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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 reductions determined for 2019 applicable to all
subsequent taxable years, except that the second individual income tax rate listed
in each tax bracket would change again in 2020. The bill requires DOR to determine
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 determination 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 determination 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 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.
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:
AB251,1 1Section 1 . 66.0615 (1m) (f) 2. of the statutes is amended to read:
AB251,2,62 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.
AB251,2 7Section 2 . 66.0615 (1m) (g) of the statutes is created to read:
AB251,3,3
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.
AB251,3 4Section 3. 73.03 (71) (a) of the statutes is renumbered 73.03 (71) (a) (intro.)
5and amended to read:
AB251,3,116 73.03 (71) (a) (intro.) To determine the amount of additional revenue reported
7to the department from the taxes imposed under subch. III of ch. 77 as a result of the
8United States Supreme Court decision that expands the state's authority to require
9out-of-state retailers and marketplace providers, as defined in s. 77.51 (7i), to collect
10and remit the taxes imposed under subch. III of ch. 77 on purchases by Wisconsin
11residents during the period beginning following periods:
AB251,3,12 121. Beginning on October 1, 2018, and ending on September 30, 2019.
AB251,4 13Section 4. 73.03 (71) (a) 2. of the statutes is created to read:
AB251,3,1514 73.03 (71) (a) 2. Beginning on October 1, 2019, and ending on September 30,
152020.
AB251,5 16Section 5. 73.03 (71) (b) of the statutes is renumbered 73.03 (71) (b) 1. and
17amended to read:
AB251,3,2418 73.03 (71) (b) 1. After the department makes the determination under par. (a)
191., the department shall determine how much the individual income tax rates under
20s. 71.06 may be reduced for the taxable year ending on December 31, 2019, in order
21to decrease individual income tax revenue by the amount determined under par. (a)
221. For purposes of this paragraph, the tax rate reductions shall be calculated in
23proportion to the share of gross tax attributable to each of the tax brackets under s.
2471.06 in effect during the most recently completed taxable year.
AB251,6 25Section 6. 73.03 (71) (b) 2. of the statutes is created to read:
AB251,4,5
173.03 (71) (b) 2. After the department makes the determination under par. (a)
22., the department shall determine how much the 2nd individual income tax rate
3listed in each bracket under s. 71.06, as affected by subd. 1., may be reduced for the
4taxable year ending on December 31, 2020, in order to decrease individual income
5tax revenue by the amount determined under par. (a) 2.
AB251,7 6Section 7. 73.03 (71) (c) of the statutes is renumbered 73.03 (71) (c) 1. and
7amended to read:
AB251,4,148 73.03 (71) (c) 1. No later than October 20, 2019, the secretary of revenue shall
9certify and report the determinations made under pars. (a) 1. and (b) 1. to the
10secretary of the department of administration, the governor, the joint committee on
11finance, and the legislative audit bureau and specify with that certification and
12report that the new tax rates take effect for the taxable year ending on December 31,
132019, and for each taxable year thereafter, subject to par. (d) 1. and except as
14provided in par. (b) 2
.
AB251,8 15Section 8. 73.03 (71) (c) 2. of the statutes is created to read:
AB251,4,2116 73.03 (71) (c) 2. No later than October 20, 2020, the secretary of revenue shall
17certify and report the determinations made under pars. (a) 2. and (b) 2. to the
18secretary of the department of administration, the governor, the joint committee on
19finance, and the legislative audit bureau and specify with that certification and
20report that the new tax rates take effect for the taxable year ending on December 31,
212020, and for each taxable year thereafter, subject to par. (d) 2.
AB251,9 22Section 9. 73.03 (71) (d) of the statutes is renumbered 73.03 (71) (d) 1. and
23amended to read:
AB251,5,824 73.03 (71) (d) 1. The legislative audit bureau shall review the determinations
25reported under par. (c) 1. and report its findings to the joint legislative audit

1committee and the joint committee on finance no later than November 1, 2019. If the
2legislative audit bureau's review of the determinations reported under par. (c) 1.
