AB 200

This bill makes changes to the individual income tax rates and brackets

structure, increases the personal exemption amount for certain taxpayers, and

sunsets the manufacturing and agriculture tax credit.

Changes to rates and brackets

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 4.0 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. In general, this rate and bracket structure first applied

to taxable year 2013 and was enacted in

2013 Wisconsin Act 20

, the state's 2013

Biennial Budget Act, although the rate for the lowest bracket was 4.40 percent for

taxable year 2013 and became 4.0 percent in taxable year 2014.

Under this bill, which first applies to taxable year 2017, there are five 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

the bill for single individuals, certain fiduciaries, heads of households, and married

persons for the four lowest brackets remains the same as current law, 4.0 percent,

5.84 percent, 6.27 percent, and 7.65 percent, and the rate for the new fifth bracket

is 8.25 percent.

Before indexing for inflation, for taxable year 2017, for single individuals,

certain fiduciaries, and heads of households, the lowest bracket applies to taxable

income of over $0 up to $7,500; the second bracket applies to taxable income over

$7,500 up to $15,000; the third bracket applies to taxable income over $15,000 up to

$225,000; the fourth bracket applies to taxable income over $225,000 up to $500,000;

and the new fifth, or top bracket, applies to taxable income over $500,000. For

married joint filers, the lowest bracket applies to taxable income of over $0 up to

$10,000; the second bracket applies to taxable income over $10,000 up to $20,000; the

third bracket applies to taxable income over $20,000 up to $300,000; the fourth

bracket applies to taxable income over $300,000 up to $1,000,000; and the new fifth,

or top bracket, applies to taxable income over $1,000,000.

Personal exemptions

Under current law, an individual income tax personal exemption exists in the