71.05 (6) (b) 4. of the statutes is amended to read:
(b) 4. Disability payments other than disability payments that are 16
paid from a retirement plan, the payments from which are exempt under sub. (1) (ae), 17
(am), and (an), if the individual either is single or is married and files a joint return,
18to the extent those payments are excludable under section 105 (d) of the Internal
19Revenue Code as it existed immediately prior to its repeal in 1983 by section 122 (b)
20of P.L. 98-21, except that if is at least 65 years of age before the close of the taxable
21year to which the subtraction relates, retired on disability, and, when the individual
22retired, was permanently and totally disabled. If
an individual is divorced during 23
the taxable year that individual may subtract an amount only if that person is 24
disabled and the amount that may be subtracted then is $100 for each week that 25
payments are received or the amount of disability pay reported as income, whichever
is less. If the exclusion under this subdivision is claimed on a joint return and only 2
one of the spouses is disabled, the maximum exclusion is $100 for each week that 3
payments are received or the amount of disability pay reported as income, whichever 4
is less. In this subdivision, “permanently and totally disabled" means an individual
5who is unable to engage in any substantial gainful activity by reason of any medically
6determinable physical or mental impairment that can be expected to result in death
7or that has lasted or can be expected to last for a continuous period of not less than
812 months. An individual shall not be considered permanently and totally disabled
9for purposes of this subdivision unless proof is furnished in such form and manner,
10and at such times, as prescribed by the department.
71.07 (9m) (h) of the statutes is amended to read:
(h) Any person, including a nonprofit entity described in section 501 13
(c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under 14
par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes 15
imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the 16
transfer, and submits with the notification a copy of the transfer documents, and the 17
department certifies ownership of the credit with each transfer.
The transferor may
18file a claim for more than one taxable year on a form prescribed by the department
19to compute all years of the credit under par. (a) 2m. or 3., at the time of the transfer
20request. The transferee may first use the credit to offset tax in the taxable year of
21the transferor in which the transfer occurs and may use the credit only to offset tax
22in taxable years otherwise allowed to be claimed and carried forward by the original
71.25 (6) (intro.) of the statutes is amended to read:
71.25 (6) Allocation and separate accounting and apportionment formula. 2
(intro.) Corporations engaged in business within and without the state shall be taxed 3
only on such income as is derived from business transacted and property located 4
within the state. The amount of such income attributable to Wisconsin may be 5
determined by an allocation and separate accounting thereof, when the business of 6
such corporation within the state is not an integral part of a unitary business, but 7
the department of revenue may permit an allocation and separate accounting in any 8
case in which it is satisfied that the use of such method will properly reflect the 9
income taxable by this state. In all cases in which allocation and separate accounting 10
is not permissible, the determination shall be made in the following manner: for all 11
businesses except air carriers, financial organizations, telecommunications 12
companies, pipeline companies, public utilities, railroads, car line companies and 13
corporations or associations that are subject to a tax on unrelated business income 14
under s. 71.26 (1) (a) there shall first be deducted from the total net income of the
15taxpayer the part thereof (less related expenses, if any) that follows the situs of the
16property or the residence of the recipient. The remaining, the
net income shall be 17
apportioned to this state by use of the following:
71.28 (6) (h) of the statutes is amended to read:
(h) Any person, including a nonprofit entity described in section 501 20
(c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under 21
par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes 22
imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the 23
transfer, and submits with the notification a copy of the transfer documents, and the 24
department certifies ownership of the credit with each transfer.
The transferor may
25file a claim for more than one taxable year on a form prescribed by the department
1to compute all years of the credit under par. (a) 2m. or 3., at the time of the transfer
2request. The transferee may first use the credit to offset tax in the taxable year of the
3transferor in which the transfer occurs, and may use the credit only to offset tax in
4taxable years otherwise allowed to be claimed and carried forward by the original
71.47 (6) (h) of the statutes is amended to read:
(h) Any person, including a nonprofit entity described in section 501 8
(c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under 9
par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes 10
imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the 11
transfer, and submits with the notification a copy of the transfer documents, and the 12
department certifies ownership of the credit with each transfer.
