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2023 - 2024 LEGISLATURE
2023 ASSEMBLY BILL 262
May 8, 2023 - Introduced by Representatives O 'CONNOR, MACCO, ALLEN,
ARMSTRONG, WITTKE, MAGNAFICI, BRANDTJEN, MURPHY, DITTRICH, MOSES,
GUNDRUM and BEHNKE. Referred to Committee on Ways and Means.
***AUTHORS SUBJECT TO CHANGE***
AN ACT to amend 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06 (2) (j) (intro.),
71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.125 (1), 71.125 (2),
71.17 (6), 71.64 (9) (b) (intro.), 71.67 (5) (a) and 71.67 (5m); and to create 71.06
(1r), 71.06 (2) (k), 71.06 (2) (km), 71.06 (2) (L), 71.06 (2) (Lm), 71.06 (2) (m), 71.06
(2) (mm), 71.06 (2) (n), 71.06 (2) (nn), 71.06 (2) (o), 71.06 (2) (oo), 71.06 (2e) (be),
71.06 (2e) (bm), 71.06 (2e) (bs), 71.06 (2e) (bt), 71.06 (2e) (bu), 71.06 (2s) (e),
71.06 (2s) (f), 71.06 (2s) (g), 71.06 (2s) (h), 71.06 (2s) (i) and 71.06 (4) of the
statutes; relating to: phase-in changes to individual income tax rates and
brackets.
Analysis by the Legislative Reference Bureau
This bill modifies the individual income tax rates and brackets beginning with
the 2024 tax year and ending with the 2028 tax year. The bill decreases individual
income tax rates each year for each tax bracket. Beginning with tax year 2027, the
tax rate for individuals whose income is $7,500 or less, before being adjusted for
inflation, is zero. Beginning with tax year 2028, the tax rate for individuals whose
income exceeds $7,500, before being adjusted for inflation, is 4.5 percent.
Under current law, there are four income tax brackets for single individuals,
certain fiduciaries, heads of households, and married persons, and the brackets are
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indexed for inflation. The rate of taxation under current law for the lowest bracket
for single individuals, certain fiduciaries, heads of households, and married persons
is 3.54 percent of taxable income. The rate for the second bracket is 4.65 percent.
The rate for the third bracket is 5.3 percent. And the rate for the highest bracket is
7.65 percent. Before bracket indexing, the four brackets for individuals, certain
fiduciaries, and heads of households, to which the above rates apply, are as follows:
1) taxable income from $0 to $7,500; 2) taxable income exceeding $7,500 but not
exceeding $15,000; 3) taxable income exceeding $15,000 but not exceeding $225,000;
and 4) taxable income exceeding $225,000.
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 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:
SECTION 1. 71.06 (1q) (intro.) of the statutes is amended to read:
71.06 (1q) FIDUCIARIES, SINGLE INDIVIDUALS, AND HEADS OF HOUSEHOLDS; AFTER
2012 AND BEFORE 2024. (intro.) The tax to be assessed, levied, and collected upon the
taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning
trust or reserve funds, and single individuals and heads of households shall be
computed at the following rates for taxable years beginning after December 31, 2012,
and before January 1, 2024:
SECTION 2. 71.06 (1r) of the statutes is created to read:
71.06 (1r) FIDUCIARIES, SINGLE INDIVIDUALS, AND HEADS OF HOUSEHOLDS; AFTER
2023. (a) The tax to be assessed, levied, and collected upon the taxable incomes of all
fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
single individuals and heads of households shall be computed at the following rates
for taxable years beginning after December 31, 2023, and before January 1, 2025,
except as provided under s. 71.06 (4):
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1. On all taxable income from $0 to $7,500, 3.15 percent.
2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5
percent.
3. On all taxable income exceeding $15,000 but not exceeding $225,000, 5
percent.
4. On all taxable income exceeding $225,000, 7.40 percent.
(b) The tax to be assessed, levied, and collected upon the taxable incomes of all
fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
single individuals and heads of households shall be computed at the following rates
for taxable years beginning after December 31, 2024, and before January 1, 2026,
except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $7,500, 2.20 percent.
2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5
percent.
3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.75
percent.
