Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of this state at the time that the trust became irrevocable if, at the time that the property was placed in the trust, the trust was revocable.
Is revocable if the person whose property constitutes the trust may revest title to the property in that person.
Is irrevocable if the power to revest title, as described in subd. 1.
, does not exist.
The unrelated business taxable income of trusts shall be apportioned under the department of revenue's rules.
Income computation. 71.15(1)(1)
The standard deduction shall not be allowed in computing the taxable income of an estate, a trust or a common trust fund.
A personal exemption for the decedent under s. 71.07 (8)
shall not be allowed the personal representative, except against the tax on income of the decedent in the year of death. If the decedent would have been entitled to an exemption for the decedent's spouse or a dependent under s. 71.07 (8)
, had the decedent lived, the exemption shall be allowed to the personal representative so long as over one-half of the support of the spouse or dependent is supplied by the decedent or by the personal representative from the decedent's estate and the gross income of the spouse or dependent for the calendar year in which the taxable year of the personal representative begins is less than $500.
History: 1987 a. 312
; 2001 a. 102
Allocation of modifications.
The Wisconsin modifications applicable to the Wisconsin taxable income or Wisconsin adjusted gross income of estates, trusts and beneficiaries thereof with respect to income derived from such estates or trusts shall be computed and allocated as follows:
A modification or portion thereof which relates to an item of income, gain, loss or deduction which affects the computation of the federal distributable net income of the estate or trust for the current year shall be apportioned among and taken into account by the fiduciary and the beneficiary or beneficiaries in the same proportion that the item to which it relates is considered as distributed among them for federal income tax purposes.
Any remaining modifications or portions thereof shall be taken into account by the fiduciary.
If an additional assessment is made against the fiduciary or any beneficiary as a result of correction of an erroneous allocation of the modifications applicable to the income of an estate or trust, any overpayment resulting from consistent application of such correction to all other taxpayers interested in such estate or trust shall be refunded notwithstanding any rule of law which would otherwise bar such refund.
History: 1987 a. 312
General provisions. 71.17(1)(1)
Assessment of trust income distributable to nonresident beneficiary.
The income of a trust distributable or distributed to a nonresident beneficiary shall be assessed as the income of other nonresidents is assessed. No personal exemptions shall be allowed in assessing the income of such nonresident beneficiary unless that beneficiary makes a complete return under this chapter.
(2) Lien on trust estate; income taxes levied against beneficiary.
All income taxes levied against the income of beneficiaries shall be a lien on that portion of the trust estate or interest therein from which the income taxed is derived, and such taxes shall be paid by the fiduciary, if not paid by the distributee, before the same become delinquent. Every person who, as a fiduciary under the provisions of this subchapter, pays an income tax shall have all the rights and remedies of reimbursement for any taxes assessed against him or her or paid by him or her in such capacity, as provided in s. 70.19 (1)
(3) Liability for payment of taxes due from decedent.
Any income, withholding, sales, or use taxes, penalties, interest, and costs found to be due from a decedent, an estate, or a trust for any of the years open to assessment under s. 71.77
and any delinquent income, withholding, sales, or use taxes, penalties, interest, and costs found to be due shall be assessed against and paid by one of the following:
The personal representative or trustee.
The beneficiaries, in the same ratio that their interest in the estate or trust bears to the total estate or trust, if found to be due after the personal representative or trustee is discharged.
(4) Trusts established or maintained out-of-state; grantor liable for tax.
The establishment or maintenance of a trust outside Wisconsin by a Wisconsin resident as grantor, the income from which trust is taxable to the grantor or to any person other than the trust under the internal revenue code, is hereby declared to be a tax avoidance device designed to avoid the legal application of the Wisconsin income tax to income properly taxable to the grantor or such other person. Any Wisconsin resident who is the grantor of such a trust shall be liable for the Wisconsin income tax on the income of such trust which is federally taxable to such grantor or other person under the internal revenue code.
(5) Trusts that are exempt from federal income tax.
Trusts exempt from federal income tax pursuant to subtitle A, chapter 1, subchapter F of the internal revenue code shall to the same extent be exempt from taxation under this chapter.
(6) Funeral trusts.
If a qualified funeral trust makes the election under section 685
of the Internal Revenue Code for federal income tax purposes, that election applies for purposes of this chapter and each trust shall compute its own tax and shall apply the rates under s. 71.06 (1)
, or (1q)
PARTNERSHIPS AND LIMITED LIABILITY COMPANIES
Unless specifically provided in this subchapter, partnerships and limited liability companies shall be subject to all of the provisions, requirements and liabilities of this chapter, so far as applicable, unless the context requires otherwise.
