The bill creates a sales and use tax exemption for the sale of over-the-counter drugs.
County and municipality sales and use taxes
Current law allows a county to enact an ordinance to impose sales and use taxes at the rate of 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. The county must use the revenue from the taxes for property tax relief. Under the bill, a county may impose that county sales and use tax at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent. The bill also allows a county, except for Milwaukee County, to impose, by ordinance, an additional sales and use tax at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. However, the ordinance does not take effect unless approved by a majority of the voters of the county at a referendum. The revenue from those taxes may be used for any purpose designated by the county board or specified in the ordinance or in the referendum approving the ordinance.
The bill also allows a municipality, except for the City of Milwaukee, with a 2020 population exceeding 30,000 to enact an ordinance to impose sales and use taxes at the rate of 0.1, 0.2, 0.3, 0.4, or 0.5 percent of the sales price or purchase price on tangible personal property and taxable services. The ordinance does not take effect unless approved by a majority of the voters of the municipality at a referendum. The revenue from those taxes may be used for any purpose designated by the governing body of the municipality or specified in the ordinance or in the referendum approving the ordinance.
Sales tax exemption for diapers and feminine hygiene products
The bill creates a sales and use tax exemption for the sale of diapers and feminine hygiene products.
Breastfeeding equipment
The bill creates a sales and use tax exemption for breast pumps, breast pump kits, and breast pump storage and collection supplies.
Sales and use tax exemption for gun safety items
The bill creates a sales and use tax exemption for sales of gun safes, trigger locks, and gun barrel locks.
Prairie and wetland counseling services
Under current law, the sale of landscaping and lawn maintenance services is subject to the sales tax. The bill excludes from taxable landscaping services the planning and counseling services for the restoration, reclamation, or revitalization of prairie, savanna, or wetlands if such services are provided for a separate and optional fee distinct from other services.
Sales tax exemption for energy systems
Current law provides a sales and use tax exemption for a product that has as its power source wind energy, direct radiant energy received from the sun, or gas generated from anaerobic digestion of animal manure and other agricultural waste, if the product produces at least 200 watts of alternating current or 600 British thermal units per day. The sale of electricity or energy produced by the product is also exempt.
The bill modifies current law so that the exemption applies to solar power systems and wind energy systems that produce electrical or heat energy directly from the sun or wind and are capable of continuously producing at least 200 watts of alternating current or 600 British thermal units. In addition, the exemption applies to a waste energy system that produces electrical or heat energy directly from gas generated from anaerobic digestion of animal manure and other agricultural waste and is capable of continuously producing at least 200 watts of alternating current or 600 British thermal units. A system for which the exemption applies includes tangible personal property sold with the system that is used primarily to store or facilitate the storage of the electrical or heat energy produced by the system.
Elimination of sales tax exemption for farm-raised deer
The bill eliminates the sales and use tax exemption that applies to the sale of farm-raised deer to a person operating a hunting preserve or game farm in this state.
Vapor products
Current law imposes a tax on vapor products, which are any noncombustible products that produce vapor or aerosol for inhalation from the application of a heating element to a liquid or other substance that is depleted as the product is used, regardless of whether the liquid or other substance contains nicotine. The tax is imposed at the rate of 5 cents per milliliter of the liquid or other substance based on the volume as listed by the manufacturer.
The bill taxes vapor products at the rate of 71 percent of the manufacturer’s established list price and modifies the definition of “vapor product.” Under the bill, “vapor product” means a noncombustible product that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means that can be used to produce vapor from a solution or other substance, regardless of whether the product contains nicotine. A “vapor product” is defined to include an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device, as well as any container of a solution or other substance that is intended to be used with these items. The bill specifies that any product regulated by the federal Food and Drug Administration as a drug or device is not a vapor product.
Little cigars
The bill taxes little cigars at the same rate as the excise tax imposed on cigarettes. Under current law, all cigars are taxed at the rate of 71 percent of the manufacturer’s established list price, limited to 50 cents per cigar. Under the bill, little cigars are taxed at the rate of 126 mills per little cigar, regardless of weight. The bill defines “little cigar” to mean a cigar that has an integrated cellulose acetate filter and is wrapped in any substance containing tobacco.
Filing fee increase for petitions to Tax Appeals Commission
The bill increases the filing fee paid by petitioners who file certain petitions for review with the Tax Appeals Commission. Specifically, under the bill, the filing fee increases from $25 to $250 for petitions that do not involve a small claims case. The bill also modifies the definition of “small claims” to a matter in which the amount in controversy is less than or equal to the amount used to determine the applicability of small claims procedure to certain civil actions under current law, which is currently $10,000. Under current law, the definition of “small claims” for cases decided by the Tax Appeals Commission is $2,500, and certain procedures of the Tax Appeals Commission for deciding cases differ between small claims cases and non–small claims cases.