The transferor may
13file a claim for more than one taxable year on a form prescribed by the department
14to compute all years of the credit under par. (a) 2m. or 3., at the time of the transfer
15request. The transferee may first use the credit to offset tax in the taxable year of the
16transferor in which the transfer occurs, and may use the credit only to offset tax in
17taxable years otherwise allowed to be claimed and carried forward by the original
71.52 (1g) of the statutes is created to read:
71.52 (1g) “Earned income” means wages, salaries, tips, and other employee 21
compensation that may be included in federal adjusted gross income for the taxable 22
year, plus the amount of the claimant's net earnings from self-employment for the 23
taxable year determined with regard to the deduction allowed to the taxpayer by 24
(f) of the Internal Revenue Code. For purposes of this subsection, a 25
claimant's earned income is computed without regard to any marital property laws
and a claimant may elect to treat amounts excluded from federal adjusted gross 2
income as earned income, as provided under section 112
of the Internal Revenue 3
Code. “Earned income” does not include the following:
(a) Any amount received as a pension or annuity.
(b) Any amount to which section 871
(a) of the Internal Revenue Code applies.
(c) Any amount received for services provided by an individual while the 7
individual is an inmate at a penal institution.
(d) Any amount received for service performed in work activities under 9
paragraphs (4) or (7) of section 407 (d) of the Social Security Act to which the claimant 10
is assigned under any state program under part A of title IV of the Social Security 11
Act. This paragraph applies only to amounts subsidized under any such state 12
71.55 (10) of the statutes is amended to read:
71.55 (10) Farmers.
Notwithstanding the provision in s. 71.52 (6) that requires 15
the addition of certain disqualified losses to income, such an addition may not be 16
made by a claimant who is a farmer whose primary income is from farming and 17
whose farming generates less than $250,000 in gross receipts from the operation of 18
farm premises in the year to which the claim relates. For purposes of this subsection,
19a claimant's primary income is from farming if the claimant's gross income from
20farming for the year to which the claim relates is greater than 50 percent of the
21claimant's total gross income from all sources for the year to which the claim relates.
22In this subsection, “gross income” has the meaning given in s. 71.03 (1).
71.738 (3c) of the statutes is created to read:
“Pass-through entity" means a partnership, a limited liability 2
company, a tax-option corporation, an estate, or a trust that is treated as a 3
pass-through entity for federal income tax purposes.
71.738 (3d) of the statutes is created to read:
“Pass-through item" means a tax-option item under s. 71.34 (3) 6
or an item of income, gain, loss, deduction, credit, or any other item that originates 7
with a pass-through entity and is required to be reported by one or more 8
pass-through members under this chapter.
71.738 (3f) of the statutes is created to read:
“Pass-through member" means a person who is a partner in a 11
partnership, shareholder in a tax-option corporation, beneficiary of an estate or a 12
trust, or any other person whose tax liability under this chapter is determined in 13
whole or in part by taking into account the person's share of pass-through items, 14
directly or indirectly, from a pass-through entity.
71.738 (3g) of the statutes is created to read:
“Person” includes a pass-through entity,
71.738 (5b) of the statutes is created to read:
“Taxpayer” includes a pass-through entity,
71.745 of the statutes is created to read:
2071.745 Pass-through entity audits, additional assessments and
21refunds at the entity level. (1) Audit assessments and refunds
. Except as 22
provided in s. 71.80 (27), the department may audit and assess tax to a pass-through 23
entity on income otherwise reportable by the pass-through members at the highest 24
tax rate applicable under this chapter. The department may issue a refund to a
pass-through entity when the audit results in an overpayment of tax originally paid 2
by the entity.
3(2) Adjustment of credits
. Except as provided in s. 71.80 (27), the department 4
may correct the credit computation of a pass-through entity resulting from a 5
department audit under this subchapter at the pass-through entity level, and may 6
apply the credit adjustment to an assessment or refund issued to the pass-through 7
8(3) Adjustments to the pass-through entity are attributable to the
Except when an election under s. 71.21 (6) (a) or 71.365 (4m) (a) is made, 10
any adjustments to income, gain, loss, deduction, or credit made to the pass-through 11
entity under this section are attributable to each pass-through member in a manner 12
that is consistent with the treatment of such income, gain, loss, deduction, or credit 13
to the pass-through entity.
14(4) Liability may be assessed to more than one person.
If for any reason a 15
pass-through entity fails to timely make any report or payment required under this 16
subchapter, the department may assess the pass-through members for any liability 17
resulting from an audit under this subchapter. If for any reason a pass-through 18
member fails to timely make any report or payment required under this subchapter, 19
the department may assess the pass-through entity for any liability resulting from 20
an audit under this subchapter.
71.75 (11) of the statutes is created to read:
The department shall not issue a refund to a pass-through entity 23
except when the claim is for overpayment of tax originally paid by the entity.
