Equity grant program and diversity, equity, and inclusion
The bill requires DOA to provide grants to public, private, and nonprofit
entities in this state that promote diversity and advance equity and inclusion. The
bill also makes a new appropriation to DOA to administer the equity grant program
and for diversity, equity, and inclusion activities overseen by DOA.
Director of Native American affairs
The bill requires the secretary of administration to appoint a director of Native
American affairs in the unclassified service to manage relations between the state
and American Indian tribes or bands in the state.
Grants to American Indian tribes or bands
The bill requires DOA to award grants of equal amounts to each American
Indian tribe or band in the state for the purpose of supporting programs to meet the
needs of members of the tribe or band. No grant moneys may be used to pay
gaming-related expenses.
Civil legal services for the indigent
The bill requires DOA to make annual payments to the Wisconsin Trust
Account Foundation, Inc., for the purpose of providing civil legal services to indigent
persons.
Procurement and risk management educational services
The bill authorizes DOA to provide educational services in procurement and
risk management to local governmental units and private entities. The bill requires
DOA to charge fees for its services. The bill also creates an appropriation for fees
received from local governmental units and private entities for technical assistance
services provided by the Office of Sustainability and Clean Energy.
Plan for green and environmentally friendly state procurement practices
The bill requires DOA to develop a plan to expand the use of green and
environmentally friendly state procurement practices, and to provide the written
plan to the governor by June 30, 2022.
Contracts for written foreign language translation
The bill requires the Bureau of Procurement in DOA to enter into contracts or
amend existing contracts with vendors to provide written foreign language
translation services to executive branch agencies by September 1, 2022.
High-voltage transmission line fees
The bill requires PSC to administer annual impact and onetime environmental
impact fees paid under current law by persons authorized by PSC to operate
high-voltage transmission lines. Under current law, DOA administers the fees.
Excess insurance premiums
The bill creates an appropriation account to receive premiums charged to state
agencies for excess insurance under a contract entered into by DOA.
Worker misclassification outreach
The bill requires DOA to direct state agencies, constitutional offices,
departments, independent agencies, and societies, associations, and certain other
agencies of state government for which appropriations are made by law, to provide
educational outreach regarding worker misclassification to employers, workers, and
organizations that serve vulnerable populations.
Juneteenth state holiday
The bill designates June 19, the day on which Juneteenth is celebrated, as a
state holiday on which state offices are closed. Under current law, the offices of the
agencies of state government are generally closed on Saturdays, Sundays, and a total
of nine state holidays. The bill also increases the number of regular paid holidays
state employees receive annually from nine days to 10 days. The bill also requires
the administrator of the Division of Personnel Management in DOA to include June
19 as a paid holiday for UW System employees in the proposal it submits to the Joint
Committee on Employee Relations for compensation plan changes for the 2021-23
biennium.
BCPL payments in lieu of taxes appropriation
Under current law, land that BCPL owns is not subject to property taxes. For
certain lands purchased on or after July 14, 2015, though, BCPL makes annual
payments to municipalities in lieu of the property tax that would have been owed on
these lands were they not tax exempt. Currently, these payments are made from
BCPL's general operations appropriation account. The bill creates an appropriation
account specifically for these payments in lieu of taxes.
BCPL gifts and grants appropriation
The bill creates a continuing appropriation for all gifts and grants received by
BCPL.
Raffle and bingo appropriations
The bill combines the appropriation accounts for general program operations
for raffles and bingo, and removes the requirement for unspent bingo funds to be
transferred into the lottery fund at the end of each fiscal year.
Defining “multijurisdictional” for the purposes of the lottery
Under current law, the state is authorized to operate a state lottery, which
includes participation in a multijurisdictional lottery. Under current law,
“multijurisdictional” is defined to include any U.S. state or territory, Canada, or any
Canadian province. The bill changes the definition of “multijurisdictional,” for the
purposes of the state lottery, to include any other country or nation.
Public records location fee
Current law allows an authority to impose a fee on any person requesting a
public record to cover the cost of locating that record, if the cost is $50 or more. The
location fee may not exceed the actual, necessary, and direct cost of locating the
record. Current law defines an “authority” to include any elective official or state or
local government agency that has custody of a public record.
Under the bill, the cost of locating a public record must be $100 or more before
an authority may impose a fee to cover the actual, necessary, and direct cost of
locating the record.
taxation
Income taxation
Child and dependent care tax credit
The bill creates an individual income tax credit based on the federal child and
dependent care tax credit. The federal credit may be claimed by an individual who
pays for the care of a “qualifying individual” so that the credit claimant can work or
actively look for work. A qualifying individual is the claimant's dependent child
under 13 years of age or the claimant's spouse or dependent who is incapable of self
care. The total expenses for care that a claimant may take into account when
calculating the federal credit is $3,000 if there is one qualifying individual and
$6,000 if there is more than one qualifying individual. Depending on the claimant's
adjusted gross income, the credit may be worth between 20 percent and 35 percent
of the allowable expenses. The federal credit is nonrefundable, which means it may
be claimed only up to the amount of the claimant's tax liability.
