Senate Bill 1012 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. The bill also replaces the fixed 12 percent interest rate for delinquent taxes with this new variable rate when deemed fair and equitable by the secretary of revenue.

Additionally, the bill 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 determined under the new provision, s. 73.03 (78). This provision establishes a method for calculating a monthly interest rate based on the effective federal funds rate, which will be used for interest calculations starting in 2026. The bill also outlines the process for determining a minimum sale price for property and the consequences if the property is not sold at that price, including the state's ability to resell the property if the original purchaser defaults. Furthermore, it includes provisions for the DOR to inspect records of local government officers who fail to provide required information, with associated costs becoming a special charge against those municipalities if not paid within a specified timeframe, and adjusts the interest on these charges to align with the new variable interest rate system.

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