4. On all taxable income exceeding $225,000, 6.70 percent.
(c) The tax to be assessed, levied, and collected upon the taxable incomes of all
fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
single individuals and heads of households shall be computed at the following rates
for taxable years beginning after December 31, 2025, and before January 1, 2027,
except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $7,500, 1.25 percent.
2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5
percent.
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3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5
percent.
4. On all taxable income exceeding $225,000, 6 percent.
(d) The tax to be assessed, levied, and collected upon the taxable incomes of all
fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
single individuals and heads of households shall be computed at the following rates
for taxable years beginning after December 31, 2026, and before January 1, 2028,
except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $7,500, 0 percent.
2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5
percent.
3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5
percent.
4. On all taxable income exceeding $225,000, 5.20 percent.
(e) The tax to be assessed, levied, and collected upon the taxable incomes of all
fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
single individuals and heads of households shall be computed at the following rates
percent for taxable years beginning after December 31, 2027, except as provided
under s. 71.06 (4):
1. On all taxable income from $0 to $7,500, 0 percent.
2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5
percent.
3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5
percent.
4. On all taxable income exceeding $225,000, 4.5 percent.
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SECTION 3. 71.06 (2) (i) (intro.) of the statutes is amended to read:
71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after
December 31, 2012, and before January 1, 2024:
SECTION 4. 71.06 (2) (j) (intro.) of the statutes is amended to read:
71.06 (2) (j) (intro.) For married persons filing separately, for taxable years
beginning after December 31, 2012, and before January 1, 2024:
SECTION 5. 71.06 (2) (k) of the statutes is created to read:
71.06 (2) (k) For joint returns, for taxable years beginning after December 31,
2023, and before January 1, 2025, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $10,000, 3.15 percent.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5
percent.
3. On all taxable income exceeding $20,000 but not exceeding $300,000, 5
percent.
4. On all taxable income exceeding $300,000, 7.40 percent.
SECTION 6. 71.06 (2) (km) of the statutes is created to read:
71.06 (2) (km) For married persons filing separately, for taxable years
beginning after December 31, 2023, and before January 1, 2025, except as provided
under s. 71.06 (4):
1. On all taxable income from $0 to $5,000, 3.15 percent.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5
percent.
3. On all taxable income exceeding $10,000 but not exceeding $150,000, 5
percent.
4. On all taxable income exceeding $150,000, 7.40 percent.
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SECTION 7 ASSEMBLY BILL 262
SECTION 7. 71.06 (2) (L) of the statutes is created to read:
71.06 (2) (L) For joint returns, for taxable years beginning after December 31,
2024, and before January 1, 2026, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $10,000, 2.20 percent.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5
percent.
3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.75
percent.
4. On all taxable income exceeding $300,000, 6.70 percent.
SECTION 8. 71.06 (2) (Lm) of the statutes is created to read:
71.06 (2) (Lm) For married persons filing separately, for taxable years
beginning after December 31, 2024, and before January 1, 2026, except as provided
under s. 71.06 (4):
1. On all taxable income from $0 to $5,000, 2.20 percent.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5
percent.
3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.75
percent.
4. On all taxable income exceeding $150,000, 6.70 percent.
SECTION 9. 71.06 (2) (m) of the statutes is created to read:
71.06 (2) (m) For joint returns, for taxable years beginning after December 31,
2025, and before January 1, 2027, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $10,000, 1.25 percent.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5
percent.
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3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.5
percent.
4. On all taxable income exceeding $300,000, 6 percent.
SECTION 10. 71.06 (2) (mm) of the statutes is created to read:
71.06 (2) (mm) For married persons filing separately, for taxable years
beginning after December 31, 2025, and before January 1, 2027, except as provided
under s. 71.06 (4):
1. On all taxable income from $0 to $5,000, 1.25 percent.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5
percent.
3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.5
percent.
4. On all taxable income exceeding $150,000, 6 percent.
SECTION 11. 71.06 (2) (n) of the statutes is created to read:
71.06 (2) (n) For joint returns, for taxable years beginning after December 31,
2026, and before January 1, 2028, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $10,000, 0 percent.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5
percent.
3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.5
percent.