3results in a different calculation of the tax rates than that made under par. (b) 1., the
4joint committee on finance shall determine which tax rates to apply to the taxable
5year ending on December 31, 2019, and to each taxable year thereafter, except as
6provided in par. (b) 2. and subd. 2.,
and report its determination to the governor, the
7secretary of administration, and the secretary of revenue no later than November 10,
82019.
AB251,10 9Section 10. 73.03 (71) (d) 2. of the statutes is created to read:
AB251,5,1810 73.03 (71) (d) 2. The legislative audit bureau shall review the determinations
11reported under par. (c) 2. and report its findings to the joint legislative audit
12committee and the joint committee on finance no later than November 1, 2020. If the
13legislative audit bureau's review of the determinations reported under par. (c) 2.
14results in a different calculation of the tax rates than that made under par. (b) 2., the
15joint committee on finance shall determine which tax rates to apply to the taxable
16year ending on December 31, 2020, and to each taxable year thereafter, and report
17its determination to the governor, the secretary of administration, and the secretary
18of revenue no later than November 10, 2020.
AB251,11 19Section 11 . 77.51 (7i) of the statutes is created to read:
AB251,6,220 77.51 (7i) “Marketplace provider" means any person who facilitates a retail
21sale by a seller by listing or advertising for sale by the seller, in any manner, tangible
22personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or a
23service specified under s. 77.52 (2) (a) and through agreements or arrangements with
243rd parties, directly or indirectly, who are collecting payment from the purchaser and
25transmitting that payment to the seller, regardless of whether the person receives

1compensation or other consideration in exchange for the services provided by the
2person.
AB251,12 3Section 12 . 77.51 (7j) of the statutes is created to read:
AB251,6,64 77.51 (7j) “Marketplace seller" means a seller who sells products through a
5physical or electronic marketplace operated by a marketplace provider, regardless
6of whether the seller is required to be registered with the department.
AB251,13 7Section 13 . 77.51 (11d) of the statutes is amended to read:
AB251,6,118 77.51 (11d) For purposes of subs. (1ag), (1f), (3pf), (7i), (7j), and (9p) and ss.
977.52 (20) and (21), 77.522, 77.54 (9g), (51), (52), and (60), and 77.59 (5r), “product"
10includes tangible personal property, and items, property, and goods under s. 77.52
11(1) (b), (c), and (d), and services.
AB251,14 12Section 14 . 77.51 (13) (intro.) of the statutes is amended to read:
AB251,6,1413 77.51 (13) (intro.) Except as provided in sub. (13b), “retailer" “Retailer”
14includes:
AB251,15 15Section 15 . 77.51 (13) (a) of the statutes is amended to read:
AB251,6,1916 77.51 (13) (a) Every seller who makes any sale on the seller's own behalf or on
17behalf of another person
, regardless of whether the sale is mercantile in nature, of
18tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or
19(d), or a service specified under s. 77.52 (2) (a).
AB251,16 20Section 16 . 77.51 (13) (c) of the statutes is amended to read:
AB251,7,521 77.51 (13) (c) When the department determines that it is necessary for the
22efficient administration of this subchapter to regard any salespersons,
23representatives, peddlers, marketplace providers, or canvassers as the agents of the
24dealers, distributors, marketplace sellers, supervisors, or employers under whom
25they operate or from whom they obtain the tangible personal property or items,

1property, or goods under s. 77.52 (1) (b), (c), or (d) sold by them, irrespective of
2whether they are making the sales on their own behalf or on behalf of such dealers,
3distributors, marketplace sellers, supervisors , or employers, the department may so
4regard them and may regard the dealers, distributors, marketplace sellers,
5supervisors, or employers as retailers for purposes of this subchapter.
AB251,17 6Section 17 . 77.51 (13) (p) 7. of the statutes is created to read:
AB251,7,87 77.51 (13) (p) 7. Whether the seller sells on the seller's own behalf or on behalf
8of another person.
AB251,18 9Section 18 . 77.51 (13) (q) of the statutes is created to read:
AB251,7,1310 77.51 (13) (q) A marketplace provider who facilitates, on behalf of a
11marketplace seller, sales that are sourced to this state as provided under s. 77.522
12of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c),
13or (d), or services.
AB251,19 14Section 19 . 77.51 (13b) of the statutes is repealed.
