The Wisconsin Department of Revenue proposes an order to: repeal Tax 1.13 (3) (a) and (b), 1.17, 2.32 (2) (a) 7. (Note), 2.395, 2.61 (7) (h) 1. and 2., 2.92 (3) (e) (Note 1), 2.98 (2) (b) (Note 1), (Note 2), and (Note 3), and 14.03 (4) (b) 23.;amend Tax 1.12 (9) (a) 1. (Note), 1.13 (1) (b) and (4) (a) and (b), 2.01, 2.03 (3) (b) 2. a. (Note), 2.04 (2) (d) (Note) and (dm) 1. (Note), (3), (4) (c) and (e), (5), (6) (a), (b), and (c) 1. (Note), (7), and (8) (b) 1. (Note) and (c) 2. (Note), 2.07 (2) (g) (Note), 2.08 (3) (b), (d) 1. (Note), and (e) 2. (Note), 2.105 (4) (b), 2.12 (3) (c), 2.30 (2) (Example), 2.32 (2) (a) 1., 2., 3., 4., 5., and 6., (b) 1., 2., 3., 4., 5., 6., 7., and 8., (c) 1., 2., 3., 4., 5., and 6., and (d) 1., 2., 3., 4., 5., and 6., 2.39 (6) (f) and (h), 2.49 (2) (hm) and (4) (x) 1. b. and c., 2.61 (4) (b) 1. and 4., (6) (a) 3., and (7) (h), 2.62 (2) (d) 1., 2.64 (2) (b) 7., (c), and (e) 3., 2.67 (2) (b) 2. (Note), 2.87 (1) (a), 2.88 (3) (a) and (5) (Note 4), 2.89 (4) (b), (c), and (d), 2.935 (1) (a), 2.95 (5) (Example), 2.955 (2) (a) and (b), (4) (intro), (b) 2. and 3., (c), and (d), and (5) (Example), and 2.96 (1) (a); and create Tax 1.13 (4) (c), 2.08 (3) (ci), 2.88 (3) (d), 2.955 (2m), 14.01 (2) (am), and 14.03 (4) (c) 10.; relating to income and franchise tax provisions.
The scope statement for this rule, SS 103-18, was approved by the Governor on August 27, 2018, published in Register No. 753A1 on September 4, 2018, and approved by the Secretary of Revenue on September 20, 2018. Analysis by the Department of Revenue
Statutes interpreted: Tax 1.12 – ss. 71.01 (8r), 71.255 (7) (b), 71.42 (3m), 71.63 (1m) and (5m), 71.65 (3) (a), 73.029, 77.58 (1m), 77.61 (14, 77.96 (5m), 78.12 (5), 78.55 (5m), 139.01 (5m), 139.30 (8m), and 139.75 (5m), Stats. Tax 2.01 – s. 71.02, Stats. Tax 2.04 – ss. 71.26 (3) (e), 71.63 (3m), 71.65 (2), 71.67 (4) and (5), 71.70, 71.71 (2), 71.72, 71.738 (2m), 71.74 (4), and 71.80 (20), Stats. Tax 2.12 – ss. 71.255 (1), (4), and (7), 71.30 (4), 71.738 (2m), 71.74, 71.75, 71.76, 71.77, 71.80 (18), and 77.96 (4), Stats. Tax 2.39 – ss. 71.04 (4), (4m), (5), (6), (7), (10), and (11), 71.25 (5), (6), (6m), (7), (8), (9), (11), and (15), and 71.255 (5), Stats. Tax 2.67 – ss. 71.24 (1), (1m), and (7), 71.255 (1) (b), (7) (b), (8), and (9), 71.44 (1), (1m), and (3), 71.77, 71.82, and 71.83, Stats. Tax 2.88 – ss. 71.03 (7), 71.07 (3q), (3w), (3wm), and (3y), 71.24 (7), 71.28 (3q), (3w), (3wm), and (3y), 71.44 (3), 71.82 (1) and (2) (a), 71.47 (3q) (3w), and (3y), 71.55 (4), and 71.90 (1), Stats. Explanation of agency authority: Under ss. 71.05 (7) (g) 2., and 71.25 (9) (g) 2., Stats., the department may promulgate rules relating to situs of income; allocation and apportionment. Under s. 71.80 (1) (c), Stats., the department may make such regulations as it shall deem necessary in order to carry out chapter 71 of the Wisconsin Statutes, relating to income and franchise taxes. Section 227.11 (2) (a), Stats., provides “[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute...” Related statute or rule: There are no other applicable statutes or rules.