History: 1987 a. 312
; 1993 a. 112
In this subchapter, “partnership" includes limited liability companies and other entities that are treated as partnerships under the Internal Revenue Code, and “partnership" does not include publicly traded partnerships treated as corporations under s. 71.22 (1k)
History: 1997 a. 27
; 2005 a. 25
Filing returns. 71.20(1)(1)
Every partnership shall furnish to the department a true and accurate statement, on or before the date on which the partnership is required to file for federal income tax purposes, not including any extension, under the Internal Revenue Code, in the manner and form and setting forth the facts the department deems necessary to enforce this chapter. A partnership that is the owner of a single-owner entity that is disregarded as a separate entity under section 7701
of the Internal Revenue Code shall include that entity's information on the owner's return under this subchapter. The statement shall be subscribed by one of the partners of the partnership.
Every partnership that is required to file a return under sub. (1)
shall, on or before the due date of the return, including extensions, provide a schedule to each partner whose share of income, deductions, credits, or other items of the partnership may affect the partner's tax liability under this chapter. The schedule shall separately indicate the partner's share of each item.
Nothing in this section precludes the department of revenue from requiring any person other than a corporation to file an income tax return when in the judgment of the department a return should be filed.
Any extension granted by law or by the Internal Revenue Service for the filing of the federal return that corresponds to the return required under sub. (1)
extends the time for filing under this section.
See also ss. Tax 2.08
, and 2.10
, Wis. adm. code.
The net income of a partnership shall be computed in the same manner and on the same basis as provided for computation of the income of persons other than corporations.
The standard deduction shall not be allowed in computing the taxable income of a partnership.
The credits under s. 71.28 (4m)
may not be claimed by a partnership or by partners, including partners of a publicly traded partnership.
The amount of the credits computed by a partnership under s. 71.07 (2dm)
, and (10)
and passed through to partners shall be added to the partnership's income.
Amounts computed by a partnership under s. 71.07 (5n)
in the previous taxable year and not included in federal ordinary business income shall be added to the partnership's income.
(a) (3) of the internal revenue code is modified so that state taxes and taxes of the District of Columbia that are value-added taxes, single business taxes or taxes on or measured by all or a portion of net income, gross income, gross receipts or capital stock are not deductible.
If persons who, on the day on which an election under this paragraph is made, hold more than 50 percent of the capital and profits of a partnership consent, a partnership that is a partnership for federal income tax purposes may elect, on or before the due date or extended due date of its return under this chapter, to be taxed at the entity level at a rate of 7.9 percent of net income reportable to this state as described in par. (d) 1.
for that taxable year.
It is the intent of the election under par. (a)
that partners of a partnership may not include in their Wisconsin adjusted gross income their proportionate share of all items of income, gain, loss, or deduction of the partnership. It is also the intent that the partnership shall pay tax on items that would otherwise be taxed if this election was not made.
If persons who, on the day on which the election under this paragraph is made, hold more than 50 percent of the capital and profits of a partnership that has elected to be taxed at the entity level under par. (a)
consent, a partnership that is a partnership for federal income tax purposes may elect, on or before the due date or extended due date of its return under this chapter, to revoke for that taxable year its election under par. (a)
If an election is made under par. (a)
, all of the following apply:
The net income of the partnership is computed under subs. (1)
and the situs of income shall be determined as if the election under par. (a)
was not made.
A partner's adjusted basis of the partner's interest in the partnership is determined as if the election under par. (a)
was not made.
The provisions of ss. 71.09
relating to estimated payments and underpayment interest shall apply to the partnership.
If the partnership fails to pay the amount owed to the department with respect to income as a result of the election under par. (a)
, the department may collect the amount from the partners based on their proportionate share of such income.
The department may promulgate rules to implement this subsection.
A deduction under the Internal Revenue Code for moving expenses, as defined in s. 71.01 (8j)
, paid or incurred during the taxable year to move the taxpayer's Wisconsin business operation, in whole or in part, to a location outside the state or to move the taxpayer's business operations outside the United States is not allowed.
History: 1987 a. 312
; 1989 a. 31
; 1993 a. 112
; 1995 a. 27
; 1997 a. 27
; 2001 a. 16
; 2003 a. 99
; 2005 a. 74
; 2007 a. 20
; 2009 a. 2
; 2011 a. 32
; 2011 a. 260
; 2013 a. 20
; 2015 a. 55
; 2017 a. 58
; 2019 a. 7
TAXATION OF CORPORATIONS
In this chapter in regard to corporations and to nuclear decommissioning trust or reserve funds:
“Aggregate effective tax rate" means the sum of the effective tax rates imposed by a state, U.S. possession, foreign country, or any combination thereof, on the person or entity.
“Broadcaster" means a television or radio station licensed by the federal communications commission, a television or radio broadcast network, a cable television network, or a television distribution company. “Broadcaster" does not include a cable service provider, a direct broadcast satellite system, or an Internet content distributor.
For purposes of s. 71.25 (9) (df)
, and (dk)
, “commercial domicile" means the location from which a trade or business is principally managed and directed, based on any factors the department determines are appropriate, including the location where the greatest number of employees of the trade or business work, have their office or base of operations, or from which the employees are directed or controlled.
“Corporation" includes corporations, publicly traded partnerships treated as corporations in section 7704
of the internal revenue code, limited liability companies treated as corporations under the internal revenue code, joint stock companies, associations, common law trusts and all other entities treated as corporations under section 7701
of the Internal Revenue Code, unless the context requires otherwise. A single-owner entity that is disregarded as a separate entity under section 7701
of the Internal Revenue Code is disregarded as a separate entity under this chapter, and its owner is subject to the tax on or measured by the entity's income. “Corporation" does not include any entity that is a qualified subchapter S subsidiary under s. 71.365 (7)
“Department" means the department of revenue.
“Doing business in this state" includes, except as prohibited under P.L. 86-272
, issuing credit, debit, or travel and entertainment cards to customers in this state; regularly selling products or services of any kind or nature to customers in this state that receive the product or service in this state; regularly soliciting business from potential customers in this state; regularly performing services outside this state for which the benefits are received in this state; regularly engaging in transactions with customers in this state that involve intangible property and result in receipts flowing to the taxpayer from within this state; holding loans secured by real or tangible personal property located in this state; owning, directly or indirectly, a general or limited partnership interest in a partnership that does business in this state, regardless of the percentage of ownership; and owning, directly or indirectly, an interest in a limited liability company that does business in this state, regardless of the percentage of ownership, if the limited liability company is treated as a partnership for federal income tax purposes. A taxpayer doing business in this state for any part of the taxable year is considered to be doing business in this state for the entire taxable year.
For purposes of s. 71.25 (9) (df)
, and (dk)
, “domicile" means an individual's true, fixed, and permanent home where the individual intends to remain permanently and indefinitely and to which, whenever absent, the individual intends to return, except that no individual may have more than one domicile at any time.
“Effective tax rate" means the maximum tax rate imposed by the state, U.S. possession, or foreign country, multiplied by the apportionment percentage, if any, applicable to the person or entity under the laws of that state, U.S. possession, or foreign country.
“Entertainment corporation" means a domestic or foreign corporation which derives income from amusement, entertainment or sporting events in this state or from the services of an entertainer, as defined in s. 71.01 (2)
“File" means mail or deliver a document that the department prescribes to the department or, if the department prescribes another method of submitting or another destination, use that other method or submit to that other destination.
“Gain" means gain as computed under the internal revenue code.
For purposes of ss. 71.26 (2) (a) 7.
and 71.255 (2) (d) 1.
, “intangible expenses" include the following, to the extent that the amounts would otherwise be deductible in determining net income under the Internal Revenue Code as modified under s. 71.26 (3)
Expenses, losses, and costs for, related to, or directly or indirectly in connection with the acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property.
Losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions.
Royalty, patent, technical, and copyright fees.
“Intangible property" includes stocks, bonds, financial instruments, patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.
For taxable years beginning after December 31, 2013, and before January 1, 2017, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2013, except as provided in subds. 2.
and subject to subd. 4.
, and except as provided in sub. (4m)
and ss. 71.26 (2) (b)
, 71.34 (1g)
, and 71.42 (2)
For purposes of this paragraph, “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2013: section 13113 of P.L 103-66
; sections 1, 3, 4, and 5 of P.L. 106-519
; sections 101, 102, and 422 of P.L 108-357
; sections 1310 and 1351 of P.L. 109-58
; section 11146 of P.L. 109-59
; section 403 (q) of P.L. 109-135
; section 513 of P.L. 109-222
; sections 104 and 307 of P.L. 109-432
; sections 8233 and 8235 of P.L. 110-28
; section 11 (e) and (g) of P.L. 110-172
; section 301 of P.L. 110-245
; sections 15303 and 15351 of P.L. 110-246
; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343
; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5
; sections 211, 212, 213, 214, and 216 of P.L. 111-226
; sections 2011 and 2122 of P.L. 111-240
; sections 753, 754, and 760 of P.L. 111-312
; section 1106 of P.L. 112-95
; and sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240
For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2013, except that “Internal Revenue Code" includes the provisions of the following federal public laws: