ORDER OF THE DEPARTMENT OF REVENUE REPEALING, AMENDING, REPEALING AND RECREATING, AND CREATING RULES
The Wisconsin Department of Revenue proposes an order to: repeal Tax 2.05, 2.66 (2) (b) (Note) and (4) (c) (Note), and 2.67 (2) (c) 2. and 3.; amend Tax 1.15 (title), (1), and (5) (intro.) and (Note), 2.61 (9) (c) 3. (Example), 2.67 (2) (c) 1. and 4. and (d) 1. and 3., 2.82 (1) (a), (4) (c) (Example), and (5) (a) (Example), 2.88 (3) (a), 4.10 (3) (b) 2., 4.65 (3) (c), 14.01 (4) (a), (b), and (c), and 14.03 (3) (a) and (a) (Example), (4) (b) 23. h., and (5) (a) 7.; repeal and recreate Tax 1.15 (2), (3), and (4); and create Tax 2.88 (3) (c) and 14.01 (4) (a) (Note); relating to income, franchise, and excise tax provisions.
The scope statement for this rule, SS 070-14, was approved by the Governor on July 24, 2014, published in Register No. 704 on August 14, 2014, and approved by the Secretary of Revenue on August 27, 2014. Analysis by the Department of Revenue
Explanation of agency authority: Under s. 71.80 (1) (c), Stats., the department may make such regulations as it shall deem necessary in order to carry out chapter 71 of the Wisconsin Statutes, relating to income and franchise taxes. This provision applies to the revision of ss. Tax 2.05, 2.61, 2.67, 2.82, 2.88, 14.01, and 14.03. Section 78.79, Stats., provides "[t]he department may promulgate reasonable rules relating to the administration and enforcement of this chapter…" This provision applies to the revision of ss. Tax 4.10 and 4.65. Section 227.04 (2m), Stats., requires each agency to promulgate a rule that requires the agency to disclose in advance the discretion that the agency will follow in the enforcement of rules against a small business that has committed a minor violation. This provision applies to the repeal and recreation of s. Tax 1.15. Related statute or rule: There are no other applicable statutes or rules.
Plain language analysis: The proposed rule makes the following changes:
• Clarifies an example of the carryforward of net business losses in s. Tax 2.61 (9) (c) 3. • Revises ss. Tax 2.66, 2.67, and 2.82 to change references to certain corporate franchise and income tax forms that are being consolidated and renamed as a result of forms redesign. • Revises s. Tax 2.88 (3) to reflect that refund interest may not be paid on an overpayment that results from the carryback of a net operating loss. This provision is under s. 71.05 (8) (c), Stats., as created by 2013 Wis. Act 145. • Amends s. Tax 4.10 (3) (b) 2. to reflect the removal by 2013 Wis. Act 54 of limits on the capacity of a vehicle transporting fuel and the distance between the destination of the import or export of fuel from a bulk plant and the Wisconsin border. • Revise s. Tax 4.65 (3) (c) to reflect that s. 78.01 (2t), Stats., as created by 2013 Wis. Act 204, provides that exemption certificates used to claim exemption from the motor vehicle fuel tax on gasoline or diesel fuel are valid for 3 years. • Revises ss. Tax 14.01 and 14.05 to include Schedule H-EZ as a form for claiming homestead credit. • Revises s. Tax 14.03 to reflect the current amount of the dependent deduction under s. 71.52 (5), Stats.; include net operating loss carrybacks as an item includable in income under s. 71.52 (6), Stats., as amended by 2013 Wis. Act 184; and clarify that only nontaxable pension rollovers are excluded from income. Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states: The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies: The 2013-2014 Legislative session has made various changes to Wisconsin's income, franchise, and excise tax provisions. The department has created this proposed rule order to reflect these statutory changes, as well as provide needed clarification and reference changes as described above. No other data was used in the preparation of this proposed rule order or this analysis.
Analysis and supporting documents used to determine effect on small business: This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated costs incurred by private sector: This rule order does not have a fiscal effect on the private sector.
Effect on small business: This rule order does not affect small business.
Agency contact person: Please contact Jennifer Chadwick at (608) 266-8253 or jennifer.chadwick@wisconsin.gov, if you have any questions regarding this rule order. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below. The deadline for comments concerning this rule order was September 23, 2016. Information as to the place, date, and time of the public hearing was published in the Wisconsin Administrative Register.
Jennifer Chadwick
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
SECTION 1. Tax 1.15 (title) and (1) are amended to read:
Tax 1.15 (title) Enforcement of rules and guidelines as they apply to against a small business that has commited a minor violation.
(1) Purpose. This section discloses the discretion the department will follow in the enforcement of rules and guidelines as they apply to against a small business that has committed a minor violation.
SECTION 2. Tax 1.15 (2), (3), and (4) are repealed and recreated to read:
Tax 1.15 (2) (2) Definitions. In this section: (a) "Minor violation" has the meaning given in s. 227.04 (1) (a), Stats. (b) "Small business" has the meaning given in s. 227.114 (1), Stats. (3) Discretion the department will follow. The enforcement of rules against a small business that has committed a minor violation, including the assessment of a penalty, forfeiture, fine, or interest, shall be done on a case-by-case basis. Each case shall be determined on its merits as evaluated by the department, taking into consideration all relevant factors. Factors shall include:
(a) The difficulty and cost of compliance with the rule by the small business.
(b) The financial capacity of the small business, including the ability of the small business to pay the amount of any penalty that may be imposed.
(c) The compliance options available, including options for achieving voluntary compliance with the rule.
(d) The level of public interest and concern.
(e) The opportunities available to the small business to understand and comply with the rule.
(f) Fairness to the small business and to other persons, including competitors and the public.
