March 10, 2021 - Introduced by Senators Ballweg, Jacque and Ringhand,
cosponsored by Representatives Kitchens, Billings, Krug, Dallman,
Duchow, Edming, Emerson, Mursau, B. Meyers, Novak, J. Rodriguez, Rozar,
Skowronski, Spiros, Spreitzer and Subeck. Referred to Committee on
Financial Institutions and Revenue.

SB198,1,8 1An Act to repeal 66.0615 (1) (bs) and 66.0615 (5); to renumber and amend
259.25 (3) (e); to amend 66.0615 (1) (de), 66.0615 (1) (dk), 66.0615 (1m) (a),
366.0615 (1m) (g), 66.0615 (2) (intro.), 66.0615 (2) (a), 66.0615 (2) (b), 66.0615 (2)
4(e), 66.0615 (3), 66.0615 (4) (a) (intro.) and 66.1014 (2) (d) 1.; and to create 59.25
5(3) (e) 1., 59.25 (3) (e) 2., 66.0615 (1) (bt), 66.0615 (1) (bu), 66.0615 (1r), 66.0615
6(2m), 66.0615 (4) (a) 4., 66.0615 (4) (d) and 66.1014 (1) (c) of the statutes;
7relating to: expanding applicability of the room tax, making substantive and
8technical changes to the local room tax, and providing a penalty.

This bill expands the applicability of the room tax, makes a number of
substantive and technical changes to the local room tax in the areas of collections,
audits, and the exchange of information between local governments and the
Department of Revenue, establishes a common tax base between the sales tax and
the room tax, and authorizes a municipality to impose a forfeiture on a marketplace
provider that does not timely file a required room tax return to the municipality or
pay the required tax. The forfeiture may not exceed 25 percent of the room tax due
for the previous year or $5,000, whichever is less. A “marketplace provider” is
defined as a person who facilitates a retail sale by a seller by listing or advertising,

to the extent that the marketplace provider facilitates the sale or furnishing of
rooms, lodging, or other accommodations to transients.

Currently, the room tax may be imposed by a municipality or a local exposition
district on the privilege of furnishing rooms or lodging to transients by hotelkeepers,
motel operators, lodging marketplaces, and other persons who furnish such
accommodations. Under the bill, the room tax may be imposed by a municipality or
district on the sales price from selling or furnishing rooms or lodging to transients
by hotelkeepers, motel operators, and others. 2019 Wisconsin Act 10 in effect
requires lodging marketplaces to collect and remit sales taxes from third parties.

Under this bill, for transactions that occur through a marketplace provider, the
marketplace provider generally collects any room tax due from a marketplace seller
(a seller who sells products through a physical or electronic marketplace operated by
a marketplace provider), and forwards it to the municipality on a quarterly basis,
along with a form prepared by DOR. The form must include the total sales for
properties located in a municipality with a room tax, the total number of nights such
properties were rented, the room tax rate, and the total tax collected. Annually,
beginning 90 days after the bill's effective date, DOR is required to post on its website
the name of each municipality that imposes a room tax, and the rate of each room tax.

Under current law and the bill, to enforce the collection of a room tax imposed
by a municipality or local exposition district, if such entities have probable cause to
believe that the correct amount of room tax has not been assessed or that a room tax
return is incorrect, they may inspect and audit the financial records of any person
subject to the room tax. Under current law, a person who fails to comply with a
request to inspect and audit such records is subject to a forfeiture not exceeding 5
percent of the room tax imposed or 5 percent of what the municipality or district
determines the room tax should be, according to its best judgment. Under the bill,
this same forfeiture may be imposed on a marketplace provider if the municipality
or district has made three requests to inspect and audit the requested records and
the marketplace provider fails to respond or comply with the request.

The technical changes made by the bill include the following:

1. Requires counties to provide DOR with the complete county tax roll.

2. Applies to the room tax a number of definitions that currently apply to the
general sales and use tax.

3. Authorizes a municipality or district performing an audit related to the room
tax to conduct joint audits with other such entities and to exchange audit information
with DOR and any municipality that took part in the joint audit.