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AB754,10,4
170.995 (14) (b) If the department of revenue does not receive the fee imposed
2on a municipality under par. (a) by March 31 of each year, the department shall
3reduce the distribution made to the municipality under s. 79.02 (2) (b) (1) by the
4amount of the fee.
AB754,13 5Section 13. 71.04 (1) (a) of the statutes is amended to read:
AB754,11,256 71.04 (1) (a) All income or loss of resident individuals and resident estates and
7trusts shall follow the residence of the individual, estate or trust. Income or loss of
8nonresident individuals and nonresident estates and trusts from business, not
9requiring apportionment under sub. (4), (10) or (11), shall follow the situs of the
10business from which derived, except that all income that is realized from the sale of
11or purchase and subsequent sale or redemption of lottery prizes if the winning tickets
12were originally bought in this state shall be allocated to this state. All items of
13income, loss and deductions of nonresident individuals and nonresident estates and
14trusts derived from a tax-option corporation not requiring apportionment under
15sub. (9) shall follow the situs of the business of the corporation from which derived,
16except that all income that is realized from the sale of or purchase and subsequent
17sale or redemption of lottery prizes if the winning tickets were originally bought in
18this state shall be allocated to this state. Income or loss of nonresident individuals
19and nonresident estates and trusts derived from rentals and royalties from real
20estate or tangible personal property, or from the operation of any farm, mine or
21quarry, or from the sale of real property or tangible personal property shall follow the
22situs of the property from which derived. Income from personal services of
23nonresident individuals, including income from professions, shall follow the situs of
24the services. A nonresident limited partner's distributive share of partnership
25income shall follow the situs of the business, except that all income that is realized

1from the sale of or purchase and subsequent sale or redemption of lottery prizes if
2the winning tickets were originally bought in this state shall be allocated to this
3state. A nonresident limited liability company member's distributive share of
4limited liability company income shall follow the situs of the business, except that
5all income that is realized from the sale of or purchase and subsequent sale or
6redemption of lottery prizes if the winning tickets were originally bought in this state
7shall be allocated to this state. Income of nonresident individuals, estates and trusts
8from the state lottery under ch. 565 is taxable by this state. Income of nonresident
9individuals, estates and trusts from any multijurisdictional lottery under ch. 565 is
10taxable by this state, but only if the winning lottery ticket or lottery share was
11purchased from a retailer, as defined in s. 565.01 (6), located in this state or from the
12department. Income of nonresident individuals, nonresident trusts and nonresident
13estates from pari-mutuel winnings or purses under ch. 562 is taxable by this state.
14Income of nonresident individuals, estates and trusts from winnings from a casino
15or bingo hall that is located in this state and that is operated by a Native American
16tribe or band shall follow the situs of the casino or bingo hall. Income derived by a
17nonresident individual from a covenant not to compete is taxable by this state to the
18extent that the covenant was based on a Wisconsin-based activity. All other income
19or loss of nonresident individuals and nonresident estates and trusts, including
20income or loss derived from land contracts, mortgages, stocks, bonds and securities
21or from the sale of similar intangible personal property, shall follow the residence of
22such persons, except as provided in par. (b) and sub. (9), except that all income that
23is realized from the sale of or purchase and subsequent sale or redemption of lottery
24prizes if the winning tickets were originally bought in this state shall be allocated
25to this state
.
AB754,14
1Section 14. 71.04 (1) (b) (intro.) of the statutes is amended to read:
AB754,12,32 71.04 (1) (b) (intro.) For Except as provided in par. (c), for purposes of
3determining the situs of income under this section:
AB754,15 4Section 15. 71.04 (1) (c) of the statutes is created to read:
AB754,12,65 71.04 (1) (c) Except as provided in subs. (4), (9), and (9m), the situs of income
6or loss of nonresident individuals and nonresident estates and trusts is as follows:
AB754,12,87 1. Except as provided in subds. 3. and 4., income from services performed by
8nonresident individuals shall follow the situs of the services.
AB754,12,139 2. Income or loss from business, not requiring apportionment under sub. (4),
10(10), or (11), shall follow the situs of the business from which derived, except that all
11income that is realized from the sale of or purchase and subsequent sale or
12redemption of lottery prizes if the winning tickets were originally bought in this state
13shall be allocated to this state.
