Taxpayer Fairness Reform Act Introduced, Receives Hearing

Senator Marklein and Representative Macco have introduced Assembly Bill 623, the Taxpayer Fairness Reform Act, a package of reforms intended to make Wisconsin a better place in which to do business. The bill contains seven elements which will help businesses more easily and fairly comply with state law. Those changes include:

  • Ending Wisconsin’s participation in a third-party audit group known as the Multi-State Tax Commission.  With the addition of 102 new state auditor positions in the recent state budget, Wisconsin no longer has need for an outside group to conduct additional audits of companies doing business here.
  • Treating taxpayers fairly under two statutes adopted by Governor Doyle in 2009.  The first deals with economic substance, a system under which various business transactions are considered taxable.  This proposal adopts the federal definition (passed in 2010) and changes the legal threshold for businesses to contest tax assessments from an impossible standard to one that allows fair rules if there is a dispute.
  • The second change to a Doyle-era law is restoring the pre-2009 standard for business to produce tax documents to the state.  This proposal allows in-state companies to be served a subpoena first rather than allow the steep penalties adopted in 2009 to be applied.
  • Simplify sales tax reporting for contractors by allowing the 10% lump sum contract changes adopted in 2013 to apply to all construction contracts and grant general contractors the ability to designate what materials are eligible for the 10%.
  • Allow appropriate depreciation expenses to be considered when determining the Manufacturing and Agriculture Credit.
  • Direct the state to adopt an administrative rule treating business sales subject to the “throwback rule” (where tax is assessed by Wisconsin for sales in states which do not levy a tax) in the same manner as other sales.
  • Extend taxpayer protections for material reviewed by an earlier tax audit.

These changes will make Wisconsin a better state in which to do business and ensure taxpayers are treated fairly under the items identified above.