Tax 6.50(4)(a)(a) In determining cost indicators, the department may consider 4 kinds of cost described as follows:
Tax 6.50(4)(a)4.
4. Replacement cost to currently replace the property with its functional equivalent.
Tax 6.50(4)(b)
(b) The department shall make adequate and reasonable allowances for loss of value due to all causes including physical depreciation, functional and economic obsolescence, regulatory required write-offs and utility plant acquisition adjustments. The cost indicator for regulated public utilities shall recognize that an asset's value generally is limited by its value for ratemaking purposes. The cost indicator shall include construction work in-progress regardless of the treatment for ratemaking purposes.
Tax 6.50(5)(a)(a) Stock and debt indicators are determined by the application of the general financial appraisal principle that the market value of the debt and equity interests of the enterprise are equal to the market value of the assets presented on the balance sheet. Stock and debt indicators determine the value of a company's assets by appraising the value of the shareholders' equity and liabilities of the company, such as current liabilities, long-term debt, reserves and deferred credits. Appropriate reductions shall be made for nonoperating property of the company. The department may consider the following ratios to eliminate nonoperating properties:
Tax 6.50(5)(b)
(b) The department shall also make required adjustments for nontaxable properties as set forth in
sub. (4).
Tax 6.50(6)
(6) Capitalized income indicators of value. Capitalized income indicators are determined by the application of the general appraisal principle that the full market value of operating property is the present worth of anticipated future benefits to be derived from ownership of the property. Future benefits are the summation of the positive and negative cash flows which a fully informed person is warranted in assuming will be produced by operations of the property as a going concern. The department shall reflect earnings limitations imposed upon regulated utilities in this determination.
Tax 6.50(7)(a)(a) The validity of a determination of value may be measured against the supporting evidence and documented data from which the determination of value was derived. Accordingly the department shall consider and weigh, in its best judgment any or all available indicators of full market value enumerated in
sub. (2) (g) 1. to
3. In this correlation process it shall consider the following:
Tax 6.50(7)(a)1.
1. The speculative nature of estimates used in developing the indicators of value and the degree of reliability of each of the indicators of value.
Tax 6.50(7)(a)2.
2. The consistency of weighting indicators of value from year to year.
Tax 6.50(7)(a)5.
5. The reasonableness of the correlated full value market estimate when compared to:
Tax 6.50(7)(a)5.a.
a. Actual sales of comparable properties in an arm's-length transaction between independent parties;
Tax 6.50(7)(a)5.c.
c. Other states' correlated estimates of full market value of the same company adjusted for differences in state law;
Tax 6.50(7)(a)5.e.
e. Additional evidence of full market value submitted by the company or the department;
Tax 6.50(7)(a)5.g.
g. All other facts obtainable bearing on the value of the property collectively.
Tax 6.50(7)(b)
(b) In the case of regulated utilities, a sale is comparable only if there is the sale of an entire operation capable of functioning independently and the parties thereto are subject to regulatory policies similar to those of Wisconsin.
Tax 6.50(8)
(8) Requests for documentation. Upon written request the department shall provide to the company copies of its computational worksheets used in determining full market value.
Tax 6.50(9)
(9) Correction of errors. Errors which are agreed to be palpable or computational and which are discovered after issuance of the assessment shall be adjusted by the department in the next subsequent assessment year and the department shall provide the company with evidence of such adjustment.
Tax 6.50 Note
Note: This section interprets s.
76.07 (5), Stats.
Tax 6.50 History
History: Cr.
Register, November, 1983, No. 335, eff. 12-1-83;
CR 13-037: am. (4) (b) Register February 2014 No. 698, eff. 3-1-14.