AB754,12,1914 3. All items of income, loss, and deductions derived from a tax-option
15corporation not requiring apportionment under sub. (9) shall follow the situs of the
16business of the corporation from which derived, except that all income that is realized
17from the sale of or purchase and subsequent sale or redemption of lottery prizes if
18the winning tickets were originally bought in this state shall be allocated to this
19state.
AB754,12,2520 4. All items of income, loss, and deductions derived from a partnership or
21limited liability company not requiring apportionment under sub. (9m) shall follow
22the situs of the business of the partnership or limited liability company from which
23derived, except that all income that is realized from the sale of or purchase and
24subsequent sale or redemption of lottery prizes if the winning tickets were originally
25bought in this state shall be allocated to this state.
AB754,13,4
15. Income or loss derived from rentals and royalties from real estate or tangible
2personal property, or from the operation of any farm, mine or quarry, or from the sale
3of real property or tangible personal property shall follow the situs of the property
4from which derived.
AB754,13,85 6. Income from the state lottery under ch. 565 is taxable to this state. Income
6from any multijurisdictional lottery under ch. 565 is taxable by this state, but only
7if the winning lottery ticket or lottery share was purchased from a retailer, as defined
8in s. 565.01 (6), located in this state or from the department.
AB754,13,109 7. Income from pari-mutuel winnings or purses under ch. 562 is taxable by this
10state.
AB754,13,1311 8. Income from winnings from a casino or bingo hall that is located in this state
12and that is operated by a Native American tribe or band shall follow the situs of the
13casino or bingo hall.
AB754,13,1614 9. Income derived by a nonresident individual from a covenant not to compete
15is taxable by this state to the extent that the covenant was based on a
16Wisconsin-based activity.
AB754,13,2317 10. All other income or loss of nonresident individuals and nonresident estates
18and trusts, including income or loss derived from land contracts, mortgages, stocks,
19bonds, and securities or from the sale of similar intangible personal property, shall
20follow the residence of such persons, except as provided in par. (b) and subs. (9) and
21(9m), except that all income that is realized from the sale of or purchase and
22subsequent sale or redemption of lottery prizes if the winning tickets were originally
23bought in this state shall be allocated to this state.
AB754,16 24Section 16. 71.04 (3) (b) of the statutes is amended to read:
AB754,14,7
171.04 (3) (b) Part-year residents, nonresidents. All partners or members who
2are residents of this state for less than a full taxable year or who are nonresidents
3shall compute taxes for that year on their share of partnership or limited liability
4company income or loss under this chapter for the part of the taxable year during
5which they are nonresidents by recognizing their proportionate share of all items of
6income, loss or deduction attributable to a business in, services performed in, or
7rental of property in,
this state.
AB754,17 8Section 17. 71.04 (4) (intro.) of the statutes is amended to read:
AB754,14,259 71.04 (4) Nonresident allocation and apportionment formula. (intro.)
10Nonresident individuals and nonresident estates and trusts engaged in business
11within and without the state shall be taxed only on such income as is derived from
12business transacted and property located within the state. The amount of such
13income attributable to Wisconsin may be determined by an allocation and separate
14accounting thereof, when the business of such nonresident individual or nonresident
15estate or trust within the state is not an integral part of a unitary business, but the
16department of revenue may permit an allocation and separate accounting in any case
17in which it is satisfied that the use of such method will properly reflect the income
18taxable by this state. In all cases in which allocation and separate accounting is not
19permissible, the determination shall be made in the following manner: for all
20businesses except air carriers, financial organizations, telecommunications
21companies, pipeline companies, public utilities, railroads, and car line companies
22there shall first be deducted from the total net income of the taxpayer the part thereof
23(less related expenses, if any) that follows the situs of the property or the residence
24of the recipient. The remaining
, the net income shall be apportioned to this state by
25use of the following:
AB754,18
1Section 18. 71.04 (9) of the statutes is amended to read:
AB754,15,182 71.04 (9) Nonresident income from multistate tax-option corporation.
3Nonresident individuals and nonresident estates and trusts deriving income from a
4tax-option corporation which is engaged in business within and without this state
5shall be taxed only on the income of the corporation derived from business transacted
6and property located in this state as computed under the apportionment formula
7under subs. (4) and (4m)
and losses and other items of the corporation deductible by
8such shareholders shall be limited to their proportionate share of the Wisconsin loss
9or other item as computed under the apportionment formula under subs. (4) and
10(4m)
, except that all income that is realized from the sale of or purchase and
11subsequent sale or redemption of lottery prizes if the winning tickets were originally
12bought in this state shall be allocated to this state. For purposes of this subsection,
13all intangible income of tax-option corporations , including intangible income,
14passed through to shareholders is business income that follows the situs of the
15business as computed under the apportionment formula under subs. (4) and (4m),
16except that all income that is realized from the sale of or purchase and subsequent
17sale or redemption of lottery prizes if the winning tickets were originally bought in
18this state shall be allocated to this state.
AB754,19 19Section 19. 71.04 (9m) of the statutes is created to read:
AB754,16,1320 71.04 (9m) Nonresident income from multistate partnership and limited
21liability company
. Nonresident individuals and nonresident estates and trusts
22deriving income from a partnership or limited liability company which is engaged in
23business within and without this state shall be taxed only on the income of the
24partnership or limited liability company derived from business transacted and
25property located in this state as computed under the apportionment formula under

1subs. (4) and (4m) and losses and other items of the partnership or limited liability
2company deductible by such partners and members shall be limited to their
3proportionate share of the Wisconsin loss or other item as computed under the
4apportionment formula under subs. (4) and (4m), except that all income that is
5realized from the sale of or purchase and subsequent sale or redemption of lottery
6prizes if the winning tickets were originally bought in this state shall be allocated
7to this state. For purposes of this subsection, all partnership or limited liability
8company income, including intangible income, passed through to partners and
9members is presumed business income that follows the situs of the business as
10computed under the apportionment formula under subs. (4) and (4m), except that all
11income that is realized from the sale of or purchase and subsequent sale or
12redemption of lottery prizes if the winning tickets were originally bought in this state
13shall be allocated to this state.
AB754,20 14Section 20 . 71.05 (6) (b) 4. of the statutes is amended to read:
AB754,17,1015 71.05 (6) (b) 4. Disability payments other than disability payments that are
16paid 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
23the taxable year that individual may subtract an amount only if that person is
24disabled and the amount that may be subtracted then is $100 for each week that
25payments are received or the amount of disability pay reported as income, whichever

1is less. If the exclusion under this subdivision is claimed on a joint return and only
2one of the spouses is disabled, the maximum exclusion is $100 for each week that
3payments are received or the amount of disability pay reported as income, whichever
4is 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.
AB754,21 11Section 21. 71.07 (9m) (h) of the statutes is amended to read:
AB754,17,2312 71.07 (9m) (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
14par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes
15imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the
16transfer, and submits with the notification a copy of the transfer documents, and the
17department 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
23claimant.
AB754,22 24Section 22. 71.25 (6) (intro.) of the statutes is amended to read:
AB754,18,17
171.25 (6) Allocation and separate accounting and apportionment formula.
2(intro.) Corporations engaged in business within and without the state shall be taxed
3only on such income as is derived from business transacted and property located
4within the state. The amount of such income attributable to Wisconsin may be
5determined by an allocation and separate accounting thereof, when the business of
6such corporation within the state is not an integral part of a unitary business, but
7the department of revenue may permit an allocation and separate accounting in any
8case in which it is satisfied that the use of such method will properly reflect the
9income taxable by this state. In all cases in which allocation and separate accounting
10is not permissible, the determination shall be made in the following manner: for all
11businesses except air carriers, financial organizations, telecommunications
12companies, pipeline companies, public utilities, railroads, car line companies and
13corporations or associations that are subject to a tax on unrelated business income
14under 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
17apportioned to this state by use of the following:
AB754,23 18Section 23. 71.28 (6) (h) of the statutes is amended to read:
AB754,19,519 71.28 (6) (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
21par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes
22imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the
23transfer, and submits with the notification a copy of the transfer documents, and the
24department 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
5claimant.
