Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB658 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 658
5	5	November 9, 2023 - Introduced by Representatives KATSMA, BORN, DALLMAN,
6	6	EDMING, KURTZ, MURSAU, NEDWESKI, NOVAK, O'CONNOR, PENTERMAN, PLUMER,
7	7	SCHUTT, STEFFEN, WICHGERS and JACOBSON, cosponsored by Senators
8	8	MARKLEIN, BALLWEG, PFAFF and TOMCZYK. Referred to Committee on Ways and
9	9	Means.
10	10	*AUTHORS SUBJECT TO CHANGE*
11	11	AN ACT to repeal 565.32 (3) (a) 2. c.; to renumber and amend 71.05 (6) (b) 25.;
12	12	to amend 71.05 (25m) (c), 71.26 (3) (vm) 2., 71.34 (1k) (p) 2., 71.45 (2) (a) 21.
13	13	b., 71.64 (6) (b), 71.775 (3) (a) 2. and 565.30 (3) (a) 1.; and to create 71.05 (6)
14	14	(b) 25. a. and b., 77.54 (71) and 565.30 (3) (a) 3. of the statutes; relating to: a
15	15	sales tax exemption for road-building equipment; increasing the income tax
16	16	withholding threshold for nonresidents; modifying the certification
17	17	requirement for a qualified opportunity fund; prohibiting certain lottery
18	18	games; and extending the capital gains exclusion to family members who
19	19	inherit certain farms organized as a partnership or limited liability company.
20	20	Analysis by the Legislative Reference Bureau
21	21	This bill makes the following changes to current law provisions administered
22	22	by the Department of Revenue:
23	23	Road-building equipment
24	24	The bill creates a sales and use tax exemption for the sale of portable machinery
25	25	and equipment used primarily to crush, mill, produce, or pulverize asphalt, concrete,
26	26	gravel, rock, or aggregate base for road or commercial surface lot construction or
27	27	resurfacing.
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39	39	Withholding thresholds
40	40	Under current law, generally, every employer must, at the time of paying an
41	41	employee, withhold from the employee's wages attributable to this state an amount
42	42	determined pursuant to the withholding tables prepared by the Department of
43	43	Revenue in order to pay for state and federal taxes and other obligations and
44	44	benefits. However, an employer is not required to withhold amounts from an
45	45	employee who is not a resident of this state if the total amount of the annual wages
46	46	attributable to this state paid by the employer to that employee is less than $1,500.
47	47	In addition, a pass-through entity, such as a partnership or limited liability
48	48	company, is not required to withhold amounts paid to a partner, member,
49	49	shareholder, or beneficiary if the total annual wages attributable to this state paid
50	50	to that partner, member, shareholder, or beneficiary is less than $1,000.
51	51	The bill increases the withholding thresholds for nonresident employees so that
52	52	no withholding is required for nonresident employees if the total amount of annual
53	53	wages attributable to this state is less than $2,000.
54	54	Qualified opportunity funds
55	55	Current law allows a taxpayer, for state tax purposes, to claim a capital gains
56	56	exclusion equal to the gain excluded from federal gross income in the taxable year
57	57	for an investment held in a Wisconsin qualified opportunity fund for a specified
58	58	minimum period, typically five to seven years. A “Wisconsin qualified opportunity
59	59	fund” is a fund that holds at least 90 percent of its assets in qualified opportunity zone
60	60	property in this state, as determined under federal law. Current state law requires
61	61	a Wisconsin qualified opportunity fund to certify to its investors and DOR that the
62	62	fund qualifies as a WQOF no later than January 31 following the close of the fund's
63	63	taxable year. Under the bill, the certification must be made to investors and DOR
64	64	no later than the due date, including extensions, of the fund's corresponding income
65	65	or franchise tax return. The bill also requires a WQOF to make the certification in
66	66	the form and manner prescribed by DOR.
67	67	Lottery games
68	68	Under current law, the administrator of the Lottery Division of DOR
69	69	determines the particular features of and procedures for each lottery game offered.
70	70	Current law requires that the features and procedures be in written form and
71	71	accessible to the public and include the name and theme of the game, the price of the
72	72	lottery tickets, the frequency of drawings, and the prize structure, including the
73	73	number and value of the prizes. The bill eliminates the requirement for estimating
74	74	the amounts of prizes and the odds of a particular lottery ticket or lottery share
75	75	winning each prize when the prize or odds are dependent on the number of
76	76	participants in the game or drawing.
