Chapter 71

71.54(2m) (2m) Indexing for inflation; 2010.

71.54(2m)(a) (a) For calendar years beginning after December 31, 2009, and before January 1, 2011, the dollar amounts of the threshold income under sub. (1) (f) 1. and 2., the maximum household income under sub. (1) (f) 3. and the maximum property taxes under sub. (2) (b) 3. shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the 12-month average of the U.S. consumer price index for the month of August of the year before the previous year through the month of July of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the 12-month average of the U.S. consumer price index for August 2007 through July 2008, as determined by the federal department of labor, except that the adjustment may occur only if the percentage is a positive number. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.

71.54(2m)(b) (b) The department of revenue shall adjust the slope under sub. (1) (f) 2. such that, as a claimant’s income increases from the threshold income as calculated under par. (a), to an amount that exceeds the maximum household income as calculated under par. (a), the credit that may be claimed is reduced to $0 and the department of revenue shall incorporate the changes into the income tax forms and instructions.

71.54(3) (3) Qualified credit minimum. If the amount of a qualified claimant’s claim is more than zero but less than $10 the amount of credit paid or credited shall be $10.

71.54(4) (4) Department will compute credit. The claimant is not required to record on the claim the amount claimed. The department of revenue shall compute the claim allowable to persons who do not record the amount, and the department of revenue shall notify the claimant of the amount of the allowable claim.

71.54 History History: 1987 a. 312; 1989 a. 31, 198, 336; 1995 a. 27, 201, 289; 1997 a. 35; 1999 a. 9; 1999 a. 150 s. 672; 2009 a. 28; 2011 a. 32; 2017 a. 59, 324.

71.54 Cross-reference Cross-reference: See also ss. Tax 14.04 and 14.05, Wis. adm. code.

71.55 71.55 General provisions.

71.55(1) (1) Application of credit against any liability. The amount of any claim otherwise payable under this subchapter may be applied by the department of revenue against any amount certified to the department under s. 71.93 or 71.935 or may be credited under s. 71.80 (3) or (3m).

71.55(2) (2) Fee charge by lessor not permitted. No lessor may charge a fee for supplying a claimant with the information necessary for the claimant to comply with sub. (7).

71.55(3) (3) Forms to be provided by department. In administering this subchapter, the department of revenue shall make available suitable forms with instructions for claimants, including a form that may be included with, or as a part of, the individual income tax form. In preparing homestead credit forms, the department of revenue shall provide a space for identification of the county and city, village or town in which the claimant resides.

71.55 Cross-reference Cross-reference: See also s. Tax 2.08, Wis. adm. code.

71.55(4) (4) Interest not allowed. No interest may be allowed on any payment made to a claimant under this subchapter.

71.55(5) (5) Legislation may be proposed by department. At the end of each fiscal year, the department of revenue shall review the homestead tax credit program and may propose legislation to adjust the amounts of claims allowable under the program, taking into account findings that social security benefits and the cost of living, as reflected in the index computed by the U.S. bureau of labor statistics, have increased or decreased.

71.55(6) (6) Penalties. Unless specifically provided in this subchapter, the penalties under subch. XIII apply for failure to comply with this subchapter unless the context requires otherwise.

71.55(6m) (6m) Administration. The income tax provisions in this chapter relating to assessments, refunds, appeals and collection apply to the credit under this subchapter.

71.55(7) (7) Records may be required by department to determine correct credit. To ascertain the correctness of any claim under this subchapter or to determine the amount of the credit under this subchapter of any person, the department may examine, or cause to be examined by any agent or representative designated by the department, any books, papers, records or memoranda bearing on the homestead credit of the person, may require the production of the books, papers, records or memoranda, and require the attendance, of any person having relevant knowledge, and may take testimony and require proof material for its information. Based on the information it discovers, the department shall determine the true amount of homestead credit during the year or years under investigation.