71.76 of the statutes is amended to read:
171.76 Internal revenue service and other state adjustments.
If for any 2
year the amount of federal net income tax payable, of a credit claimed or carried 3
forward, of a net operating loss carried forward or of a capital loss carried forward 4
of any taxpayer as reported to the internal revenue service is changed or corrected 5
by the internal revenue service or other officer of the United States, such taxpayer 6
shall report such changes or corrections to the department within
days after 7
its final determination and shall concede the accuracy of such determination or state 8
how the determination is erroneous. Such changes or corrections need not be 9
reported unless they affect the amount of net tax payable under this chapter, of a 10
credit calculated under this chapter, of a Wisconsin net operating loss carried 11
forward, of a Wisconsin net business loss carried forward or of a capital loss carried 12
forward under this chapter. Any taxpayer submitting an amended return to the 13
internal revenue service, or to another state if there has been allowed a credit against 14
Wisconsin taxes for taxes paid to that state, shall also file, within
days of such 15
filing date, an amended return if any information contained on the amended return 16
affects the amount of net tax payable under this chapter of a credit calculated under 17
this chapter, of a Wisconsin net operating loss carried forward, of a Wisconsin net 18
business loss carried forward or of a capital loss carried forward under this chapter.
71.77 (7) (b) of the statutes is amended to read:
(b) If notice of assessment or refund is given to the taxpayer within 2190 180
days of the date on which the department receives a report from the taxpayer 22
under s. 71.76 or within such other period specified in a written agreement entered 23
into prior to the expiration of such 90 180
days by the taxpayer and the department. 24
If the taxpayer does not report to the department as required under s. 71.76, the
department may make an assessment against the taxpayer or refund to the taxpayer 2
within 4 years after discovery by the department.
71.775 (1) (intro.) and (a) of the statutes are consolidated, 4
renumbered 71.775 (1) and amended to read:
71.775 (1) Definitions.
In this section: (a) “Nonresident", “
includes an individual who is not domiciled in this state; a partnership, limited 7
liability company, or corporation whose commercial domicile is outside the state; and 8
an estate or a trust that is a nonresident under s. 71.14 (1) to (3m).
71.775 (1) (b) of the statutes is repealed.
71.78 (1) of the statutes is amended to read:
71.78 (1) Divulging information.
Except as provided in subs. (4), (4m) and, 12
(10), and (11),
no person may divulge or circulate or offer to obtain, divulge, or 13
circulate any information derived from an income, franchise, withholding, fiduciary, 14
partnership, or limited liability company tax return or tax credit claim, including 15
information which may be furnished by the department as provided in this section. 16
This subsection does not prohibit publication by any newspaper of information 17
lawfully derived from such returns or claims for purposes of argument or prohibit 18
any public speaker from referring to such information in any address. This 19
subsection does not prohibit the department from publishing statistics classified so 20
as not to disclose the identity of particular returns, or claims or reports and the items 21
thereof. This subsection does not prohibit employees or agents of the department of 22
revenue from offering or submitting any return, including joint returns of a spouse 23
or former spouse, separate returns of a spouse, individual returns of a spouse or 24
former spouse, and combined individual income tax returns, or from offering or 25
submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any
information derived from, any of those documents as evidence into the record of any 2
contested matter involving the department in proceedings or litigation on state tax 3
matters if, in the department's judgment, that evidence has reasonable probative 4
71.78 (11) of the statutes is created to read:
71.78 (11) Pass-through entity audits
. If the department audits a 7
pass-through entity for the income or franchise taxes of its pass-through members, 8
including when an election is made under s. 71.21 (6) (a) or 71.365 (4m) (a) to pay tax 9
at the entity level, the department may disclose the following:
(a) To a pass-through member that the pass-through entity is under audit or 11
was audited, if the disclosure is necessary to explain any amounts assessed or 12
refunded to the pass-through member or to obtain information necessary to 13
determine the proper amount of adjustment to make at the pass-through entity 14
(b) To a pass-through entity, the identities of one or more members who have 16
failed to report pass-through items originating with the entity on their Wisconsin 17
returns, if the disclosure is necessary to explain any amounts assessed or refunded 18
to the pass-through entity or to obtain information about a pass-through member's 19
return in order to determine the proper amount of adjustment to make at the 20
pass-through entity level.
71.80 (26) of the statutes is created to read:
71.80 (26) Tax matters member of a pass-through entity
. (a) Each 23
pass-through entity filing a return in this state under this chapter shall designate 24
one pass-through member as the tax matters member on the pass-through entity's 25
return filed in this state for each taxable year. If no tax matters member is
designated on the return or no return is filed, the pass-through entity shall appoint 2
a tax matters member no later than 30 days after a written request by the 3
department. If no member is so appointed, the department may designate the tax 4
matters member and notify the pass-through entity in writing of the designation. 5
The pass-through entity may at any time provide a written statement designating 6
a new tax matters member and the department shall accept it if it is signed by an 7
authorized agent of the pass-through entity. The tax matters member for this state 8
may be different from the entity's federal tax matters member.
