LRBs0054/1
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2019 - 2020 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 243
June 10, 2019 - Offered by Senator
Kooyenga.
SB243-SSA1,1,10
1An Act to repeal 77.51 (13b);
to renumber and amend 73.03 (71) (a), 73.03 (71)
2(b), 73.03 (71) (c) and 73.03 (71) (d);
to amend 66.0615 (1m) (f) 2., 77.51 (11d),
377.51 (13) (intro.), 77.51 (13) (a), 77.51 (13) (c), 77.982 (2), 77.991 (2) and
477.9951 (2); and
to create 66.0615 (1m) (g), 73.03 (71) (a) 2., 73.03 (71) (b) 2.,
573.03 (71) (c) 2., 73.03 (71) (d) 2., 77.51 (7i), 77.51 (7j), 77.51 (13) (p) 7., 77.51
6(13) (q), 77.51 (14) (n) 7., 77.51 (17) (g), 77.52 (3m), 77.52 (14) (c), 77.523, 77.585
7(1g) and 77.585 (11) of the statutes;
relating to: requiring marketplace
8providers to collect and remit sales tax from third parties and reducing
9individual income tax rates based on the collection of sales and use tax from
10out-of-state retailers and marketplace providers.
Analysis by the Legislative Reference Bureau
Current law requires the Department of Revenue to determine the amount of
additional revenue collected from the state sales and use tax from October 1, 2018,
to September 30, 2019, as a result of the U.S. Supreme Court decision that expands
the state's authority to collect such taxes from out-of-state retailers. See, South
Dakota v. Wayfair, Inc., 585 U.S. ___ (2018). After DOR makes that determination,
the Department of Administration, in consultation with DOR, must then determine
how much the individual income tax rates may be reduced for the 2019 taxable year
in order to decrease individual income tax revenue by the amount of additional sales
and use tax revenue. If a review by the Legislative Audit Bureau results in a
redetermination of the rates, the Joint Committee on Finance decides which rates
to apply. The reduction in rates only applies to 2019.
This bill makes the rate reduction determined for 2019 applicable only to the
second individual tax rate listed in each bracket. Those reduced rates would change
again in 2020. The bill requires DOR to estimate the amount of additional revenue
collected from the sales and use tax from October 1, 2019, to September 30, 2020, as
a result of the Supreme Court decision. DOA, in consultation with DOR, would then
use that estimation to determine how much the second individual income tax rate
listed in each tax bracket may be reduced in the 2020 taxable year. Those reduced
rates would apply in 2020 and in each year thereafter. The bill also requires DOR
to make its estimation of additional sales and use tax revenue based on the sales and
use taxes collected from out-of-state retailers and marketplace providers.
The bill requires, generally, that marketplace providers collect and remit sales
tax on sales facilitated on behalf of marketplace sellers. For purposes of the bill, a
“marketplace provider” is a person who facilitates a retail sale by a seller by listing
or advertising for sale, in any manner, the seller's products or taxable services and
through agreements or arrangements with third parties, directly or indirectly, who
are collecting payment from the purchaser and transmitting that payment to the
seller. The bill defines “marketplace seller” to mean a seller who sells products
through a physical or electronic marketplace operated by a marketplace provider,
regardless of whether the seller is required to be registered with DOR.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB243-SSA1,1
1Section 1
. 66.0615 (1m) (f) 2. of the statutes is amended to read:
SB243-SSA1,2,62
66.0615
(1m) (f) 2. Sections 77.51 (12m),
(13), (14), (14g), (15a),
and (15b),
and
3(17), 77.52 (3),
(3m), (13), (14), (18), and (19), 77.522,
77.523, 77.58 (1) to (5), (6m),
4and (7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5), (8), (9), (12) to (15), and (19m), and
577.62, as they apply to the taxes under subch. III of ch. 77, apply to the tax described
6under subd. 1.
SB243-SSA1,2
7Section 2
. 66.0615 (1m) (g) of the statutes is created to read:
SB243-SSA1,3,3
166.0615
(1m) (g) Sections 77.52 (3m) and 77.523, as they apply to the taxes
2under subch. III of ch. 77, shall apply to the tax imposed under par. (a) by a
3municipality.
