Wisconsin Legislative Council
AMENDMENT MEMO
One Ea st Ma in Stre e t, Suite 401 • Ma dison, W I 53703 • (608) 266-1304 • le g.council@le gis.wisconsin.gov • http://www.le gis.wisconsin.gov/lc
Memo published: October 10, 2023 Contact: Brian Larson, Senior Staff Attorney
2023 Senate Bill 389
Senate Substitute
Amendment 1
2023 SENATE BILL 389
2023 Senate Bill 389 (SB 389) updates state-law references to the Internal Revenue Code (IRC) under
the individual income and corporate income and franchise taxes to conform to most federal tax
provisions adopted through federal legislation in 2021 and 2022.
1
These updates to state tax law would
apply retroactively and for taxable years beginning after 2022.
However, SB 389 would not adopt the provision under the federal ARPA that creates an income tax
exclusion for certain forgiven student loans. Also, SB 389 does not include certain provisions relating to
tax treatment of high-deductible health plans (HDHPs) contained in CAA22 and CAA23.
In addition, SB 389 would adopt for state tax purposes Section 1202 of the IRC related to excluding the
sale of qualified small business stock from taxable income, retroactive to tax year 2019, and including
any future changes to that provision.
SENATE SUBSTITUTE AMENDMENT 1
Similarly to the bill, as introduced, Senate Substitute Amendment (SSA1) to SB 389:
Updates state-law references to the IRC under the individual income and corporate income and
franchise taxes to conform to most federal tax provisions adopted through federal legislation in
2021 and 2022, applicable retroactively and for taxable years beginning after 2022.
Would not adopt the provisions relating to student loan forgiveness under ARPA nor tax treatment
of HDHPs under CAA22 and CAA23.
Would adopt the IRC provision related to excluding the sale of qualified small business stock from
taxable income, retroactive to tax year 2019, including any future changes to that provision.
However, the provisions in SSA1 to SB 389 are organized and drafted differently, as compared to the
bill as introduced, based on feedback from the state Department of Revenue (DOR).
BILL HISTORY
On August 11, 2023, Senator Marklein introduced SB 389, and on September 12, 2023, Senator
Marklein offered SSA1. On September 19, 2023, the Senate Committee on Universities and Revenue
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Federal enactments modifying the IRC during 2021 and 2022 include the American Rescue Plan Act of 2021 (ARPA),
the Paycheck Protection Program Extension Act of 2021, the Surface Transportation Extension Act of 2021, the Further
Surface Transportation Extension Act of 2021, the Infrastructure Investment and Jobs Act, the Consolidated
Appropriations Act of 2022 (CAA22), the Supreme Court Security Funding Act of 2022, the Inflation Reduction Act of
2022, and the Consolidated Appropriations Act of 2023 (CAA23). - 2 -
recommended adoption of SSA1 and passage of SB 389, as amended, on votes of Ayes, 8; Noes, 0. On
September 26, 2023, the Joint Committee on Finance recommended adoption of SSA1 and passage of
SB 389, as amended, on votes of Ayes, 15; Noes, 0.
For a full history of the bill, visit the Legislature’s bill history page.
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