(b) The small business has violated the same rule or guideline more than 3 times in the past 5 years.
(c) The violation may result in an imminent endangerment to the environment, or to public health or safety.
SECTION 3. Tax 1.15 (5) (intro.) and (Note) are amended to read:
Tax 1.15 (5) (intro.) Voluntary disclosure. The department encourages a small business that is not in compliance with Wisconsin tax law has committed a minor violation to voluntarily come forward. On a case-by-case basis, considering all relevant factors, the department may exercise discretion to:
SECTION 4. Tax 2.05 is repealed.
SECTION 5. Tax 2.61 (9) (c) 3. (Example) is amended to read:
Tax 2.61 (9) (c) 3. (Example) Combined Group EFG consists of Member E, Member F, and Member G. E has the following loss carryforwards:
Year Incurred | Sharable Carryforward | Non-sharable Carry- forward |
2008 2009 | −− ($6,000) | ($10,000) ($2,000) |
In 2010, E’s share of combined unitary income plus its separate entity items equal $14,000. After using its carryforwards to offset this income, E has $4,000 of remaining net business loss carryforward (= ($10,000) + ($6,000) + ($2,000) + $14,000). Of this amount, a portion is a sharable carryforward that may be applied against F and G’s shares of combined unitary income in the manner described in par. (d). Since loss carryforwards are applied in the order incurred, the $10,000 carryforward from 2008 is used in its entirety, and $4,000 of the 2009 carryforward is used. The portion of E’s remaining carryforward from 2009 that is sharable is $3,000 (= $4,000 x [$6,000 / $8,000]) and the portion that is non−sharable is $1,000 (= 4,000 x [$2,000 / $8,000]).
In 2012, E has the following loss carryforwards:
Year Incurred | Sharable Carryforward | Non-sharable Carry- forward |
2009 2010 2011 | ($3,000) −− ($4,000) | ($1,000) −− ($6,000) |
In addition, in 2012 E has received a pre−2009 net business loss carryforward of $3,000 ($60,000 x 5%) from Member F. E’s share of combined unitary income plus its separate entity items for 2012 equal $16,000. After using its carryforwards to offset this income, E has $1,000 of remaining net business loss carryforward (= ($3,000) + ($3,000) + ($1,000) + ($4,000) + ($6,000) + ($3,000) + $16,000). Since the loss carryforwards are first applied to the net business loss carryforwards incurred in 2009 and after, the $4,000 carryforward from 2009 and the $10,000 carryforward from 2011 are used in their entirety. The remaining $2,000 of loss carryforwards are applied to the pre−2009 net business loss carryforward. The remaining pre−2009 net business loss carryforward is $1,000.
SECTION 6. Tax 2.66 (2) (b) (Note) and (4) (c) (Note) are repealed.
SECTION 7. Tax 2.67 (2) (c) 1. is amended to read:
Tax 2.67 (2) (c) 1. One Wisconsin Form 4 6, Income or Franchise Tax Return, for the combined group as a whole.
SECTION 8. Tax 2.67 (2) (c) 2. and 3. are repealed.
SECTION 9. Tax 2.67 (2) (c) 4. and (d) 1. and 3. are amended to read:
Tax 2.67 (2) (c) 4. If the combined group is using apportionment, one Wisconsin Form 4A, Apportionment Data for Combined Groups, and the apportionment factor computation for each member of the combined group as performed on Form 4A-1 A-1, Apportionment Data for Single Factor Formulas, or Form 4A-2 A-2, Apportionment Data for Multiple Factor Formulas, as applicable.
(d) 1. Subject to the provisions of s. Tax 2.65 (3) (b), if any combined group member has separate entity items, the designated agent shall include those separate entity items in the combined return. If a corporation that would otherwise be a combined group member has no items that are subject to combination under the water's edge rules of s. Tax 2.61 (4), the designated agent may include that corporation's separate entity items in the combined return, in which case the combined return shall include the items specified in sub. (2) (c) 3., 5., and 6. and subd. 3. for that corporation as if it is a combined group member. Alternatively, the corporation may file a separate Wisconsin return to report those items. 3. The separate entity net income or loss and apportionment factors included in the combined return shall be reported on Wisconsin Form 4N N, Nonapportionable and Separately Apportioned Income. The designated agent shall complete and submit Form 4N N with the combined return for each applicable corporation and carry forward the total Form 4N N amounts to the appropriate line on Form 4 6. For purposes of the requirement of s. 71.255 (2) (d), Stats., separate entity items reported on Form 4N N shall be considered filed on a separate return. However, for purposes of determining a combined group member's net income, tax, interest, underpayment interest, economic development surcharge, and the statute of limitations, the separate entity amounts shall be added to its amounts, if any, computed in the unitary combination. SECTION 10. Tax 2.82 (1) (a), (4) (c) (Example), and (5) (a) (Example) are amended to read:
Tax 2.82 (1) (a) Every domestic corporation, one incorporated under Wisconsin's laws, except those exempt under ss. 71.26 (1) and 71.45 (1), Stats., and every licensed foreign corporation, one not incorporated in Wisconsin, is required to file a complete corporation franchise or income tax return, form Form 4, 5S, or 5 6, regardless of whether or not business was transacted. (4) (c) (Example) Corporation W is a calendar year corporation that operates five retail stores, one of which is in Wisconsin. The stores constitute a unitary business. Corporation W is not in a combined group. In the year 2010 2014, Corporation W operated one store in Wisconsin. On August 31, 2010 2014, Corporation W sold the Wisconsin store to Corporation Y but continued to operate the other stores outside Wisconsin. Between September 1, 2010 2014 and December 31, 2010 2014, Corporation W had no activities that would create nexus in Wisconsin. Corporation W is considered to have nexus in Wisconsin for its entire taxable year. Therefore, on its 2010 2014 Wisconsin Form 4, Corporation W must compute its apportioned share of Wisconsin income based on its apportionable income from all of its stores for the entire year 2010 2014. In addition, the numerator of the sales factor in its apportionment computation must include sales shipped to Wisconsin customers for the entire year 2010 2014.
(5) (a) (Example) Assume the same facts as the example in sub. (4) (c). In addition, assume Corporation Y is a member of Combined Group XYZ, which reports on a calendar year. Although Group XYZ operated numerous stores outside Wisconsin for the entire year, none of the members of Group XYZ had any nexus-creating activities in Wisconsin until July 1, 2010 2014, when Corporation Y set up a temporary office in Wisconsin in anticipation of the purchase of the store from Corporation W. However, Corporation Z had sales shipped to Wisconsin customers during 2010 2014. Since Corporation Y established nexus in Wisconsin during the year, Group XYZ is considered to have nexus in Wisconsin for its entire taxable year. Therefore, Group XYZ must file a combined Wisconsin Form 4 6 for the year 2010 2014. On the combined return, Group XYZ must include its apportionable income for the entire taxable year (from all stores) in the combined unitary income to be apportioned. The Wisconsin share of the combined unitary income for Corporation Y and Corporation Z is then determined as described in s. 71.255 (5), Stats., and s. Tax 2.61 (7). Assuming all of Group XYZ's Wisconsin sales are attributable to Corporations Y and Z, Corporations Y and Z would be the only corporations in the group with Wisconsin income. SECTION 11. Tax 2.88 (3) (a) is amended to read:
Tax 2.88 (3) (a) Any refund of individual income or corporate franchise or income taxes shall include interest at the rate of 3% per year from the due date of the return to the date paid by the department, except as provided in par. pars. (b) and (c).
SECTION 12. Tax 2.88 (3) (c) is created to read:
Tax 2.88 (3) (c) No interest may be allowed on a refund of income taxes that results from the carryback of a net operating loss.
SECTION 13. Tax 4.10 (3) (b) 2. is amended to read:
Tax 4.10 (3) (b) 2. The product is transported across the state line by a supplier from an out-of-state bulk plant in a transporting vehicle not capable of carrying more than 4,200 gallons and the delivery location is no more than 25 miles inside the Wisconsin border. The sales invoice shall clearly indicate Wisconsin as the destination state and that the tax shall be paid by the supplier.
SECTION 14. Tax 4.65 (3) (c) is amended to read:
Tax 4.65 (3) (c) The customer shall provide the vendor with an annual exemption certificate when purchasing undyed diesel fuel and gasoline which will be consumed by that customer for an exempt purpose as defined in s. 78.01 (2) and (2m), Stats. A purchaser of undyed diesel fuel and gasoline for an exempt use shall provide the seller with a properly completed exemption certificate, form MF-209, prior to the tax-exempt purchase. The certificate may not cover a period of more than 12 months. SECTION 15. Tax 14.01 (4) (a) is amended to read:
Tax 14.01 (4) (a) A homestead credit claim shall be filed on schedule H or H-EZ, titled "Wisconsin Homestead Credit Claim," and filed with the department at the location described in the instructions to schedule H homestead credit."
SECTION 16. Tax 14.01 (4) (a) (Note) is created to read:
Tax 14.01 (4) (a) (Note) Note: Schedules H and H-EZ are available from the department's website at www.revenue.wi.gov. SECTION 17. Tax 14.01 (4) (b) and (c) are amended to read:
Tax 14.01 (4) (b) If a person or the person's spouse files a Wisconsin income tax return and claims a homestead credit on the return, the claimant shall attach schedule H or H-EZ to the income tax return. If the claimant has previously filed the income tax return or is filing an income tax return separately from the schedule H or H-EZ, the preferred procedure for filing a homestead credit claim is to file a duplicate copy of the income tax return with schedule H or H-EZ and to write the words "Duplicate" on the top of the first page of the tax return copy and "Income Tax Return Separately Filed" on the top of schedule H or H-EZ.
(c) If neither the claimant nor the claimant's spouse is required to file a Wisconsin income tax return for the year to which the claim relates, the claimant may file schedule H or H-EZ without attaching it to a return.
SECTION 18. Tax 14.03 (3) (a) and (a) (Example), (4) (b) 23. h., and (5) (a) 7. are amended to read:
Tax 14.03 (3) (a) Under s. 71.52 (5), Stats., a deduction of $250 $500 is allowed for each of the claimant's dependents, as defined in s. 152 of the internal revenue code Internal Revenue Code, who have the same principal abode as the claimant for more than 6 months during the calendar year to which a claim for homestead credit relates. A claimant may multiply the number of dependents with the same principal abode for more than 6 months by $250 $500 and subtract the result from the total of the income items to arrive at household income. (a) (Example) A claimant and the claimant's spouse claim 3 dependents on their 1997 2014 federal income tax return, and all 3 dependents have the same principal abode as the claimant for the entire year. Household income items include Wisconsin adjusted gross income of $10,500, depreciation of $1,500 and unemployment insurance of $500.
Tax 14.03 NoteTotal household income is $11,750 $11,000, consisting of the total of the income items listed, $12,500, minus the dependent deduction of $750 $1,500, which is $250 times $500 multiplied by 3 dependents.
(4) (b) 23. h. Net operating loss carryforwards and carrybacks.
(5) (a) 7. Pension The nontaxable portions of pension, annuity, or other retirement plan payments rolled over from one retirement plan to another.
SECTION 19. Initial applicability. The treatment of s. Tax 1.15 first applies to minor violations committed after the effective date of this rule. SECTION 20. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.), Stats.