4. On all taxable income exceeding $300,000, 5.20 percent.
SECTION 12. 71.06 (2) (nn) of the statutes is created to read:
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71.06 (2) (nn) For married persons filing separately, for taxable years
beginning after December 31, 2026, and before January 1, 2028, except as provided
under s. 71.06 (4):
1. On all taxable income from $0 to $5,000, 0 percent.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5
percent.
3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.5
percent.
4. On all taxable income exceeding $150,000, 5.20 percent.
SECTION 13. 71.06 (2) (o) of the statutes is created to read:
71.06 (2) (o) For joint returns, for taxable years beginning after December 31,
2027, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $10,000, 0 percent.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5
percent.
3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.5
percent.
4. On all taxable income exceeding $300,000, 4.5 percent.
SECTION 14. 71.06 (2) (oo) of the statutes is created to read:
71.06 (2) (oo) For married persons filing separately, for taxable years beginning
after December 31, 2027, except as provided under s. 71.06 (4):
1. On all taxable income from $0 to $5,000, 0 percent.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5
percent.
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3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.5
percent.
4. On all taxable income exceeding $150,000, 4.5 percent.
SECTION 15. 71.06 (2e) (a) of the statutes is amended to read:
71.06 (2e) (a) For taxable years beginning after December 31, 1998, and before
January 1, 2000, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1m) and (2)
(c) and (d), and for taxable years beginning after December 31, 1999, and before
January 1, 2024, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1n), (1p) (a)
to (c), (1q) (a) and (b), and (2) (e), (f), (g) 1. to 3., (h) 1. to 3., (i) 1. and 2., and (j) 1. and
2., shall be increased each year by a percentage equal to the percentage change
between the U.S. consumer price index for all urban consumers, U.S. city average,
for the month of August of the previous year and the U.S. consumer price index for
all urban consumers, U.S. city average, for the month of August 1997, as determined
by the federal department of labor, except that for taxable years beginning after
December 31, 2000, and before January 1, 2002, the dollar amount in the top bracket
under subs. (1p) (c) and (d), (2) (g) 3. and 4. and (h) 3. and 4. shall be increased by a
percentage equal to the percentage change between the U.S. consumer price index
for all urban consumers, U.S. city average, for the month of August of the previous
year and the U.S. consumer price index for all urban consumers, U.S. city average,
for the month of August 1999, as determined by the federal department of labor,
except that for taxable years beginning after December 31, 2011, the adjustment may
occur only if the resulting amount is greater than the corresponding amount that was
calculated for the previous year.
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SECTION 16 ASSEMBLY BILL 262
SECTION 16. 71.06 (2e) (b) of the statutes is amended to read:
71.06 (2e) (b) For taxable years beginning after December 31, 2009, and before
January 1, 2024, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1p) (d), (1q)
(c), and (2) (g) 4., (h) 4., (i) 3., and (j) 3., and the dollar amount in the top bracket under
subs. (1p) (e), (1q) (d), and (2) (g) 5., (h) 5., (i) 4., and (j) 4., shall be increased each year
by a percentage equal to the percentage change between the U.S. consumer price
index for all urban consumers, U.S. city average, for the month of August of the
previous year and the U.S. consumer price index for all urban consumers, U.S. city
average, for the month of August 2008, as determined by the federal department of
labor, except that for taxable years beginning after December 31, 2011, the
adjustment may occur only if the resulting amount is greater than the corresponding
amount that was calculated for the previous year.
SECTION 17. 71.06 (2e) (be) of the statutes is created to read:
71.06 (2e) (be) 1. For taxable years beginning after December 31, 2023, and
before January 1, 2025, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1r) (a) 1.
and 2. and (2) (k) 1. and 2. and (km) 1. and 2., shall be increased by a percentage equal
to the percentage change between the U.S. consumer price index for all urban
consumers, U.S. city average, for the month of August of the previous year and the
U.S. consumer price index for all urban consumers, U.S. city average, for the month
of August 1997, as determined by the federal department of labor, except that the
adjustment may occur only if the resulting amount is greater than the corresponding
amount that was calculated for the previous year.
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2. For taxable years beginning after December 31, 2023, and before January
1, 2025, the maximum dollar amount in each tax bracket, and the corresponding
minimum dollar amount in the next bracket, under subs. (1r) (a) 3. and (2) (k) 3. and
(km) 3., and the dollar amount in the top bracket under subs. (1r) (a) 4. and (2) (k)
4. and (km) 4., shall be increased by a percentage equal to the percentage change
between the U.S. consumer price index for all urban consumers, U.S. city average,
for the month of August of the previous year and the U.S. consumer price index for
all urban consumers, U.S. city average, for the month of August 2008, as determined
by the federal department of labor, except that the adjustment may occur only if the
resulting amount is greater than the corresponding amount that was calculated for
the previous year.
SECTION 18. 71.06 (2e) (bm) of the statutes is created to read:
71.06 (2e) (bm) 1. For taxable years beginning after December 31, 2024, and
before January 1, 2026, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1r) (b) 1.
and 2. and (2) (L) 1. and 2. and (Lm) 1. and 2. shall be increased by a percentage equal
to the percentage change between the U.S. consumer price index for all urban
consumers, U.S. city average, for the month of August of the previous year and the
U.S. consumer price index for all urban consumers, U.S. city average, for the month
of August 1997, as determined by the federal department of labor, except that the
adjustment may occur only if the resulting amount is greater than the corresponding
amount that was calculated for the previous year.
2. For taxable years beginning after December 31, 2024, and before January
1, 2026, the maximum dollar amount in each tax bracket, and the corresponding
minimum dollar amount in the next bracket, under subs. (1r) (b) 3. and (2) (L) 3. and
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(Lm) 3., and the dollar amount in the top bracket under subs. (1r) (b) 4. and (2) (L)
4. and (Lm) 4., shall be increased by a percentage equal to the percentage change
between the U.S. consumer price index for all urban consumers, U.S. city average,
for the month of August of the previous year and the U.S. consumer price index for
all urban consumers, U.S. city average, for the month of August 2008, as determined
by the federal department of labor, except that the adjustment may occur only if the
resulting amount is greater than the corresponding amount that was calculated for
the previous year.
SECTION 19. 71.06 (2e) (bs) of the statutes is created to read:
71.06 (2e) (bs) 1. For taxable years beginning after December 31, 2025, and
before January 1, 2027, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1r) (c) 1.
and 2. and (2) (m) 1. and 2. and (mm) 1. and 2., shall be increased by a percentage
equal to the percentage change between the U.S. consumer price index for all urban
consumers, U.S. city average, for the month of August of the previous year and the
U.S. consumer price index for all urban consumers, U.S. city average, for the month
of August 1997, as determined by the federal department of labor, except that the
adjustment may occur only if the resulting amount is greater than the corresponding
amount that was calculated for the previous year.
2. For taxable years beginning after December 31, 2025, and before January
1, 2027, the maximum dollar amount in each tax bracket, and the corresponding
minimum dollar amount in the next bracket, under subs. (1r) (c) 3. and (2) (m) 3. and
(mm) 3., and the dollar amount in the top bracket under subs. (1r) (c) 4. and (2) (m)
4. and (mm) 4., shall be increased by a percentage equal to the percentage change
between the U.S. consumer price index for all urban consumers, U.S. city average,
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for the month of August of the previous year and the U.S. consumer price index for
all urban consumers, U.S. city average, for the month of August 2008, as determined
by the federal department of labor, except that the adjustment may occur only if the
resulting amount is greater than the corresponding amount that was calculated for
the previous year.
SECTION 20. 71.06 (2e) (bt) of the statutes is created to read:
71.06 (2e) (bt) 1. For taxable years beginning after December 31, 2026, and
before January 1, 2028, the maximum dollar amount in each tax bracket, and the
corresponding minimum dollar amount in the next bracket, under subs. (1r) (d) 1.
and 2. and (2) (n) 1. and 2. and (nn) 1. and 2., shall be increased by a percentage equal
to the percentage change between the U.S. consumer price index for all urban
consumers, U.S. city average, for the month of August of the previous year and the
U.S. consumer price index for all urban consumers, U.S. city average, for the month
of August 1997, as determined by the federal department of labor, except that the
adjustment may occur only if the resulting amount is greater than the corresponding
amount that was calculated for the previous year.
