Wisconsin 2025-2026 Regular Session

Wisconsin Assembly Bill AB38 Compare Versions

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

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1	1	2025 - 2026 LEGISLATURE
2	2	LRB-1657/1
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4	4	2025 ASSEMBLY BILL 38
5	5	February 17, 2025 - Introduced by Representatives TUSLER, BEHNKE, GREEN,
6	6	GUNDRUM, KREIBICH, MAXEY, MURSAU, PENTERMAN, PIWOWARCZYK, TITTL,
7	7	TRANEL and WICHGERS, cosponsored by Senators JACQUE, BRADLEY, HUTTON,
8	8	CABRAL-GUEVARA, FEYEN, NASS, QUINN and TOMCZYK. Referred to Committee
9	9	on Ways and Means.
10	10
11	11	*AUTHORS SUBJECT TO CHANGE*
12	12	AN ACT to repeal 71.63 (6) (n) 1. and 71.63 (6) (n) 2.; to renumber and amend
13	13	71.63 (6) (n) (intro.); to amend 71.05 (6) (b) 19. cm., 71.05 (6) (b) 19. dm., 71.05
14	14	(6) (b) 28. e., 71.05 (6) (b) 28. f., 71.05 (6) (b) 32. b., 71.05 (6) (b) 32. c., 71.05 (6)
15	15	(b) 33. b., 71.05 (6) (b) 33. c., 71.05 (6) (b) 35. c., 71.05 (6) (b) 35. d., 71.05 (6) (b)
16	16	38. c., 71.05 (6) (b) 38. d., 71.05 (6) (b) 42. c., 71.05 (6) (b) 42. d. and 71.05 (6) (b)
17	17	43. f.; to create 71.05 (1) (j) of the statutes; relating to: an income tax
18	18	exemption for cash tips paid to an employee.
19	19	Analysis by the Legislative Reference Bureau
20	20	This bill creates an income tax exemption for cash tips received by an employee
21	21	from the customers of the employee[s employer.
22	22	Because this bill relates to an exemption from state or local taxes, it may be
23	23	referred to the Joint Survey Committee on Tax Exemptions for a report to be
24	24	printed as an appendix to the bill.
25	25	For further information see the state fiscal estimate, which will be printed as
26	26	an appendix to this bill.
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33	33	7 2025 - 2026 Legislature
34	34	ASSEMBLY BILL 38
35	35	- 2 - LRB-1657/1
36	36	KP:amn
37	37	The people of the state of Wisconsin, represented in senate and assembly, do
38	38	enact as follows:
39	39	SECTION 1. 71.05 (1) (j) of the statutes is created to read:
40	40	71.05 (1) (j) Tips. Amounts received as cash tips by an employee from the
41	41	customers of the employee[s employer.
42	42	SECTION 2. 71.05 (6) (b) 19. cm. of the statutes is amended to read:
43	43	71.05 (6) (b) 19. cm. For taxable years beginning after December 31, 2020, for
44	44	a person who is a nonresident or a part-year resident of this state, modify the
45	45	amount calculated under subd. 19. b. by multiplying the amount by a fraction the
46	46	numerator of which is the person[s wages, salary, tips, unearned income, and net
47	47	earnings from a trade or business that are taxable by this state and the
48	48	denominator of which is the person[s total wages, salary, tips, unearned income,
49	49	and net earnings from a trade or business. In this subd. 19. cm., for married
50	50	persons filing separately Xwages, salary, tips, unearned income, and net earnings
51	51	from a trade or businessY means the separate wages, salary, tips, unearned income,
52	52	and net earnings from a trade or business of each spouse, and for married persons
53	53	filing jointly Xwages, salary, tips, unearned income, and net earnings from a trade
54	54	or businessY means the total wages, salary, tips, unearned income, and net earnings
55	55	from a trade or business of both spouses.
56	56	SECTION 3. 71.05 (6) (b) 19. dm. of the statutes is amended to read:
57	57	71.05 (6) (b) 19. dm. For taxable years beginning after December 31, 2020,
58	58	reduce the amount calculated under subd. 19. b. or cm. to the person[s aggregate
59	59	wages, salary, tips, unearned income, and net earnings from a trade or business
60	60	that are taxable by this state.
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86	86	SECTION 4
87	87	SECTION 4. 71.05 (6) (b) 28. e. of the statutes is amended to read:
88	88	71.05 (6) (b) 28. e. For an individual who is a nonresident or part-year
89	89	resident of this state, multiply the amount calculated under subd. 28. a., am., b., c.
90	90	or d. by a fraction the numerator of which is the individual[s wages, salary, tips,
91	91	unearned income and net earnings from a trade or business that are taxable by this
92	92	state and the denominator of which is the individual[s total wages, salary, tips,
93	93	unearned income and net earnings from a trade or business. In this subd. 28. e., for
94	94	married persons filing separately Xwages, salary, tips, unearned income and net
95	95	earnings from a trade or businessY means the separate wages, salary, tips,
96	96	unearned income and net earnings from a trade or business of each spouse, and for
97	97	married persons filing jointly Xwages, salary, tips, unearned income and net
98	98	earnings from a trade or businessY means the total wages, salary, tips, unearned
99	99	income and net earnings from a trade or business of both spouses.
100	100	SECTION 5. 71.05 (6) (b) 28. f. of the statutes is amended to read:
101	101	71.05 (6) (b) 28. f. Reduce the amount calculated under subd. 28. a., am., b., c.,
102	102	d. or e. to the individual[s aggregate wages, salary, tips, unearned income and net
103	103	earnings from a trade or business that are taxable by this state.
104	104	SECTION 6. 71.05 (6) (b) 32. b. of the statutes is amended to read:
105	105	71.05 (6) (b) 32. b. For an individual who is a nonresident or part-year
106	106	resident of this state, multiply the amount calculated under subd. 32. a. by a
107	107	fraction the numerator of which is the individual[s wages, salary, tips, unearned
108	108	income and net earnings from a trade or business that are taxable by this state and
109	109	the denominator of which is the individual[s total wages, salary, tips, unearned
110	110	income and net earnings from a trade or business. In this subd. 32. b., for married
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138	138	SECTION 6
139	139	persons filing separately Xwages, salary, tips, unearned income and net earnings
140	140	from a trade or businessY means the separate wages, salary, tips, unearned income
141	141	and net earnings from a trade or business of each spouse, and for married persons
142	142	filing jointly Xwages, salary, tips, unearned income and net earnings from a trade or
143	143	businessY means the total wages, salary, tips, unearned income and net earnings
144	144	from a trade or business of both spouses.
145	145	SECTION 7. 71.05 (6) (b) 32. c. of the statutes is amended to read:
146	146	71.05 (6) (b) 32. c. Reduce the amount calculated under subd. 32. a. or b. to the
147	147	individual[s aggregate wages, salary, tips, unearned income and net earnings from
148	148	a trade or business that are taxable by this state.
149	149	SECTION 8. 71.05 (6) (b) 33. b. of the statutes is amended to read:
150	150	71.05 (6) (b) 33. b. For an individual who is a nonresident or part-year
151	151	resident of this state, multiply the amount calculated under subd. 33. a. by a
152	152	fraction the numerator of which is the individual[s wages, salary, tips, unearned
153	153	income and net earnings from a trade or business that are taxable by this state and
154	154	the denominator of which is the individual[s total wages, salary, tips, unearned
155	155	income and net earnings from a trade or business. In this subd. 33. b., for married
156	156	persons filing separately Xwages, salary, tips, unearned income and net earnings
157	157	from a trade or businessY means the separate wages, salary, tips, unearned income
158	158	and net earnings from a trade or business of each spouse, and for married persons
159	159	filing jointly Xwages, salary, tips, unearned income and net earnings from a trade or
160	160	businessY means the total wages, salary, tips, unearned income and net earnings
161	161	from a trade or business of both spouses.
162	162	SECTION 9. 71.05 (6) (b) 33. c. of the statutes is amended to read:
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190	190	SECTION 9
191	191	71.05 (6) (b) 33. c. Reduce the amount calculated under subd. 33. a. or b. to the
192	192	individual[s aggregate wages, salary, tips, unearned income and net earnings from
193	193	a trade or business that are taxable by this state.
194	194	SECTION 10. 71.05 (6) (b) 35. c. of the statutes is amended to read:
195	195	71.05 (6) (b) 35. c. For an individual who is a nonresident or part-year
196	196	resident of this state, multiply the amount calculated under subd. 35. a. or b., by a
197	197	fraction the numerator of which is the individual[s wages, salary, tips, unearned
198	198	income, and net earnings from a trade or business that are taxable by this state and
199	199	the denominator of which is the individual[s total wages, salary, tips, unearned
200	200	income, and net earnings from a trade or business. In this subd. 35. c., for married
201	201	persons filing separately Xwages, salary, tips, unearned income, and net earnings
202	202	from a trade or businessY means the separate wages, salary, tips, unearned income,
203	203	and net earnings from a trade or business of each spouse, and for married persons
204	204	filing jointly Xwages, salary, tips, unearned income, and net earnings from a trade
205	205	or businessY means the total wages, salary, tips, unearned income, and net earnings
206	206	from a trade or business of both spouses.
207	207	SECTION 11. 71.05 (6) (b) 35. d. of the statutes is amended to read:
208	208	71.05 (6) (b) 35. d. Reduce the amount calculated under subd. 35. a., b., or c. to
209	209	the individual[s aggregate wages, salary, tips, unearned income, and net earnings
210	210	from a trade or business that are taxable by this state.
211	211	SECTION 12. 71.05 (6) (b) 38. c. of the statutes is amended to read:
212	212	71.05 (6) (b) 38. c. For an individual who is a nonresident or part-year
213	213	resident of this state, multiply the amount calculated under subd. 38. a. or b., by a
214	214	fraction the numerator of which is the individual[s wages, salary, tips, unearned
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242	242	SECTION 12
243	243	income, and net earnings from a trade or business that are taxable by this state and
244	244	the denominator of which is the individual[s total wages, salary, tips, unearned
245	245	income, and net earnings from a trade or business. In this subd. 38. c., for married
246	246	persons filing separately Xwages, salary, tips, unearned income, and net earnings
247	247	from a trade or businessY means the separate wages, salary, tips, unearned income,
248	248	and net earnings from a trade or business of each spouse, and for married persons
249	249	filing jointly Xwages, salary, tips, unearned income, and net earnings from a trade
250	250	or businessY means the total wages, salary, tips, unearned income, and net earnings
251	251	from a trade or business of both spouses.
252	252	SECTION 13. 71.05 (6) (b) 38. d. of the statutes is amended to read:
253	253	71.05 (6) (b) 38. d. Reduce the amount calculated under subd. 38. a., b., or c. to
254	254	the individual[s aggregate wages, salary, tips, unearned income, and net earnings
255	255	from a trade or business that are taxable by this state.
256	256	SECTION 14. 71.05 (6) (b) 42. c. of the statutes is amended to read:
257	257	71.05 (6) (b) 42. c. For an individual who is a nonresident or part-year
258	258	resident of this state, multiply the amount calculated under subd. 42. a. or b., by a
259	259	fraction the numerator of which is the individual[s wages, salary, tips, unearned
260	260	income, and net earnings from a trade or business that are taxable by this state and
261	261	the denominator of which is the individual[s total wages, salary, tips, unearned
262	262	income, and net earnings from a trade or business. In this subd. 42. c., for married
263	263	persons filing separately Xwages, salary, tips, unearned income, and net earnings
264	264	from a trade or businessY means the separate wages, salary, tips, unearned income,
265	265	and net earnings from a trade or business of each spouse, and for married persons
266	266	filing jointly Xwages, salary, tips, unearned income, and net earnings from a trade
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294	294	SECTION 14
295	295	or businessY means the total wages, salary, tips, unearned income, and net earnings
296	296	from a trade or business of both spouses.
297	297	SECTION 15. 71.05 (6) (b) 42. d. of the statutes is amended to read:
298	298	71.05 (6) (b) 42. d. Reduce the amount calculated under subd. 42. a., b., or c. to
299	299	the individual[s aggregate wages, salary, tips, unearned income, and net earnings
300	300	from a trade or business that are taxable by this state.
301	301	SECTION 16. 71.05 (6) (b) 43. f. of the statutes is amended to read:
302	302	71.05 (6) (b) 43. f. An individual who is a nonresident or part-year resident of
303	303	this state and who claims the subtraction under this subdivision shall multiply the
304	304	amount calculated under subd. 43. a., b., c., or d. by a fraction the numerator of
305	305	which is the individual[s wages, salary, tips, unearned income, and net earnings
306	306	from a trade or business that are taxable by this state and the denominator of which
307	307	is the individual[s total wages, salary, tips, unearned income, and net earnings from
308	308	a trade or business. In this subd. 43. f., for married persons filing separately
309	309	Xwages, salary, tips, unearned income, and net earnings from a trade or businessY
310	310	means the separate wages, salary, tips, unearned income, and net earnings from a
311	311	trade or business of each spouse, and for married persons filing jointly Xwages,
312	312	salary, tips, unearned income, and net earnings from a trade or businessY means
313	313	the total wages, salary, tips, unearned income, and net earnings from a trade or
314	314	business of both spouses.
315	315	SECTION 17. 71.63 (6) (n) (intro.) of the statutes is renumbered 71.63 (6) (n)
316	316	and amended to read:
317	317	71.63 (6) (n) In the form of tips paid to employees if:.
318	318	SECTION 18. 71.63 (6) (n) 1. of the statutes is repealed.
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346	346	SECTION 19
347	347	SECTION 19. 71.63 (6) (n) 2. of the statutes is repealed.
348	348	SECTION 20. Initial applicability.
349	349	(1) This act first applies to taxable years beginning after December 31, 2024.
350	350	(END)
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