Under current law, Wisconsin does not have a child and dependent care tax
credit but does allow individuals to deduct the expenses that qualify for the federal
credit when computing their income for state tax purposes.
For taxable years beginning after December 31, 2020, the bill creates a tax
credit based on the amount claimed under the federal credit and repeals the existing
deduction. Under the bill, an individual who is eligible for and claims the federal
child and dependent care tax credit may claim 50 percent of the same amount as a
nonrefundable credit on his or her Wisconsin income tax return. The Wisconsin
credit may not be claimed by a part-year resident or nonresident of this state.
Caregiver tax credit
The bill creates an income tax credit for individuals who pay for items that
directly relate to the care or support of a family member who requires assistance with
one or more daily living activities and is over the age of 18. The credit equals 50
percent of the expenses, limited to a maximum annual credit per family member of
$500, or $250 for married spouses filing separately. If more than one individual may
claim the credit based on the same family member, the maximum annual credit
amount is apportioned among them based on expenses paid. For married couples
filing jointly, the credit phases out between federal adjusted gross income of $150,000
and $170,000, and no credit may be claimed if federal AGI exceeds $170,000. For all
other taxpayers, the phase out range is between federal AGI of $75,000 and $85,000,
and no credit may be claimed if federal AGI exceeds $85,000. Under the bill,
expenses that qualify for the credit include amounts spent on improving the
claimant's primary residence to assist the family member, purchasing equipment to
help the family member with daily living activities, and obtaining other goods or
services to help care for the family member. Expenses that do not qualify for the
credit include general food, clothing, transportation, and household repair costs, as
well as amounts that are reimbursed by insurance or other means. The credit is
nonrefundable, which means it may be claimed only up to the amount of the
claimant's tax liability.
Earned income tax credit
The bill increases the amount that an individual with fewer than three
qualifying children may claim as the Wisconsin earned income tax credit. Under
current law, the Wisconsin EITC is equal to a percentage of the federal EITC. The
percentage is 4 percent of the federal EITC if the individual has one qualifying child,
11 percent if the individual has two qualifying children, and 34 percent if the
individual has three or more qualifying children. The credit is refundable, which
means that if the credit exceeds the individual's tax liability, he or she will receive
the excess as a refund check.
Under the bill, the percentage of the federal EITC that an eligible individual
may claim for Wisconsin purposes is 16 percent if the individual has one qualifying
child, 25 percent if the individual has two qualifying children, and 34 percent if the
individual has three or more qualifying children.
Subtraction for active duty pay
Under current law, members of a reserve component of the U.S. armed forces
who are called into active federal service or special state service under specified
sections of the U.S. Code may subtract the military pay they receive from the federal
government while on active duty. The bill expands the existing subtraction to include
members who are activated under an additional section of the U.S. Code that relates
to orders to active duty for preplanned missions in support of the combatant
commands. Also under the bill, members of the Wisconsin national guard may, when
computing their state income taxes, subtract from income the pay they receive from
the state while on active state duty.
Manufacturing and agriculture credit limitation
Currently, a person may claim a tax credit on the basis of the person's income
from manufacturing or agriculture. A taxpayer may claim a credit equal to 7.5
percent of the income derived from either the sale of tangible personal property
manufactured in whole or in part on property in this state that is assessed as
manufacturing property or from the sale of tangible personal property produced,
grown, or extracted in whole or in part from property in this state assessed as
agricultural property. If the amount of the credit exceeds the taxpayer's income tax
liability, the taxpayer does not receive a refund, but may apply the balance to the
taxpayer's tax liability in subsequent taxable years.
The bill limits to $300,000 the amount of income from manufacturing that a
person may use as the basis for claiming the credit. The bill does not affect the
amount of income from agriculture that may be used as a basis for claiming the
credit.
Work opportunity tax credit
The bill creates a state income and franchise tax credit to supplement the
federal Work Opportunity Tax Credit. The federal tax credit is available to
employers who hire individuals from specified targeted groups. The targeted groups
are veterans, ex-felons, Temporary Assistance for Needy Families recipients,
designated community residents, vocational rehabilitation referrals, summer youth
employees, Supplemental Nutrition Assistance Program recipients, Supplemental
Security Income recipients, long-term family assistance recipients, and long-term
unemployment recipients. In general, the federal credit equals 40 percent of the
wages, limited to $6,000, paid to the individual during the first year of employment
if the individual works at least 400 hours and 20 percent of such wages if the
individual works between 120 and 400 hours. Different limitations and rules exist
for members of certain targeted groups. The federal tax credit is scheduled to expire
on January 1, 2026.