Electronic filing of petitions with Tax Appeals Commission
The bill allows electronic filing of petitions for review to the Tax Appeals Commission and specifies that a petition filed electronically is considered timely filed if submitted by midnight of the last day for filing.
Providing notices for public utility taxes
Under current law, public utility companies, including railroads and air carriers, are exempt from local property taxes and instead are subject to special state taxes. Current law requires DOR to send certain notices regarding these taxes by certified mail. Under the bill, DOR must still provide the notices but is no longer required to send them to public utilities subject to ad valorem taxes by certified mail.
TRANSPORTATION
Highways and local assistance
Enumeration of the I 39/90/94 project
Under current law, major highway projects must be specifically authorized by the legislature and approved by the transportation projects commission before construction on the project may begin. The bill enumerates the I 39/90/94 project, which the bill defines to mean “I 39/90/94 extending approximately 67 miles in Dane, Columbia, Sauk, and Juneau counties from USH 12/18 in Madison to USH 12/STH 16 in Wisconsin Dells, including I 39 from I 90/94 to Levee Road near the city of Portage, and including all interchanges and work on adjacent roadways necessary for the completion of the project.”
Currently, moneys are appropriated to DOT for various purposes relating to state highway facilities. DOT is prohibited from encumbering or expending those moneys for purposes related to the purchase of land, easements, or development rights in land, unless the purchase is in association with a highway project and the land or interest in land is located within one-quarter mile of the highway. The bill exempts the I 39/90/94 project from this prohibition.
Sound barriers on I 894
The bill requires DOT, during the 2025–27 fiscal biennium, to allocate $19,500,000 for the construction of sound barriers on I 894, between 27th street and 76th street, in Milwaukee County.
Contract cost threshold for gubernatorial approval
Under current law, DOT may enter into contracts for services. Certain contracts that exceed a specified cost threshold require the approval of the governor. The bill increases the cost threshold for the following contract types:
1. For engineering, consulting, surveying, or other specialized services, increased from $3,000 to $100,000.
2. For highway improvements, increased from $1,000 to $250,000.
3. For counties to perform highway improvements, increased from $5,000 to $100,000.
4. For performing portions of improvement work affecting railroads or utilities, increased from $5,000 to $100,000.
5. For prompt repair, protection, or preservation of state highways jeopardized by extraordinary conditions or emergency, increased from $10,000 to $100,000.
Requirements for local transportation projects
Under current law, for certain highway projects for which DOT spends federal money, federal money must make up at least 70 percent of the funding for those projects. DOT is required to notify political subdivisions receiving aid for local projects whether the aid includes federal moneys and how those moneys must be spent. For certain projects that receive no federal money, DOT may not require political subdivisions to comply with any portion of DOT’s facilities development manual other than design standards. Any local project funded with state funds under the surface transportation program or the local bridge program must be let through competitive bidding and by contract to the lowest responsible bidder. The bill eliminates all of these requirements.
Traffic calming grants
Under the bill, DOT must develop and administer a local traffic calming grant program. Under the program, DOT must award grants to political subdivisions for infrastructure projects designed to reduce the speed of vehicular traffic.
Mass transit aids
Under current law, DOT provides state aid payments to local public bodies in urban areas served by mass transit systems to assist the local public bodies with the expenses of operating those systems. There are five classes of mass transit systems, and the total amount of state aid payments to four of these classes is limited to a specific amount in each calendar year. The fifth class consists of certain commuter or light rail systems, and no state aid amounts are specified for this class.
The bill modifies the criteria by which mass transit systems are placed into classes, modifying the threshold operating expenses for each class and updating the census by which population-based class distinctions are determined for two of the classes.
For the four classes of mass transit systems for which state aid amounts are specified, the bill does the following to the total amount limits:
1. For mass transit systems having annual operating expenses of $100,000,000 or more, the bill maintains the current limit of $66,787,400 in calendar year 2025 and increases the limit to $69,458,900 in calendar year 2026 and to $72,237,300 in calendar year 2027 and thereafter.
2. For mass transit systems having annual operating expenses of more than $30,000,000 but less than $100,000,000, the bill maintains the current limit of $17,549,500 in calendar year 2025 and increases the limit to $18,251,500 in calendar year 2026 and to $18,981,600 in calendar year 2027 and thereafter.
