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LRB-2339/1
MES&KRP:jld&wlj
2017 - 2018 LEGISLATURE
April 5, 2017 - Introduced by Representatives C. Taylor, Subeck, Riemer, Crowley,
Sargent, Zamarripa, Hebl, Considine, Berceau, Anderson, Stuck, Goyke,
Brostoff, Sinicki, Pope, Kolste and Ohnstad, cosponsored by Senators
Wirch, Johnson and Risser. Referred to Committee on Ways and Means.
AB200,1,8 1An Act to amend 71.05 (23) (b) 1., 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06
2(2) (j) (intro.), 71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.125 (1),
371.125 (2), 71.17 (6), 71.64 (9) (b) (intro.), 71.67 (5) (a) and 71.67 (5m); and to
4create
71.05 (23) (be), 71.06 (1r), 71.06 (2) (k), 71.06 (2) (L), 71.06 (2e) (bg) and
571.07 (5n) (e) of the statutes; relating to: increasing certain individual income
6tax rates and expanding the number of brackets, increasing the personal
7exemption for certain individuals, and sunsetting the manufacturing and
8agriculture tax credit.
Analysis by the Legislative Reference Bureau
This bill makes changes to the individual income tax rates and brackets
structure, increases the personal exemption amount for certain taxpayers, and
sunsets the manufacturing and agriculture tax credit.
Changes to rates and brackets
Under current law, there are four income tax brackets for single individuals,
certain fiduciaries, heads of households, and married persons. The brackets are
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 4.0 percent of taxable income; the rate for the second bracket is 5.84 percent; the

rate for the third bracket is 6.27 percent; and the rate for the highest bracket is 7.65
percent. Before applying bracket indexing, the four brackets for individuals, certain
fiduciaries, and heads of households, to which the above rates apply, are as follows:
taxable income from $0 to $7,500; taxable income exceeding $7,500 but not exceeding
$15,000; taxable income exceeding $15,000 but not exceeding $225,000; and taxable
income exceeding $225,000. In general, this rate and bracket structure first applied
to taxable year 2013 and was enacted in 2013 Wisconsin Act 20, the state's 2013
Biennial Budget Act, although the rate for the lowest bracket was 4.40 percent for
taxable year 2013 and became 4.0 percent in taxable year 2014.
Under this bill, which first applies to taxable year 2017, there are five income
tax brackets for single individuals, certain fiduciaries, heads of households, and
married persons. The brackets are indexed for inflation. The rate of taxation under
the bill for single individuals, certain fiduciaries, heads of households, and married
persons for the four lowest brackets remains the same as current law, 4.0 percent,
5.84 percent, 6.27 percent, and 7.65 percent, and the rate for the new fifth bracket
is 8.25 percent.
Before indexing for inflation, for taxable year 2017, for single individuals,
certain fiduciaries, and heads of households, the lowest bracket applies to taxable
income of over $0 up to $7,500; the second bracket applies to taxable income over
$7,500 up to $15,000; the third bracket applies to taxable income over $15,000 up to
$225,000; the fourth bracket applies to taxable income over $225,000 up to $500,000;
and the new fifth, or top bracket, applies to taxable income over $500,000. For
married joint filers, the lowest bracket applies to taxable income of over $0 up to
$10,000; the second bracket applies to taxable income over $10,000 up to $20,000; the
third bracket applies to taxable income over $20,000 up to $300,000; the fourth
bracket applies to taxable income over $300,000 up to $1,000,000; and the new fifth,
or top bracket, applies to taxable income over $1,000,000.
Personal exemptions
Under current law, an individual income tax personal exemption exists in the
amount of $700 for each taxpayer who is required to file an income tax return and
$700 for the taxpayer's spouse, except if the spouse is filing separately or as a head
of household. A taxpayer may also claim a $700 exemption for each dependent for
whom he or she is entitled to claim an exemption under the Internal Revenue Code.
In general, an additional exemption of $250 may be claimed by a taxpayer, and
spouse, who has reached the age of 65 before the close of the taxable year to which
his or her tax return relates.
This bill increases the personal exemption amount for certain taxpayers
starting with taxable year 2017. Under the bill, if a single individual has Wisconsin
adjusted gross income (WAGI) of less than $12,000, his or her personal exemption is
$8,260. The personal exemption amount for such an individual phases down to
approximately $700 as his or her WAGI increases from $12,000 to the maximum
income threshold of $60,000. If such an individual's WAGI is more than the
maximum income threshold, the individual calculates his or her exemption under
current law.

