AB262: Bill Text

May 8, 2023 - Introduced by Representatives O’Connor, Macco, Allen, Armstrong, Wittke, Magnafici, Brandtjen, Murphy, Dittrich, Moses, Gundrum and Behnke. Referred to Committee on Ways and Means.

AB262,,2 An Act to amend 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06 (2) (j) (intro.), 71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.125 (1), 71.125 (2), 71.17 (6), 71.64 (9) (b) (intro.), 71.67 (5) (a) and 71.67 (5m); and to create 71.06 (1r), 71.06 (2) (k), 71.06 (2) (km), 71.06 (2) (L), 71.06 (2) (Lm), 71.06 (2) (m), 71.06 (2) (mm), 71.06 (2) (n), 71.06 (2) (nn), 71.06 (2) (o), 71.06 (2) (oo), 71.06 (2e) (be), 71.06 (2e) (bm), 71.06 (2e) (bs), 71.06 (2e) (bt), 71.06 (2e) (bu), 71.06 (2s) (e), 71.06 (2s) (f), 71.06 (2s) (g), 71.06 (2s) (h), 71.06 (2s) (i) and 71.06 (4) of the statutes; relating to: phase-in changes to individual income tax rates and brackets.

AB262,,3 Analysis by the Legislative Reference Bureau

This bill modifies the individual income tax rates and brackets beginning with the 2024 tax year and ending with the 2028 tax year. The bill decreases individual income tax rates each year for each tax bracket. Beginning with tax year 2027, the tax rate for individuals whose income is $7,500 or less, before being adjusted for inflation, is zero. Beginning with tax year 2028, the tax rate for individuals whose income exceeds $7,500, before being adjusted for inflation, is 4.5 percent.

Under current law, there are four income tax brackets for single individuals, certain fiduciaries, heads of households, and married persons, and 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 3.54 percent of taxable income. The rate for the second bracket is 4.65 percent. The rate for the third bracket is 5.3 percent. And the rate for the highest bracket is 7.65 percent. Before bracket indexing, the four brackets for individuals, certain fiduciaries, and heads of households, to which the above rates apply, are as follows: 1) taxable income from $0 to $7,500; 2) taxable income exceeding $7,500 but not exceeding $15,000; 3) taxable income exceeding $15,000 but not exceeding $225,000; and 4) taxable income exceeding $225,000.

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 fiscal estimate, which will be printed as an appendix to this bill.

AB262,,4 The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB262,1 Section 1. 71.06 (1q) (intro.) of the statutes is amended to read:

AB262,,6 71.06 (1q) Fiduciaries, single individuals, and heads of households; after 2012 and before 2024. (intro.) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2012, and before January 1, 2024:

AB262,2 Section 2. 71.06 (1r) of the statutes is created to read:

AB262,,8 71.06 (1r) Fiduciaries, single individuals, and heads of households; after 2023. (a) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2023, and before January 1, 2025, except as provided under s. 71.06 (4):

AB262,,9 1. On all taxable income from $0 to $7,500, 3.15 percent.

AB262,,10 2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5 percent.

AB262,,11 3. On all taxable income exceeding $15,000 but not exceeding $225,000, 5 percent.

AB262,,12 4. On all taxable income exceeding $225,000, 7.40 percent.

AB262,,13 (b) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2024, and before January 1, 2026, except as provided under s. 71.06 (4):

AB262,,14 1. On all taxable income from $0 to $7,500, 2.20 percent.

AB262,,15 2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5 percent.

AB262,,16 3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.75 percent.

AB262,,17 4. On all taxable income exceeding $225,000, 6.70 percent.

AB262,,18 (c) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2025, and before January 1, 2027, except as provided under s. 71.06 (4):

AB262,,19 1. On all taxable income from $0 to $7,500, 1.25 percent.

AB262,,20 2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5 percent.

AB262,,21 3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5 percent.

AB262,,22 4. On all taxable income exceeding $225,000, 6 percent.

AB262,,23 (d) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2026, and before January 1, 2028, except as provided under s. 71.06 (4):

AB262,,24 1. On all taxable income from $0 to $7,500, 0 percent.

AB262,,25 2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5 percent.

AB262,,26 3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5 percent.

AB262,,27 4. On all taxable income exceeding $225,000, 5.20 percent.

AB262,,28 (e) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates percent for taxable years beginning after December 31, 2027, except as provided under s. 71.06 (4):

AB262,,29 1. On all taxable income from $0 to $7,500, 0 percent.

AB262,,30 2. On all taxable income exceeding $7,500 but not exceeding $15,000, 4.5 percent.