77	77	Under current law, a person who holds a winning lottery ticket or lottery share
78	78	may claim a prize within 180 days after the drawing or other selection in which the
79	79	prize is won. A person who holds a winning ticket or share for an instant game or
80	80	scratch-off game may claim a prize within 180 days after the game's end date, as
81	81	determined by the administrator. Under the bill, the administrator may determine
82	82	a shorter period for which to claim a winning lottery ticket or lottery share in a
83	83	multijurisdictional lottery secondary or subsequent chance drawing or game. - 3 -2023 - 2024 Legislature
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87	87	Farm assets
88	88	Current law provides a capital gains income tax exclusion for assets used in
89	89	farming that are held more than one year and sold or transferred to persons who are
90	90	related to the seller. Under current law, “assets used in farming” includes shares in
91	91	a corporation or trust engaged in farming, if it has no more than 15 shareholders or
92	92	beneficiaries, it has no more than two classes of shares, and all its shareholders or
93	93	beneficiaries are natural persons. Under the bill, “assets used in farming” also
94	94	includes ownership interest in a partnership or limited liability company, if the
95	95	partnership or limited liability company has 15 or fewer partners or members and
96	96	all partners or members are natural persons.
97	97	Because this bill relates to an exemption from state or local taxes, it may be
98	98	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
99	99	as an appendix to the bill.
100	100	For further information see the state and local fiscal estimate, which will be
101	101	printed as an appendix to this bill.
102	102	The people of the state of Wisconsin, represented in senate and assembly, do
103	103	enact as follows:
104	104	SECTION 1. 71.05 (6) (b) 25. of the statutes is renumbered 71.05 (6) (b) 25.
105	105	(intro.) and amended to read:
106	106	71.05 (6) (b) 25. (intro.) All gains that are not excluded from taxation under
107	107	subd. 9., on business assets or on assets used in farming, including shares in a
108	108	corporation or trust that meets the standards under s. 182.001 (1), or both, held more
109	109	than one year, that are sold or otherwise disposed of to persons who are related to the
110	110	seller or transferor by blood, marriage or adoption within the 3rd degree of kinship
111	111	as determined under s. 990.001 (16), as computed under the Internal Revenue Code,
112	112	not including amounts treated as ordinary income for federal income tax purposes
113	113	because of the recapture of depreciation or any other reason. For purposes of this
114	114	subdivision, “assets used in farming" includes any of the following:
115	115	SECTION 2. 71.05 (6) (b) 25. a. and b. of the statutes are created to read:
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129	129	SECTION 2 ASSEMBLY BILL 658
130	130	71.05 (6) (b) 25. a. Shares in a corporation or beneficial interest in a trust that
131	131	meets the standards under s. 182.001 (1).
132	132	b. Ownership interest in a partnership or limited liability company treated as
133	133	a partnership under this chapter, if the partnership or limited liability company has
134	134	15 or fewer partners or members and all partners or members are natural persons.
135	135	SECTION 3. 71.05 (25m) (c) of the statutes is amended to read:
136	136	71.05 (25m) (c) No later than January 31 of the year following the close of the
137	137	fund's taxable year In the form and manner prescribed by the department, a fund
138	138	shall annually certify to each investor and the department that it qualifies as a
139	139	Wisconsin qualified opportunity fund for the fund's taxable year. A fund shall make
140	140	the annual certifications under this paragraph no later than the due date, including
141	141	extensions, of the fund's corresponding income or franchise tax return under this
142	142	chapter.
143	143	SECTION 4. 71.26 (3) (vm) 2. of the statutes is amended to read:
144	144	71.26 (3) (vm) 2. No later than January 31 of the year following the close of the
145	145	fund's taxable year In the form and manner prescribed by the department, a fund
146	146	shall annually certify to each investor and the department that it qualifies as a
147	147	Wisconsin qualified opportunity fund for the fund's taxable year. A fund shall make
148	148	the annual certifications under this subdivision no later than the due date, including
149	149	extensions, of the fund's corresponding income or franchise tax return under this
150	150	chapter.