AB754,24 6Section 24. 71.47 (6) (h) of the statutes is amended to read:
AB754,19,187 71.47 (6) (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
9par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes
10imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the
11transfer, and submits with the notification a copy of the transfer documents, and the
12department 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
18claimant.
AB754,25 19Section 25. 71.52 (1g) of the statutes is created to read:
AB754,20,320 71.52 (1g) “Earned income” means wages, salaries, tips, and other employee
21compensation that may be included in federal adjusted gross income for the taxable
22year, plus the amount of the claimant's net earnings from self-employment for the
23taxable year determined with regard to the deduction allowed to the taxpayer by
24section 164 (f) of the Internal Revenue Code. For purposes of this subsection, a
25claimant's earned income is computed without regard to any marital property laws

1and a claimant may elect to treat amounts excluded from federal adjusted gross
2income as earned income, as provided under section 112 of the Internal Revenue
3Code. “Earned income” does not include the following:
AB754,20,44 (a) Any amount received as a pension or annuity.
AB754,20,55(b) Any amount to which section 871 (a) of the Internal Revenue Code applies.
AB754,20,76 (c) Any amount received for services provided by an individual while the
7individual is an inmate at a penal institution.
AB754,20,128 (d) Any amount received for service performed in work activities under
9paragraphs (4) or (7) of section 407 (d) of the Social Security Act to which the claimant
10is assigned under any state program under part A of title IV of the Social Security
11Act. This paragraph applies only to amounts subsidized under any such state
12program.
AB754,26 13Section 26. 71.55 (10) of the statutes is amended to read:
AB754,20,2214 71.55 (10) Farmers. Notwithstanding the provision in s. 71.52 (6) that requires
15the addition of certain disqualified losses to income, such an addition may not be
16made by a claimant who is a farmer whose primary income is from farming and
17whose farming generates less than $250,000 in gross receipts from the operation of
18farm 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).
AB754,27 23Section 27. 71.738 (3c) of the statutes is created to read:
AB754,21,3
171.738 (3c) “Pass-through entity" means a partnership, a limited liability
2company, a tax-option corporation, an estate, or a trust that is treated as a
3pass-through entity for federal income tax purposes.
AB754,28 4Section 28. 71.738 (3d) of the statutes is created to read:
AB754,21,85 71.738 (3d) “Pass-through item" means a tax-option item under s. 71.34 (3)
6or an item of income, gain, loss, deduction, credit, or any other item that originates
7with a pass-through entity and is required to be reported by one or more
8pass-through members under this chapter.
AB754,29 9Section 29. 71.738 (3f) of the statutes is created to read:
AB754,21,1410 71.738 (3f) “Pass-through member" means a person who is a partner in a
11partnership, shareholder in a tax-option corporation, beneficiary of an estate or a
12trust, or any other person whose tax liability under this chapter is determined in
13whole or in part by taking into account the person's share of pass-through items,
14directly or indirectly, from a pass-through entity.
AB754,30 15Section 30. 71.738 (3g) of the statutes is created to read:
AB754,21,1616 71.738 (3g) “Person” includes a pass-through entity,
AB754,31 17Section 31. 71.738 (5b) of the statutes is created to read:
AB754,21,1818 71.738 (5b) “Taxpayer” includes a pass-through entity,
AB754,32 19Section 32. 71.745 of the statutes is created to read:
AB754,22,2 2071.745 Pass-through entity audits, additional assessments and
21refunds at the entity level. (1)
Audit assessments and refunds. Except as
22provided in s. 71.80 (27), the department may audit and assess tax to a pass-through
23entity on income otherwise reportable by the pass-through members at the highest
24tax rate applicable under this chapter. The department may issue a refund to a

1pass-through entity when the audit results in an overpayment of tax originally paid
2by the entity.
AB754,22,7 3(2) Adjustment of credits. Except as provided in s. 71.80 (27), the department
4may correct the credit computation of a pass-through entity resulting from a
5department audit under this subchapter at the pass-through entity level, and may
6apply the credit adjustment to an assessment or refund issued to the pass-through
7entity.
AB754,22,13 8(3) Adjustments to the pass-through entity are attributable to the
9members.