Under the bill, an employer may claim a state tax credit for wages paid to
individuals who are members of a targeted group, as determined under federal law,
for services performed in Wisconsin. The state credit is equal to 50 percent of the
amount that the claimant could claim under the federal credit for those wages and
must be claimed at the same time as the federal credit.
First-time homebuyer savings accounts
The bill creates a tax-advantaged first-time homebuyer savings account.
Under the bill, an individual, known as the account holder, may open an account at
a financial institution for the purpose of paying the down payment and closing costs
for the purchase of a single-family residence in Wisconsin by the account's
designated beneficiary. The beneficiary, who may be the account holder, must be a
Wisconsin resident who has not owned a single-family residence during the 36
months prior to the purchase. An individual may be designated the beneficiary of
more than one account, but not by the same account holder. The account holder may
change the beneficiary at any time. An account may only remain open for 10 years.
The bill provides that an account holder, when calculating his or her income for
state tax purposes, may subtract the deposits that he or she made into the account
during the year, as well as any interest and other gains on the account that are
redeposited into it. The maximum amount of deposits that the account holder may
subtract per account each year is $5,000, which is increased to $10,000 if he or she
is married and files a joint return. Over all taxable years, the account holder may
not subtract more than $50,000 of deposits into any account for each beneficiary. The
bill provides that other persons may contribute to the account, but they may not
subtract their contributions.
Under the bill, with limited exceptions, if an amount is withdrawn from the
account for any reason other than paying the down payment and closing costs, the
account holder is subject to a 10 percent penalty tax on the withdrawal and must
include the amount of the withdrawal in income for state tax purposes.
The bill requires that the account holder annually submit information about
the account to DOR, including a list of the account's transactions. These provisions
apply to taxable years beginning after December 31, 2021.
Homestead tax credit
Under current law, the homestead tax credit is a refundable income tax credit
that may be claimed by homeowners and renters. The credit is based on the
claimant's household income and the amount of property taxes or rent constituting
property taxes on his or her Wisconsin homestead. Because the credit is refundable,
if the credit exceeds the claimant's income tax liability, he or she receives the excess
as a refund check. Under current law, there are three key dollar amounts used when
calculating the credit:
1. If household income is $8,060 or less, the credit is 80 percent of the property
taxes or rent constituting property taxes. If household income exceeds $8,060, the
property taxes or rent constituting property taxes are reduced by 8.785 percent of the
household income exceeding $8,060, and the credit is 80 percent of the reduced
property taxes or rent constituting property taxes.
2. The credit may not be claimed if household income exceeds $24,680.
3. The maximum property taxes or rent constituting property taxes used to
calculate the credit is $1,460.
Beginning with claims filed in 2021, the bill reduces the percentage used for
household income over $8,060 from 8.785 to 6.655 percent and increases the
maximum income amount from $24,680 to $30,000. The bill also indexes the $8,060,
$30,000, and $1,460 amounts for inflation, beginning in 2023.
Veterans and surviving spouses property tax credit
Under current law, an eligible veteran or surviving spouse may claim a
refundable income tax credit that equals the amount of property taxes paid during
the year on his or her principal dwelling in Wisconsin. Current law does not
expressly address the treatment of renters. DOR allows an eligible veteran or
surviving spouse who is a renter to claim the credit if he or she is required to pay the
property taxes under a written agreement with the landlord and pays the property
taxes directly to the municipality.
Under the bill, an eligible veteran or surviving spouse who is a renter may claim
the credit in an amount equal to his or her rent constituting property taxes. The bill
defines “rent constituting property taxes" to mean 20 percent of the rent paid during
the year for the use of a principal dwelling if heat is included in the rent, and 25
percent of the rent if heat is not included.
Medical care insurance subtraction
The bill modifies the income tax subtraction for amounts paid for medical care
insurance by self-employed individuals. Under current law, the subtraction may not
exceed the individual's net earnings from a trade or business that are taxable by
Wisconsin. Under the bill, the subtraction may not exceed the individual's wages,
salary, tips, unearned income, and net earnings from a trade or business that are
taxable by Wisconsin.
The bill similarly modifies the provision under current law that prorates the
subtraction for self-employed nonresidents and part-year residents based on the
percentage of the individual's net earnings from a trade or business taxable by
Wisconsin to total net earnings from a trade or business. Under the bill, the
subtraction is prorated based on the percentage of the individual's wages, salary,
tips, unearned income, and net earnings from a trade or business that are taxable
by Wisconsin to total wages, salary, tips, unearned income, and net earnings from a
trade or business. The bill also eliminates obsolete provisions related to the medical
care insurance subtraction for self-employed individuals.
