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SB1012: Bill Text
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2025 - 2026 LEGISLATURE
LRB-0769/1
KP:emw
2025 SENATE BILL 1012
February 12, 2026 - Introduced by Senators
Marklein
and
Nass
, cosponsored by Representatives
Wittke
,
Behnke
,
Dittrich
,
Kaufert
,
Knodl
,
Kreibich
,
O'Connor
,
Pronschinske
and
Murphy
. Referred to Committee on Agriculture and Revenue.
SB1012,1,9
1
An Act
to renumber and amend
77.60 (1) (a) and 77.60 (1) (b);
to amend
2
70.38 (1m), 71.03 (7) (intro.), 71.24 (7) (a), 71.44 (3) (a), 71.775 (4) (bm) 1.,
3
71.775 (4) (bm) 2., 71.775 (4) (em), 71.82 (1), 71.82 (2) (b), 71.82 (2) (d), 71.84
4
(1), 71.84 (2) (a), 71.84 (2) (b), 71.84 (2) (c), 71.90 (1), 71.91 (6) (e) 3., 71.91 (6)
5
(f) 5., 73.03 (6), 76.075, 76.13 (2), 76.13 (2a), 76.13 (3), 76.22 (2), 76.28 (4) (a),
6
76.28 (4) (b), 76.28 (11), 76.39 (4) (d), 76.48 (5), 77.59 (6) (c), 77.96 (5), 78.68 (1),
7
139.25 (1), 139.44 (9), 168.12 (6) (c), 168.12 (6) (d) 2., 168.12 (6) (e) 1. and
8
168.12 (6) (e) 3.;
to create
73.03 (78) and 77.60 (1) (b) 2. of the statutes;
9
relating to:
interest rates on late, nondelinquent taxes and on overpayments.
Analysis by the Legislative Reference Bureau
This bill modifies the interest rates applicable to various late, nondelinquent taxes and fees owed to the Department of Revenue and to overpayments for those taxes and fees that are refunded by DOR. Under current law, generally, late, nondelinquent taxes or fees administered by DOR are subject to an interest rate of 12 percent per year, and DOR must pay interest at the rate of 3 percent per year on refunds of overpayments of those taxes or fees. Beginning in 2026, the bill requires DOR to annually determine an interest rate to be used in calculating interest for late, nondelinquent taxes or fees administered by DOR and for refunds of overpayments paid by DOR. The interest rate is based on the effective federal funds rate published by the Federal Reserve Bank of New York for January 2 of the applicable year.
The bill applies to the following taxes and fees: 1) the individual income and corporate income and franchise tax; 2) the withholding tax; 3) the sales and use tax; 4) taxes paid by utilities and insurers; 5) excises taxes on motor vehicle fuel, alcohol beverages, and cigarettes, tobacco, and vapor products; 6) the economic development surcharge; 7) the petroleum inspection fee; 8) the metalliferous mining tax; and 9) the charge imposed by DOR on a city, village, town, or county for the expenses incurred by DOR in examining city, village, town, or county records regarding the assessment of property upon a failure to return information requested by DOR.
Also, current law requires that an interest rate of 12 percent per year apply to delinquent individual income and corporate income and franchise taxes in instances in which the secretary of revenue determines that reduction from an interest rate of 1.5 percent per month for such delinquent taxes is fair and equitable. The bill requires that the interest rate described above that is determined annually by DOR based on the effective federal funds rate apply to such delinquent taxes in instances in which the secretary determines that the reduction is fair and equitable.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB1012,1
1
Section
1
.
70.38 (1m) of the statutes is amended to read:
SB1012,3,3
2
70.38
(1m)
Estimated liability.
Upon written request and for sufficient
3
reason shown, the department shall allow a person subject to the tax under s.
4
70.375 to file, on or before June 15, a net proceeds tax return and to pay that tax
5
based upon estimated tax liability. On or before September 15, that person shall
6
file a final report and pay any additional tax due along with interest at the rate of
7
1 percent per month
interest determined under s. 73.03 (78)
from June 15 until the
8
date of payment. If the additional tax exceeds 10 percent of the person’s tax under
1
s. 70.375 for the previous year, the penalty and interest under s. 70.39 (1) apply. If
2
the final report indicates that the person overpaid the person’s liability, the
3
department shall refund the overpayment.
