Assembly Bill 1026 introduces significant changes to the interest rates applied to late, nondelinquent taxes and fees managed by the Wisconsin Department of Revenue (DOR), as well as to overpayments refunded by DOR. Currently, late taxes incur a fixed interest rate of 12 percent per year, while overpayments receive a 3 percent interest rate. The bill mandates that starting in 2026, DOR will determine an annual interest rate based on the effective federal funds rate published by the Federal Reserve Bank of New York for January 2 of the applicable year. This new interest rate will apply to various taxes and fees, including individual and corporate income taxes and sales and use taxes. Additionally, the bill replaces the fixed 12 percent interest rate for delinquent taxes with the newly determined rate when deemed fair and equitable by the secretary of revenue.

The bill also amends several sections of the statutes related to tax assessments and property sales, changing the interest rate applied to judgments and unpaid purchase prices from a fixed rate of 12 percent per year to a variable rate based on the effective federal funds rate, effective in 2026. It modifies the process for the Department of Revenue to inspect records of local government officers and outlines consequences for failure to pay incurred expenses, including the application of the new interest rate. Furthermore, the bill clarifies procedures for property sales by the DOR, including determining a minimum sale price and addressing defaults by purchasers, allowing the department to either sue for unpaid balances or void sales. Overall, the bill aims to modernize interest calculations and streamline tax assessment and property sale procedures.

Statutes affected:
Bill Text: 70.38(1m), 70.38, 71.03(7)(intro.), 71.03, 71.24(7)(a), 71.24, 71.44(3)(a), 71.44, 71.775(4)(bm)1, 71.775, 71.775(4)(bm)2, 71.775(4)(em), 71.82(1), 71.82, 71.82(2)(b), 71.82(2)(d), 71.84(1), 71.84, 71.84(2)(a), 71.84(2)(b), 71.84(2)(c), 71.90(1), 71.90, 71.91(6)(e)3, 71.91, 71.91(6)(f)5, 73.03(6), 73.03