3. For mass transit systems serving urban areas having a population of at least 50,000 but having annual operating expenses of no more than $30,000,000, the bill maintains the current limit of $25,475,900 in calendar year 2025 and increases the limit to $26,494,900 in calendar year 2026 and to $27,554,700 in calendar year 2027 and thereafter.
4. For mass transit systems serving urban areas having a population of less than 50,000, the bill maintains the current limit of $5,398,600 in calendar year 2025 and increases the limit to $9,800,600 in calendar year 2026 and to $10,192,600 in calendar year 2027 and thereafter.
General transportation aids
Under current law, DOT administers a general transportation aids program that makes aid payments to a county based on a share-of-costs formula, and to a municipality based on the greater of a share-of-costs formula or an aid rate per mile. The aid rate per mile is $2,734 for 2025. The bill increases the aid rate per mile to $2,816 for 2026 and $2,901 for 2027 and thereafter.
Currently, the maximum annual amount of aid that may be paid to counties under the program is $132,276,700. The bill maintains this amount for 2025 and increases this amount to $136,245,000 for 2026 and $140,332,400 for 2027 and thereafter. Currently, the maximum annual amount of aid that may be paid to municipalities under the program is $415,116,200. The bill maintains this amount for 2025 and increases this amount to $427,569,700 for 2026 and $440,396,800 for 2027 and thereafter.
Local road improvement program funding
Under current law, DOT administers the local roads improvement program (LRIP) to assist political subdivisions in improving seriously deteriorating local roads by reimbursing political subdivisions for certain improvements. LRIP has several components, including discretionary grants. Current law specifies dollar amounts that DOT must allocate in each fiscal year to each of three project types that exceed specified cost thresholds: 1) county trunk highway improvements that exceed $250,000; 2) town road improvements that exceed $100,000; and 3) municipal street improvements that exceed $250,000.
The bill increases the amounts that DOT is required to allocate for discretionary grants for the three project types, as follows:
1. Allocations for county trunk highway improvements are increased from $5,840,200 to $6,015,400 in fiscal year 2025–26 and $6,195,900 in fiscal year 2026–27 and each fiscal year thereafter.
2. Allocations for town road improvements are increased from $6,398,000 to $6,590,000 in fiscal year 2025–26 and $6,787,600 in fiscal year 2026–27 and each fiscal year thereafter.
3. Allocations for municipal street improvements are increased from $4,166,900 to $4,291,900 in fiscal year 2025–26 and $4,420,700 in fiscal year 2026–27 and each fiscal year thereafter.
In addition to the ongoing LRIP, onetime funding has previously been appropriated to provide supplemental grants to local governments for projects that are eligible for discretionary grants. This funding was provided for fiscal year 2019–20, with specified amounts required to be allocated between improvement projects on county trunk highways, town roads, and municipal streets. The bill provides that supplemental grants in fiscal year 2025–26 be allocated so that the total funding is distributed among the three project types at the same percentage that each group was allocated funding in fiscal year 2019–20. The bill changes the funding source for these grants from the transportation fund to the general fund.
Local roads improvement grants to Ontario and DeForest
The bill requires DOT to provide local roads improvement program (LRIP) grants of $500,000 to the village of Ontario for residential street development and $6,000,000 to the village of DeForest for improvements to the I 39/CTH “V” interchange. Under current law, DOT administers LRIP to assist political subdivisions in improving seriously deteriorating local roads by reimbursing political subdivisions for certain improvements.
Agricultural roads improvement program general fund appropriation
Under current law, DOT administers an agricultural roads improvement program (ARIP) under which DOT provides grants to political subdivisions for projects to improve certain highway facilities that facilitate access to agricultural lands. Currently, a transportation fund appropriation funds the grants. The bill adds a general fund appropriation to fund grants under the program.
Agricultural roads improvement program time limits
Currently, all grants under ARIP must be awarded by June 23, 2026, and only costs incurred by June 23, 2028, may be reimbursed. These dates represent three years and five years, respectively, from the effective date of the bill creating ARIP.
The bill provides that any grants made from moneys appropriated in the 2025–27 fiscal biennium must be awarded by three years from the effective date of the bill and only costs incurred by five years from the effective date of the bill may be reimbursed.
Local bridge and culvert improvements set-aside
The bill requires DOT to designate 10 percent of the moneys appropriated for LRIP discretionary supplemental grants and ARIP in the 2025–27 fiscal biennium for grants for improvements to certain local bridges or culverts identified as being in poor or worse condition.