(b) With regard to a department audit of a pass-through entity for income or 10
franchise taxes, the tax matters member has the power and duty to do all of the 11
1. Act as the sole authority on behalf of the pass-through entity with respect 13
to the year under review. The pass-through members are bound by actions of the tax 14
matters member under this subdivision.
2. Provide the department sufficient information to identify each pass-through 16
member, and the profits interest of each pass-through member, for each taxable year 17
affected by the audit.
3. Represent the pass-through entity and keep all pass-through members 19
4. Enter extension agreements on behalf of the pass-through entity under s. 21
5. Receive pass-through entity adjustment notices.
6. Notify all pass-through members of their share of corrections and 24
adjustments made to the pass-through entity within 90 days after the final 25
determination date of the notice.
7. File appeals of pass-through entity adjustment notices.
8. Enter a settlement agreement related to pass-through entity items from the 3
entity that is binding on the pass-through members.
(c) The tax matters member may delegate the powers and duties under par. (b) 5
to an authorized agent.
71.80 (27) of the statutes is created to read:
71.80 (27) Exception to pass-through entity level assessment
. No later than 8
60 days after receipt of the department's audit determination, in a manner 9
prescribed by the department, a pass-through entity with 5 or fewer members for all 10
years under review may elect an audit assessment to be assessed separately to each 11
pass-through member. This subsection does not apply to a pass-through entity if 12
one or more of its members is a pass-through entity for any year under review or if 13
the pass-through entity has made an election for the taxable year under s. 71.21 (6) 14
(a) or 71.365 (4m) (a). The election under this subsection does not dismiss the duties 15
of a tax matters member provided under sub. (26) (a) and (b) 2., 3., and 6.
71.83 (1) (a) 12. of the statutes is created to read:
(a) 12. `Incomplete or incorrect pass-through entity return.' If any 18
pass-through entity, as defined in s. 71.738 (3c), required under this chapter to file 19
a return files an incomplete or incorrect return, the department, upon a showing by 20
the department under s. 73.16 (4), shall assess the pass-through entity an amount 21
equal to 25 percent of the amount of tax assessed under s. 71.745. The amount shall 22
be assessed, levied, and collected in the same manner as additional income or 23
71.87 of the statutes is amended to read:
In this subchapter, “person feeling aggrieved" and “person 2
aggrieved" include includes a pass-through entity, as defined in s. 71.738 (3c), and 3
the spouse of a person against whom an additional assessment was made or who was 4
denied a claim for refund for a taxable year for which a separate return was filed and 5
include either spouse for a taxable year for which a joint return was filed or, if no 6
return was filed, a joint return could have been filed.
73.0305 of the statutes is amended to read:
873.0305 Revenue limits calculations.
The department of revenue shall 9annually
determine and certify to the state superintendent of public instruction, no
10later than the 4th Monday in June at the superintendent's request
, the allowable 11
rate of increase under subch. VII of ch. 121. The allowable rate of increase is the 12
percentage change, if not negative, in the consumer price index for all urban 13
consumers, U.S. city average, between the preceding March 31 and the 2nd 14
preceding March 31, as computed by the federal department of labor.
73.09 (4) (c) of the statutes is amended to read:
(c) Recertification is contingent upon submission of an application for 17
renewal, at least 60 days before the expiration date of the current certificate, 18
attesting to the completion of the requirements specified in
par. (b). Persons 19
applying for renewal on the basis of attendance at the meetings called by the 20
department under s. 73.06 (1) and by meeting continuing education requirements 21
shall submit a $20
recertification fee, in an amount determined by the department
22not to exceed $75,
with their applications.
73.09 (5) of the statutes is amended to read:
73.09 (5) Examinations.
As provided in subs. (1) and (2), the department of 25
revenue shall prepare and administer examinations for each level of certification.
A person applying for an examination under this subsection shall submit a $20 an 2
examination fee with the person's application. If the department administers and
3grades the examinations, the fee shall be the amount equal to the department's best
4estimate of the actual cost to administer and grade the examinations, but no greater
5than $75. If a test service provider administers and grades the examinations, the fee
6shall be the amount equal to the department's best estimate of the provider's actual
7cost to administer and grade the examinations, but no greater than $75.
department of revenue
shall grant certification to each person who passes the 9
examination for that level.