151	151	SECTION 5. 71.34 (1k) (p) 2. of the statutes is amended to read:
152	152	71.34 (1k) (p) 2. No later than January 31 of the year following the close of the
153	153	fund's taxable year In the form and manner prescribed by the department, a fund
154	154	shall annually certify to each investor and the department of revenue that it qualifies
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182	182	SECTION 5
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184	184	as a Wisconsin qualified opportunity fund for the fund's taxable year. A fund shall
185	185	make the annual certifications under this subdivision no later than the due date,
186	186	including extensions, of the fund's corresponding income or franchise tax return
187	187	under this chapter.
188	188	SECTION 6. 71.45 (2) (a) 21. b. of the statutes is amended to read:
189	189	71.45 (2) (a) 21. b. No later than January 31 of the year following the close of
190	190	the fund's taxable year In the form and manner prescribed by the department, a fund
191	191	shall annually certify to each investor and the department that it qualifies as a
192	192	Wisconsin qualified opportunity fund for the fund's taxable year. A fund shall make
193	193	the annual certifications under this subd. 21. b. no later than the due date, including
194	194	extensions, of the fund's corresponding income or franchise tax return under this
195	195	chapter.
196	196	SECTION 7. 71.64 (6) (b) of the statutes is amended to read:
197	197	71.64 (6) (b) No amount shall be withheld from the wages paid to a nonresident
198	198	employee for services performed in this state if the employer reasonably estimates
199	199	that during that calendar year the employee will earn less than $1,500 $2,000; but
200	200	whenever it appears that the employee will earn more than $1,500 $2,000 in this
201	201	state during the calendar year, the employer shall withhold, from wages paid
202	202	thereafter, such additional amounts as the employer reasonably estimates will be
203	203	required to offset the amounts not withheld from previous payments.
204	204	SECTION 8. 71.775 (3) (a) 2. of the statutes is amended to read:
205	205	71.775 (3) (a) 2. The partner's, member's, shareholder's, or beneficiary's share
206	206	of income from the pass-through entity that is attributable to this state is less than
207	207	$1,000 $2,000.
208	208	SECTION 9. 77.54 (71) of the statutes is created to read:
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235	235	SECTION 9 ASSEMBLY BILL 658
236	236	77.54 (71) The sales price from the sale of and the storage, use, or other
237	237	consumption of portable machinery and equipment, including accessories,
238	238	attachments, parts, and supplies for such machinery and equipment, used primarily
239	239	to crush, mill, produce, or pulverize asphalt, concrete, gravel, rock, or aggregate base
240	240	for road or commercial surface lot construction or resurfacing.
241	241	SECTION 10. 565.30 (3) (a) 1. of the statutes is amended to read:
242	242	565.30 (3) (a) 1. Except as provided in subd. subds. 2. and 3., the holder of a
243	243	winning lottery ticket or lottery share may claim a prize within 180 days after the
244	244	drawing or other selection in which the prize is won.
245	245	SECTION 11. 565.30 (3) (a) 3. of the statutes is created to read:
246	246	565.30 (3) (a) 3. As determined by the administrator, multijurisdictional
247	247	lottery secondary or subsequent chance drawings or games may have a shorter claim
248	248	period for holders of a winning lottery ticket or lottery share, which shall be
249	249	prescribed in the features and procedures for the secondary or subsequent chance
250	250	drawing or game.
251	251	SECTION 12. 565.32 (3) (a) 2. c. of the statutes is repealed.
252	252	SECTION 13.0Initial applicability.
253	253	(1) The treatment of ss. 71.05 (25m) (c), 71.26 (3) (vm) 2., 71.34 (1k) (p) 2., 71.45
254	254	(2) (a) 21. b., 71.64 (6) (b), and 71.775 (3) (a) 2., the renumbering and amendment of
255	255	s. 71.05 (6) (b) 25., and the creation of s. 71.05 (6) (b) 25. a. and b. first apply to taxable
256	256	years beginning on January 1, 2024.
257	257	SECTION 14.0Effective dates. This act takes effect on the day after publication,
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284	284	SECTION 14
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286	286	(1) The treatment of s. 77.54 (71) takes effect on the first day of the 3rd month
287	287	beginning after publication.
288	288	(END)
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