Tax 2.82(4)(a)11. 11. The performance of services in Wisconsin by employees or representatives, the services of which are unrelated to the sale of tangible personal property.

Tax 2.82 Note Example: Repair Company is a calendar year-end corporation headquartered outside Wisconsin. Repair Company does not maintain a business location or have resident employees in Wisconsin. During the year, Repair Company sends four technicians to repair customer equipment located in Wisconsin. Each of the technicians perform repairs in Wisconsin for three days during the year. Repair Company has nexus in Wisconsin since its employees or representatives perform services in Wisconsin. Public Law 86-272 does not apply because services such as repair activities are not a protected activity.

Tax 2.82(4)(a)12. 12. Engaging in substantial activities that help to establish and maintain a market in Wisconsin.

Tax 2.82(4)(b) (b) “Doing business in this state”. Additionally, if a corporation has any of the activities that are specifically included in the statutory definition of “doing business in this state” (s. 71.22 (1r), Stats.), the corporation has nexus except where prohibited by P.L. 86-272. Therefore, the following activities constitute nexus in Wisconsin to the extent sub. (3) (b) 3. does not apply:

Tax 2.82(4)(b)1. 1. Issuing credit cards, debit cards, or travel and entertainment cards to customers in Wisconsin.

Tax 2.82(4)(b)2. 2. Regularly selling products or services of any kind or nature to customers in Wisconsin that receive the product or service in Wisconsin.

Tax 2.82(4)(b)3. 3. Regularly soliciting business from potential customers in Wisconsin.

Tax 2.82(4)(b)4. 4. Regularly performing services outside Wisconsin for which the benefits are received in Wisconsin.

Tax 2.82(4)(b)5. 5. Regularly engaging in transactions with customers in Wisconsin that involve intangible property and result in receipts flowing to the corporation from within Wisconsin.

Tax 2.82(4)(b)6. 6. Holding loans secured by real or tangible personal property located in Wisconsin.

Tax 2.82(4)(b)7. 7. Owning, directly or indirectly, a general or limited partnership interest in a partnership that does business in Wisconsin, regardless of the percentage of ownership.

Tax 2.82(4)(b)8. 8. Owning, directly or indirectly, an interest in a limited liability company that does business in Wisconsin, regardless of the percentage of ownership, if the limited liability company is treated as a partnership for federal income tax purposes.

Tax 2.82(4)(c) (c) Nexus for entire taxable year. If a corporation has nexus in Wisconsin for any part of its taxable year, it is considered to have nexus in Wisconsin for its entire taxable year, regardless of whether the activity that created the nexus took place throughout the year.

Tax 2.82 Note Example: Corporation W is a calendar year corporation that operates five retail stores, one of which is in Wisconsin. The stores constitute a unitary business. Corporation W is not in a combined group. In the year 2014, Corporation W operated one store in Wisconsin. On August 31, 2014, Corporation W sold the Wisconsin store to Corporation Y but continued to operate the other stores outside Wisconsin. Between September 1,2014 and December 31, 2014, Corporation W had no activities that would create nexus in Wisconsin. Corporation W is considered to have nexus in Wisconsin for its entire taxable year. Therefore, on its 2014 Wisconsin Form 4, Corporation W must compute its apportioned share of Wisconsin income based on its apportionable income from all of its stores for the entire year 2014. In addition, the numerator of the sales factor in its apportionment computation must include sales shipped to Wisconsin customers for the entire year 2014.

Tax 2.82(4)(d) (d) How to obtain ruling. Paragraph (a) and the statutory definitions summarized in par. (b) as to what activities constitute nexus are not all-inclusive. A ruling may be requested about a particular foreign corporation as to whether it is subject to Wisconsin franchise or income taxes by writing to the Wisconsin Department of Revenue, Audit Bureau, Nexus Unit, P.O. Box 8906, Madison, WI 53708.

Tax 2.82 Note Note: Section 71.23 (3), Stats., provides specific activities that do not constitute nexus in Wisconsin even if they exceed the protection of P.L. 86-272.

Tax 2.82(5) (5) Nexus for combined group members.

Tax 2.82(5)(a) (a) General. For a combined group, nexus is determined for the unitary business as a whole, as provided in s. 71.255 (5) (a), Stats. Therefore, if a member of a combined group has nexus in Wisconsin and that nexus is attributable to the combined group’s unitary business, all members of the combined group have nexus in Wisconsin.

Tax 2.82 Note Example: Assume the same facts as the example in sub. (4) (c). In addition, assume Corporation Y is a member of Combined Group XYZ, which reports on a calendar year. Although Group XYZ operated numerous stores outside Wisconsin for the entire year, none of the members of Group XYZ had any nexus-creating activities in Wisconsin until July 1, 2014, when Corporation Y set up a temporary office in Wisconsin in anticipation of the purchase of the store from Corporation W. However, Corporation Z had sales shipped to Wisconsin customers during 2014. Since Corporation Y established nexus in Wisconsin during the year, Group XYZ is considered to have nexus in Wisconsin for its entire taxable year. Therefore, Group XYZ must file a Wisconsin Form 6 for the year 2014. On the combined return, Group XYZ must include its apportionable income for the entire taxable year (from all stores) in the combined unitary income to be apportioned. The Wisconsin share of the combined unitary income for Corporation Y and Corporation Z is then determined as described in s. 71.255 (5), Stats., and s. Tax 2.61 (7). Assuming all of Group XYZ’s Wisconsin sales are attributable to Corporations Y and Z, Corporations Y and Z would be the only corporations in the group with Wisconsin income.

Tax 2.82(5)(b) (b) Effect of controlled group election. For a combined group that has made the controlled group election provided in s. 71.255 (2m), Stats., the entire commonly controlled group’s business is deemed to be a single unitary business, and the commonly controlled group becomes a combined group. Therefore, if a combined group has made the controlled group election and at least one member of the combined group has nexus in Wisconsin, all members of the combined group have nexus in Wisconsin.

Tax 2.82 Note Note: See s. Tax 2.62 for further discussion of the concept of a unitary business. Also see s. Tax 2.61 (4) (h) for details of how a corporation’s nexus may be affected by the water’s edge rules of combined reporting, and how these water’s edge rules may affect taxation of a corporation’s income from a unitary business.

Tax 2.82(6) (6) Nexus for economic development surcharge. If a corporation has nexus under this section, the corporation is considered to be doing business in this state for purposes of s. 77.93, Stats., relating to the economic development surcharge. Therefore, if a corporation, other than a corporation exempt from taxation, has nexus and has at least $4,000,000 of gross receipts from all activities for the taxable year, the corporation is subject to the economic development surcharge. The economic development surcharge applies to each member of a combined group separately.

Tax 2.82 Note Note: See s. Tax 2.32 for a description of what constitutes gross receipts for purposes of applying the $4,000,000 threshold.

Tax 2.82 Note Examples: 1) Corporation A is incorporated outside Wisconsin and is not a member of a combined group. Corporation A is licensed to do business in Wisconsin, but all of its activities in Wisconsin are protected by P.L. 86-272. Therefore, Corporation A does not have nexus. Corporation A is not subject to the economic development surcharge because it does not have nexus in Wisconsin.

Tax 2.82 Note 2) Assume the same facts as Example 1, except that Corporation A is in Combined Group ABCD, which consists of Corporations A, B, C, and D. Corporation D has a warehouse and several stores in Wisconsin that are part of the combined group’s common unitary business. Since Corporation D has nexus in Wisconsin, all corporations in the combined group have nexus in Wisconsin. Corporations A, B, and D have sales to Wisconsin customers but Corporation C does not. The gross receipts, Wisconsin income, gross tax, and resulting economic development surcharge for each corporation in the group are as follows:

- See PDF for table

Tax 2.82 Note The Wisconsin income and gross tax are computed using the method described in s. Tax 2.61. Since the economic development surcharge applies to each member of a combined group separately:

Tax 2.82 Note • Corporation A is subject to the economic development surcharge because its gross receipts are at least $4,000,000.

Tax 2.82 Note • Corporation B is not subject to the economic development surcharge because its gross receipts are less than $4,000,000.