Chapter 71

71.30(6) (6) Installment method; distributions and final year. A corporation entitled to use the installment method of accounting shall take the unreported balance of gain on all installment obligations into income in the taxable year of their distribution, transfer or acquisition by another person or for the final taxable year for which it files or is required to file a return under this chapter, whichever year occurs first.

71.30(7) (7) Penalties. Unless specifically provided in this subchapter, the penalties under subch. XIII apply for failure to comply with the provisions of this subchapter unless the context requires otherwise.

71.30(8) (8) Pricing effect on taxable income.

71.30(8)(a) (a) When any corporation liable to taxation under this chapter conducts its business in such a manner as either directly or indirectly to benefit the members or stockholders thereof or any person interested in such business, by selling its products or the goods or commodities in which it deals at less than the fair price which might be obtained therefor, or where a corporation, a substantial portion of whose capital stock is owned either directly or indirectly by another corporation, acquires and disposes of the products of the corporation so owning a substantial portion of its stock in such a manner as to create a loss or improper net income, the department may determine the amount of taxable income to such corporation for the calendar or fiscal year, having due regard to the reasonable profits which but for such arrangement or understanding might or could have been obtained from dealing in such products, goods or commodities.

71.30(8)(b) (b) For the purpose of this chapter, if a corporation which is required to file an income or franchise tax return is affiliated with or related to any other corporation through stock ownership by the same interests or as parent or subsidiary corporations or has income that is regulated through contract or other arrangement, the department of revenue may require such consolidated statements as in its opinion are necessary in order to determine the taxable income received by any one of the affiliated or related corporations or to determine whether the corporations are a unitary business.

71.30(9) (9) Reserve account transfer to surplus. If any transfer of a reserve or other account or portion thereof is in effect a transfer to surplus, so much of such transfer as had been accumulated through deductions from the gross or taxable income of the years open to audit under s. 71.74 (1) and (2) shall be included in the gross or taxable income of such years, and so much of such transfer as has been accumulated through deductions from the gross or taxable income of the years following January 1, 1911, and not open to audit under s. 71.74 (1) and (2) shall be included in the gross or taxable income of the year in which such transfer was effected.

71.30(10) (10) Endangered resources.

71.30(10)(a) (a) Definitions. In this subsection:

71.30(10)(a)1. 1. “Conservation fund” means the fund under s. 25.29.

71.30(10)(a)2. 2. “Endangered resources program” means purchasing or improving land or habitats for any native Wisconsin endangered or threatened species, as defined in s. 29.604 (2) (a) or (b), or for any nongame species, as defined in s. 29.001 (60); conducting the natural heritage inventory program under s. 23.27 (3); conducting wildlife and resource research and surveys; providing wildlife management services; providing for wildlife damage control or the payment of claims for damage associated with endangered or threatened species; and the payment of administrative expenses related to the administration of this subsection.

71.30(10)(b) (b) Voluntary payments.

71.30(10)(b)1. 1. ‘Designation on return.’ A corporation filing an income or franchise tax return may designate on the return any amount of additional payment or any amount of a refund that is due the corporation for the endangered resources program.

71.30(10)(b)2. 2. ‘Designation added to tax owed.’ If the corporation owes any tax, the corporation shall remit in full the tax due and the amount designated on the return for the endangered resources program when the corporation files a tax return.

71.30(10)(b)3. 3. ‘Designation deducted from refund.’ Except as provided under par. (d), and subject to ss. 71.75 (9) and 71.80 (3), if the corporation is owed a refund, the department shall deduct the amount designated on the return for the endangered resources program from the amount of the refund.

71.30(10)(c) (c) Errors; failure to remit correct amount.

71.30(10)(c)1. 1. ‘Reduced designation.’ If a corporation remits an amount that exceeds the tax due, after error corrections, but that is less than the total of the tax due, after error corrections, and the amount that is designated by the corporation on the return for the endangered resources program, the department shall reduce the designation for the endangered resources program to reflect the amount remitted that exceeds the tax due, after error corrections.

71.30(10)(c)2. 2. ‘Void designation.’ The designation for the endangered resources program is void if the corporation remits an amount equal to or less than the tax due, after error corrections.

71.30(10)(d) (d) Errors; insufficient refund. If a corporation is owed a refund that is less than the amount designated on the return for the endangered resources program, after attachment and crediting under ss. 71.75 (9) and 71.80 (3) and after error corrections, the department shall reduce the designation for the endangered resources program to reflect the actual amount of the refund the corporation is otherwise owed.

71.30(10)(e) (e) Conditions. If a corporation places any conditions on a designation for the endangered resources program, the designation is void.

71.30(10)(f) (f) Void designation. If a designation for the endangered resources program is void, the department shall disregard the designation and determine the amounts due, owed, refunded and received.

71.30(10)(g) (g) Tax return. The secretary of revenue shall provide a place for the designations under this subsection on the corporate income and franchise tax returns.

71.30(10)(h) (h) Certification of amounts. Annually, on or before September 15, the secretary of revenue shall certify to the department of natural resources and the department of administration:

71.30(10)(h)1. 1. The total amount of the administrative costs, including data processing costs, incurred by the department of revenue in administering this subsection during the previous fiscal year.

71.30(10)(h)2. 2. The total amount received from all designations for the endangered resources program made by corporations during the previous fiscal year.

71.30(10)(h)3. 3. The net amount remaining after the administrative costs under subd. 1. are subtracted from the total received under subd. 2.

71.30(10)(i) (i) Appropriations. From the moneys received from designations for the endangered resources program, an amount equal to the sum of administrative expenses certified under par. (h) 1. shall be deposited into the general fund and credited to the appropriation under s. 20.566 (1) (hp), and the net amount remaining certified under par. (h) 3. shall be deposited into the conservation fund and credited to the appropriation under s. 20.370 (1) (fs).

71.30(10)(j) (j) Refunds. An amount designated for the endangered resources program under this subsection is not subject to refund to a corporation that designates a donation under par. (b) unless the corporation submits information to the satisfaction of the department within 18 months from the date that taxes are due from the corporation or from the date that the corporation filed the return, whichever is later, that the amount designated is clearly in error. A refund granted by the department under this paragraph shall be deducted from the moneys received under this subsection in the fiscal year that the refund is certified under s. 71.75 (7).

71.30(11) (11) Veterans trust fund.

71.30(11)(a) (a) Definitions. In this subsection, “veterans trust fund” means the fund under s. 25.36.

71.30(11)(b) (b) Voluntary payments.

71.30(11)(b)1. 1. ‘Designation on return.’ A corporation filing an income or franchise tax return may designate on the return any amount of additional payment or any amount of a refund that is due the corporation as a donation to the veterans trust fund to be used for veterans programs under s. 25.36 (1).

71.30(11)(b)2. 2. ‘Designation added to tax owed.’ If the corporation owes any tax, the corporation shall remit in full the tax due and the amount designated on the return as a donation to the veterans trust fund when the corporation files a tax return.

71.30(11)(b)3. 3. ‘Designation deducted from refund.’ Except as provided under par. (d), and subject to ss. 71.75 (9) and 71.80 (3), if the corporation is owed a refund, the department shall deduct the amount designated on the return as a donation to the veterans trust fund from the amount of the refund.

71.30(11)(c) (c) Errors; failure to remit correct amount.

71.30(11)(c)1. 1. ‘Reduced designation.’ If a corporation remits an amount that exceeds the tax due, after error corrections, but that is less than the total of the tax due, after error corrections, and the amount designated by the corporation on the return as a donation to the veterans trust fund, the department shall reduce the designation to reflect the amount remitted that exceeds the tax due, after error corrections.

71.30(11)(c)2. 2. ‘Void designation.’ The designation for a donation to the veterans trust fund is void if the corporation remits an amount equal to or less than the tax due, after error corrections.

71.30(11)(d) (d) Errors; insufficient refund. If a corporation is owed a refund that is less than the amount designated on the return as a donation to the veterans trust fund, after attachment and crediting under ss. 71.75 (9) and 71.80 (3) and after error corrections, the department shall reduce the designation to reflect the actual amount of the refund the corporation is otherwise owed.

71.30(11)(e) (e) Conditions. If a corporation places any conditions on a designation for a donation to the veterans trust fund, the designation is void.

71.30(11)(f) (f) Void designation. If a designation for a donation to the veterans trust fund is void, the department shall disregard the designation and determine the amounts due, owed, refunded, and received.

71.30(11)(g) (g) Tax return. The secretary of revenue shall provide a place for the designations under this subsection on the corporate income and franchise tax returns.

71.30(11)(h) (h) Certification of amounts. Annually, on or before September 15, the secretary of revenue shall certify to the department of veterans affairs and the department of administration:

71.30(11)(h)1. 1. The total amount of the administrative costs, including data processing costs, incurred by the department of revenue in administering this subsection during the previous fiscal year.

71.30(11)(h)2. 2. The total amount received from all designations to the veterans trust fund under this subsection made by corporations during the previous fiscal year.

71.30(11)(h)3. 3. The net amount remaining after the administrative costs under subd. 1. are subtracted from the total received under subd. 2.

71.30(11)(i) (i) Appropriations. From the moneys received from designations to the veterans trust fund under this subsection, an amount equal to the sum of administrative expenses certified under par. (h) 1. shall be deposited into the general fund and credited to the appropriation under s. 20.566 (1) (hp), and the net amount remaining certified under par. (h) 3. shall be deposited into the veterans trust fund and used for the veterans programs under s. 25.36 (1).

71.30(11)(j) (j) Refunds. An amount designated as a donation to the veterans trust fund under this subsection is not subject to refund to a corporation that designates the donation unless the corporation submits information to the satisfaction of the department within 18 months from the date that taxes are due from the corporation or from the date that the corporation filed the return, whichever is later, that the amount designated is clearly in error. A refund granted by the department under this paragraph shall be deducted from the moneys received under this subsection in the fiscal year that the refund is certified under s. 71.75 (7).

71.30 History History: 1987 a. 312; 1987 a. 411 ss. 144, 145, 182 to 185; 1989 a. 31, 56; 1991 a. 39; 1995 a. 27, 209; 1997 a. 27; 1999 a. 9; 2001 a. 16; 2003 a. 33, 99, 135, 255; 2005 a. 25, 74, 361, 479, 483; 2007 a. 20, 226; 2009 a. 2, 28, 265, 269, 295, 332; 2011 a. 3, 32, 212, 222, 232; 2011 a. 260 ss. 26, 80; 2015 a. 55; 2015 a. 197 s. 51; 2015 a. 218; 2017 a. 58, 59, 176, 197, 231, 364; 2019 a. 54; 2021 a. 127; 2023 a. 138.

subch. V of ch. 71 SUBCHAPTER V

TAX-OPTION CORPORATIONS

71.32 71.32 Conformity. Unless specifically provided in this subchapter, tax-option corporations shall be subject to all of the provisions, requirements and liabilities of this chapter, so far as applicable, unless the context requires otherwise.

71.32 History History: 1987 a. 312.

71.33 71.33 Intent. It is the intent of this subchapter and other subchapters relating to the treatment of tax-option corporations and their shareholders to prevent the double inclusion or omission of any item of income, deduction or basis.

71.33 History History: 1987 a. 312.

71.34 71.34 Definitions. In this subchapter:

71.34(1am) (1am) “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.

71.34(1b) (1b) “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.

71.34(1c) (1c) For purposes of sub. (1k) (j) and (L), “intangible expenses” include the following, to the extent that the amounts would otherwise be deductible in computing Wisconsin adjusted gross income:

71.34(1c)(a) (a) 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.

71.34(1c)(b) (b) Losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions.

71.34(1c)(c) (c) Royalty, patent, technical, and copyright fees.

71.34(1c)(d) (d) Licensing fees.

71.34(1c)(e) (e) Other similar expenses, losses, and costs.

71.34(1d) (1d) “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.

71.34(1e) (1e) For purposes of sub. (1k) (j) and (L), “interest expenses” means interest that would otherwise be deductible under section 163 of the Internal Revenue Code and deductible in the computation of Wisconsin adjusted gross income.

71.34(1g) (1g) 

71.34(1g)(j) (j)

71.34(1g)(j)1. 1. For taxable years beginning after December 31, 2013, and before January 1, 2017, for tax option corporations, “Internal Revenue Code” means the federal Internal Revenue Code as amended to December 31, 2013, except as provided in subds. 2., 3., and 5. and subject to subd. 4.

71.34(1g)(j)2. 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.

71.34(1g)(j)3. 3. 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:

71.34(1g)(j)3.a. a. P.L. 113-97.

71.34(1g)(j)3.b. b. P.L. 113-159.

71.34(1g)(j)3.c. c. P.L. 113-168.

71.34(1g)(j)3.d. d. Section 302901 of P.L. 113-287.

71.34(1g)(j)3.e. e. Sections 171, 172, and 201 to 221 of P.L. 113-295.

71.34(1g)(j)3.f. f. Sections 102, 105, and 207 of division B of P.L. 113-295.

71.34(1g)(j)3.g. g. P.L. 114-14.

71.34(1g)(j)3.h. h. P.L. 114-26.

71.34(1g)(j)3.i. i. Section 2004 of P.L. 114-41.

71.34(1g)(j)3.j. j. Sections 503 and 504 of P.L. 114-74.

71.34(1g)(j)3.k. k. Sections 103, 104, 124, 168, 184, 185, 190, 204, 303, 306, 336, and 341 of division Q of P.L. 114-113.

71.34(1g)(j)3.L. L. P.L. 114-239.

71.34(1g)(j)3.m. m. Sections 101 (m), (n), (o), (p), and (q), 104 (a), and 109 of division U of P.L. 115-141.

71.34(1g)(j)3.n. n. Section 102 of division M and sections 110, 111, and 116 (b) of division O of P.L. 116-94.

71.34(1g)(j)4. 4. For purposes of this paragraph, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this paragraph, apply for Wisconsin purposes at the same time as for federal purposes.

71.34(1g)(j)5. 5. For purposes of this paragraph, section 1366 (f) of the Internal Revenue Code (relating to pass-through of items to shareholders) is modified by substituting the tax under s. 71.35 for the taxes under sections 1374 and 1375 of the Internal Revenue Code.

71.34(1g)(k) (k)

71.34(1g)(k)1. 1. For taxable years beginning after December 31, 2016, and before January 1, 2018, for tax option corporations, “Internal Revenue Code” means the federal Internal Revenue Code as amended to December 31, 2016, except as provided in subds. 2., 3., and 5. and s. 71.98, and subject to subd. 4.

71.34(1g)(k)2. 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, 2016: 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; section 104 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; section 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; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; and sections 112, 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 326, and 411 of division Q of P.L. 114-113.

71.34(1g)(k)3. 3. For purposes of this paragraph, “Internal Revenue Code” does not include amendments to the federal Internal Revenue Code, including provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97; sections 40307 and 40413 of P.L. 115-123; sections 101 (m), (n), (o), (p), and (q), 104 (a), and 109 of division U of P.L. 115-141; section 102 of division M and sections 110, 111, and 116 (b) of division O of P.L. 116-94; and section 9707 of P.L. 117-2.