AB251-ASA1,1,10 1An Act to repeal 77.51 (13b); to renumber and amend 73.03 (71) (a), 73.03 (71)
2(b), 73.03 (71) (c) and 73.03 (71) (d); to amend 66.0615 (1m) (f) 2., 77.51 (11d),
377.51 (13) (intro.), 77.51 (13) (a), 77.51 (13) (c), 77.982 (2), 77.991 (2) and
477.9951 (2); and to create 66.0615 (1m) (g), 73.03 (71) (a) 2., 73.03 (71) (b) 2.,
573.03 (71) (c) 2., 73.03 (71) (d) 2., 77.51 (7i), 77.51 (7j), 77.51 (13) (p) 7., 77.51
6(13) (q), 77.51 (14) (n) 7., 77.51 (17) (g), 77.52 (3m), 77.52 (14) (c), 77.523, 77.585
7(1g) and 77.585 (11) of the statutes; relating to: requiring marketplace
8providers to collect and remit sales tax from third parties and reducing
9individual income tax rates based on the collection of sales and use tax from
10out-of-state retailers and marketplace providers.

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 reduction determined for 2019 applicable only to the
second individual tax rate listed in each bracket. Those reduced rates would change
again in 2020. The bill requires DOR to estimate 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 estimation 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 estimation 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, generally, 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.

AB251-ASA1,2,62 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-ASA1,3,3

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-ASA1,3,116 73.03 (71) (a) (intro.) To determine estimate the amount of additional revenue
7reported to the department from the taxes imposed under subch. III of ch. 77 as a
8result of the United States Supreme Court decision that expands the state's
9authority to require out-of-state retailers and marketplace providers, as defined in
10s. 77.51 (7i), to collect and remit the taxes imposed under subch. III of ch. 77 on
11purchases by Wisconsin residents during the period beginning following periods:

AB251-ASA1,4,218 73.03 (71) (b) 1. After the department makes the determination estimation
19under par. (a) 1., the department shall determine how much the 2nd individual
20income tax rates rate listed in each bracket under s. 71.06 may be reduced for the
21taxable year ending on December 31, 2019 beginning after December 31, 2018, and
22before January 1, 2020, in order to decrease individual income tax revenue by the
23amount determined estimated under par. (a). For purposes of this paragraph, the
24tax rate reductions shall be calculated in proportion to the share of gross tax

1attributable to each of the tax brackets under s. 71.06 in effect during the most
2recently completed taxable year 1.

AB251-ASA1,4,84 73.03 (71) (b) 2. After the department makes the estimation under par. (a) 2.,
5the department shall determine how much the 2nd individual income tax rate listed
6in each bracket under s. 71.06, as affected by subd. 1., may be reduced for the taxable
7year beginning after December 31, 2019, and before January 1, 2021, in order to
8decrease individual income tax revenue by the amount estimated under par. (a) 2.

AB251-ASA1,4,1711 73.03 (71) (c) 1. No later than October 20, 2019, the secretary of revenue shall
12certify and report the determinations made under pars. (a) 1. and (b) 1. to the
13secretary of the department of administration, the governor, the joint committee on
14finance, and the legislative audit bureau and specify with that certification and
15report that the new tax rates take effect for the taxable year ending on December 31,
162019 beginning after December 31, 2018, and before January 1, 2020, subject to par.
17(d) 1.

AB251-ASA1,4,2519 73.03 (71) (c) 2. No later than October 20, 2020, the secretary of revenue shall
20certify and report the determinations made under pars. (a) 2. and (b) 2. to the
21secretary of the department of administration, the governor, the joint committee on
22finance, and the legislative audit bureau and specify with that certification and
23report that the new tax rates take effect for the taxable year beginning after
24December 31, 2019, and before January 1, 2021, and for each taxable year thereafter,
25subject to par. (d) 2.

AB251-ASA1,5,113 73.03 (71) (d) 1. The legislative audit bureau shall review the determinations
4reported under par. (c) 1. and report its findings to the joint legislative audit
5committee and the joint committee on finance no later than November 1, 2019. If the
6legislative audit bureau's review of the determinations reported under par. (c) 1.
7results in a different calculation of the tax rates than that made under par. (b) 1., the
8joint committee on finance shall determine which tax rates to apply to the taxable
9year ending on December 31, 2019 beginning after December 31, 2018, and before
10January 1, 2020, and report its determination to the governor, the secretary of
11administration, and the secretary of revenue no later than November 10, 2019.