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
.
SECTION 1. Tax 1.12 (9) (a) 1. (Note) and 1.13 (1) (b) are amended to read:
(b) The power of attorney requirement applies to income, franchise, alternative minimum, withholding, sales and use, county sales and use, estate, motor fuel, general aviation fuel, special fuel, fermented malt beverage, intoxicating liquor, cigarette and tobacco products tax matters of individuals, partnerships and corporations, including (S) corporations, and homestead and farmland preservation credit matters, and unclaimed property matters.
SECTION 2. Tax 1.13 (3) (a) and (b) are repealed.
SECTION 3. Tax 1.13 (4) (a) and (b) are amended to read:
(a) Form A-222. Wisconsin's Power power of attorney forms form, Form A-222, are is available from the Wisconsin department of revenue's web site or from any Wisconsin department of revenue office. The Wisconsin form, Form A-222, is similar to the federal power of attorney form, Form 2848.
(b) Alternate Form. Use of the Wisconsin power of attorney form is not mandatory. However, the department prefers that this form or another similar form be used. The Wisconsin power of attorney form or substitute form shall clearly express the scope of the authority granted the taxpayer's representative, the Wisconsin tax matters, e.g., income, sales, or franchise tax, covered and the tax year or period to which it relates. An alternative form may be used, but must include the following:
1. Name of representative
2. Clear description of the scope of authority granted to the representative
3. Notarized signature of the taxpayer, except federal Forms 2848 and 8655, SSTGB Form F0023, and other forms approved by the department do not require the signature to be notarized
SECTION 4. Tax 1.13 (4) (c) is created to read:
(c) The Wisconsin power of attorney form or substitute form shall clearly express the scope of the authority granted the taxpayer's representative and the Wisconsin matter covered (e.g., income, sales, or franchise tax or unclaimed property).
SECTION 5. Tax 1.17 is repealed.
SECTION 6. Tax 2.01 is amended to read:
Residence. Individuals claiming a change of residence, i.e., domicile, from Wisconsin to another state shall file form I-827, “Residence Questionnaire", or the “Residence Questionnaire" which is a part of the 1NPR income tax form, with the Wisconsin department of revenue by attaching it to their Wisconsin income tax return for the year they claim to have changed residence, and shall furnish other information the department may require.
SECTION 7. Tax 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) are amended to read:
2.04 (2) (d) Note: Forms W-2, 1099-R, 9b, and 1099 that are not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to the department. Forms 9b or substitute forms filed on paper may be mailed to Wisconsin Department of Revenue, PO Box 89328920, Madison, WI 53708-893253708-8920. Other forms may be mailed to Wisconsin Department of Revenue, PO Box 8920, Madison, WI 53708-8920.
(3) Rents and royalties. Under ss. 71.70 and 71.80 (20), Stats., except as provided in par. (d), all persons making payments of rents and royalties of $600 or more to individuals who are residents of Wisconsin, regardless of where the property is located, and to nonresident individuals if the property is located in Wisconsin, shall file with the department, on form Form 9b or an approved substitute form, a statement of payments made in the preceding calendar year. As provided in sub. (6), the department may require such statement be filed electronically. The following shall also apply with respect to rents and royalties: (a) A copy of federal form Form 1099-MISC may be filed in lieu of Wisconsin form Form 9b.
(b) Corporations shall file the statement with the department by March 15January 31 and payers other than corporations shall file by April 15January 31.
Note: Forms not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to Wisconsin Department of Revenue, PO Box 89328920, Madison, WI 53708-893253708-8920.
(c) No A 30 day extension of time for filing forms Forms 9b or substitute forms to report payments of rents or royalties may be allowed.
(d) The requirement to file form Form 9b or a substitute form does not apply to persons other than corporations who do not deduct the payments in determining Wisconsin taxable income.
(4) (c) The winnings required to be reported in pars. (a) and (b) shall be reported on federal form Form W-2G or on an approved substitute form. As provided in sub. (6), the department may require such form be filed electronically.
(e) No extension of time for filing formsForms W-2G or substitute forms to report payments of lottery prize winnings or pari-mutuel wager winnings may be allowed.
(5) Disallowance of deductions. Items to be reported on formsForms W-2, 1099-R, 9b or substitute forms may be disallowed as deductions from gross income if not properly reported.
(6) Electronic filing requirement.
