SB 1

Individual Income tax rates

Under current law, there are four income tax brackets for single individuals,

certain fiduciaries, heads of households, and married persons. The brackets are

indexed for inflation. The rate of taxation under current law for the lowest bracket

for single individuals, certain fiduciaries, heads of households, and married persons

is 4.40 percent of taxable income; the rate for the second bracket is 5.84 percent; the

rate for the third bracket is 6.27 percent; and the rate for the highest bracket is 7.65

percent. Before applying bracket indexing, the four brackets for individuals, certain

fiduciaries, and heads of households, to which the above rates apply, are as follows:

taxable income from $0 to $7,500; taxable income exceeding $7,500 but not exceeding

$15,000; taxable income exceeding $15,000 but not exceeding $225,000; and taxable

income exceeding $225,000.

This rate and bracket structure first applies to taxable year 2013, and was

enacted in

2013 Wisconsin Act 20

, the state budget bill.

For taxable years beginning after December 31, 2013, this bill lowers the rate

of taxation for the lowest tax bracket. Under the bill, the rate of taxation for the

lowest bracket for single individuals, certain fiduciaries, heads of households, and

married persons is 4.0 percent of taxable income.

technical college system

This bill provides property tax relief aid to technical college districts,

distributed annually to each district on the basis of its equalized value as compared

to the equalized value of all technical college districts as of January 2014. The first

distribution is in February 2015.

The bill eliminates the current limit on a technical college district's tax levy and

imposes, instead, a revenue limit. Under the bill, with certain exceptions, a district

board's revenue (defined as the sum of its tax levy for operations and the amount of

property tax relief aid it receives) in the 2014-15 school year or any school year

thereafter may not exceed its revenue in the previous school year increased by the

district's valuation factor, which is the percentage change in the district's equalized

value due to new construction, less improvements removed.

net operating losses

Under current law, for income tax purposes, under certain circumstances, a

taxpayer may claim a Wisconsin net operating loss against Wisconsin taxable income

of the two years preceding the year in which the taxpayer sustained the loss. This

bill clarifies that a taxpayer need not make an offset against Wisconsin modified

taxable income of the two years preceding the loss, if the taxpayer chooses not to

carry back the net operating loss to the two years preceding the loss.

tax credits