73.16 (4) of the statutes is amended to read:
73.16 (4) Negligence determinations.
The department shall not impose a 12
penalty on a taxpayer under ss. 71.09 (11) (d), 71.83 (1) (a) 1. to 4. and 12.
and (3) (a), 13
76.05 (2), 76.14, 76.28 (6) (b), 76.39 (3), 76.645 (2), 77.60 (2) (intro.), (3), and (4), 78.68 14
(3) and (4), and 139.25 (3) and (4), unless the department shows that the taxpayer's 15
action or inaction was due to the taxpayer's willful neglect and not to reasonable 16
74.315 (1) of the statutes is amended to read:
74.315 (1) Submission.
No later than October 1 of each year, the taxation 19
district clerk shall submit to the department of revenue, on a form prescribed by the 20
department, a listing of all the omitted taxes under s. 70.44 to be included on the 21
taxation district's next tax roll, if the total of all such omitted
taxes exceeds $5,000 22for any single description of property are $250 or more
74.315 (1m) of the statutes is created to read:
74.315 (1m) Amount collected from property in a tax incremental district
A tax may not be included on a form submitted under sub. (1) if the tax was levied
on a property within a tax incremental district, as defined in s. 60.85 (1) (n) or 66.1105 2
(2) (k), unless the current value of the tax incremental district is lower than the tax 3
incremental base, as defined in s. 60.85 (1) (m) or 66.1105 (2) (j), in the assessment 4
year for which the tax was collected.
74.315 (2) of the statutes is amended to read:
74.315 (2) Equalized valuation Amount determined.
After receiving the form 7
under sub. (1), but no later than November 15, the department of revenue shall 8
determine the amount of any change in the taxation district's equalized valuation
9that results from considering the valuation represented by the taxes described under
10sub. (1) taxes to be shared with each taxing jurisdiction for which the taxation district
11collected taxes and determine the amount of taxes collected under s. 70.44 to be
12shared with each taxing jurisdiction for which the taxation district collected taxes
The department's determination under this subsection is subject to review only 14
under s. 227.53.
74.315 (3) of the statutes is amended to read:
74.315 (3) Notice and distribution. If the department of revenue determines
17under sub. (2) that the taxation district's equalized valuation changed as a result of
18considering the valuation represented by the taxes described under sub. (1), the The 19
department shall notify the taxation district and the taxation district shall distribute 20
collections under ss. 74.23 (1) (a) 5., 74.25 (1) (a) 4m., and 74.30 (1) (dm) 21resulting from the determinations made under sub. (2)
76.04 (1) of the statutes is amended to read:
Every company defined in s. 76.02 shall, annually, file a true and 24
accurate statement in such manner and form and setting forth such facts as the 25
department shall deem necessary to enforce ss. 76.01 to 76.26. The annual reports
1for railroad companies
shall be filed
on or before April 15 and for conservation and
2regulation companies, air carriers and pipeline companies
on or before May 1.
76.07 (1) of the statutes is amended to read:
76.07 (1) Duty of department.
The department on or before August 1 5September 15
in each year in the case of railroad companies, and on or before
6September 15 in the case of air carrier companies, conservation and regulation
7companies and pipeline companies,
shall, according to its best knowledge and 8
judgment, ascertain and determine the full market value of the property of each 9
company within the state.
76.075 of the statutes is amended to read:
1176.075 Adjustments of assessments.
Within 4 years after the due date, or 12
extended due date, of the report under s. 76.04, any person subject to taxation under 13
this subchapter may request the department to make, or the department may make, 14
an adjustment to the data under s. 76.07 (4g) or (4r) submitted by the person. If an 15
adjustment under this section results in an increase in the tax due under this 16
subchapter, the person shall pay the amount of the tax increase plus interest on that 17
amount at the rate of 1 percent per month from the due date or extended due date 18
of the report under s. 76.04 until the date of final determination and interest at the 19
rate of 1.5 percent per month from the date of final determination until the date of 20
payment. If an adjustment under this section results in a decrease in the tax due 21
under this subchapter, the department shall refund the appropriate amount plus 22
interest at the rate of 0.75 0.25
percent per month from the due date or extended due 23
date under s. 76.04 until the date of refund. Sections 71.74 (1) and (2) and 71.75 (6) 24
and (7), as they apply to income and franchise tax adjustments, apply to adjustments 25
under this section. Review of the adjustments is as stated in s. 76.08.
76.13 (3) of the statutes is amended to read: