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SB720,18,17
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:
SB720,23 18Section 23. 71.28 (6) (h) of the statutes is amended to read:
SB720,19,519 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.
SB720,24 6Section 24. 71.47 (6) (h) of the statutes is amended to read:
SB720,19,187 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.
SB720,25 19Section 25. 71.52 (1g) of the statutes is created to read:
SB720,20,320 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:
SB720,20,44 (a) Any amount received as a pension or annuity.
SB720,20,55(b) Any amount to which section 871 (a) of the Internal Revenue Code applies.
SB720,20,76 (c) Any amount received for services provided by an individual while the
7individual is an inmate at a penal institution.
SB720,20,128 (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.
SB720,26 13Section 26. 71.55 (10) of the statutes is amended to read:
SB720,20,2214 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).
SB720,27 23Section 27. 71.738 (3c) of the statutes is created to read:
SB720,21,3
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.
SB720,28 4Section 28. 71.738 (3d) of the statutes is created to read:
SB720,21,85 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.
SB720,29 9Section 29. 71.738 (3f) of the statutes is created to read:
SB720,21,1410 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.
SB720,30 15Section 30. 71.738 (3g) of the statutes is created to read:
SB720,21,1616 71.738 (3g) “Person” includes a pass-through entity,
SB720,31 17Section 31. 71.738 (5b) of the statutes is created to read:
SB720,21,1818 71.738 (5b) “Taxpayer” includes a pass-through entity,
SB720,32 19Section 32. 71.745 of the statutes is created to read:
SB720,22,2 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.
SB720,22,7 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.
SB720,22,13 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.
SB720,22,20 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.
SB720,33 21Section 33. 71.75 (11) of the statutes is created to read:
SB720,22,2322 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.
SB720,34 24Section 34. 71.76 of the statutes is amended to read:
SB720,23,18
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.
SB720,35 19Section 35. 71.77 (7) (b) of the statutes is amended to read:
SB720,24,220 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.
SB720,36 3Section 36. 71.775 (1) (intro.) and (a) of the statutes are consolidated,
4renumbered 71.775 (1) and amended to read:
SB720,24,85 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).
SB720,37 9Section 37. 71.775 (1) (b) of the statutes is repealed.
SB720,38 10Section 38. 71.78 (1) of the statutes is amended to read:
SB720,25,411 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.
SB720,39 5Section 39. 71.78 (11) of the statutes is created to read:
SB720,25,96 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:
SB720,25,1410 (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.
SB720,25,2015 (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.
SB720,40 21Section 40. 71.80 (26) of the statutes is created to read:
SB720,26,822 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.
SB720,26,119 (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:
SB720,26,1412 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.
SB720,26,1715 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.
SB720,26,1918 3. Represent the pass-through entity and keep all pass-through members
19informed.
SB720,26,2120 4. Enter extension agreements on behalf of the pass-through entity under s.
2171.77 (5).
SB720,26,2222 5. Receive pass-through entity adjustment notices.
SB720,26,2523 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.
SB720,27,1
17. File appeals of pass-through entity adjustment notices.
SB720,27,32 8. Enter a settlement agreement related to pass-through entity items from the
3entity that is binding on the pass-through members.
SB720,27,54 (c) The tax matters member may delegate the powers and duties under par. (b)
5to an authorized agent.
SB720,41 6Section 41. 71.80 (27) of the statutes is created to read:
SB720,27,157 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.
SB720,42 16Section 42. 71.83 (1) (a) 12. of the statutes is created to read:
SB720,27,2317 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.
SB720,43 24Section 43. 71.87 of the statutes is amended to read:
SB720,28,6
171.87 Definition. In this subchapter, “person feeling aggrieved" and “person
2aggrieved" include includes a pass-through entity, as defined in s. 71.738 (3c), and
3the spouse of a person against whom an additional assessment was made or who was
4denied a claim for refund for a taxable year for which a separate return was filed and
5include either spouse for a taxable year for which a joint return was filed or, if no
6return was filed, a joint return could have been filed.
SB720,44 7Section 44. 73.0305 of the statutes is amended to read:
SB720,28,14 873.0305 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
11rate of increase under subch. VII of ch. 121. The allowable rate of increase is the
12percentage change, if not negative, in the consumer price index for all urban
13consumers, U.S. city average, between the preceding March 31 and the 2nd
14preceding March 31, as computed by the federal department of labor.
SB720,45 15Section 45. 73.09 (4) (c) of the statutes is amended to read:
SB720,28,2216 73.09 (4) (c) Recertification is contingent upon submission of an application for
17renewal, at least 60 days before the expiration date of the current certificate,
18attesting to the completion of the requirements specified in par. (b). Persons
19applying for renewal on the basis of attendance at the meetings called by the
20department under s. 73.06 (1) and by meeting continuing education requirements
21shall submit a $20 recertification fee, in an amount determined by the department
22not to exceed $75,
with their applications.
SB720,46 23Section 46. 73.09 (5) of the statutes is amended to read:
SB720,29,924 73.09 (5) Examinations. As provided in subs. (1) and (2), the department of
25revenue shall prepare and administer examinations for each level of certification.

1A person applying for an examination under this subsection shall submit a $20 an
2examination 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.
The
8department of revenue shall grant certification to each person who passes the
9examination for that level.
SB720,47 10Section 47. 73.16 (4) of the statutes is amended to read:
SB720,29,1611 73.16 (4) Negligence determinations. The department shall not impose a
12penalty on a taxpayer under ss. 71.09 (11) (d), 71.83 (1) (a) 1. to 4. and 12. and (3) (a),
1376.05 (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
15action or inaction was due to the taxpayer's willful neglect and not to reasonable
16cause.
SB720,48 17Section 48 . 74.315 (1) of the statutes is amended to read:
SB720,29,2218 74.315 (1) Submission. No later than October 1 of each year, the taxation
19district clerk shall submit to the department of revenue, on a form prescribed by the
20department, a listing of all the omitted taxes under s. 70.44 to be included on the
21taxation 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.
SB720,49 23Section 49 . 74.315 (1m) of the statutes is created to read:
SB720,30,424 74.315 (1m) Amount collected from property in a tax incremental district.
25A tax may not be included on a form submitted under sub. (1) if the tax was levied

1on 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
3incremental base, as defined in s. 60.85 (1) (m) or 66.1105 (2) (j), in the assessment
4year for which the tax was collected.
SB720,50 5Section 50 . 74.315 (2) of the statutes is amended to read:
SB720,30,146 74.315 (2) Equalized valuation Amount determined. After receiving the form
7under sub. (1), but no later than November 15, the department of revenue shall
8determine 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
.
13The department's determination under this subsection is subject to review only
14under s. 227.53.
SB720,51 15Section 51 . 74.315 (3) of the statutes is amended to read:
SB720,30,2116 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
19department shall notify the taxation district and the taxation district shall distribute
20the resulting 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).
SB720,52 22Section 52. 76.04 (1) of the statutes is amended to read:
SB720,31,223 76.04 (1) Every company defined in s. 76.02 shall, annually, file a true and
24accurate statement in such manner and form and setting forth such facts as the
25department 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.
SB720,53 3Section 53. 76.07 (1) of the statutes is amended to read:
SB720,31,94 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
8judgment, ascertain and determine the full market value of the property of each
9company within the state.
SB720,54 10Section 54. 76.075 of the statutes is amended to read:
SB720,31,25 1176.075 Adjustments of assessments. Within 4 years after the due date, or
12extended due date, of the report under s. 76.04, any person subject to taxation under
13this subchapter may request the department to make, or the department may make,
14an adjustment to the data under s. 76.07 (4g) or (4r) submitted by the person. If an
15adjustment under this section results in an increase in the tax due under this
16subchapter, the person shall pay the amount of the tax increase plus interest on that
17amount at the rate of 1 percent per month from the due date or extended due date
18of the report under s. 76.04 until the date of final determination and interest at the
19rate of 1.5 percent per month from the date of final determination until the date of
20payment. If an adjustment under this section results in a decrease in the tax due
21under this subchapter, the department shall refund the appropriate amount plus
22interest at the rate of 0.75 0.25 percent per month from the due date or extended due
23date under s. 76.04 until the date of refund. Sections 71.74 (1) and (2) and 71.75 (6)
24and (7), as they apply to income and franchise tax adjustments, apply to adjustments
25under this section. Review of the adjustments is as stated in s. 76.08.
SB720,55
1Section 55. 76.13 (3) of the statutes is amended to read:
SB720,32,132 76.13 (3) If the Dane County circuit court, after such roll is delivered to the
3secretary of administration, increases or decreases the assessment of any company,
4the department shall immediately redetermine the tax of the company on the basis
5of the revised assessment, and shall certify and deliver the revised assessment to the
6secretary of administration as a revision of the tax roll. If the amount of tax upon
7the assessment as determined by the court is less than the amount paid by the
8company, the secretary of administration shall refund the excess to the company with
9interest at the rate of 9 3 percent per year. If the amount of the tax upon the
10assessment as determined by the court is in excess of the amount of the tax as
11determined by the department, interest shall be paid on the additional amount at the
12rate of 12 percent per year from the date of entry of judgment to the date the
13judgment becomes final, and at 1.5 percent per month thereafter until paid.
SB720,56 14Section 56. 76.28 (4) (b) of the statutes is amended to read:
SB720,32,2315 76.28 (4) (b) In the case of overpayments of license fees by any light, heat and
16power company under par. (a), the department shall certify the overpayments to the
17department of administration, which shall audit the amount of the overpayments
18and the secretary of administration shall pay the amounts determined by means of
19the audit. All refunds of license fees under this subsection shall bear interest at the
20annual rate of 9 3 percent from the date of the original payment to the date when
21the refund is made. The time for making additional levies of license fees or claims
22for refunds of excess license fees paid, in respect to any year, shall be limited to 4
23years after the time the report for such year was filed.
SB720,57 24Section 57. 76.28 (11) of the statutes is amended to read:
SB720,33,7
176.28 (11) Payment before contesting. No action or proceeding, except a
2petition for redetermination under sub. (4), may be brought by a light, heat or power
3company against this state to contest any assessment of a tax under this section
4unless the taxpayer first pays to this state the amount of tax assessed. If the
5taxpayer prevails in an action or proceeding, this state shall settle with the taxpayer,
6including payment of interest at 9 3 percent per year on the amount of the money
7paid from the date of payment until the date of judgment.
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