SB243-SSA1,3
4Section
3. 73.03 (71) (a) of the statutes is renumbered 73.03 (71) (a) (intro.)
5and amended to read:
SB243-SSA1,3,116
73.03
(71) (a) (intro.) To
determine estimate the amount of additional revenue
7reported to the department from the taxes imposed under subch. III of ch. 77 as a
8result of the United States Supreme Court decision that expands the state's
9authority to require out-of-state retailers
and marketplace providers, as defined in
10s. 77.51 (7i), to collect and remit the taxes imposed under subch. III of ch. 77 on
11purchases by Wisconsin residents during the
period beginning following periods:
SB243-SSA1,3,12
121. Beginning on October 1, 2018, and ending on September 30, 2019.
SB243-SSA1,4
13Section
4. 73.03 (71) (a) 2. of the statutes is created to read:
SB243-SSA1,3,1514
73.03
(71) (a) 2. Beginning on October 1, 2019, and ending on September 30,
152020.
SB243-SSA1,5
16Section
5. 73.03 (71) (b) of the statutes is renumbered 73.03 (71) (b) 1. and
17amended to read:
SB243-SSA1,4,218
73.03
(71) (b) 1. After the department makes the
determination estimation 19under par. (a)
1., the department shall determine how much the
2nd individual
20income tax
rates rate listed in each bracket under s. 71.06 may be reduced for the
21taxable year
ending on December 31, 2019 beginning after December 31, 2018, and
22before January 1, 2020, in order to decrease individual income tax revenue by the
23amount
determined estimated under par. (a)
. For purposes of this paragraph, the
24tax rate reductions shall be calculated in proportion to the share of gross tax
1attributable to each of the tax brackets under s. 71.06 in effect during the most
2recently completed taxable year 1.
SB243-SSA1,6
3Section
6. 73.03 (71) (b) 2. of the statutes is created to read:
SB243-SSA1,4,84
73.03
(71) (b) 2. After the department makes the estimation under par. (a) 2.,
5the department shall determine how much the 2nd individual income tax rate listed
6in each bracket under s. 71.06, as affected by subd. 1., may be reduced for the taxable
7year beginning after December 31, 2019, and before January 1, 2021, in order to
8decrease individual income tax revenue by the amount estimated under par. (a) 2.
SB243-SSA1,7
9Section
7. 73.03 (71) (c) of the statutes is renumbered 73.03 (71) (c) 1. and
10amended to read:
SB243-SSA1,4,1711
73.03
(71) (c) 1. No later than October 20, 2019, the secretary of revenue shall
12certify and report the determinations made under pars. (a)
1. and (b)
1. to the
13secretary of the department of administration, the governor, the joint committee on
14finance, and the legislative audit bureau and specify with that certification and
15report that the new tax rates take effect for the taxable year
ending on December 31,
162019 beginning after December 31, 2018, and before January 1, 2020, subject to par.
17(d)
1.
SB243-SSA1,8
18Section
8. 73.03 (71) (c) 2. of the statutes is created to read:
SB243-SSA1,4,2519
73.03
(71) (c) 2. No later than October 20, 2020, the secretary of revenue shall
20certify and report the determinations made under pars. (a) 2. and (b) 2. to the
21secretary of the department of administration, the governor, the joint committee on
22finance, and the legislative audit bureau and specify with that certification and
23report that the new tax rates take effect for the taxable year beginning after
24December 31, 2019, and before January 1, 2021, and for each taxable year thereafter,
25subject to par. (d) 2.
SB243-SSA1,9
1Section
9. 73.03 (71) (d) of the statutes is renumbered 73.03 (71) (d) 1. and
2amended to read:
SB243-SSA1,5,113
73.03
(71) (d) 1. The legislative audit bureau shall review the determinations
4reported under par. (c)
1. and report its findings to the joint legislative audit
5committee and the joint committee on finance no later than November 1, 2019. If the
6legislative audit bureau's review of the determinations reported under par. (c)
1. 7results in a different calculation of the tax rates than that made under par. (b)
1., the
8joint committee on finance shall determine which tax rates to apply to the taxable
9year
ending on December 31, 2019 beginning after December 31, 2018, and before
10January 1, 2020, and report its determination to the governor, the secretary of
11administration, and the secretary of revenue no later than November 10, 2019.