2. For taxable years beginning after December 31, 2026, and before January
1, 2028, the maximum dollar amount in each tax bracket, and the corresponding
minimum dollar amount in the next bracket, under subs. (1r) (d) 3. and (2) (n) 3. and
(nn) 3., and the dollar amount in the top bracket under subs. (1r) (d) 4. and (2) (n) 4.
and (nn) 4., shall be increased by a percentage equal to the percentage change
between the U.S. consumer price index for all urban consumers, U.S. city average,
for the month of August of the previous year and the U.S. consumer price index for
all urban consumers, U.S. city average, for the month of August 2008, as determined
by the federal department of labor, except that the adjustment may occur only if the
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resulting amount is greater than the corresponding amount that was calculated for
the previous year.
SECTION 21. 71.06 (2e) (bu) of the statutes is created to read:
71.06 (2e) (bu) 1. For taxable years beginning after December 31, 2027, the
maximum dollar amount in each tax bracket, and the corresponding minimum dollar
amount in the next bracket, under subs. (1r) (e) 1. and 2. and (2) (o) 1. and 2. and (oo)
1. and 2., shall be increased by a percentage equal to the percentage change between
the U.S. consumer price index for all urban consumers, U.S. city average, for the
month of August of the previous year and the U.S. consumer price index for all urban
consumers, U.S. city average, for the month of August 1997, as determined by the
federal department of labor, except that the adjustment may occur only if the
resulting amount is greater than the corresponding amount that was calculated for
the previous year.
2. For taxable years beginning after December 31, 2027, the maximum dollar
amount in each tax bracket, and the corresponding minimum dollar amount in the
next bracket, under subs. (1r) (e) 3. and (2) (o) 3. and (oo) 3., and the dollar amount
in the top bracket under subs. (1r) (e) 4. and (2) (o) 4. and (oo) 4., shall be increased
by a percentage equal to the percentage change between the U.S. consumer price
index for all urban consumers, U.S. city average, for the month of August of the
previous year and the U.S. consumer price index for all urban consumers, U.S. city
average, for the month of August 2008, as determined by the federal department of
labor, except that the adjustment may occur only if the resulting amount is greater
than the corresponding amount that was calculated for the previous year.
SECTION 22. 71.06 (2m) of the statutes is amended to read:
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71.06 (2m) RATE CHANGES. If a rate under sub. (1), (1m), (1n), (1p), (1q), (1r),
or (2) changes during a taxable year, the taxpayer shall compute the tax for that
taxable year by the methods applicable to the federal income tax under section 15 of
the Internal Revenue Code.
SECTION 23. 71.06 (2s) (d) of the statutes is amended to read:
71.06 (2s) (d) For taxable years beginning after December 31, 2000, and before
January 1, 2024, with respect to nonresident individuals, including individuals
changing their domicile into or from this state, the tax brackets under subs. (1p), (1q),
and (2) (g), (h), (i), and (j) shall be multiplied by a fraction, the numerator of which
is Wisconsin adjusted gross income and the denominator of which is federal adjusted
gross income. In this paragraph, for married persons filing separately “adjusted
gross income" means the separate adjusted gross income of each spouse, and for
married persons filing jointly “adjusted gross income" means the total adjusted gross
income of both spouses. If an individual and that individual's spouse are not both
domiciled in this state during the entire taxable year, the tax brackets under subs.
(1p), (1q), and (2) (g), (h), (i), and (j) on a joint return shall be multiplied by a fraction,
the numerator of which is their joint Wisconsin adjusted gross income and the
denominator of which is their joint federal adjusted gross income.
SECTION 24. 71.06 (2s) (e) of the statutes is created to read:
71.06 (2s) (e) For taxable years beginning after December 31, 2023, and before
January 1, 2025, with respect to nonresident individuals, including individuals
changing their domicile into or from this state, the tax brackets under subs. (1r) (a)
and (2) (k) and (km) shall be multiplied by a fraction, the numerator of which is
Wisconsin adjusted gross income and the denominator of which is federal adjusted
gross income. In this paragraph, for married persons filing separately “adjusted
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gross income" means the separate adjusted gross income of each spouse, and for
married persons filing jointly “adjusted gross income" means the total adjusted gross
income of both spouses. If an individual and that individual's spouse are not both
domiciled in this state during the entire taxable year, the tax brackets under subs.
(1r) (a) and (2) (k) and (km) on a joint return shall be multiplied by a fraction, the
numerator of which is their joint Wisconsin adjusted gross income and the
denominator of which is their joint federal adjusted gross income.