SB1012,2
4
Section
2
.
71.03 (7) (intro.) of the statutes is amended to read:
SB1012,3,19
5
71.03
(7)
Extension of time to file.
(intro.) Returns of natural persons and
6
fiduciaries that require a statement of amounts or information contained or entered
7
on a corresponding return under the internal revenue code shall be filed within the
8
time fixed under that code for filing of the corresponding federal return. Any
9
extension of time granted by law or by the internal revenue service for the filing of
10
that corresponding federal return extends the time for filing under this chapter if a
11
copy of the taxpayer’s application to the internal revenue service requesting the
12
extension is filed with the return under this chapter or if a copy of any request for
13
an extension required by the internal revenue service is filed with the return under
14
this chapter or at an earlier date that the department prescribes by rule and if the
15
taxpayer pays the Wisconsin tax in the manner applicable to federal income taxes
16
under the internal revenue code. Taxes payable upon the filing of the return do not
17
become delinquent during the period of an extension but are subject to interest at
18
the rate of
12 percent per year
interest determined under s. 73.03 (78)
during such
19
period except as follows:
SB1012,3
20
Section
3
.
71.24 (7) (a) of the statutes is amended to read:
SB1012,4,8
21
71.24
(7)
(a) In the case of a corporation required to file a return, the
22
department of revenue shall allow an automatic extension of 7 months or until the
23
original due date of the corporation’s corresponding federal return, whichever is
1
later. Any extension of time granted by law or by the internal revenue service for
2
the filing of corresponding federal returns shall extend the time for filing under this
3
subchapter to 30 days after the federal due date if the corporation reports the
4
extension in the manner specified by the department on the return. Except for
5
payments of estimated taxes, income or franchise taxes payable upon the filing of
6
the tax return shall not become delinquent during such extension period, but shall,
7
except as provided in par. (b), be subject to interest at the rate of
12 percent per year
8
interest determined under s. 73.03 (78)
during such period.
SB1012,4
9
Section
4
.
71.44 (3) (a) of the statutes is amended to read:
SB1012,4,20
10
71.44
(3)
(a) In the case of a corporation required to file a return, the
11
department of revenue shall allow an automatic extension of 7 months or until the
12
original due date of the corporation’s corresponding federal return, whichever is
13
later. Any extension of time granted by law or by the internal revenue service for
14
the filing of corresponding federal returns shall extend the time for filing under this
15
subchapter to 30 days after the federal due date if the corporation reports the
16
extension in the manner specified by the department on the return. Except for
17
payments of estimated taxes, income or franchise taxes payable upon the filing of
18
the tax return shall not become delinquent during such extension period, but shall,
19
except as provided in par. (b), be subject to interest at the rate of
12 percent per year
20
interest determined under s. 73.03 (78)
during such period.
SB1012,5
21
Section
5
.
71.775 (4) (bm) 1. of the statutes is amended to read:
SB1012,5,5
22
71.775
(4)
(bm) 1. For the return under par. (a), the department shall allow an
23
automatic extension of 7 months or until the corresponding due date of the pass-
1
through entity’s federal income tax return or return of partnership income,
2
whichever is later. Except for payments of estimated taxes, and except as provided
3
in subd. 2., withholding taxes payable upon filing the return are not delinquent
4
during the extension period but shall be subject to interest at the rate of
12 percent
5
per year
interest determined under s. 73.03 (78)
during that period.
SB1012,6
6
Section
6
.
71.775 (4) (bm) 2. of the statutes is amended to read:
SB1012,5,12
7
71.775
(4)
(bm) 2. For taxable years beginning after December 31, 2008, for
8
persons who qualify for a federal extension of time to file under
26 USC 7508A
due
9
to a presidentially declared disaster or terroristic or military action, withholding
10
taxes that are otherwise due from a pass-through entity under sub. (2) are not
11
subject to
12 percent
interest as otherwise provided under subd. 1. during the
12
extension period and for 30 days after the end of the federal extension period.
SB1012,7
13
Section
7
.