County forest road aids
Under current law, DOT provides aid to counties for the improvement of public roads within county forests. The current amount of aid is $351 per mile of county forest road. The bill maintains the aid amount for calendar year 2025 and increases the aid amount, per mile of road, to $361 in calendar year 2026 and $373 in calendar year 2027 and each year thereafter.
Bonding authority for design-build program
Under current law, DOT administers the design-build project program, under which highway improvement project contracts are awarded to a single builder that designs, engineers, and constructs the project. Under the program, DOT may fund state highway rehabilitation projects, major highway projects, or southeast Wisconsin freeway megaprojects. The state is authorized to contract public debt in an amount up to $20,000,000 for the program. The bill increases the authorized public debt for this purpose by $92,500,000, to $112,500,000.
I 94 east-west corridor bonding
Under current law, the state may contract up to $40,000,000 in public debt for reconstruction of the “I 94 east-west corridor,” which is all freeways, including related interchange ramps, roadways, and shoulders, encompassing I 94 in Milwaukee County from 70th Street to 16th Street, and all adjacent frontage roads and collector road systems. The bill increases the authorized general obligation bonding limit for this purpose by $185,171,300, to a total of $225,171,300.
Use of revenue bond proceeds for state highway rehabilitation
Under current law, the Building Commission may issue revenue bonds for certain major highway projects and transportation administrative facilities. Also under current law, state highway rehabilitation projects are funded from various sources, including bond proceeds, but not from proceeds of revenue bonds. The bill provides that revenue bond proceeds may be expended for state highway rehabilitation projects.
Transportation revenue bonds
Under current law, the Building Commission may issue revenue bonds for major highway projects and transportation administrative facilities in a principal amount that may not exceed $4,325,885,700. The bill increases the revenue bond limit to $4,644,920,800, an increase of $319,035,100.
Drivers and motor vehicles
Noncitizen driver’s licenses
Under 2007 Wisconsin Act 20, certain provisions specified in the federal REAL ID Act of 2005 (REAL ID) were incorporated into state law, and these provisions became effective on January 1, 2013. Among these provisions was the requirement that DOT follow certain procedures in processing applications for driver’s licenses and identification cards. However, under 2011 Wisconsin Acts 23 and 32, DOT may process applications for driver’s licenses and identification cards in a manner other than that required by REAL ID if the driver’s licenses and identification cards are marked to indicate that they are not REAL ID compliant and DOT processes the applications in compliance with DOT practices and procedures applicable immediately prior to implementation of REAL ID. Under current law, an applicant for a driver’s license or identification card, regardless of whether it is REAL ID compliant or REAL ID noncompliant, must provide to DOT 1) an identification document that includes either the applicant’s photograph or both the applicant’s full legal name and date of birth; 2) documentation, which may be the same as item 1, above, showing the applicant’s date of birth; 3) proof of the applicant’s social security number or verification that the applicant is not eligible for a social security number; 4) documentation showing the applicant’s name and address of principal residence; and 5) documentary proof that the applicant is a U.S. citizen or is otherwise lawfully present in the United States. However, in processing an application for a REAL ID noncompliant driver’s license or identification card, DOT is not required to meet the standards for document retention and verification that are imposed for REAL ID compliant products.
Under the bill, an applicant for a REAL ID noncompliant driver’s license or identification card (noncompliant REAL ID) is not required to provide documentary proof that the applicant is a U.S. citizen or is otherwise lawfully present in the United States. Also, an applicant may, in lieu of item 1 above, provide an individual taxpayer identification number, a foreign passport, or any other documentation deemed acceptable to DOT and, in lieu of items 2 and 4 above, provide documentation deemed acceptable to DOT. If the applicant does not have a social security number, the applicant is required to provide verification only that he or she does not have one, rather than verification that he or she is not eligible for one. In processing an application for, and issuing or renewing, a noncompliant REAL ID, DOT may not include any question or require any proof or documentation as to whether the applicant is a U.S. citizen or is otherwise lawfully present in the United States. The license document issued must display, on its face, the words “Not valid for voting purposes. Not evidence of citizenship or immigration status.” The bill does not change any current law requirements related to driver qualifications such as minimum age or successful completion of knowledge and driving skills tests.
With limited exceptions, DOT may not disclose social security numbers obtained from operator’s license or identification card applicants. The bill prohibits DOT from disclosing the fact that an applicant has verified to DOT that the applicant does not have a social security number, except that DOT may disclose this information to the Elections Commission.