SECTION 25. 71.06 (2s) (f) of the statutes is created to read:
71.06 (2s) (f) For taxable years beginning after December 31, 2024, and before
January 1, 2026, with respect to nonresident individuals, including individuals
changing their domicile into or from this state, the tax brackets under subs. (1r) (b)
and (2) (L) and (Lm) shall be multiplied by a fraction, the numerator of which is
Wisconsin adjusted gross income and the denominator of which is federal adjusted
gross income. In this paragraph, for married persons filing separately “adjusted
gross income" means the separate adjusted gross income of each spouse, and for
married persons filing jointly “adjusted gross income" means the total adjusted gross
income of both spouses. If an individual and that individual's spouse are not both
domiciled in this state during the entire taxable year, the tax brackets under subs.
(1r) (b) and (2) (L) and (Lm) on a joint return shall be multiplied by a fraction, the
numerator of which is their joint Wisconsin adjusted gross income and the
denominator of which is their joint federal adjusted gross income.
SECTION 26. 71.06 (2s) (g) of the statutes is created to read:
71.06 (2s) (g) For taxable years beginning after December 31, 2025, and before
January 1, 2027, with respect to nonresident individuals, including individuals
changing their domicile into or from this state, the tax brackets under subs. (1r) (c)
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and (2) (m) and (mm) shall be multiplied by a fraction, the numerator of which is
Wisconsin adjusted gross income and the denominator of which is federal adjusted
gross income. In this paragraph, for married persons filing separately “adjusted
gross income" means the separate adjusted gross income of each spouse, and for
married persons filing jointly “adjusted gross income" means the total adjusted gross
income of both spouses. If an individual and that individual's spouse are not both
domiciled in this state during the entire taxable year, the tax brackets under subs.
(1r) (c) and (2) (m) and (mm) on a joint return shall be multiplied by a fraction, the
numerator of which is their joint Wisconsin adjusted gross income and the
denominator of which is their joint federal adjusted gross income.
SECTION 27. 71.06 (2s) (h) of the statutes is created to read:
71.06 (2s) (h) For taxable years beginning after December 31, 2026, and before
January 1, 2028, with respect to nonresident individuals, including individuals
changing their domicile into or from this state, the tax brackets under subs. (1r) (d)
and (2) (n) and (nn) shall be multiplied by a fraction, the numerator of which is
Wisconsin adjusted gross income and the denominator of which is federal adjusted
gross income. In this paragraph, for married persons filing separately “adjusted
gross income" means the separate adjusted gross income of each spouse, and for
married persons filing jointly “adjusted gross income" means the total adjusted gross
income of both spouses. If an individual and that individual's spouse are not both
domiciled in this state during the entire taxable year, the tax brackets under subs.
(1r) (d) and (2) (n) and (nn) on a joint return shall be multiplied by a fraction, the
numerator of which is their joint Wisconsin adjusted gross income and the
denominator of which is their joint federal adjusted gross income.
SECTION 28. 71.06 (2s) (i) of the statutes is created to read:
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71.06 (2s) (i) For taxable years beginning after December 31, 2027, with
respect to nonresident individuals, including individuals changing their domicile
into or from this state, the tax brackets under subs. (1r) (e) and (2) (o) and (oo) shall
be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross
income and the denominator of which is federal adjusted gross income. In this
paragraph, for married persons filing separately “adjusted gross income" means the
separate adjusted gross income of each spouse, and for married persons filing jointly
“adjusted gross income" means the total adjusted gross income of both spouses. If
an individual and that individual's spouse are not both domiciled in this state during
the entire taxable year, the tax brackets under subs. (1r) (e) and (2) (o) and (oo) on
a joint return shall be multiplied by a fraction, the numerator of which is their joint
Wisconsin adjusted gross income and the denominator of which is their joint federal
adjusted gross income.