71.55(8) (8) Rental not at arm’s length. In any case in which a homestead is rented by a person from another person under circumstances deemed by the department of revenue to be not at arm’s length, it may, with the aid of its property tax bureau, determine rent constituting property taxes accrued as at arm’s length, and, for purposes of this subchapter, such determination shall be final.

71.55(9) (9) Table shall be published. The secretary of revenue shall prepare a table under which claims under this subchapter shall be determined. The table shall be published in the department’s instructional booklets.

71.55(10) (10) Farmers. Notwithstanding the provision in s. 71.52 (6) that requires the addition of certain disqualified losses to income, such an addition may not be made by a claimant who is a farmer whose primary income is from farming and whose farming generates less than $250,000 in gross receipts from the operation of farm premises in the year to which the claim relates. For purposes of this subsection, a claimant’s primary income is from farming if the claimant’s gross income from farming for the year to which the claim relates is greater than 50 percent of the claimant’s total gross income from all sources for the year to which the claim relates. In this subsection, “gross income” has the meaning given in s. 71.03 (1).

71.55 History History: 1987 a. 312; 1989 a. 31, 294; 1991 a. 39, 232; 1993 a. 205; 1995 a. 27; 2001 a. 107; 2003 a. 33; 2017 a. 59; 2021 a. 1.

71.55 Cross-reference Cross-reference: See also s. Tax 14.05, Wis. adm. code.

subch. IX of ch. 71 SUBCHAPTER IX

FARMLAND PRESERVATION CREDIT

71.57 71.57 Purpose. The purpose of ss. 71.58 to 71.61 is to provide credit to owners of farmland which is subject to agricultural use restrictions, through a system of income or franchise tax credits and refunds and appropriations from the general fund.

71.57 History History: 1987 a. 312; 1991 a. 39; 2009 a. 28.

71.58 71.58 Definitions. In ss. 71.57 to 71.61:

71.58(1) (1) “Claimant” means an owner, as defined in s. 91.01 (9), 2007 stats., of farmland, domiciled in this state during the entire year for which a credit under ss. 71.57 to 71.61 is claimed, except as follows:

71.58(1)(a) (a) When 2 or more individuals of a household are able to qualify individually as a claimant, they may determine between them who the claimant shall be. If they are unable to agree, the matter shall be referred to the secretary of revenue, whose decision is final.

71.58(1)(b) (b) If any person in a household has claimed or will claim credit under subch. VIII, all persons from that household are ineligible to claim any credit under ss. 71.57 to 71.61 for the year to which the credit under subch. VIII pertained.

71.58(1)(c) (c) For partnerships except publicly traded partnerships treated as corporations under s. 71.22 (1k), “claimant” means each individual partner.

71.58(1)(cm) (cm) For limited liability companies, except limited liability companies treated as corporations under s. 71.22 (1k), “claimant” means each individual member.

71.58(1)(d) (d) For purposes of filing a claim under ss. 71.57 to 71.61, the personal representative of an estate and the trustee of a trust shall be deemed owners of farmland. “Claimant” does not include the estate of a person who is a nonresident of this state on the person’s date of death, a trust created by a nonresident person, a trust which receives Wisconsin real property from a nonresident person or a trust in which a nonresident settlor retains a beneficial interest.

71.58(1)(e) (e) For purposes of filing a claim under ss. 71.57 to 71.61, when land is subject to a land contract, the claimant shall be the vendee under the contract.

71.58(1)(f) (f) For purposes of filing a claim under ss. 71.57 to 71.61, when a guardian has been appointed in this state for a ward who owns the farmland, the claimant shall be the guardian on behalf of the ward.

71.58(1)(g) (g) For a tax-option corporation, “claimant” means each individual shareholder.

71.58(2) (2) “Department” means the department of revenue.

71.58(3) (3) “Farmland” means 35 or more acres of real property in this state owned by the claimant or any member of the claimant’s household during the taxable year for which a credit under ss. 71.57 to 71.61 is claimed if the farmland, during that year, produced not less than $6,000 in gross farm profits resulting from the farmland’s agricultural use, as defined in s. 91.01 (1), 2007 stats., or if the farmland, during that year and the 2 years immediately preceding that year, produced not less than $18,000 in such profits, or if at least 35 acres of the farmland, during all or part of that year, was enrolled in the conservation reserve program under 16 USC 3831 to 3836.

71.58(4) (4) “Gross farm profits” means gross receipts, excluding rent, from agricultural use, as defined in s. 91.01 (1), 2007 stats., including the fair market value at the time of disposition of payments in kind for placing land in federal programs or payments from the federal dairy termination program under 7 USC 1446 (d), less the cost or other basis of livestock or other items purchased for resale which are sold or otherwise disposed of during the taxable year.

71.58(5) (5) “Household” means an individual and his or her spouse and all minor dependents.

71.58(6) (6) “Household income” means all of the income of the claimant and the claimant’s spouse and the farm income, including wages, earned on the farm to which the credit applies of all minor dependents attributable to the taxable year while members of the household.

71.58(7) (7) “Income”:

71.58(7)(a) (a) For an individual, means income as defined under s. 71.52 (6), plus nonfarm business losses, plus amounts under s. 46.27, 2017 stats., less net operating loss carry-forwards, less first-year depreciation allowances under section 179 of the internal revenue code and less the first $25,000 of depreciation expenses in respect to the farm claimed by all of the individuals in a household.

71.58(7)(b) (b) For a corporate claimant, except a tax-option corporation, means the same as for an individual claimant except that net income plus any farm business loss carry-forward allowed under s. 71.26 (4) shall be included instead of income under s. 71.52 (6) and “income” of a corporate claimant shall include all household income of each of its corporate shareholders of record at the end of its taxable year, plus nonfarm business losses and depreciation expenses of the corporate claimant, except the first $25,000 of depreciation expenses in respect to the farm.

71.58(7)(c) (c) For an estate or trust, means the same as “income” for an individual except that the net income of the estate or trust before subtracting any deductions claimed for income distributable to the estate’s or trust’s beneficiaries shall be included instead of Wisconsin adjusted gross income.

71.58(8) (8) “Property taxes accrued” means property taxes, exclusive of special assessments, delinquent interest and charges for service, levied on the farmland and improvements owned by the claimant or any member of the claimant’s household in any calendar year under ch. 70, less the tax credit, if any, afforded in respect of the property by s. 79.10. “Property taxes accrued” shall not exceed $6,000. If farmland is owned by a tax-option corporation, a limited liability company or by 2 or more persons or entities as joint tenants, tenants in common or partners or is marital property or survivorship marital property and one or more such persons, entities or owners is not a member of the claimant’s household, “property taxes accrued” is that part of property taxes levied on the farmland, reduced by the tax credit under s. 79.10, that reflects the ownership percentage of the claimant and the claimant’s household. For purposes of this subsection, property taxes are “levied” when the tax roll is delivered to the local treasurer for collection. If farmland is sold during the calendar year of the levy the “property taxes accrued” for the seller is the amount of the tax levy, reduced by the tax credit under s. 79.10, prorated to each in the closing agreement pertaining to the sale of the farmland, except that if the seller does not reimburse the buyer for any part of those property taxes there are no “property taxes accrued” for the seller, and the “property taxes accrued” for the buyer is the property taxes levied on the farmland, reduced by the tax credit under s. 79.10, minus, if the seller reimburses the buyer for part of the property taxes, the amount prorated to the seller in the closing agreement. With the claim for credit under ss. 71.57 to 71.61, the seller shall submit a copy of the closing agreement and the buyer shall submit a copy of the closing agreement and a copy of the property tax bill.

71.58(9) (9) “Taxable year” has the meaning under s. 71.01 (12).

71.58 History History: 1987 a. 312, 411; 1989 a. 31; 1993 a. 112; 2005 a. 25, 387; 2009 a. 28; 2019 a. 9.

71.59 71.59 Filing claims.

71.59(1) (1) Eligibility and qualifications.

71.59(1)(a) (a) Subject to the limitations provided in ss. 71.57 to 71.61 and s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income or franchise taxes otherwise due, the amount derived under s. 71.60. If the allowable amount of claim exceeds the income or franchise taxes otherwise due on or measured by the claimant’s income or if there are no Wisconsin income or franchise taxes due on or measured by the claimant’s income, the amount of the claim not used as an offset against income or franchise taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft drawn on the general fund.

71.59(1)(b) (b) Every claimant under ss. 71.57 to 71.61 shall supply, at the request of the department, in support of the claim, all of the following:

71.59(1)(b)1. 1. A copy of the property tax bill relating to the farmland.

71.59(1)(b)2. 2. Certification by the claimant that all taxes owed by the claimant on the property for which the claim is made for the year before the year for which the claim is made have been paid.

71.59(1)(b)3. 3. A copy of the farmland preservation agreement or a certificate of the appropriate zoning authority, except that, if the claimant has obtained a certificate of the appropriate zoning authority to file a claim for a previous year and the claimant determines that the conditions described under par. (d) that caused the authority to issue the previous certificate have not changed and are still applicable, the claimant may certify that such conditions have not changed and still apply and such a claimant is not required to submit a certificate of the zoning authority unless the department, in writing, requires the claimant to submit a certificate because the department determines that it needs a certificate to process the claim.

71.59(1)(b)4. 4. Certification by the claimant that each county land conservation committee with jurisdiction over the farmland has been notified that the claimant intends to submit a claim under ss. 71.57 to 71.61.

71.59(1)(c) (c) A farmland preservation agreement submitted under par. (b) 3. shall contain provisions specified under s. 91.13 (8), 2007 stats., including either a provision requiring farming operations to be conducted in substantial accordance with a soil and water conservation plan prepared under s. 92.104, 2007 stats., or a provision requiring farming operations to be conducted in compliance with reasonable soil and water conservation standards established under s. 92.105, 2007 stats.

71.59(1)(d) (d) The certificate of the zoning authority submitted under par. (b) 3. shall certify:

71.59(1)(d)1. 1. That the lands are within the boundaries of an agricultural zoning district which is part of an adopted ordinance meeting the standards of subch. V of ch. 91, 2007 stats., and certified under s. 91.06, 2007 stats.

71.59(1)(d)2. 2. That the ordinance has been approved, where necessary, by the board of the town within which the lands are situated, as required by s. 59.69, and shall indicate the date of approval.

71.59(1)(d)3. 3. That each structure or improvement on the lands conforms to the requirements of the exclusive agricultural use ordinance.

71.59(1)(d)4. 4. The portion of the claimant’s farmland which is within the area zoned for exclusive agricultural use.

71.59(1)(d)5. 5. That soil and water conservation standards applicable to the land are established and approved as required under s. 92.105 (1) to (3), 2007 stats., and that no notice of noncompliance is in effect under s. 92.105 (5), 2007 stats., with respect to the claimant at the time the certificate is issued.

71.59(1m) (1m) Permitted uses. The designation by the department of natural resources of any farmland in this state, for which a claim under this section may be filed, as part of the ice age trail, under s. 23.17, is a permitted use under a farmland preservation agreement, or a certificate of a zoning authority, under sub. (1) (b).

71.59(2) (2) Ineligible claims. No credit shall be allowed under ss. 71.57 to 71.61:

71.59(2)(a) (a) Unless a claim is filed with the department in conformity with the filing requirements in s. 71.03 (6) and (7) for a claimant filing under subch. I, in conformity with the filing requirements in s. 71.24 (1), (1m) and (7) for a claimant filing under subch. IV and in conformity with the filing requirements in s. 71.44 (1), (1m) and (3) for a claimant filing under subch. VII.

71.59(2)(b) (b) If a notice of noncompliance with an applicable soil and water conservation plan under s. 92.104, 2007 stats., is in effect with respect to the claimant at the time the claim is filed.

71.59(2)(c) (c) If a notice of noncompliance with applicable soil and water conservation standards under s. 92.105, 2007 stats., is in effect with respect to the claimant at the time the claim is filed.

71.59(2)(d) (d) For property taxes accrued on farmland zoned for exclusive agricultural use under an ordinance certified under subch. V of ch. 91, 2007 stats., which is granted a special exception or conditional use permit for a use which is not an agricultural use, as defined in s. 91.01 (1), 2007 stats.

71.59(2)(e) (e) If the department determines that ownership of the farmland has been transferred to the claimant primarily for the purpose of maximizing benefits under ss. 71.57 to 71.61.

71.59 History History: 1987 a. 312, 411; 1989 a. 31, 359; 1991 a. 39, 309; 1995 a. 201; 1997 a. 137; 2009 a. 28.

71.60 71.60 Computation.

71.60(1) (1) Except as provided in sub. (2), the amount of any claim filed in calendar years based upon property taxes accrued in the preceding calendar year shall be determined as follows:

71.60(1)(a) (a) The amount of excessive property taxes shall be computed by subtracting from property taxes accrued the amount of 7 percent of the 2nd $5,000 of household income plus 9 percent of the 3rd $5,000 of household income plus 11 percent of the 4th $5,000 of household income plus 17 percent of the 5th $5,000 of household income plus 27 percent of the 6th $5,000 of household income plus 37 percent of household income in excess of $30,000. The maximum excessive property tax which can be utilized is $6,000.

71.60(1)(b) (b) The credit allowed under ss. 71.57 to 71.61 shall be limited to 90 percent of the first $2,000 of excessive property taxes plus 70 percent of the 2nd $2,000 of excessive property taxes plus 50 percent of the 3rd $2,000 of excessive property taxes. The maximum credit shall not exceed $4,200 for any claimant. The credit for any claimant shall be the greater of either the credit as calculated under ss. 71.57 to 71.61 as it exists at the end of the year for which the claim is filed or as it existed on the date on which the farmland became subject to a current agreement under subch. II or III of ch. 91, 2007 stats., using for such calculations household income and property taxes accrued of the year for which the claim is filed.

71.60(1)(c) (c)

71.60(1)(c)1. 1. If the farmland is located in a county which has a certified agricultural preservation plan under subch. IV of ch. 91, 2007 stats., at the close of the year for which credit is claimed and is in an area zoned by a county, city or village for exclusive agricultural use under ch. 91, 2007 stats., at the close of such year, the amount of the claim shall be that as specified in par. (b).

71.60(1)(c)2. 2. If the farmland is subject to a transition area agreement under subch. II of ch. 91, 2007 stats., on July 1 of the year for which credit is claimed, or the claimant had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, and the farmland is located in a city or village which has a certified exclusive agricultural use zoning ordinance under subch. V of ch. 91, 2007 stats., in effect at the close of the year for which credit is claimed, or in a town which is subject to a certified county exclusive agricultural use zoning ordinance under subch. V of ch. 91, 2007 stats., in effect at the close of the year for which credit is claimed, the amount of the claim shall be that as specified in par. (b).

71.60(1)(c)3. 3. If the claimant or any member of the claimant’s household owns farmland which is ineligible for credit under subd. 1. or 2. but was subject to a farmland preservation agreement under subch. III of ch. 91, 2007 stats., on July 1 of the year for which credit is claimed, or the owner had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, and if the owner has applied by the end of the year in which conversion under s. 91.41, 2007 stats., is first possible for conversion of the agreement to a transition area agreement under subch. II of ch. 91, 2007 stats., and the transition area agreement has subsequently been executed, and the farmland is located in a city or village which has a certified exclusive agricultural use zoning ordinance under subch. V of ch. 91, 2007 stats., in effect at the close of the year for which credit is claimed, or in a town which is subject to a certified county exclusive agricultural use zoning ordinance under subch. V of ch. 91, 2007 stats., in effect at the close of the year for which credit is claimed, the amount of the claim shall be that specified in par. (b).

71.60(1)(c)4. 4. If the claimant or any member of the claimant’s household owns farmland which is ineligible for credit under subd. 1. or 2. but which is subject to a farmland preservation agreement or a transition area agreement under subch. II of ch. 91, 2007 stats., on July 1 of the year for which credit is claimed, or the owner had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, the amount of the claim shall be limited to 80 percent of that specified in par. (b).

71.60(1)(c)5. 5. If the claimant or any member of the claimant’s household owns farmland which is ineligible for credit under subds. 1. to 4. but was subject to a farmland preservation agreement under subch. III of ch. 91, 2007 stats., on July 1 of the year for which credit is claimed, or the owner had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, and if the owner has applied by the end of the year in which conversion under s. 91.41, 2007 stats., is first possible for conversion of the agreement to an agreement under subch. II of ch. 91, 2007 stats., and the agreement under subch. II of ch. 91, 2007 stats., has subsequently been executed, the amount of the claim shall be limited to 80 percent of that specified in par. (b).

71.60(1)(c)6. 6. If the farmland is located in an agricultural district under a certified county agricultural preservation plan under subch. IV of ch. 91, 2007 stats., at the close of the year for which credit is claimed, and is located in an area zoned for exclusive agricultural use under a certified town ordinance under subch. V of ch. 91, 2007 stats., at the close of such year, the amount of the claim shall be the amount specified in par. (b).

71.60(1)(c)6m. 6m. If the farmland is located in an agricultural district under a certified county agricultural preservation plan under subch. IV of ch. 91, 2007 stats., at the close of the year for which credit is claimed, and is located in an area zoned for exclusive agricultural use under a certified county or town ordinance under subch. V of ch. 91, 2007 stats., for part of a year but not at the close of that year because the farmland became subject to a city or village extraterritorial zoning ordinance under s. 62.23 (7a), the amount of the claim shall be equal to the amount that the claim would have been under this section if the farmland were subject to a certified county or town exclusive agricultural use ordinance at the close of the year.

71.60(1)(c)7. 7. If the farmland is located in an area zoned for exclusive agricultural use under a certified county, city or village ordinance under subch. V of ch. 91, 2007 stats., at the close of the year for which credit is claimed, but the county in which the farmland is located has not adopted an agricultural preservation plan under subch. IV of ch. 91, 2007 stats., by the close of such year, the amount of the claim shall be limited to 70 percent of that specified in par. (b).

71.60(1)(c)8. 8. If the farmland is subject to a farmland preservation agreement under subch. III of ch. 91, 2007 stats., on July 1 of the year for which credit is claimed or the claimant had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, the amount of the claim shall be limited to 50 percent of that specified in par. (b).

71.60(2) (2) If the farmland is subject to a certified ordinance under subch. V of ch. 91, 2007 stats., or an agreement under subch. II of ch. 91, 2007 stats., in effect at the close of the year for which the credit is claimed, the amount of the claim is 10 percent of the property taxes accrued or the amount determined under sub. (1), whichever is greater.

71.60 History History: 1987 a. 312, 411; 1989 a. 31; 1991 a. 39; 1993 a. 246, 420; 2009 a. 28.

71.61 71.61 General provisions.

71.61(1) (1) Department may apply credit against any tax liability. The amount of any claim otherwise payable under ss. 71.57 to 71.61 may be applied by the department against any amount certified to the department under s. 71.93 or 71.935 or may be credited under s. 71.80 (3) or (3m).