71.775 (4) (em) of the statutes is amended to read:
SB1012,6,2
14
71.775
(4)
(em) Except as provided in par. (fm), in the case of any
15
underpayment of estimated withholding taxes under par. (cm), interest shall be
16
added to the aggregate withholding tax for the taxable year at the rate of
12 percent
17
per year
interest determined under s. 73.03 (78)
on the amount of the
18
underpayment for the period of the underpayment. In this paragraph, “period of
19
the underpayment” means the time period beginning with the due date of the
20
installment and ending on either the unextended due date of the return under par.
21
(a) or the date of payment, whichever is earlier.
If 90 percent of the tax due under
22
sub. (2) for the taxable year is not paid by the unextended due date of the return
23
under par. (a), the difference between that amount and the estimated taxes paid,
1
along with any interest due, shall accrue delinquent interest in the same manner as
2
income and franchise taxes under s. 71.82 (2) (a).
SB1012,8
3
Section
8
.
71.82 (1) of the statutes is amended to read:
SB1012,6,8
4
71.82
(1)
Normal.
(a) In assessing taxes interest shall be added to such
5
taxes at
12 percent per year
the rate of interest determined under s. 73.03 (78)
from
6
the date on which such taxes if originally assessed would have become delinquent if
7
unpaid, to the date on which such taxes when subsequently assessed will become
8
delinquent if unpaid.
SB1012,6,22
9
(b) Except as otherwise specifically provided, in crediting overpayments of
10
income and surtaxes against underpayments or against taxes to be subsequently
11
collected and in certifying refunds of such taxes interest shall be added at the rate
12
of
3 percent per year
interest determined under s. 73.03 (78)
from the date on which
13
such taxes when assessed would have become delinquent if unpaid to the date on
14
which such overpayment was certified for refund except that if any overpayment of
15
tax is certified for refund within 90 days after the last date prescribed for filing the
16
return of such tax or 90 days after the date of actual filing of the return of such tax,
17
whichever occurs later, no interest shall be allowed on such overpayment. For
18
purposes of this section the return of such tax shall not be deemed actually filed by
19
an employee unless and until the employee has included the written statement
20
required to be filed under s. 71.65 (1). However when any part of a tax paid on an
21
estimate of income, whether paid in connection with a tentative return or not, is
22
refunded or credited to a taxpayer, such refund or credit shall not draw interest.
SB1012,7,3
23
(c) Any assessment made as a result of the adjustment or disallowance of a
1
claim for credit under s. 71.07, 71.28 or 71.47 or subch. VIII or IX, except as
2
provided in sub. (2) (c), shall bear interest at
12 percent per year
the rate of interest
3
determined under s. 73.03 (78)
from the due date of the claim.
SB1012,9
4
Section
9
.
71.82 (2) (b) of the statutes is amended to read:
SB1012,7,8
5
71.82
(2)
(b)
Department may reduce delinquent interest.
The department
6
shall provide by rule for reduction of interest under par. (a) to
12 percent per year
7
the rate of interest determined under s. 73.03 (78)
in stated instances wherein the
8
secretary of revenue determines that reduction is fair and equitable.
SB1012,10
9
Section
10
.
71.82 (2) (d) of the statutes is amended to read:
SB1012,8,5
10
71.82
(2)
(d)
Withholding tax.
Of the amounts required to be withheld any
11
amount not deposited or paid over to the department within the time required shall
12
be deemed delinquent and deposit reports or withholding reports filed after the due
13
date shall be deemed late. Delinquent deposits or payments shall bear interest at
14
the rate of 1.5 percent per month from the date deposits or payments are required
15
under this section until deposited or paid over to the department. The department
16
shall provide by rule for reduction of interest on delinquent deposits to
12 percent
17
per year
the rate of interest determined under s. 73.03 (78)
in stated instances
18
wherein the secretary of revenue determines reduction fair and equitable. In the
19
case of a timely filed deposit or withholding report, withheld taxes shall become
20
delinquent if not deposited or paid over on or before the due date of the report. In
21
the case of no report filed or a report filed late, withheld taxes shall become
22
delinquent if not deposited or paid over by the due date of the report. In the case of
23
an assessment under s. 71.83 (1) (b) 2., the amount assessed shall become
1
delinquent if not paid on or before the first day of the calendar month following the
2
calendar month in which the assessment becomes final, but if the assessment is
3
contested before the tax appeals commission or in the courts, it shall become
4
delinquent on the 30th day following the date on which the order or judgment
5
representing final determination becomes final.
SB1012,11
6
Section
11
.
71.84 (1) of the statutes is amended to read:
SB1012,8,14
7
71.84
(1)
Individuals and fiduciaries.
Except as provided in s. 71.09 (11),
8
in the case of any underpayment of estimated tax by an individual, estate or trust,
9
except as provided under s. 71.09, there shall be added to the aggregate tax for the
10
taxable year interest at the rate of
12 percent per year
interest determined under s.
11
73.03 (78)
on the amount of the underpayment for the period of the underpayment.
12
In this subsection, “the period of the underpayment” means the time period from
13
the due date of the installment until either the 15th day of the 4th month beginning
14
after the end of the taxable year or the date of payment, whichever is earlier.
SB1012,12
15
Section
12
.
71.84 (2) (a) of the statutes is amended to read:
SB1012,9,5
16
71.84
(2)
(a) Except as provided in s. 71.29 (7), in the case of any
17
underpayment of estimated tax by a corporation under s. 71.29 or 71.48, there shall
18
be added to the aggregate tax for the taxable year interest at the rate of
12 percent
19
per year
interest determined under s. 73.03 (78)
on the amount of the
20
underpayment for the period of the underpayment. In this paragraph, “period of
21
the underpayment” means the time period from the due date of the installment
22
until either the date on which the corporation is required to file for federal income
23
tax purposes, not including any extension, under the Internal Revenue Code or the
1
date of payment, whichever is earlier.
If 90 percent of the tax shown on the return
2
is not paid by the date on which the corporation is required to file for federal income
3
tax purposes, not including any extension, under the Internal Revenue Code, the
4
difference between that amount and the estimated taxes paid, along with any
5
interest due, shall accrue delinquent interest under s. 71.91 (1) (a).
SB1012,13
6
Section
13
.
71.84 (2) (b) of the statutes is amended to read:
SB1012,9,15
7
71.84
(2)
(b) For corporations that are subject to a tax under this chapter on
8
unrelated business taxable income, as defined under section 512 of the internal
9
revenue code, and virtually exempt entities, “period of the underpayment” means
10
the time period from the due date of the installment until either the 15th day of the
11
5th month beginning after the end of the taxable year or the date of payment,
12
whichever is earlier.
If 90 percent of the tax shown on the return is not paid by the
13
15th day of the 5th month following the close of the taxable year, the difference
14
between that amount and the estimated taxes paid along with any interest due,
15
shall accrue delinquent interest under s. 71.91 (1) (a).
SB1012,14
16
Section
14
.
71.84 (2) (c) of the statutes is amended to read:
SB1012,9,22
17
71.84
(2)
(c) If a refund under s. 71.29 (3m) results in an income or franchise
18
tax liability that is greater than the amount of estimated taxes paid when reduced
19
by the amount of the refund, the taxpayer shall add to the aggregate tax for the
20
taxable year interest at
an annual rate of 12 percent
the rate determined under s.
21
73.03 (78)
on the amount of the unpaid tax liability for the period beginning on the
22
date the refund is issued and ending on either the date on which the taxpayer is
1
required to file for federal income tax purposes, not including any extension, under
2
the Internal Revenue Code or the date the tax liability is paid, whichever is earlier.
SB1012,15
3
Section
15
.
71.90 (1) of the statutes is amended to read:
SB1012,10,20
4
71.90
(1)
Deposit.
The department shall notify any person who files a
5
petition for redetermination that the person may deposit the amount of an
6
additional assessment, including any interest or penalty, with the department, or
7
with a person that the department prescribes, at any time before the department
8
makes its redetermination. The department shall notify spouses jointly except
9
that, if the spouses have different addresses and if either spouse notifies the
10
department in writing of those addresses, the department shall serve a duplicate of
11
the original notice on the spouse who has the address other than the address to
12
which the original notice was sent. Amounts deposited under this subsection shall
13
be subject to the interest provided by s. 71.82 only to the extent of the interest
14
accrued prior to the first day of the month succeeding the date of deposit. Any
15
deposited amount which is refunded shall bear interest at the rate of
3 percent per
16
year
interest determined under s. 73.03 (78)
during the time the funds were on
17
deposit. A person may also pay any portion of an assessment which is admitted to
18
be correct and the payment shall be considered an admission of the validity of that
19
portion of the assessment and may not be recovered in an appeal or in any other
20
action or proceeding.
SB1012,16
21
Section
16
.
71.91 (6) (e) 3. of the statutes is amended to read:
SB1012,11,4
22
71.91
(6)
(e) 3. For purposes of an adjudication under this paragraph, the
23
assessment of the tax upon which the interest or lien of the department is based is
1
conclusively presumed to be valid. Interest shall be allowed for judgments under
2
this paragraph at the rate of
12 percent per year
interest determined under s. 73.03
3
(78)
from the date the department receives the money wrongfully levied upon to the
4
date of payment of the judgment or from the date of sale to the date of payment.
SB1012,17
5
Section
17
.
71.91 (6) (f) 5. of the statutes is amended to read:
SB1012,11,22
6
71.91
(6)
(f) 5. Before the sale, the department shall determine a minimum
7
price for which the property shall be sold. If no person offers for that property at the
8
sale at least the amount of the minimum price, the state shall purchase the
9
property for the minimum price; otherwise, the property shall be sold to the highest
10
bidder. In determining the minimum price, the department shall take into account
11
the expense of making the levy and sale in addition to the value of the property. If
12
payment in full is required at the time of acceptance of a bid and is not paid then,
13
the department shall sell the property in the manner provided under this
14
paragraph. If the conditions of the sale permit part of the payment to be deferred
15
and if that part is not paid within the prescribed period, the department may sue
16
the purchaser in the circuit court for Dane County for the unpaid part of the
17
purchase price and interest at the rate of
12 percent per year
interest determined
18
under s. 73.03 (78)
from the date of the sale or the department may declare the sale
19
void and may sell the property again under this paragraph. If the property is sold
20
again, the 2nd purchaser shall receive it free of any claim of the defaulting
21
purchaser and the amount paid upon the bid price by the defaulting purchaser is
22
forfeited.
SB1012,18
23
Section
18
.
73.03 (6) of the statutes is amended to read:
SB1012,12,16
1
73.03
(6)
In its discretion to inspect and examine or cause an inspection and
2
examination of the records of any town, city, village, or county officer whenever
3
such officer shall have failed or neglected to return properly the information as
4
required by sub. (5), within the time set by the department of revenue. Upon the
5
completion of such inspection and examination the department of revenue shall
6
transmit to the clerk of the town, city, village, or county a statement of the expenses
7
incurred by the department of revenue to secure the necessary information.
8
Duplicates of such statements shall be filed in the office of the secretary of
9
administration. Within 60 days after the receipt of the above statement, the same
10
shall be audited, as other claims of towns, cities, villages, and counties are audited,
11
and shall be paid into the state treasury, in default of which the same shall become
12
a special charge against such town, city, village, or county and be included in the
13
next apportionment or certification of state taxes and charges, and collected with
14
interest at the rate of
10 percent per year
interest determined under s. 73.03 (78)
15
from the date such statements were certified by the department, as other special
16
charges are certified and collected.
SB1012,19
17
Section
19
.
73.03 (78) of the statutes is created to read:
SB1012,12,22
18
73.03
(78)
(a) Beginning in 2026, to annually determine a monthly interest
19
rate to be used in calculating interest during each year as provided in this
20
subsection. A monthly interest rate determined under this subsection becomes
21
effective on January 1 of the year for which it is determined and applies to interest
22
that accrues during that year.
SB1012,12,24
23
(b) The department shall determine the monthly interest rate under this
24
subsection as follows:
SB1012,13,3
1
1. Add one to the effective federal funds rate published by the federal reserve
2
bank of New York for January 2 of the applicable year or, if no effective federal
3
funds rate is published for January 2, for the next day for which a rate is published.
SB1012,13,4
4
2. Raise the amount determined under subd. 1. to the power of one-twelfth.
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