The bill adopts for state income and franchise tax purposes various provisions
of the federal Internal Revenue Code, including provisions of the Consolidated
Appropriations Act of 2020 related to the earned income tax credit, the paycheck
protection program, the economic injury disaster loan program, payment assistance
for certain loan programs, and grants to shuttered venue operators. However, the
bill limits the amount that a person may claim in the taxable year as a deduction for
expenses paid or incurred directly or indirectly from forgiven paycheck protection
program loans to $250,000.

The bill eliminates obsolete provisions related to the medical care insurance
subtraction for self-employed persons.

Under current law, payments or distributions of $5,000 or less received each
year by an individual from a qualified retirement plan is exempt from income tax if
the individual is at least 65 years of age and has income of less than $15,000 if single
or filing a tax return as head of household or less than $30,000 if married. The bill
changes the exemption to a subtraction that the taxpayer can choose not to claim if
not claiming the subtraction would result in the taxpayer receiving a greater
homestead credit.

This bill provides a sales and use tax exemption for tangible personal property
sold to a construction contractor who transfers the property to the University of
Wisconsin Hospitals and Clinics Authority as part of constructing a facility for the
authority in this state. A similar exemption applies under current law to property
sold to a contractor who transfers the property to a local unit of government,
technical college district, or institution or campus of the University of Wisconsin
System. Under current law, a sale of tangible personal property directly to the
University of Wisconsin Hospitals and Clinics Authority is exempt from the sales
and use tax, but the exemption does not apply to a contractor who purchases tangible
personal property on the authority's behalf.

Current law provides that persons providing landscaping, printing,
fabricating, processing, or photographic services or performing services to tangible
personal property may purchase for resale, without paying the sales tax, items that
the person will transfer to a customer in conjunction with providing a service that
is subject to the sales tax. The bill provides that the exemption applies regardless
of whether the service is taxable.

The bill modifies the sales and use tax exemption for churches, religious
organizations, and certain nonprofit organizations to conform with DOR's current
practice with regard to the administration of the exemption. The bill provides that
the exemption applies to organizations that are exempt from federal taxation under
section 501 (c) (3) of the Internal Revenue Code and have received a determination
letter for the Internal Revenue Service. The bill also provides that the exemption
applies to churches and religious organizations that meet the requirements of
section 501 (c) (3) of the Internal Revenue Code, but are not required to apply for or
obtain tax-exempt status from the IRS.

Under current law, an out-of-state retailer that has annual gross sales into this
state in excess of $100,000 or 200 or more annual separate sales transactions into
this state must register with DOR and collect the sales tax on those sales and
transactions. The determination of the annual gross sales and transactions is based
on the retailer's taxable year for federal income tax purposes.

Under the bill, an out-of-state retailer that has annual gross sales into this
state in excess of $100,000 in the previous or current calendar year must register
with DOR and collect the sales tax on those sales.

The bill allows the state auditor and Legislative Audit Bureau to examine sales
and use tax returns and related documents to the extent necessary for the LAB to
carry out its duties.

This bill creates a grant program administered by DOR to make grants to
businesses affected by the COVID-19 pandemic. For the purpose of distributing the
grants, DOR will give preference to a business that did not receive a loan under the
federal paycheck protection program, has no more than 300 employees, and can
demonstrate that it had at least a 25 percent reduction in its gross receipts between
comparable calendar quarters in 2019 and 2020. The bill does not preclude a
business that received a PPP loan from receiving the grant, but DOR must give
preference among those recipients to businesses that have no more than 300
employees and can demonstrate the 25 percent reduction in gross receipts. The bill
prohibits a person who committed fraud from receiving a grant and requires that the
person pay back the amount of any grant the person may have received. The bill also
prohibits a payday lender and a person who outsourced jobs to another entity from

receiving grants. Finally, the amount of the grant is excluded from the recipient's
taxable income.

Under current law, during the period beginning on the third Monday of March
and ending 10 days after the annual town meeting, a county treasurer may not pay
to a town treasurer any money that belongs to the town and that is in the hands of
the county treasurer except upon a written order of the town board. The bill
eliminates this restriction.

AB2-SSA1,7,42 20.835 (2) (cd) Grants to businesses harmed by the pandemic. A sum sufficient
3to make grants to businesses under s. 73.135, except that the total amount of grants
4made under s. 73.135 shall not exceed $214,700,000.