AB262,,31 3. On all taxable income exceeding $15,000 but not exceeding $225,000, 4.5 percent.

AB262,,32 4. On all taxable income exceeding $225,000, 4.5 percent.

AB262,3 Section 3. 71.06 (2) (i) (intro.) of the statutes is amended to read:

AB262,,34 71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after December 31, 2012, and before January 1, 2024:

AB262,4 Section 4. 71.06 (2) (j) (intro.) of the statutes is amended to read:

AB262,,36 71.06 (2) (j) (intro.) For married persons filing separately, for taxable years beginning after December 31, 2012, and before January 1, 2024:

AB262,5 Section 5. 71.06 (2) (k) of the statutes is created to read:

AB262,,38 71.06 (2) (k) For joint returns, for taxable years beginning after December 31, 2023, and before January 1, 2025, except as provided under s. 71.06 (4):

AB262,,39 1. On all taxable income from $0 to $10,000, 3.15 percent.

AB262,,40 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5 percent.

AB262,,41 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 5 percent.

AB262,,42 4. On all taxable income exceeding $300,000, 7.40 percent.

AB262,6 Section 6. 71.06 (2) (km) of the statutes is created to read:

AB262,,44 71.06 (2) (km) For married persons filing separately, for taxable years beginning after December 31, 2023, and before January 1, 2025, except as provided under s. 71.06 (4):

AB262,,45 1. On all taxable income from $0 to $5,000, 3.15 percent.

AB262,,46 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5 percent.

AB262,,47 3. On all taxable income exceeding $10,000 but not exceeding $150,000, 5 percent.

AB262,,48 4. On all taxable income exceeding $150,000, 7.40 percent.

AB262,7 Section 7. 71.06 (2) (L) of the statutes is created to read:

AB262,,50 71.06 (2) (L) For joint returns, for taxable years beginning after December 31, 2024, and before January 1, 2026, except as provided under s. 71.06 (4):

AB262,,51 1. On all taxable income from $0 to $10,000, 2.20 percent.

AB262,,52 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5 percent.

AB262,,53 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.75 percent.

AB262,,54 4. On all taxable income exceeding $300,000, 6.70 percent.

AB262,8 Section 8. 71.06 (2) (Lm) of the statutes is created to read:

AB262,,56 71.06 (2) (Lm) For married persons filing separately, for taxable years beginning after December 31, 2024, and before January 1, 2026, except as provided under s. 71.06 (4):

AB262,,57 1. On all taxable income from $0 to $5,000, 2.20 percent.

AB262,,58 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5 percent.

AB262,,59 3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.75 percent.

AB262,,60 4. On all taxable income exceeding $150,000, 6.70 percent.

AB262,9 Section 9. 71.06 (2) (m) of the statutes is created to read:

AB262,,62 71.06 (2) (m) For joint returns, for taxable years beginning after December 31, 2025, and before January 1, 2027, except as provided under s. 71.06 (4):

AB262,,63 1. On all taxable income from $0 to $10,000, 1.25 percent.

AB262,,64 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5 percent.

AB262,,65 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.5 percent.

AB262,,66 4. On all taxable income exceeding $300,000, 6 percent.

AB262,10 Section 10. 71.06 (2) (mm) of the statutes is created to read:

AB262,,68 71.06 (2) (mm) For married persons filing separately, for taxable years beginning after December 31, 2025, and before January 1, 2027, except as provided under s. 71.06 (4):

AB262,,69 1. On all taxable income from $0 to $5,000, 1.25 percent.

AB262,,70 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5 percent.

AB262,,71 3. On all taxable income exceeding $10,000 but not exceeding $150,000, 4.5 percent.

AB262,,72 4. On all taxable income exceeding $150,000, 6 percent.

AB262,11 Section 11. 71.06 (2) (n) of the statutes is created to read:

AB262,,74 71.06 (2) (n) For joint returns, for taxable years beginning after December 31, 2026, and before January 1, 2028, except as provided under s. 71.06 (4):

AB262,,75 1. On all taxable income from $0 to $10,000, 0 percent.

AB262,,76 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 4.5 percent.

AB262,,77 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 4.5 percent.

AB262,,78 4. On all taxable income exceeding $300,000, 5.20 percent.

AB262,12 Section 12. 71.06 (2) (nn) of the statutes is created to read:

AB262,,80 71.06 (2) (nn) For married persons filing separately, for taxable years beginning after December 31, 2026, and before January 1, 2028, except as provided under s. 71.06 (4):

AB262,,81 1. On all taxable income from $0 to $5,000, 0 percent.

AB262,,82 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 4.5 percent.