Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB375 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 375
5	5	August 4, 2023 - Introduced by Representatives ZIMMERMAN, PETRYK, GREEN,
6	6	MAGNAFICI, O'CONNOR and WITTKE, cosponsored by Senators STAFSHOLT,
7	7	BALLWEG, BRADLEY and QUINN. Referred to Committee on Ways and Means.
8	8	AN ACT to amend 71.10 (7) (a) and 71.10 (7) (c); and to create 71.10 (7) (d) of the
9	9	statutes; relating to: Wisconsin and Minnesota income tax reciprocity.
10	10	Analysis by the Legislative Reference Bureau
11	11	This bill requires the Department of Revenue, in conjunction with the
12	12	Minnesota Department of Revenue, to conduct a study on the effects of instituting
13	13	income tax reciprocity between Wisconsin and Minnesota. The study must
14	14	determine the number of residents of each state who earn income in the other state,
15	15	the total amount of income earned in each state by such taxpayers, and the amount
16	16	of tax revenue that would be forgone by each state if reciprocity were instituted.
17	17	Under reciprocity, taxpayers must pay taxes only in their state of residence on
18	18	income earned in the other state. The study is to be based on income tax data for
19	19	taxable years 2020 and 2021 and any other information each DOR determines is
20	20	necessary to complete the study. The results of the study must be submitted to the
21	21	legislature and governor of each state no later than December 31, 2024.
22	22	The bill also requires that any income tax reciprocity agreement between
23	23	Wisconsin and Minnesota applies to wages, salaries, tips, and commissions received
24	24	by persons who reside in this state or Minnesota for at least 183 days during their
25	25	taxable years and return to their state of residence at least once per month; does not
26	26	have an expiration or termination date; and is approved by both the governor and the
27	27	Joint Committee on Finance. Under the bill, Wisconsin may not make a payment to
28	28	Minnesota for any prior taxable years before the reciprocity agreement takes effect,
29	29	and a reciprocity agreement may not be revised unless approved by JCF.
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33	33	ASSEMBLY BILL 375
34	34	For further information see the state fiscal estimate, which will be printed as
35	35	an appendix to this bill.
36	36	The people of the state of Wisconsin, represented in senate and assembly, do
37	37	enact as follows:
38	38	SECTION 1. 71.10 (7) (a) of the statutes is amended to read:
39	39	71.10 (7) (a) For purposes of income tax reciprocity reached with the state of
40	40	Minnesota under s. 71.05 (2), whenever the income taxes on residents of one state
41	41	which would have been paid to the 2nd state without reciprocity exceed the income
42	42	taxes on residents of the 2nd state which would have been paid to the first state
43	43	without reciprocity, the state with the net revenue loss shall receive from the other
44	44	state the amount of the loss. Interest shall be payable on all delinquent balances
45	45	relating to taxable years beginning after the first December 31, 1977 after the date
46	46	identified in the notice under 2023 Wisconsin Act .... (this act), section 4 (2). The
47	47	secretary of revenue may enter into agreements with the state of Minnesota
48	48	specifying the reciprocity payment due date, conditions constituting delinquency,
49	49	interest rates and the method of computing interest due on any delinquent amounts.
50	50	SECTION 2. 71.10 (7) (c) of the statutes is amended to read:
51	51	71.10 (7) (c) For taxable years beginning after the first December 31, 2000 after
52	52	the date identified in the notice under 2023 Wisconsin Act .... (this act), section 4 (2),
53	53	this state shall pay Minnesota interest on any reciprocity payment that is due under
54	54	this subsection. Interest shall be calculated according to the Laws of Minnesota 2002
55	55	Chapter 377, or at another rate and under another method of calculation that is
56	56	agreed to by Minnesota and Wisconsin.
57	57	SECTION 3. 71.10 (7) (d) of the statutes is created to read:
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80	80	SECTION 3
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82	82	71.10 (7) (d) 1. No agreement that is entered into under this subsection on or
83	83	after the effective date of this subdivision .... [LRB inserts date], may take effect
84	84	unless all of the following apply:
85	85	a. The agreement applies to wages, salaries, tips, and commissions received as
86	86	an employee by persons who reside in this state or Minnesota for at least 183 days
87	87	during their taxable years and who return to their state of residence at least once per
88	88	month.
89	89	b. The agreement contains no expiration or termination date.
90	90	c. The agreement is approved by the governor and by the joint committee on
91	91	finance under s. 13.10.
92	92	2. a. This state may not make a payment under an agreement entered into
93	93	under this subsection for any taxable year ending before the effective date of this
94	94	subd. 2. a. .... [LRB inserts date].
95	95	b. An agreement entered into under this subsection may provide for making
96	96	estimated payments during a year and for a final payment for the year to be made
97	97	after computing the amount of the loss for the year as described in par. (b).
98	98	3. An agreement entered into under this subsection that takes effect on or after
99	99	the effective date of this subdivision .... [LRB inserts date], may not be revised unless
100	100	approved by the joint committee on finance under s. 13.10.
101	101	4. An agreement entered into under this subsection may require that a study
102	102	be conducted no more than once every 5 years to obtain information necessary to
103	103	determine payments under this subsection.
104	104	SECTION 4.0Nonstatutory provisions.
105	105	(1) DEPARTMENT OF REVENUE STUDY.
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131	131	SECTION 4 ASSEMBLY BILL 375
132	132	(a) In this subsection, “income from personal services” means wages, salaries,
133	133	tips, and commissions received as an employee.
134	134	(b) The department of revenue, in conjunction with the Minnesota department
135	135	of revenue, shall conduct a study to determine at least all of the following:
136	136	1. The number of residents of each state who earn income from personal
137	137	services in the other state, including an assessment of population trends in the
138	138	counties along the border between the 2 states.
139	139	2. The total amount of income from personal services earned in each state by
140	140	the taxpayers described in subd. 1.
141	141	3. The amount of tax revenue that would be foregone by each state if an income
142	142	tax reciprocity agreement were instituted between the 2 states under which the
143	143	taxpayers were required to pay income taxes on such income only in their state of
144	144	residence.
145	145	(c) The study under par. (b) shall be conducted as soon as practicable, using
146	146	information obtained from each state's income tax returns for taxable years 2020 and
147	147	2021 and from any other source of information the departments determine is
148	148	necessary to complete the study.
149	149	(d) No later than December 31, 2024, the department of revenue shall submit
150	150	a report containing the results of the study under par. (b) to the legislature under s.
151	151	13.172 (2), the joint committee on finance, the governor, and the governor and
152	152	legislature of Minnesota.
153	153	(2) NOTICE OF APPROVED RECIPROCITY AGREEMENT. As soon as practicable after a
154	154	reciprocity agreement under s. 71.10 (7) is approved by the governor and the joint
155	155	committee on finance, the department of revenue shall send a notice to the legislative
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182	182	SECTION 4
183	183	ASSEMBLY BILL 375
184	184	reference bureau for publication in the Wisconsin Administrative Register that
185	185	states the date on which the agreement was approved.
186	186	(END)
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