SB243-SSA1,10
12Section
10. 73.03 (71) (d) 2. of the statutes is created to read:
SB243-SSA1,5,2113
73.03
(71) (d) 2. The legislative audit bureau shall review the determinations
14reported under par. (c) 2. and report its findings to the joint legislative audit
15committee and the joint committee on finance no later than November 1, 2020. If the
16legislative audit bureau's review of the determinations reported under par. (c) 2.
17results in a different calculation of the tax rates than that made under par. (b) 2., the
18joint committee on finance shall determine which tax rates to apply to the taxable
19year beginning after December 31, 2019, and before January 1, 2021, and to each
20taxable year thereafter, and report its determination to the governor, the secretary
21of administration, and the secretary of revenue no later than November 10, 2020.
SB243-SSA1,11
22Section 11
. 77.51 (7i) of the statutes is created to read:
SB243-SSA1,6,723
77.51
(7i) “Marketplace provider" means any person who facilitates a retail
24sale by a seller by listing or advertising for sale by the seller, in any manner, tangible
25personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or a
1service specified under s. 77.52 (2) (a) and through agreements or arrangements with
23rd parties, directly or indirectly, who are collecting payment from the purchaser and
3transmitting that payment to the seller, regardless of whether the person receives
4compensation or other consideration in exchange for the services provided by the
5person. “Marketplace provider” does not include a person who provides advertising
6services or product listings and who neither collects payment from the purchaser nor
7remits such payment to the marketplace seller.
SB243-SSA1,12
8Section 12
. 77.51 (7j) of the statutes is created to read:
SB243-SSA1,6,119
77.51
(7j) “Marketplace seller" means a seller who sells products through a
10physical or electronic marketplace operated by a marketplace provider, regardless
11of whether the seller is required to be registered with the department.
SB243-SSA1,13
12Section 13
. 77.51 (11d) of the statutes is amended to read:
SB243-SSA1,6,1613
77.51
(11d) For purposes of subs. (1ag), (1f), (3pf),
(7j), and (9p) and ss. 77.52
14(20) and (21), 77.522, 77.54 (9g), (51), (52), and (60), and 77.59 (5r), “product" includes
15tangible personal property, and items, property, and goods under s. 77.52 (1) (b), (c),
16and (d), and services.
SB243-SSA1,14
17Section 14
. 77.51 (13) (intro.) of the statutes is amended to read:
SB243-SSA1,6,1918
77.51
(13) (intro.)
Except as provided in sub. (13b), “retailer" “Retailer”
19includes:
SB243-SSA1,15
20Section 15
. 77.51 (13) (a) of the statutes is amended to read:
SB243-SSA1,6,2421
77.51
(13) (a) Every seller who makes any sale
on the seller's own behalf or on
22behalf of another person, regardless of whether the sale is mercantile in nature, of
23tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or
24(d), or a service specified under s. 77.52 (2) (a).
SB243-SSA1,16
25Section 16
. 77.51 (13) (c) of the statutes is amended to read:
SB243-SSA1,7,10
177.51
(13) (c) When the department determines that it is necessary for the
2efficient administration of this subchapter to regard any salespersons,
3representatives, peddlers
, marketplace providers, or canvassers as the agents of the
4dealers, distributors,
marketplace sellers, supervisors
, or employers under whom
5they operate or from whom they obtain the tangible personal property or items,
6property, or goods under s. 77.52 (1) (b), (c), or (d) sold by them, irrespective of
7whether they are making the sales on their own behalf or on behalf of such dealers,
8distributors,
marketplace sellers, supervisors
, or employers, the department may so
9regard them and may regard the dealers, distributors,
marketplace sellers, 10supervisors
, or employers as retailers for purposes of this subchapter.
SB243-SSA1,17
11Section 17
. 77.51 (13) (p) 7. of the statutes is created to read:
SB243-SSA1,7,1312
77.51
(13) (p) 7. Whether the seller sells on the seller's own behalf or on behalf
13of another person.