AB251,20 15Section 20 . 77.51 (14) (n) 7. of the statutes is created to read:
AB251,7,1716 77.51 (14) (n) 7. Whether the seller sells on the seller's own behalf or on behalf
17of another person.
AB251,21 18Section 21 . 77.51 (17) (g) of the statutes is created to read:
AB251,7,2019 77.51 (17) (g) Whether the seller sells on the seller's own behalf or on behalf
20of another person.
AB251,22 21Section 22 . 77.52 (3m) of the statutes is created to read:
AB251,8,222 77.52 (3m) (a) Except as provided in par. (b), a marketplace provider is liable
23for the tax imposed under this section on the entire sales price charged to the
24purchaser, including any amount charged by the marketplace provider for
25facilitating the sale, from the sale, license, lease or rental of tangible personal

1property, or items, property, or goods under sub. (1) (b), (c), or (d), or services under
2sub. (2).
AB251,8,183 (b) A marketplace provider whose only activities are facilitating sales of
4services on behalf of marketplace sellers operating under a shared hotel, motel, or
5restaurant brand name, may submit an application to the department to request a
6waiver from collecting and remitting tax on sales facilitated on behalf of marketplace
7sellers. The application shall include the name and address of all marketplace
8sellers selling or furnishing such services in this state, the marketplace seller's sales
9or use tax permit number obtained under sub. (7) or 77.53 (9), and any other
10information the department requires. The department may grant the waiver if it is
11satisfied that the tax due under this chapter is collected and remitted by the
12marketplace sellers. A marketplace provider that is granted the waiver must, within
1360 days from a written request by the department, provide the name and address of
14all marketplace sellers selling or furnishing such services in this state, the
15marketplace seller's sales or use tax permit number obtained under sub. (7) or 77.53
16(9), and any other information the department requires. In this paragraph, “ hotel”
17and “motel” have the meaning given in sub. (2) (a) 1. and “restaurant” has the
18meaning given in s. 97.01 (14g).
AB251,23 19Section 23 . 77.52 (14) (c) of the statutes is created to read:
AB251,8,2220 77.52 (14) (c) A marketplace provider shall obtain and maintain each
21exemption certificate from a purchaser claiming an exemption for a sale facilitated
22by the marketplace provider on behalf of a marketplace seller.
AB251,24 23Section 24 . 77.523 of the statutes is created to read:
AB251,9,2 2477.523 Liability of marketplace providers, retailers, and marketplace
25sellers.
(1) A marketplace provider shall collect and remit tax on a sale facilitated

1on behalf of a marketplace seller, unless the marketplace provider has been granted
2a waiver under s. 77.52 (3m) (b).
AB251,9,7 3(2) A marketplace provider who collects and remits tax on a sale under sub. (1)
4shall notify the marketplace seller that the marketplace provider is collecting and
5remitting the tax. Upon notification, only the marketplace provider may be audited
6and held liable for tax on the sale. If notification is not provided, the marketplace
7provider and marketplace seller may be audited and held liable for tax on the sale.
AB251,9,11 8(3) Upon examination by the department and subject to the limitations in sub.
9(5), a marketplace provider is relieved of liability under this subchapter for the
10failure to collect and remit tax on a sale if the marketplace provider can show all of
11the following to the department's satisfaction:
AB251,9,1212 (a) The sale was made solely on behalf of a marketplace seller.
AB251,9,1313 (b) The marketplace provider notified the marketplace seller under sub. (2).
AB251,9,1414 (c) The retail sale was properly sourced to this state under s. 77.522.
AB251,9,20 15(4) A marketplace provider is relieved of liability under this section for failure
16to collect and remit the correct amount of tax to the extent that the marketplace
17provider demonstrates to the satisfaction of the department that the error is due to
18insufficient or incorrect information given to the marketplace provider by the
19marketplace seller, except that this subsection does not apply if the marketplace
20provider and the marketplace seller are related entities, as defined in s. 71.01 (9am).
AB251,9,22 21(5) The relief from liability under subs. (3) and (4) may not exceed the following
22amounts:
AB251,9,2323 (a) For 2019, 5 percent of the tax due for that year.