Similarly under the bill, the personal exemption amount for a head of
household and a married individual filing separately is increased to $8,260 per
person, and to $16,520 for a married couple filing jointly, for those whose WAGI, or
joint WAGI in the case of a married couple filing jointly, is less than $14,000 (head
of household), $20,000 (married joint), or $10,000 (married separate). The
exemption amount phases down to approximately $700 ($1,400 for a married couple
filing jointly) as WAGI increases to the maximum income threshold, which is $70,000
(head of household), $100,000 (married joint), or $50,000 (married separate). If a
taxpayer's WAGI is more than the maximum income threshold, the taxpayer
calculates his or her, or the couple's, exemption under current law. The bill does not
make any change to the current law exemption provisions for dependents or
individuals who are age 65 or above.
Manufacturing and agriculture credit
This bill provides that a taxpayer may not file a new claim the manufacturing
and agriculture tax credit for taxable years beginning after December 31, 2016,
although credits claimed for taxable years beginning before January 1, 2017, may be
carried forward to taxable years that begin after December 31, 2016.
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 and local 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:
AB200,1 1Section 1. 71.05 (23) (b) 1. of the statutes is amended to read:
AB200,3,62 71.05 (23) (b) 1. A personal exemption of $700 if the taxpayer is required to file
3a return under s. 71.03 (2) (a) 1. or 2. and $700 for the taxpayer's spouse, except if
4the spouse is filing separately or as a head of household. For taxable years beginning
5after December 31, 2016, the exemption under this subdivision may not be claimed
6by a taxpayer who is eligible for, and claims, the exemption under par. (be).
AB200,2 7Section 2. 71.05 (23) (be) of the statutes is created to read:
AB200,4,3
171.05 (23) (be) For taxable years beginning after December 31, 2016, a personal
2exemption calculated as follows if the taxpayer is required to file a return under s.
371.03 (2) (a) 1. or 2.:
AB200,4,114 1. For a single individual who has a Wisconsin adjusted gross income of less
5than $12,000, an exemption of $8,260. For a single individual who has a Wisconsin
6adjusted gross income of at least $12,000, the exemption is the amount obtained by
7subtracting from $8,260 15.75 percent of Wisconsin adjusted gross income in excess
8of $12,000 but not less than $0, except that if the single individual's Wisconsin
9adjusted gross income is more than $60,000, the individual may not claim the
10exemption under this paragraph but the individual may claim the exemption under
11par. (b).
AB200,4,1912 2. For a head of household who has a Wisconsin adjusted gross income of less
13than $14,000, an exemption of $8,260. For a head of household who has a Wisconsin
14adjusted gross income of at least $14,000, the exemption is the amount obtained by
15subtracting from $8,260 13.50 percent of Wisconsin adjusted gross income in excess
16of $14,000 but not less than $0, except that if the head of household's Wisconsin
17adjusted gross income is more than $70,000, the individual may not claim the
18exemption under this paragraph but the head of household may claim the exemption
19under par. (b).
AB200,5,320 3. For a married couple filing jointly that has an aggregate Wisconsin adjusted
21gross income of less than $20,000, an exemption of $16,520 for the married couple.
22For a married couple filing jointly that has an aggregate Wisconsin adjusted gross
23income of at least $20,000, the exemption is the amount obtained by subtracting, for
24the married couple, from $16,520 18.90 percent of aggregate Wisconsin adjusted
25gross income in excess of $20,000 but not less than $0, except that if the married

1couple's Wisconsin aggregate adjusted gross income is more than $100,000, the
2couple may not claim the exemption under this paragraph but the married couple
3may claim the exemption under par. (b).
AB200,5,114 4. For a married individual filing separately who has a Wisconsin adjusted
5gross income of less than $10,000, an exemption of $8,260. For a married individual
6filing separately who has a Wisconsin adjusted gross income of at least $10,000, the
7exemption is the amount obtained by subtracting from $8,260 18.90 percent of
8Wisconsin adjusted gross income in excess of $10,000 but not less than $0, except that
9if the individual's Wisconsin adjusted gross income is more than $50,000, the
10individual may not claim the exemption under this paragraph but the individual
11may claim the exemption under par. (b).
AB200,3 12Section 3. 71.06 (1q) (intro.) of the statutes is amended to read:
AB200,5,1813 71.06 (1q) Fiduciaries, single individuals, and heads of households; after
142012
to 2016. (intro.) The tax to be assessed, levied, and collected upon the taxable
15incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or
16reserve funds, and single individuals and heads of households shall be computed at
17the following rates for taxable years beginning after December 31, 2012, and before
18January 1, 2017
:
AB200,4 19Section 4. 71.06 (1r) of the statutes is created to read:
AB200,5,2420 71.06 (1r) Fiduciaries, single individuals, and heads of households; after
212016.
The tax to be assessed, levied, and collected upon the taxable incomes of all
22fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
23single individuals and heads of households shall be computed at the following rates
24for taxable years beginning after December 31, 2016:
AB200,5,2525 (a) On all taxable income from $0 to $7,500, 4.0 percent.
AB200,6,2
1(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 5.84
2percent.
AB200,6,43 (c) On all taxable income exceeding $15,000 but not exceeding $225,000, 6.27
4percent.
AB200,6,65 (d) On all taxable income exceeding $225,000 but not exceeding $500,000, 7.65
6percent.
AB200,6,77 (e) On all taxable income exceeding $500,000, 8.25 percent.
AB200,5 8Section 5. 71.06 (2) (i) (intro.) of the statutes is amended to read:
AB200,6,109 71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after
10December 31, 2012, and before January 1, 2017:
AB200,6 11Section 6. 71.06 (2) (j) (intro.) of the statutes is amended to read:
AB200,6,1312 71.06 (2) (j) (intro.) For married persons filing separately, for taxable years
13beginning after December 31, 2012, and before January 1, 2017:
AB200,7 14Section 7. 71.06 (2) (k) of the statutes is created to read:
AB200,6,1615 71.06 (2) (k) For joint returns, for taxable years beginning after
16December 31, 2016:
AB200,6,1717 1. On all taxable income from $0 to $10,000, 4.0 percent.
AB200,6,1918 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 5.84
19percent.
AB200,6,2120 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 6.27
21percent.
AB200,6,2322 4. On all taxable income exceeding $300,000 but not exceeding $1,000,000, 7.65
23percent.
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