable income for that year.
For further information see the 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:
SB258,1
1Section 1
. 71.05 (6) (a) 30. of the statutes is created to read:
SB258,2,42
71.05
(6) (a) 30. For taxable years beginning after December 31, 2020, the
3amount taken as a subtraction under par. (b) 55. by the owner of a rental dwelling
4that the owner receives from the tenant in a succeeding taxable year.
SB258,2
5Section 2
. 71.05 (6) (b) 55. of the statutes is created to read:
SB258,2,96
71.05
(6) (b) 55. For taxable years beginning after December 31, 2020, the
7amount of arrearage that the owner of a rental dwelling unit pays under s. 66.0809
8(3m) (d) to a municipal utility for service provided to a tenant of the rental dwelling
9unit who is responsible for the payment of utility charges.
SB258,3
10Section 3
. 71.26 (2) (a) 13. of the statutes is created to read:
SB258,2,1411
71.26
(2) (a) 13. For taxable years beginning after December 31, 2020, minus
12the amount of arrearage that the owner of a rental dwelling unit pays under s.
1366.0809 (3m) (d) to a municipal utility for service provided to a tenant of the rental
14dwelling unit who is responsible for the payment of utility charges.
SB258,4
15Section 4
. 71.26 (2) (a) 14. of the statutes is created to read:
SB258,2,1816
71.26
(2) (a) 14. For taxable years beginning after December 31, 2020, plus the
17amount taken as a subtraction under subd. 13. by the owner of a rental dwelling that
18the owner receives from the tenant in a succeeding taxable year.
SB258,5
19Section 5
. 71.34 (1k) (q) of the statutes is created to read:
SB258,3,320
71.34
(1k) (q) For taxable years beginning after December 31, 2020, a
21subtraction shall be made for the amount of arrearage that the owner of a rental
1dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service
2provided to a tenant of the rental dwelling unit who is responsible for the payment
3of utility charges.
SB258,6
4Section 6
. 71.34 (1k) (r) of the statutes is created to read:
SB258,3,85
71.34
(1k) (r) For taxable years beginning after December 31, 2020, an addition
6shall be made for the amount taken as a subtraction under par. (q) by the owner of
7a rental dwelling that the owner receives from the tenant in a succeeding taxable
8year.
SB258,7
9Section 7
. 71.45 (2) (a) 24. of the statutes is created to read:
SB258,3,1410
71.45
(2) (a) 24. For taxable years beginning after December 31, 2020, by
11subtracting from federal taxable income the amount of arrearage that the owner of
12a rental dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service
13provided to a tenant of the rental dwelling unit who is responsible for the payment
14of utility charges.
SB258,8
15Section 8
. 71.45 (2) (a) 25. of the statutes is created to read:
SB258,3,1916
71.45
(2) (a) 25. For taxable years beginning after December 31, 2020, by
17adding to federal taxable income the amount taken as a subtraction under subd. 24.
18by the owner of a rental dwelling that the owner receives from the tenant in a
19succeeding taxable year.
SB258,9
20Section
9.
Initial applicability.
SB258,3,2221
(1) This act first applies to an arrearage paid by an owner of a rental dwelling
22unit under 66.0809 (3m) (d) on October 1, 2021.