Private school tuition deduction
Under current law, an individual, when computing income for income tax
purposes, may deduct the tuition paid during the year to send his or her dependent
child to private school. The maximum deduction is $4,000 for an elementary school
pupil and $10,000 for a secondary school pupil.
Under the bill, only individuals whose Wisconsin adjusted gross income is
below a threshold amount may claim the deduction for private school tuition. The
threshold amount is $100,000 for single individuals and heads of household,
$150,000 for married couples filing jointly; and $75,000 for married individuals filing
separately.
Limitation on capital gains exclusion
Current law allows individuals, when computing their income for state tax
purposes, to subtract 30 percent of the net capital gains realized from the sale of
assets held more than one year or acquired from a decedent. The subtraction is
increased to 60 percent for gains realized from the sale of farm assets held more than
one year or acquired from a decedent.
Under the bill, an individual may not make the 30 percent subtraction if his or
her federal adjusted gross income exceeds $400,000 for a single individual or head
of household filer; $533,000 for a married couple who files jointly; or $266,500 for a
married individual who files separately. The bill creates an exception for individuals
whose federal AGI, after subtracting 30 percent of net capital gains from nonfarm
assets, is below the threshold amount. These individuals may make the subtraction,
subject to the 30 percent limitation, but must reduce the amount subtracted by the
amount that federal AGI exceeds the threshold amount. The bill makes no changes
to the 60 percent subtraction.
Education award subtraction
Under current law, an individual who completes a term of service in the
AmeriCorps program may receive a Segal AmeriCorps education award to pay for
post-secondary educational expenses and to repay student loans. The awards are
subject to federal and state income taxation. Under the bill, an individual may
subtract the amount received as an award during the taxable year when calculating
his or her income for Wisconsin income tax purposes.
Flood insurance premiums
The bill creates a nonrefundable individual income tax credit for flood
insurance premiums. The credit is equal to 10 percent of the amount of the premiums
that an individual paid in the taxable year for flood insurance, but the amount of the
claim may not exceed $60 in any taxable year. Because the credit is nonrefundable,
it may be claimed only up to the amount of the individual's tax liability.
Dividends received deduction
Current law allows corporations to deduct, for income and franchise tax
purposes, the dividends received from related corporations. The dividends must be
paid on common stock, and the corporation receiving the dividends must own at least
70 percent of the total combined voting stock of the other corporation. Current law
also allows businesses to carry forward net business losses to future taxable years
in order to offset income in those years. Under the bill, a business may not take the
dividends received deduction into account when determining if it has a net business
loss that can be carried forward.
Net operating loss carryback
The bill repeals the provision under which an individual may carry back a net
operating loss to the two prior taxable years in order to reduce the amount of income
subject to tax in those years.
Pass-through entities and refundable tax credits
Current law allows businesses operating in this state to claim a number of
income and franchise tax credits to promote job creation and economic development.
The following credits allow a business to receive a refund if the amount of the credit
exceeds its tax liability: the jobs tax credit, the business development credit, the
enterprise zones jobs credit, the electronics and information technology
manufacturing zone credit, and the research credit. Partnerships, limited liability
companies, and tax-option corporations may not claim these credits, but, instead,
the partners, members, and shareholders of the respective entities may claim the
credits in proportion to their ownership interests in the entity. Generally, the entities
determine the aggregate amount of the credits that the partners, members, or
shareholders may claim.
The bill allows partnerships, limited liability companies, and tax-option
corporations to claim the refundable tax credits, not including the electronics and
information technology manufacturing zone credit and the research credit.
Research credit refunds
Current law allows a person to claim an income and franchise tax credit equal
to a percentage of the person's qualified research expenses that exceed 50 percent of
the average qualified research expenses for the three taxable years immediately
preceding the taxable year for which the person claims the credit. For example, a
person may claim a credit equal to 11.5 percent of the person's excess qualified
research expenses related to research related to the design and manufacturing of
energy efficient lighting systems, building automation and control systems, or
automotive batteries for use in hybrid-electric vehicles.
If the amount of the credit exceeds the person's tax liability, the person will
receive a refund in an amount not exceeding 10 percent of the allowable claim. The
taxpayer may apply any remaining unused portion of the credit to subsequent
taxable years. Under the bill, if the amount of the credit exceeds the person's tax
liability, the person will receive a refund in an amount not exceeding 20 percent of
the allowable claim and may continue to claim the remaining unused portion in
subsequent taxable years.