AB251,9,2424 (b) For 2020, 5 percent of the tax due for that year.
AB251,9,2525 (c) For 2021, 3 percent of the tax due for that year.
AB251,10,1
1(d) For 2022, and for each year thereafter, 0 percent of the tax due for that year.
AB251,10,4 2(6) Nothing in this section affects the obligations of a purchaser to remit use
3tax on a transaction for which the retailer or marketplace provider and marketplace
4seller did not collect and remit the tax.
AB251,10,10 5(7) No person may bring a class action against a marketplace provider in any
6court of this state on behalf of consumers arising from or in any way related to an
7overpayment of sales or use tax collected on sales facilitated by the marketplace
8provider, regardless of whether that claim is characterized as a claim for a refund.
9This subsection does not affect a person's ability to claim a refund as provided under
10s. 77.59.
AB251,25 11Section 25 . 77.585 (1g) of the statutes is created to read:
AB251,10,1712 77.585 (1g) A marketplace provider who collects and remits tax on behalf of a
13marketplace seller under s. 77.523 may claim a bad debt deduction under this
14subsection if either the marketplace provider or marketplace seller may claim a
15deduction under section 166 of the Internal Revenue Code for the sales transaction.
16A marketplace seller may not claim a deduction under this subsection for the same
17transaction.
AB251,26 18Section 26 . 77.585 (11) of the statutes is created to read:
AB251,10,2119 77.585 (11) A marketplace seller may claim as a deduction on a return under
20s. 77.58 the amount of the sales price for which the marketplace seller received
21notification under s. 77.523 (2).
AB251,27 22Section 27 . 77.982 (2) of the statutes is amended to read:
AB251,11,323 77.982 (2) Sections 77.51 (1f), (3pf), (9p), (12m), (13), (14), (14g), (15a), and
24(15b), and (17), 77.52 (1b), (3), (5), (13), (14), and (18) to (23), 77.522, 77.523, 77.54
25(51) and (52), 77.58 (1) to (5), (6m), and (7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5),

1(6), (8), (9), (12) to (15), and (19m), and 77.62, as they apply to the taxes under subch.
2III, apply to the tax under this subchapter. Section 77.73, as it applies to the taxes
3under subch. V, applies to the tax under this subchapter.
AB251,28 4Section 28 . 77.991 (2) of the statutes is amended to read:
AB251,11,115 77.991 (2) Sections 77.51 (12m), (13), (14), (14g), (15a), and (15b), and (17),
677.52 (1b), (3), (5), (13), (14), (18), and (19), 77.522, 77.523, 77.58 (1) to (5), (6m), and
7(7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5), (6), (8), (9), (12) to (15), and (19m), and
877.62, as they apply to the taxes under subch. III, apply to the tax under this
9subchapter. Section 77.73, as it applies to the taxes under subch. V, applies to the
10tax under this subchapter. The renter shall collect the tax under this subchapter
11from the person to whom the passenger car is rented.
AB251,29 12Section 29 . 77.9951 (2) of the statutes is amended to read:
AB251,11,1813 77.9951 (2) Sections 77.51 (3r), (12m), (13), (14), (14g), (15a), and (15b), and
14(17),
77.52 (1b), (3), (5), (13), (14), (18), and (19), 77.522, 77.523, 77.58 (1) to (5), (6m),
15and (7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5), (6), (8), (9), (12) to (15), and (19m),
16and 77.62, as they apply to the taxes under subch. III, apply to the fee under this
17subchapter. The renter shall collect the fee under this subchapter from the person
18to whom the vehicle is rented.
AB251,30 19Section 30 . Effective date.
AB251,11,2420 (1) Sales tax collection by marketplace providers. This treatment of ss.
2166.0615 (1m) (f) 2. and (g), 77.51 (7i), (7j), (11d), (13) (intro.), (a), (c), (p) 7., and (q),
22(13b), (14) (n) 7., and (17) (g), 77.52 (3m) and (14) (c), 77.523, 77.585 (1g) and (11),
2377.982 (2), 77.991 (2), and 77.9951 (2) takes effect on the first day of the calendar
24quarter that is at least 3 months after publication.
AB251,11,2525 (End)
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