SB 883: Transportation Projects, Sales Taxes

Major Highway Projects. This changes how Wisconsin pays for major highway projects, creating a way for the state to avoid federal prevailing wage requirement. It requires megaprojects to be funded at least 70 percent with federal money, concentrating federal funds into fewer projects – and leaving smaller projects without prevailing wage requirements. Experts say the move could cause delays for much needed highway repairs because federal funds are limited, and the state would be unable to fund 70 percent of all major highway projects in the state with them. The measure allows the DOT to file an alternative funding plan with the Joint Finance Committee, which could take up to two weeks to review and approve it – another pothole given Wisconsin’s short construction season. Additionally, shortages already exist for roadbuilders who face grueling and sometimes life-threatening situations, and labor representatives say lower pay will only exacerbate the problem.

DOT Requirements. The bill requires the DOT to notify municipalities receiving aid for local projects whether the aid includes federal funding and how it must be spent. If local projects do not have federal funding, the DOT cannot require the municipality to comply with the DOT’s facilities development manual other than design standards.

No Funding Transfers. Eliminates the ability of the DOT to transfer state and federal funding between highway programs.

No Special Approval Process. Eliminates a special approval process for the second category of major highway projects and instead requires this category to follow the same approval process as the first category.

Authority to Collect Sales Taxes. Expands the state’s authority to collect sales and use taxes from out-of-state retailers. Gives the Joint Finance Committee the power to determine which of any recommended new tax rates apply to the taxable year ending on December 31, 2019. Defines a “retailer engaged in business in this state” as any retailer with annual gross sales into this state in excess of $100,000 or 200+ separate sales transactions a year.

Income, Franchise Taxes. Along with other tweaks concerning tax-option corporations and partnerships, this allows pass-through entities to be taxed at the entity level for purposes of the state’s income and franchise taxes instead of current practice to flow income, loss or deductions through to shareholders, partners, or members.