Except when an election under s. 71.21 (6) (a) or 71.365 (4m) (a) is made,
10any adjustments to income, gain, loss, deduction, or credit made to the pass-through
11entity under this section are attributable to each pass-through member in a manner
12that is consistent with the treatment of such income, gain, loss, deduction, or credit
13to the pass-through entity.
AB754,22,20 14(4) Liability may be assessed to more than one person. If for any reason a
15pass-through entity fails to timely make any report or payment required under this
16subchapter, the department may assess the pass-through members for any liability
17resulting from an audit under this subchapter. If for any reason a pass-through
18member fails to timely make any report or payment required under this subchapter,
19the department may assess the pass-through entity for any liability resulting from
20an audit under this subchapter.
AB754,33 21Section 33. 71.75 (11) of the statutes is created to read:
AB754,22,2322 71.75 (11) The department shall not issue a refund to a pass-through entity
23except when the claim is for overpayment of tax originally paid by the entity.
AB754,34 24Section 34. 71.76 of the statutes is amended to read:
AB754,23,18
171.76 Internal revenue service and other state adjustments. If for any
2year the amount of federal net income tax payable, of a credit claimed or carried
3forward, of a net operating loss carried forward or of a capital loss carried forward
4of any taxpayer as reported to the internal revenue service is changed or corrected
5by the internal revenue service or other officer of the United States, such taxpayer
6shall report such changes or corrections to the department within 90 180 days after
7its final determination and shall concede the accuracy of such determination or state
8how the determination is erroneous. Such changes or corrections need not be
9reported unless they affect the amount of net tax payable under this chapter, of a
10credit calculated under this chapter, of a Wisconsin net operating loss carried
11forward, of a Wisconsin net business loss carried forward or of a capital loss carried
12forward under this chapter. Any taxpayer submitting an amended return to the
13internal revenue service, or to another state if there has been allowed a credit against
14Wisconsin taxes for taxes paid to that state, shall also file, within 90 180 days of such
15filing date, an amended return if any information contained on the amended return
16affects the amount of net tax payable under this chapter of a credit calculated under
17this chapter, of a Wisconsin net operating loss carried forward, of a Wisconsin net
18business loss carried forward or of a capital loss carried forward under this chapter.
AB754,35 19Section 35. 71.77 (7) (b) of the statutes is amended to read:
AB754,24,220 71.77 (7) (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
22under s. 71.76 or within such other period specified in a written agreement entered
23into prior to the expiration of such 90 180 days by the taxpayer and the department.
24If the taxpayer does not report to the department as required under s. 71.76, the

1department may make an assessment against the taxpayer or refund to the taxpayer
2within 4 years after discovery by the department.
AB754,36 3Section 36. 71.775 (1) (intro.) and (a) of the statutes are consolidated,
4renumbered 71.775 (1) and amended to read:
AB754,24,85 71.775 (1) Definitions. In this section: (a) “Nonresident", “ nonresident”
6includes an individual who is not domiciled in this state; a partnership, limited
7liability company, or corporation whose commercial domicile is outside the state; and
8an estate or a trust that is a nonresident under s. 71.14 (1) to (3m).
AB754,37 9Section 37. 71.775 (1) (b) of the statutes is repealed.
AB754,38 10Section 38. 71.78 (1) of the statutes is amended to read:
AB754,25,411 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
13circulate any information derived from an income, franchise, withholding, fiduciary,
14partnership, or limited liability company tax return or tax credit claim, including
15information which may be furnished by the department as provided in this section.
16This subsection does not prohibit publication by any newspaper of information
17lawfully derived from such returns or claims for purposes of argument or prohibit
18any public speaker from referring to such information in any address. This
19subsection does not prohibit the department from publishing statistics classified so
20as not to disclose the identity of particular returns, or claims or reports and the items
21thereof. This subsection does not prohibit employees or agents of the department of
22revenue from offering or submitting any return, including joint returns of a spouse
23or former spouse, separate returns of a spouse, individual returns of a spouse or
24former spouse, and combined individual income tax returns, or from offering or
25submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any

1information derived from, any of those documents as evidence into the record of any
2contested matter involving the department in proceedings or litigation on state tax
3matters if, in the department's judgment, that evidence has reasonable probative
4value.
AB754,39 5Section 39. 71.78 (11) of the statutes is created to read:
AB754,25,96 71.78 (11) Pass-through entity audits. If the department audits a
7pass-through entity for the income or franchise taxes of its pass-through members,
8including when an election is made under s. 71.21 (6) (a) or 71.365 (4m) (a) to pay tax
9at the entity level, the department may disclose the following:
AB754,25,1410 (a) To a pass-through member that the pass-through entity is under audit or
11was audited, if the disclosure is necessary to explain any amounts assessed or
12refunded to the pass-through member or to obtain information necessary to
13determine the proper amount of adjustment to make at the pass-through entity
14level.
AB754,25,2015 (b) To a pass-through entity, the identities of one or more members who have
16failed to report pass-through items originating with the entity on their Wisconsin
17returns, if the disclosure is necessary to explain any amounts assessed or refunded
18to the pass-through entity or to obtain information about a pass-through member's
19return in order to determine the proper amount of adjustment to make at the
20pass-through entity level.
AB754,40 21Section 40. 71.80 (26) of the statutes is created to read:
AB754,26,822 71.80 (26) Tax matters member of a pass-through entity. (a) Each
23pass-through entity filing a return in this state under this chapter shall designate
24one pass-through member as the tax matters member on the pass-through entity's
25return filed in this state for each taxable year. If no tax matters member is

1designated on the return or no return is filed, the pass-through entity shall appoint
2a tax matters member no later than 30 days after a written request by the
3department. If no member is so appointed, the department may designate the tax
4matters member and notify the pass-through entity in writing of the designation.
5The pass-through entity may at any time provide a written statement designating
6a new tax matters member and the department shall accept it if it is signed by an
7authorized agent of the pass-through entity. The tax matters member for this state
8may be different from the entity's federal tax matters member.
AB754,26,119 (b) With regard to a department audit of a pass-through entity for income or
10franchise taxes, the tax matters member has the power and duty to do all of the
11following:
AB754,26,1412 1. Act as the sole authority on behalf of the pass-through entity with respect
13to the year under review. The pass-through members are bound by actions of the tax
14matters member under this subdivision.
AB754,26,1715 2. Provide the department sufficient information to identify each pass-through
16member, and the profits interest of each pass-through member, for each taxable year
17affected by the audit.
AB754,26,1918 3. Represent the pass-through entity and keep all pass-through members
19informed.
AB754,26,2120 4. Enter extension agreements on behalf of the pass-through entity under s.
2171.77 (5).
AB754,26,2222 5. Receive pass-through entity adjustment notices.
AB754,26,2523 6. Notify all pass-through members of their share of corrections and
24adjustments made to the pass-through entity within 90 days after the final
25determination date of the notice.
AB754,27,1
17. File appeals of pass-through entity adjustment notices.
AB754,27,32 8. Enter a settlement agreement related to pass-through entity items from the
3entity that is binding on the pass-through members.
AB754,27,54 (c) The tax matters member may delegate the powers and duties under par. (b)
5to an authorized agent.
AB754,41 6Section 41. 71.80 (27) of the statutes is created to read:
AB754,27,157 71.80 (27) Exception to pass-through entity level assessment. No later than
860 days after receipt of the department's audit determination, in a manner
9prescribed by the department, a pass-through entity with 5 or fewer members for all
10years under review may elect an audit assessment to be assessed separately to each
11pass-through member. This subsection does not apply to a pass-through entity if
12one or more of its members is a pass-through entity for any year under review or if
13the 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
15of a tax matters member provided under sub. (26) (a) and (b) 2., 3., and 6.
AB754,42 16Section 42. 71.83 (1) (a) 12. of the statutes is created to read:
AB754,27,2317 71.83 (1) (a) 12. `Incomplete or incorrect pass-through entity return.' If any
18pass-through entity, as defined in s. 71.738 (3c), required under this chapter to file
19a return files an incomplete or incorrect return, the department, upon a showing by
20the department under s. 73.16 (4), shall assess the pass-through entity an amount
21equal to 25 percent of the amount of tax assessed under s. 71.745. The amount shall
22be assessed, levied, and collected in the same manner as additional income or
23franchise taxes.
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