SB243-SSA1,18
14Section 18
. 77.51 (13) (q) of the statutes is created to read:
SB243-SSA1,7,1815
77.51
(13) (q) A marketplace provider who facilitates, on behalf of a
16marketplace seller, sales that are sourced to this state as provided under s. 77.522
17of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c),
18or (d), or services.
SB243-SSA1,19
19Section 19
. 77.51 (13b) of the statutes is repealed.
SB243-SSA1,20
20Section 20
. 77.51 (14) (n) 7. of the statutes is created to read:
SB243-SSA1,7,2221
77.51
(14) (n) 7. Whether the seller sells on the seller's own behalf or on behalf
22of another person.
SB243-SSA1,21
23Section 21
. 77.51 (17) (g) of the statutes is created to read:
SB243-SSA1,7,2524
77.51
(17) (g) Whether the seller sells on the seller's own behalf or on behalf
25of another person.
SB243-SSA1,22
1Section
22. 77.52 (3m) of the statutes is created to read:
SB243-SSA1,8,72
77.52
(3m) (a)
Except as provided in par. (b), a marketplace provider is liable
3for the tax imposed under this section on the entire sales price charged to the
4purchaser, including any amount charged by the marketplace provider for
5facilitating the sale, from the sale, license, lease or rental of tangible personal
6property, or items, property, or goods under sub. (1) (b), (c), or (d), or services under
7sub. (2).
SB243-SSA1,8,238
(b) A marketplace provider whose only activities are facilitating sales of
9tangible personal property or services described in sub. (2) (a) 1. on behalf of
10marketplace sellers operating under a hotel, motel, or restaurant brand name shared
11with the marketplace provider may submit an application to the department to
12request a waiver from collecting and remitting tax on sales facilitated on behalf of
13marketplace sellers. The application shall include the name and address of all
14marketplace sellers selling or furnishing such tangible personal property or services
15in this state, the marketplace seller's sales or use tax permit number obtained under
16sub. (7) or 77.53 (9), and any other information the department requires. The
17department may grant the waiver if it is satisfied that the tax due under this chapter
18is collected and remitted by the marketplace sellers. A marketplace provider that
19is granted the waiver must, within 60 days from a written request by the department,
20provide the name and address of all marketplace sellers selling or furnishing such
21tangible personal property or services in this state, the marketplace seller's sales or
22use tax permit number obtained under sub. (7) or 77.53 (9), and any other
23information the department requires.
SB243-SSA1,9,324
(c) The department may grant waivers under par. (b) for other types of
25marketplace providers if there is evidence that the marketplace sellers have a
1history of reliably collecting and remitting to the department the tax on sales or there
2is other evidence that the marketplace sellers will reliably collect and remit to the
3department the tax on sales.
SB243-SSA1,23
4Section 23
. 77.52 (14) (c) of the statutes is created to read:
SB243-SSA1,9,75
77.52
(14) (c) A marketplace provider shall obtain and maintain each
6exemption certificate from a purchaser claiming an exemption for a sale facilitated
7by the marketplace provider on behalf of a marketplace seller.
SB243-SSA1,24
8Section 24
. 77.523 of the statutes is created to read:
SB243-SSA1,9,12
977.523 Liability of marketplace providers, retailers, and marketplace
10sellers. (1) A marketplace provider shall collect and remit tax on a sale facilitated
11on behalf of a marketplace seller, unless the marketplace provider has been granted
12a waiver under s. 77.52 (3m) (b).
SB243-SSA1,9,19
13(2) A marketplace provider who collects and remits tax on a sale under sub. (1)
14shall notify the marketplace seller that the marketplace provider is collecting and
15remitting the tax. Upon notification, only the marketplace provider may be audited
16and held liable for tax on the sale, unless the marketplace seller provided insufficient
17or incorrect information to the marketplace provider under sub. (4). If notification
18is not provided, the marketplace provider and marketplace seller may be audited and
19held liable for tax on the sale.
SB243-SSA1,9,23
20(3) Upon examination by the department, a marketplace provider is relieved
21of liability under this subchapter for the failure to collect and remit tax on a sale if
22the marketplace provider can show all of the following to the department's
23satisfaction:
SB243-SSA1,9,2424
(a) The sale was made solely on behalf of a marketplace seller.