Plain language analysis: Due to various Wisconsin acts and other technical corrections, updates to Chapters Tax 1, 2, and 14 are needed relating to the following: - Update email and website addresses.
- Update procedures relating to a revised power of attorney form and to add Streamlined Sales Tax Form F0023 as an alternate form available.
- Reflect the repeal of sec. 146.98, Stats., as a result of 2017 Wis. Act 59 related to the ambulatory surgical center assessment. - Remove reference to an obsolete form.
- Update due dates of forms for rents and royalties and electronic filing requirements as changed -in secs. 71.70 and 71.80, Stats., as a result of 2017 Wis. Act 59. - Update the address for where to file forms and remove a reference to "Tax Return Guidelines."
- Change the extension period to 30 days per sec. 71.73, Stats., as a result of 2017 Wis. Act 59. - Update when an information return should be filed with Wisconsin.
- Update an obsolete reference to the health insurance credit for purposes of claiming the earned income credit.
- Include Form PW-1 in the list of returns that are required to be filed electronically. This form is filed by trusts, partnerships, and tax-option (S) corporations that are required to withhold tax on Wisconsin income that must be reported by nonresidents. Section 71.738(2m), Wis. Stats., provides the authority for the department to prescribe the method for filing returns with the department. The requirement to electronically file started in 2018, as described in Wisconsin Tax Bulletin 200. - Reference statutory limitations, as stated in sec. 71.80 (25), Stats., related to net business and net operating losses as reflected in 2017 Wis. Act 59. - Update date references to the Internal Revenue Code (IRC).
- Remove line references to forms.
- Include exception for broadcaster's gross receipts and updating sourcing of sales of services as provided in secs. 71.04 (7) and 71.25 (9), Stats., as a result of 2017 Wis. Act 59, and to correct a reference. - Repeal s. Tax 2.395 as the alternative method of apportionment was only available prior to January 1, 2000. - Replace obsolete reference to the IRC and reflect the reference to the IRC is the one in effect for federal tax purposes.
- Replace "Delinquent Tax Collection System" with "Compliance Bureau."
- Reflect that no interest is paid on certain WEDC refunds as provided secs. 71.07, 71.28, and 71.47, Stats., as a result of Wis. Act 59.
- Update due date of installment payments for corporations and extensions of time to file corporation returns as provided in secs. 71.29 and 71.44, Stats., 2017 Wis. Act 2. - Reflect obtaining Forms WT-4 and WT-4A online.
- Update years.
- Add limitation on credit as provided in sec. 71.07 (7), Stats., as a result of 2017 Wis. Act 59. - Repeal s. Tax 2.98 (2) (b) (Note 1), (Note 2), and (Note 3) related to disasters occurring prior to 1987. - Repeal s. Tax 14.03 (4) (b) 23. This subdivision was renumbered to 14.03 (4) (c) in CR 00-16. The original subdivision was not deleted. - Add disqualified losses as provided in sec. 71.52(1e), Stats., as a result of 2017 Wis. Act 59. Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states: The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies: 2017 Wisconsin Act 2 and 59 have made changes to Wisconsin's income and franchise tax laws. The department has created this proposed rule order to reflect these statutory changes, as well as provide needed clarification and correction as described above. No other data was used in the preparation of this proposed rule order or this analysis. Analysis and supporting documents used to determine effect on small business: This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated costs incurred by private sector: This proposed rule does not have a fiscal effect on the private sector.
Effect on small business: This proposed rule does not affect small business.
Agency contact person: Please contact Jen Chadwick at (608) 266-8253 or jennifer.chadwick@wisconsin.gov, if you have any questions regarding this proposed rule. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Jen Chadwick
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
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