SECTION 29. 71.06 (4) of the statutes is created to read:
71.06 (4) PHASE-IN ADJUSTMENTS. (a) Notwithstanding subs. (1q), (1r), (2), and
(2e), the rates and brackets, as adjusted under sub. (2s), for taxable years beginning
after December 31, 2024, shall not take effect in any taxable year if in the preceding
fiscal year general fund tax collections, as indicated by the department's preliminary
actual general fund tax collection report, are less than the amount of general fund
tax collections reported for fiscal year 2019-20, multiplied by the percentage change,
if not negative, between the U.S. consumer price index for all urban consumers, U.S.
city average, for the month of August of the previous year and the U.S. consumer
price index for all urban consumers, U.S. city average, for the month of August 2020,
as determined by the federal department of labor.
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(b) In any taxable year beginning after December 31, 2024, if in the preceding
fiscal year general fund tax collections, as indicated by the department's preliminary
actual general fund tax collection report, are less than the amount determined under
par. (a), the rates and brackets shall be the rates and brackets in effect for the
previous taxable year, as adjusted under sub. (2s), and the department shall delay
the implementation of the rates and brackets for taxable years beginning after
December 31, 2024, accordingly. For each taxable year beginning after December 31,
2024, the department shall make the determination under par. (a) no later than
September 1 following the close of the preceding fiscal year. If the department
determines that that a reduction in rates, as provided under subs. (1r) and (2) (k) to
(oo), shall take effect for the following taxable year, the department shall shall
update the individual income tax withholding tables under s. 71.64 (9) to reflect the
tax rates, brackets, and sliding scale standard deduction that are in effect on
January 1 of the corresponding taxable year. Rate reductions determined under this
subsection occur successively.
SECTION 30. 71.125 (1) of the statutes is amended to read:
71.125 (1) Except as provided in sub. (2), the tax imposed by this chapter on
individuals and the rates under s. 71.06 (1), (1m), (1n), (1p), (1q), (1r), and (2) shall
apply to the Wisconsin taxable income of estates or trusts, except nuclear
decommissioning trust or reserve funds, and that tax shall be paid by the fiduciary.
SECTION 31. 71.125 (2) of the statutes is amended to read:
71.125 (2) Each electing small business trust, as defined in section 1361 (e) (1)
of the Internal Revenue Code, is subject to tax at the highest rate under s. 71.06 (1),
(1m), (1n), (1p), or (1q), or (1r), whichever taxable year is applicable, on its income
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as computed under section 641 of the Internal Revenue Code, as modified by s. 71.05
(6) to (12), (19) and (20).
SECTION 32. 71.17 (6) of the statutes is amended to read:
71.17 (6) FUNERAL TRUSTS. If a qualified funeral trust makes the election under
section 685 of the Internal Revenue Code for federal income tax purposes, that
election applies for purposes of this chapter and each trust shall compute its own tax
and shall apply the rates under s. 71.06 (1), (1m), (1n), (1p), or (1q), or (1r).
SECTION 33. 71.64 (9) (b) (intro.) of the statutes is amended to read:
71.64 (9) (b) (intro.) The department shall from time to time adjust the
withholding tables to reflect any changes in income tax rates, any applicable surtax
or any changes in dollar amounts in s. 71.06 (1), (1m), (1n), (1p), (1q), (1r), and (2)
resulting from statutory changes, except as follows:
SECTION 34. 71.67 (5) (a) of the statutes is amended to read:
71.67 (5) (a) Wager winnings. A person holding a license to sponsor and
manage races under s. 562.05 (1) (b) or (c) shall withhold from the amount of any
payment of pari-mutuel winnings under s. 562.065 (3) (a) or (3m) (a) an amount
determined by multiplying the amount of the payment by the highest rate applicable
to individuals under s. 71.06 (1) (a) to (c), (1m), (1n), (1p), or (1q), or (1r) if the amount
of the payment is more than $1,000.
SECTION 35. 71.67 (5m) of the statutes is amended to read:
71.67 (5m) WITHHOLDING FROM PAYMENTS TO PURCHASE ASSIGNMENT OF LOTTERY
PRIZE. A person that purchases an assignment of a lottery prize shall withhold from
the amount of any payment made to purchase the assignment the amount that is
determined by multiplying the amount of the payment by the highest rate applicable
to individuals under s. 71.06 (1) (a) to (c), (1m), (1n), (1p), or (1q), or (1r). Subsection
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(5) (b), (c) and (d), as it applies to the amounts withheld under sub. (5) (a), applies
to the amount withheld under this subsection.
(END)
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