SB623: Bill Text

Analysis by the Legislative Reference Bureau

Under current law, beginning with the property tax assessments as of January 1, 2018, machinery, tools, and patterns, not including those items used in manufacturing, are exempt from the personal property tax. However, beginning in 2019, the state pays each taxing jurisdiction an amount equal to the property taxes levied on those items of personal property for the property tax assessments as of January 1, 2017.

Under the bill, beginning with the property tax assessments as of January 1, 2022, no items of personal property will be subject to the property tax. Beginning in 2023, the state will pay each taxing jurisdiction an additional amount equal to the property taxes levied on the items made exempt under the bill for the property tax assessments as of January 1, 2021. Beginning in 2024, each taxing jurisdiction will receive a payment to compensate it for its loss in personal property revenue equal to the payment it received in the previous year, increased by the annual percentage change in the consumer price index.

Under current law, generally, public utilities, including railroad companies, are subject to a license fee imposed by the state instead of being subject to local property taxes. This bill creates a personal property tax exemption for railroad companies in order to comply with the requirements of the federal Railroad Revitalization and Regulatory Reform Act.

Finally, the bill makes a number of technical changes related to the repeal of the personal property tax, such as providing a process whereby manufacturing establishments located in this state that do not own real property in this state may continue to claim the manufacturing income tax credit.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.

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:

SB623,1 Section 1. 16.5185 (3) of the statutes is created to read:

SB623,3,6 16.5185 (3) On December 30, 2022, the secretary shall transfer from the general fund to the transportation fund $9,000,000. On December 30, 2023, and on each December 30 thereafter, the secretary shall transfer from the general fund to the transportation fund an amount equal to the amount transferred under this subsection in the previous fiscal year, increased by 1.25 percent

SB623,2 Section 2. 20.835 (1) (em) of the statutes, as created by 2021 Wisconsin Act 58, is repealed.

SB623,3 Section 3. 60.85 (1) (f) of the statutes is repealed.

SB623,4 Section 4. 60.85 (1) (h) 1. c. of the statutes is amended to read:

SB623,3,14 60.85 (1) (h) 1. c. Real property assembly costs, meaning any deficit incurred resulting from the sale or lease as lessor by the town of real or personal property within a tax incremental district for consideration which is less than its cost to the town.

SB623,5 Section 5. 60.85 (1) (o) of the statutes is amended to read:

SB623,3,17 60.85 (1) (o) “Taxable property" means all real and personal taxable property located in a tax incremental district.

SB623,6 Section 6. 60.85 (5) (j) of the statutes is created to read:

SB623,4,7 60.85 (5) (j) Upon receiving a written application from the town clerk, in a form prescribed by the department of revenue, the department shall recalculate the base value of a tax incremental district affected by 2021 Wisconsin Act .... (this act) to remove the value of the personal property. An application received under this paragraph no later than October 31 is effective in the year following the year in which the application is made. An application received after October 31 is effective in the 2nd year following the year in which the application is made.

SB623,7 Section 7. 66.0435 (3) (g) of the statutes is amended to read:

SB623,4,11 66.0435 (3) (g) Failure to timely pay the tax prescribed in this subsection shall be treated as a default in payment of personal property tax and is subject to all procedures and penalties applicable under chs. 70 and 74.

SB623,8 Section 8. 66.1105 (2) (d) of the statutes is repealed.

SB623,9 Section 9. 66.1105 (2) (f) 1. c. of the statutes is amended to read:

SB623,4,16 66.1105 (2) (f) 1. c. Real property assembly costs, meaning any deficit incurred resulting from the sale or lease as lessor by the city of real or personal property within a tax incremental district for consideration which is less than its cost to the city.

SB623,10 Section 10. 66.1105 (5) (j) of the statutes is created to read:

SB623,4,24 66.1105 (5) (j) Upon receiving a written application from the city clerk, in a form prescribed by the department of revenue, the department shall recalculate the base value of a tax incremental district affected by 2021 Wisconsin Act .... (this act) to remove the value of the personal property. An application received under this paragraph no later than October 31 is effective in the year following the year in which the application is made. An application received after October 31 is effective in the 2nd year following the year in which the application is made.

SB623,11 Section 11. 66.1106 (1) (k) of the statutes is amended to read:

SB623,5,2 66.1106 (1) (k) “Taxable property" means all real and personal taxable property located in an environmental remediation tax incremental district.

SB623,12 Section 12. 66.1106 (4) (e) of the statutes is created to read:

SB623,5,11 66.1106 (4) (e) Upon receiving a written application from the clerk of a political subdivision, in a form prescribed by the department, the department shall recalculate the base value of a tax incremental district affected by 2021 Wisconsin Act .... (this act) to remove the value of the personal property, as defined in s. 66.1105. An application received under this paragraph no later than October 31 is effective in the year following the year in which the application is made. An application received after October 31 is effective in the 2nd year following the year in which the application is made.

SB623,13 Section 13. 70.04 (1r) of the statutes is amended to read:

SB623,5,18 70.04 (1r) Toll bridges; private railroads and bridges; saw Saw logs, timber, and lumber, either upon land or afloat; steamboats, ships, and other vessels, whether at home or abroad; ferry boats, including the franchise for running the same; ice cut and stored for use, sale, or shipment; beginning May 1, 1974, and manufacturing machinery and equipment as defined in s. 70.11 (27), and entire property of companies defined in s. 76.28 (1), located entirely within one taxation district.

SB623,14 Section 14. 70.043 of the statutes is amended to read:

SB623,6,2 70.043 Mobile homes, recreational mobile homes, and manufactured homes. (1) A mobile home, as defined in s. 101.91 (10), a recreational mobile home, as defined in s. 66.0435 (1) (hm), or a manufactured home, as defined in s. 101.91 (2), is an improvement to real property if it is connected to utilities and is set upon a foundation upon land which is owned by the mobile home, recreational mobile home, or manufactured home owner. In this section, a mobile home, recreational mobile home, or manufactured home is “set upon a foundation" if it is off its wheels and is set upon some other support.

SB623,6,8 (2) A mobile home, as defined in s. 101.91 (10), a recreational mobile home, as defined in s. 66.0435 (1) (hm), or a manufactured home, as defined in s. 101.91 (2), is personal property if the land upon which it is located is not owned by the mobile home, recreational mobile home, or manufactured home owner or if the mobile home, recreational mobile home, or manufactured home is not set upon a foundation or connected to utilities.

SB623,15 Section 15. 70.05 (5) (a) 1. of the statutes is amended to read:

SB623,6,12 70.05 (5) (a) 1. “Assessed value" means with respect to each taxation district the total values established under ss. s. 70.32 and 70.34, but excluding manufacturing property subject to assessment under s. 70.995.

SB623,16 Section 16. 70.10 of the statutes is amended to read:

SB623,6,22 70.10 Assessment, when made, exemption. The assessor shall assess all real and personal taxable property as of the close of January 1 of each year. Except in cities of the 1st class and 2nd class cities that have a board of assessors under s. 70.075, the assessment shall be finally completed before the first Monday in April. All real property conveyed by condemnation or in any other manner to the state, any county, city, village or town by gift, purchase, tax deed or power of eminent domain before January 2 in such year shall not be included in the assessment. Assessment of manufacturing property subject to s. 70.995 shall be made according to that section.

SB623,17 Section 17. 70.11 (42) of the statutes is repealed.

SB623,18 Section 18. 70.1105 (1) of the statutes is amended to read:

SB623,7,8 70.1105 (1) Property that is exempt under s. 70.11 and that is used in part in a trade or business for which the owner of the property is subject to taxation under sections 511 to 515 of the internal revenue code, as defined in s. 71.22 (4m), shall be assessed for taxation, unless otherwise exempt under this chapter, at that portion of the fair market value of the property that is attributable to the part of the property that is used in the unrelated trade or business. This section does not apply to property that is leased by an exempt organization to another person or to property that is exempt under s. 70.11 (34).

SB623,19 Section 19. 70.1105 (2) of the statutes is repealed.

SB623,20 Section 20. 70.111 (19) (b) of the statutes is amended to read:

SB623,7,16 70.111 (19) (b) Recreational mobile homes, as defined in s. 66.0435 (1) (hm), that are personal property under s. 70.043 (2) and recreational vehicles, as defined in s. 340.01 (48r). The exemption under this paragraph also applies to steps and a platform, not exceeding 50 square feet, that lead to a doorway of a recreational mobile home or a recreational vehicle, but does not apply to any other addition, attachment, deck, or patio.

SB623,21 Section 21. 70.111 (28) of the statutes is created to read:

SB623,7,21 70.111 (28) Personal property. (a) Beginning with the property tax assessments applicable to the January 1, 2022, assessment year, personal property, as defined under s. 70.04, including steam and other vessels, furniture, and equipment.

SB623,7,22 (b) The exemption under par. (a) does not apply to all of the following:

SB623,7,23 1. Property qualifying as real property under s. 70.03.

SB623,7,25 2. Off-premises advertising signs defined as personal property under s. 70.04 (3).

SB623,8,1 3. Property assessed as real property under s. 70.17 (3).

SB623,8,2 4. Property subject to taxation under s. 76.025 (2).

SB623,8,5 (c) A taxing jurisdiction may include the most recent valuation of personal property described under par. (a) that is located in the taxing jurisdiction for purposes of complying with debt limitations applicable to the jurisdiction.

SB623,22 Section 22. 70.13 (1) of the statutes is amended to read:

SB623,8,13 70.13 (1) All For assessments made before January 1, 2022, all personal property shall be assessed in the assessment district where the same is located or customarily kept except as otherwise specifically provided. Personal property in transit within the state on the first day of January shall be assessed in the district in which the same is intended to be kept or located, and personal property having no fixed location shall be assessed in the district where the owner or the person in charge or possession thereof resides, except as provided in sub. (5).

SB623,23 Section 23. 70.13 (2) of the statutes is amended to read:

SB623,8,21 70.13 (2) Saw For assessments made before January 1, 2022, saw logs or timber in transit, which are to be sawed or manufactured in any mill in this state, shall be deemed located and shall be assessed in the district in which such mill is located. Saw logs or timber shall be deemed in transit when the same are being transported either by water or rail, but when such logs or timber are banked, decked, piled or otherwise temporarily stored for transportation in any district, they shall be deemed located, and shall be assessed in such district.

SB623,24 Section 24. 70.13 (3) of the statutes is amended to read:

SB623,9,10 70.13 (3) On For assessments made before January 1, 2022, on or before the tenth day of January in each year the owner of logs or timber in transit shall furnish the assessor of the district in which the mill at which the logs or timber will be sawed or manufactured is located a verified statement of the amount, character and value of all the logs and timber in transit on the first day of January preceding, and the owner of the logs or timber shall furnish to the assessor of the district in which the logs and timber were located on the first day of January preceding, a like verified statement of the amount, character and value thereof. Any assessment made in accordance with the owner's statement shall be valid and binding on the owner notwithstanding any subsequent change as to the place where the same may be sawed or manufactured. If the owner of the logs or timber shall fail or refuse to furnish the statement herein provided for, or shall intentionally make a false statement, that owner shall be subject to the penalties prescribed by s. 70.36.

SB623,25 Section 25. 70.13 (7) of the statutes is amended to read:

SB623,9,25 70.13 (7) Saw For assessments made before January 1, 2022, saw logs or timber removed from public lands during the year next preceding the first day of January or having been removed from such lands and in transit therefrom on the first day of January, shall be deemed located and assessed in the assessment district wherein such public lands are located and shall be assessed in no other assessment district. Saw logs or timber shall be deemed in transit when the same are being transported. On or before January 10 in each year the owner of such logs or timber shall furnish the assessor of the assessment district wherein they are assessable a verified statement of the amount, character and value of all such logs and timber. If the owner of any such logs or timber shall fail or refuse to furnish such statement or shall intentionally make a false statement, he or she is subject to the penalties prescribed by s. 70.36. This subsection shall supersede any provision of law in conflict therewith. The term “owner" as used in this subsection is deemed to mean the person owning the logs or timber at the time of severing. “Public lands" as used in this subsection shall mean lands owned by the United States of America, the state of Wisconsin or any political subdivision of this state.

SB623,26 Section 26. 70.15 (2) of the statutes is amended to read:

SB623,10,15 70.15 (2) The owner of any steam vessel, barge, boat, or other water craft, hailing from any port of this state, “and so employed regularly in interstate traffic," desiring to comply with the terms of this section, shall annually, on or before the first day of January, file with the clerk of such town, village, or city a verified statement, in writing, containing the name, port of hail, tonnage, and name of owner of such steam vessel, barge, boat, or other water craft, and shall thereupon pay into the said treasury of such town, village, or city a sum equal to one cent per net ton of the registered tonnage of said vessel, and the treasurer shall thereupon issue a receipt. All vessels, boats, or other water craft not regularly employed in interstate traffic and all private yachts or pleasure boats belonging to inhabitants of this state, whether at home or abroad, shall be taxed as personal property for taxes levied before January 1, 2022.

SB623,27 Section 27. 70.17 (1) of the statutes is amended to read:

SB623,10,25 70.17 (1) Real property shall be entered in the name of the owner, if known to the assessor, otherwise to the occupant thereof if ascertainable, and otherwise without any name. The person holding the contract or certificate of sale of any real property contracted to be sold by the state, but not conveyed, shall be deemed the owner for such purpose. The undivided real estate of any deceased person may be entered to the heirs of such person without designating them by name. The real estate of an incorporated company shall be entered in the same manner as that of an individual. Improvements on leased lands may be assessed either as real property or personal property.

SB623,28 Section 28. 70.17 (3) of the statutes is created to read:

SB623,11,3 70.17 (3) Beginning with the property tax assessments applicable to the January 1, 2022, assessment year, the following shall be assessed as real property:

SB623,11,5 (a) Manufactured and mobile homes under s. 70.043 (1) or (2), not otherwise exempt from taxation under this chapter.

SB623,11,6 (b) Advertising signs, buildings, improvements, and fixtures on leased lands.

SB623,11,10 (c) Buildings, improvements, and fixtures on exempt lands, not otherwise exempt from taxation under this chapter. The assessor may create an assessor's plat under s. 70.27 for the assessment of taxable buildings, improvements, and fixtures on land not subject to taxation.

SB623,11,11 (d) Buildings, improvements, and fixtures on forest croplands.

SB623,11,12 (e) Buildings, improvements, and fixtures on managed forest lands.

SB623,29 Section 29. 70.174 of the statutes is amended to read:

SB623,11,18 70.174 Improvements on government-owned land. Improvements made by any person on land within this state owned by the United States may shall be assessed either as real or personal property to the person making the same, if ascertainable, and otherwise to the occupant thereof or the person receiving benefits therefrom as provided under s. 70.17 (3).

SB623,30 Section 30. 70.18 of the statutes is amended to read:

SB623,12,7 70.18 Personal property, to whom assessed. (1) Personal For assessments made before January 1, 2022, personal property shall be assessed to the owner thereof, except that when it is in the charge or possession of some person other than the owner it may be assessed to the person so in charge or possession of the same. Telegraph and telephone poles, posts, railroad ties, lumber, and all other manufactured forest products shall be deemed to be in the charge or possession of the person in occupancy or possession of the premises upon which the same shall be stored or piled, and the same shall be assessed to such person, unless the owner or some other person residing in the same assessment district, shall be actually and actively in charge and possession thereof, in which case it shall be assessed to such resident owner or other person so in actual charge or possession; but nothing contained in this subsection shall affect or change the rules prescribed in s. 70.13 respecting the district in which such property shall be assessed.

SB623,12,13 (2) Goods For assessments made before January 1, 2022, goods, wares, and merchandise in storage in a commercial storage warehouse or on a public wharf shall be assessed to the owner thereof and not to the warehouse or public wharf, if the operator of the warehouse or public wharf furnishes to the assessor the names and addresses of the owners of all goods, wares, and merchandise not exempt from taxation.

SB623,31 Section 31. 70.19 of the statutes is amended to read:

SB623,12,24 70.19 Assessment, how made; liability and rights of representative. (1) When For assessments made before January 1, 2022, when personal property is assessed under s. 70.18 (1) to a person in charge or possession of the personal property other than the owner, the assessment of that personal property shall be entered upon the assessment roll separately from the assessment of that person's own personal property, adding to the person's name upon the tax roll words briefly indicating that the assessment is made to the person as the person in charge or possession of the property. The failure to enter the assessment separately or to indicate the representative capacity or other relationship of the person assessed shall not affect the validity of the assessment.

SB623,13,15 (2) The For assessments made before January 1, 2022, the person assessed under sub. (1) and s. 70.18 (1) is personally liable for the tax on the property. The person assessed under sub. (1) and s. 70.18 (1) has a personal right of action against the owner of the property for the amount of the taxes; has a lien for that amount upon the property with the rights and remedies for the preservation and enforcement of that lien as provided in ss. 779.45 and 779.48; and is entitled to retain possession of the property until the owner of the property pays the tax on the property or reimburses the person assessed for the tax. The lien and right of possession relate back and exist from the time that the assessment is made, but may be released and discharged by giving to the person assessed such undertaking or other indemnity as the person accepts or by giving the person assessed a bond in the amount and with the sureties as is directed and approved by the circuit court of the county in which the property is assessed, upon 8 days' notice to the person assessed. The bond shall be conditioned to hold the person assessed free and harmless from all costs, expense, liability, or damage by reason of the assessment.

SB623,32 Section 32. 70.20 of the statutes is amended to read:

SB623,14,5 70.20 Owner's liability when personalty assessed to another; action to collect. (1) When For assessments made before January 1, 2022, when personal property shall be assessed to some person in charge or possession thereof, other than the owner, such owner as well as the person so in charge or possession shall be liable for the taxes levied pursuant to such assessment; and the liability of such owner may be enforced in a personal action as for a debt. Such action may be brought in the name of the town, city or village in which such assessment was made, if commenced before the time fixed by law for the return of delinquent taxes, by direction of the treasurer or tax collector of such town, city or village. If commenced after such a return, it shall be brought in the name of the county or other municipality to the treasurer or other officer of which such return shall be made, by direction of such treasurer or other officer. Such action may be brought in any court of this state having jurisdiction of the amount involved and in which jurisdiction may be obtained of the person of such owner or by attachment of the property of such owner.

SB623,14,15 (2) The For assessments made before January 1, 2022, the remedy of attachment may be allowed in such action upon filing an affidavit of the officer by whose direction such action shall be brought, showing the assessment of such property in the assessment district, the amount of tax levied pursuant thereto, that the defendant was the owner of such property at the time as of which the assessment thereof was made, and that such tax remains unpaid in whole or in part, and the amount remaining unpaid. The proceedings in such actions and for enforcement of the judgment obtained therein shall be the same as in ordinary actions for debt as near as may be, but no property shall be exempt from attachment or execution issued upon a judgment against the defendant in such action.

SB623,15,2 (3) The For assessments made before January 1, 2022 and taxes levied before January 1, 2022, the assessment and tax rolls in which such assessment and tax shall be entered shall be prima facie evidence of such assessment and tax and of the justice and regularity thereof; and the same, with proof of the ownership of such property by the defendant at the time as of which the assessment was made and of the nonpayment of such tax, shall be sufficient to establish the liability of the defendant. Such liability shall not be affected and such action shall not be defeated by any omission or irregularity in the assessment or tax proceedings not affecting the substantial justice and equity of the tax. The provisions of this section shall not impair or affect the remedies given by other provisions of law for the collection or enforcement of such tax against the person to whom the property was assessed.

SB623,33 Section 33. 70.21 (1) of the statutes is amended to read:

SB623,15,8 70.21 (1) Except For assessments made before January 1, 2022, except as provided in sub. (2), the personal property of a partnership may be assessed in the names of the persons composing the partnership, so far as known or in the firm name or title under which the partnership business is conducted, and each partner shall be liable for the taxes levied on the partnership's personal property.

SB623,34 Section 34. 70.21 (1m) (intro.) of the statutes is amended to read:

SB623,15,12 70.21 (1m) (intro.) Undistributed For assessments made before January 1, 2022, undistributed personal property belonging to the estate of a decedent shall be assessed as follows:

SB623,35 Section 35. 70.21 (2) of the statutes is amended to read: