71.45(2)(b)1.1. With respect to any domestic insurer engaged in the sale of life insurance and also other insurance, the net income figure derived by application of par. (a) shall be multiplied by a fraction, the numerator of which is the net gain from operations on insurance, other than life insurance, and the denominator of which is the total net gain from operations; except that the multiplier is zero if the numerator is zero or the numerator is negative and the adjusted federal taxable income is positive or the numerator is positive and the adjusted federal taxable income is negative, and except that the multiplier is one if the numerator is positive and the denominator is zero or negative and the adjusted federal taxable income is positive or the numerator is negative and the denominator is zero or positive and the adjusted federal taxable income is negative or the numerator, the denominator and the adjusted federal taxable income are positive and the numerator is greater than the denominator, and except that if the numerator and denominator are both negative and the adjusted federal taxable income is negative the multiplier is positive but may not be more than one.

71.45(2)(b)2.2. For purposes of the numerator, “net gain from operations on insurance, other than life insurance” includes net income, after dividends to policyholders, but before federal income taxes and foreign income or franchise taxes, from fire and casualty insurance; net gain from operations, after dividends to policyholders and before federal income taxes, from accident and health insurance; and net realized capital gains or losses on investments from accident and health insurance operations, said net realized capital gains or losses to be apportioned among life and accident and health insurance lines in the same manner as net investment income is required to be apportioned by the commissioner of insurance. “Net gain from operations”, “net income”, “net realized capital gains or losses”, and “net investment income” shall be calculated and reported as required under rules adopted by the commissioner of insurance.

71.45(2)(b)3.3. For purposes of the denominator, “total net gain from operations” includes net income, after dividends to policyholders, but before federal income taxes and foreign income or franchise taxes, from fire and casualty insurance; net gain from operations after dividends to policyholders and before federal income taxes, from accident and health and life insurance; and net realized capital gains or losses on investments from accident and health and life insurance operations. “Net income”, “net gain from operations”, and “net realized capital gains or losses” shall be calculated and reported as required under rules adopted by the commissioner of insurance.

71.45(2)(b)4.4. The resultant figure shall constitute Wisconsin net income for purposes of the Wisconsin franchise tax measured by net income except with respect to such of said insurers as had, in the taxable year, premiums written on insurance other than life insurance where the subject of such insurance was resident, located or to be performed outside this state.

71.45(3)(3) Apportionment. Except as provided in sub. (3d), to determine Wisconsin income for purposes of the franchise tax, domestic insurers that, in the taxable year, have received premiums, other than life insurance premiums, written for insurance on property or risks resident, located or to be performed outside this state shall multiply the net income figure derived by application of sub. (2) by the arithmetic average of the following 2 percentages:

71.45(3)(a)(a) Subject to sub. (3d), the percentage determined by dividing the sum of direct premiums written for insurance other than life insurance, with respect to all property and risks resident, located, or to be performed in this state, and assumed premiums written for reinsurance, other than life insurance, with respect to all property and risks resident, located, or to be performed in this state, by the sum of direct premiums written for insurance on all property and risks, other than life insurance, wherever located, and assumed premiums written for reinsurance on all property and risks, other than life insurance, wherever located. In this paragraph, “direct premiums” means direct premiums as reported for the taxable year on an annual statement that is filed by the insurer with the commissioner of insurance under s. 601.42 (1g) (a). In this paragraph, “assumed premiums” means assumed reinsurance premiums from domestic insurance companies as reported for the taxable year on an annual statement that is filed with the commissioner of insurance under s. 601.42 (1g) (a).

71.45(3)(b)1.1. Subject to sub. (3d), the percentage determined by dividing the payroll, exclusive of life insurance payroll, paid in this state in the taxable year by total payroll, exclusive of life insurance payroll, paid everywhere in the taxable year.

71.45(3)(b)2.2. Under subd. 1., payroll is paid in this state if the individual’s service is performed entirely in this state; or the individual’s service is performed both in and outside of this state, but the service performed outside of this state is incidental to the individual’s service in this state; or some service is performed in this state and the base of operations, or if there is no base of operations, the place from which the service is directed or controlled is in this state, or the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state.

71.45(3d)(a)(a) For taxable years beginning after December 31, 2005, and before January 1, 2007, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by an apportionment fraction composed of the percentage under sub. (3) (a) representing 60 percent of the fraction and the percentage under sub. (3) (b) 1. representing 40 percent of the fraction.

71.45(3d)(b)(b) For taxable years beginning after December 31, 2006, and before January 1, 2008, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by an apportionment fraction composed of the percentage under sub. (3) (a) representing 80 percent of the fraction and the percentage under sub. (3) (b) 1. representing 20 percent of the fraction.

71.45(3d)(c)(c) For taxable years beginning after December 31, 2007, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by the percentage under sub. (3) (a).

71.45(3e)(a)1.1. For taxable years beginning before January 1, 2008, if both the numerator and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income are zero, the percentage under sub. (3) (a) is eliminated from the apportionment formula to determine the taxpayer’s income under sub. (3).

71.45(3e)(a)2.2. For taxable years beginning after December 31, 2007, if both the numerator and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income are zero, none of the taxpayer’s net income is apportioned to this state.

71.45(3e)(b)1.1. For taxable years beginning before January 1, 2008, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a negative number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a positive number, a negative number, or zero, the percentage under sub. (3) (a) is zero.

71.45(3e)(b)2.2. For taxable years beginning after December 31, 2007, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a negative number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a positive number, a negative number, or zero, none of the taxpayer’s net income is apportioned to this state.

71.45(3e)(c)1.1. For taxable years beginning before January 1, 2008, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a positive number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is zero or a negative number, the percentage under sub. (3) (a) is one.

71.45(3e)(c)2.2. For taxable years beginning after December 31, 2007, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is a positive number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer’s net income is zero or a negative number, all of the taxpayer’s net income is apportioned to this state.

71.45(3m)(3m) Arithmetic average. Except as provided in sub. (3d), the arithmetic average of the 2 percentages referred to in sub. (3) shall be applied to the net income figure arrived at by the successive application of sub. (2) (a) and (b) with respect to Wisconsin insurers to which sub. (2) (a) and (b) applies and which have received premiums, other than life insurance premiums, written for insurance on property or risks resident, located or to be performed outside this state, to arrive at Wisconsin income constituting the measure of the franchise tax.

71.45(3r)(3r) Allocation of certain proceeds. All income that is realized from the purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

71.45(4)(a)(a) Except as provided in par. (b) and s. 71.80 (25), insurers computing tax under this subchapter may subtract from Wisconsin net income any Wisconsin net business loss incurred in any of the 20 immediately preceding taxable years, if the insurer was subject to taxation under this chapter in the taxable year in which the loss was incurred, to the extent not offset by Wisconsin net business income of any year between the loss year and the taxable year for which an offset is claimed and computed without regard to sub. (2) (a) 8. and 9. and this subsection and limited to the amount of net income, but no loss incurred for a taxable year before taxable year 1987 by a nonprofit service plan of sickness care under ch. 148, or dental care under s. 447.13 may be treated as a net business loss of the successor service insurer under ch. 613 operating by virtue of s. 148.03 or 447.13.

71.45(4)(b)(b) An insurer that is part of a combined group under s. 71.255 may offset against its Wisconsin net business income any unused pre-2009 net business loss carry-forward under s. 71.255 (6) (bm) for the 20 taxable years that begin after December 31, 2011.

71.45(5)(5) Exceptions. The net income of a cooperative health care association organized under s. 185.981, or of a service insurance corporation organized under ch. 613, that is derived from a health maintenance organization, as defined in s. 609.01 (2), or a limited service health organization, as defined in s. 609.01 (3), is the net income that would be determined if the cooperative health care association or service insurance corporation were subject to federal income taxation and as if that income were that of an insurance company.