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:
If the Dane County circuit court, after such roll is delivered to the 3
secretary of administration, increases or decreases the assessment of any company, 4
the department shall immediately redetermine the tax of the company on the basis 5
of the revised assessment, and shall certify and deliver the revised assessment to the 6
secretary of administration as a revision of the tax roll. If the amount of tax upon 7
the assessment as determined by the court is less than the amount paid by the 8
company, the secretary of administration shall refund the excess to the company with 9
interest at the rate of 9 3
percent per year. If the amount of the tax upon the 10
assessment as determined by the court is in excess of the amount of the tax as 11
determined by the department, interest shall be paid on the additional amount at the 12
rate of 12 percent per year from the date of entry of judgment to the date the 13
judgment becomes final, and at 1.5 percent per month thereafter until paid.
76.28 (4) (b) of the statutes is amended to read:
(b) In the case of overpayments of license fees by any light, heat and 16
power company under par. (a), the department shall certify the overpayments to the 17
department of administration, which shall audit the amount of the overpayments 18
and the secretary of administration shall pay the amounts determined by means of 19
the audit. All refunds of license fees under this subsection shall bear interest at the 20
annual rate of 9 3
percent from the date of the original payment to the date when 21
the refund is made. The time for making additional levies of license fees or claims 22
for refunds of excess license fees paid, in respect to any year, shall be limited to 4 23
years after the time the report for such year was filed.
76.28 (11) of the statutes is amended to read:
76.28 (11) Payment before contesting.
No action or proceeding, except a 2
petition for redetermination under sub. (4), may be brought by a light, heat or power 3
company against this state to contest any assessment of a tax under this section 4
unless the taxpayer first pays to this state the amount of tax assessed. If the 5
taxpayer prevails in an action or proceeding, this state shall settle with the taxpayer, 6
including payment of interest at 9 3
percent per year on the amount of the money 7
paid from the date of payment until the date of judgment.
76.39 (4) (d) of the statutes is amended to read:
(d) All refunds shall be certified by the department to the department 10
of administration which shall audit the amount of the refunds and the secretary of 11
administration shall pay the amount, together with interest at the rate of 9 3
per year from the date payment was made. All additional taxes shall bear interest 13
at the rate of 12 percent per year from the time they should have been paid to the date 14
upon which the additional taxes shall become delinquent if unpaid.
76.48 (5) of the statutes is amended to read:
Additional assessments may be made, if notice of such assessment is 17
given, within 4 years of the date the annual return was filed, but if no return was 18
filed, or if the return filed was incorrect and was filed with intent to defeat or evade 19
the tax, an additional assessment may be made at any time upon the discovery of 20
gross revenues by the department. Refunds may be made if a claim for the refund 21
is filed in writing with the department within 4 years of the date the annual return 22
was filed. Refunds shall bear interest at the rate of 9 3
percent per year and shall 23
be certified by the department to the secretary of administration who shall audit the 24
amounts of such overpayments and pay the amount audited. Additional
assessments shall bear interest at the rate of 12 percent per year from the time they 2
should have been paid to the date upon which they shall become delinquent if unpaid.
77.51 (13gm) (a) (intro.) of the statutes is renumbered 77.51 4
(13gm) (a) and amended to read:
(a) “Retailer engaged in business in this state” does not include 6
a retailer who has no activities as described in sub. (13g), except for activities 7
described in sub. (13g) (c), unless the retailer meets either of the following criteria 8retailer's annual gross sales into this state exceed $100,000
in the previous year
77.51 (13gm) (a) 1. and 2. of the statutes are repealed.
77.51 (13gm) (b) of the statutes is amended to read:
(b) If an out-of-state retailer's annual gross sales into this state 13
exceed $100,000 in the previous calendar
or the retailer's annual number of
14separate sales transactions into this state is 200 or more in the previous year
, the 15
retailer shall register with the department and collect the taxes administered under 16
s. 77.52 or 77.53 on sales sourced to this state under s. 77.522 for the entire current 17calendar
77.51 (13gm) (c) of the statutes is amended to read:
(c) If an out-of-state retailer's annual gross sales into this state 20
are $100,000 or less in the previous calendar
year and the retailer's annual number
21of separate sales transactions into this state is less than 200 in the previous year
, the 22
retailer is not required to register with the department and collect the taxes 23
administered under s. 77.52 or 77.53 on sales sourced to this state under s. 77.522 24
until the retailer's gross
sales or transactions meet the criteria in par. (a) 1. or 2. 25exceed $100,000
for the current calendar
year, at which time the retailer shall
register with the department and collect the tax for the remainder of the current 2calendar
77.51 (13gm) (d) 1. of the statutes is repealed.
77.51 (13gm) (d) 2. of the statutes is amended to read:
(d) 2. The annual amounts described in this subsection include 6“Gross sales” includes
both taxable and nontaxable sales.
77.51 (13gm) (d) 3. and 4. of the statutes are repealed.
77.51 (13gm) (d) 5. of the statutes is amended to read:
(d) 5. An out-of-state retailer's annual amounts gross sales 10
include all sales into this state by the retailer on behalf of other persons and all sales 11
into this state by another person on the retailer's behalf.
77.52 (2m) (b) of the statutes is amended to read:
(b) With respect to the type of
services subject to tax
under sub. (2) 14
(a) 7., 10., 11., and 20. and except as provided in s. 77.54 (60) (b) and (bm) 2., all 15
tangible personal property or items, property, or goods under s. 77.52 sub.
(1) (b), (c), 16
or (d) physically transferred, or transferred electronically, to the customer in 17
conjunction with the selling, performing, or furnishing of the service is a sale of 18
tangible personal property or items, property, or goods under s. 77.52 sub.
(1) (b), (c), 19
or (d) separate from the selling, performing, or furnishing of the service, regardless
20of whether the purchaser claims an exemption on its purchase of the service. This
21paragraph does not apply to services provided by veterinarians
77.54 (6) (am) 2. of the statutes is amended to read:
(am) 2. Containers, labels, sacks, cans, boxes, drums, bags or other 24
packaging and shipping materials for use in packing, packaging or shipping tangible 25
personal property or items or property under s. 77.52 (1) (b) or (c), if the containers,
labels, sacks, cans, boxes, drums, bags, or other packaging and shipping materials 2
are used by the purchaser to transfer merchandise to customers
3transferred to the customer in conjunction with the selling, performing, or
4furnishing of the type of services under s. 77.52 (2) (a) 7., 10, 11., or 20. that are
5exempt from or not subject to taxation under this subchapter. This subdivision does
6not apply to services provided by veterinarians
77.54 (9a) (f) of the statutes is amended to read:
(f) Any corporation, community chest fund, or
9association organized and operated exclusively for religious, charitable, scientific or
10educational purposes, or for the prevention of cruelty to children or animals, except
11hospital service insurance corporations under s. 613.80 (2), no part of the net income
12of which inures to the benefit of any private stockholder, shareholder, member or
13corporation that is exempt from federal income tax under section 501 (c) (3) of the
14Internal Revenue Code and has received a determination letter from the internal
15revenue service. The exemption under this paragraph applies to churches and
16religious organizations that meet the requirements of section 501 (c) (3) but are not
17required to apply for and obtain tax-exempt status from the internal revenue
77.61 (5) (b) 8m. of the statutes is created to read: