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Tax 2.66(3)(d) (d) Annualized income installment method. For purposes of the annualized income installment method provided in s. 71.29 (9) (c) and (10) (c), Stats., the previous year's apportionment percentage for a combined group equals the sum of the combined group members' modified sales factor numerators as determined under s. Tax 2.61 (7) (a) for the combined group's preceding taxable year, divided by the combined group's modified sales factor denominator as determined under s. Tax 2.61 (7) (b) for the combined group's preceding taxable year.
Tax 2.66(3)(e) (e) Change in membership. For purposes of applying par. (a) and except as provided in par. (f), the combined group's "tax shown on the return" for the current taxable year or the preceding taxable year is the tax shown on the combined return for the applicable year, without regard to corporations that have joined or left the group.
Tax 2.66 Note Example: Group JK files a combined return for the calendar year 2009. During 2010, Member J acquires L and L becomes a member of the combined group. If the group qualifies to determine its estimated tax obligations for 2010 based on its preceding year's tax liability, its preceding year's tax liability only includes the tax shown on Group JK's 2009 combined return; it does not include any tax liability from L's 2009 separate return.
Tax 2.66(3)(f) (f) First combined return year. The following rules apply to the computation of required estimated payments for the first year that a combined group files a combined return:
Tax 2.66(3)(f)1. 1. If the total of the combined group's Wisconsin net income reported on the combined return is less than $250,000, the required estimated payments may be based on the sum of the members' tax shown on their Wisconsin returns for the preceding year as provided by s. 71.29 (9) (a) 2., Stats., but only if all combined group members filed a Wisconsin return which covered a full 12 months in the preceding taxable year. If a member was included in the combined return of another combined group in the preceding taxable year, its tax shown on the return for that year is the tax attributable to the sum of its share of combined unitary income and income from separate entity items reported on that return.
Tax 2.66(3)(f)2. 2. If one or more combined group members did not file a Wisconsin return which covered 12 months in the preceding taxable year, the combined group shall base its required estimated payments on 90 percent of the tax shown on the combined return as provided under s. 71.29 (9) (a) 1. or (10) (b), Stats., as applicable.
Tax 2.66(3)(f)3. 3. The previous year's apportionment percentage for purposes of the annualized income installment method equals the sum of the current combined group members' apportionment factor numerators from their returns for the preceding taxable year, divided by the sum of the apportionment factor denominators from their returns for the preceding taxable year. If a member was included in the combined return of another combined group in the preceding taxable year, its apportionment percentage for this purpose is its modified sales factor numerator for that taxable year as determined under s. Tax 2.61 (7) (a), divided by its separate company denominator for that taxable year as determined under s. Tax 2.61 (7) (b).
Tax 2.66(3)(f)4. 4. For purposes of subds. 1. to 3., if a combined group member has a taxable year different than the combined group's taxable year, the member's preceding taxable year is its taxable year most recently ended before the first day of the combined group's taxable year.
Tax 2.66(4) (4)Rules for applying estimated payments and overpayments.
Tax 2.66(4)(a)(a) Separate returns filed in year following combined return year. If a combined group terminates and the former members properly file separate returns in the subsequent year, any combined estimated payments made for that year shall be credited against the separate tax liabilities of the former members of the combined group in the manner allocated by the designated agent. The designated agent shall notify the department of the manner in which the payments are to be allocated. The designated agent may make this notification in correspondence to the department unless the department prescribes a specific form for this purpose, in which case the prescribed form shall be used. In either case, the notification shall be submitted to the department separately from any return.
Tax 2.66(4)(b) (b) Combined estimated payments but no combined return. If combined estimated payments are made for a taxable year but no combined return is filed for that year or for the previous year, the estimated payment shall only be credited to the corporation that made the payment.
Tax 2.66(4)(c) (c) Overpayments.
Tax 2.66(4)(c)1.1. If a combined group member has a credit for an overpayment of taxes from a prior taxable year when it was not a combined group member, the member may, through its designated agent, authorize the department to apply some or all of the credit against the total tax liability reported on the combined return. To carry out this authorization, the designated agent shall file a department-prescribed form with the combined return to notify the department of the amount to be applied. Alternatively, the member may file a claim for refund of the overpayment, in which case the overpayment shall be refunded to that member.
Tax 2.66 Note Note: The form prescribed for notifying the department of a member's prior year overpayments to be applied to the combined return is Part IV of Form 4M, Combined Group Member-Level Data.
Tax 2.66(4)(c)2. 2. If a corporation leaves a combined group that has an overpayment of taxes carried over from a prior combined return year, the designated agent may allocate a portion of that overpayment to the former member. The designated agent shall notify the department of the amount to be allocated to the former member. The designated agent may make this notification in correspondence to the department unless the department prescribes a specific form for this purpose, in which case the prescribed form shall be used. In either case, the notification shall be submitted to the department separately from any return.
Tax 2.66(4)(d) (d) Erroneous combined estimated payments. If a designated agent makes estimated payments on the erroneous premise that a corporation is an eligible member of the combined group, and discovers the error prior to the time the combined group and the corporation file their respective returns, the designated agent may allocate some or all of the combined estimated payments to the corporation. The designated agent shall notify the department of the amount to be allocated. The designated agent may make this notification in correspondence to the department unless the department prescribes a specific form for this purpose, in which case the prescribed form shall be used. In either case, the notification shall be submitted to the department separately from any return. The combined group and the corporation shall each compute their addition to tax under s. 71.84 (2), Stats., as if the estimated payments allocated to the corporation had actually been paid by it rather than by the combined group.
Tax 2.66(4)(e) (e) Erroneous separate estimated payments. If a corporation makes separate estimated payments on the erroneous premise that it is not a combined group member, the following rules apply:
Tax 2.66(4)(e)1. 1. If the corporation discovers the error prior to the time the designated agent files the combined return for the taxable year, and the corporation has not filed a separate return for the period that should have been included in that combined return or otherwise received a refund of the separate estimated payments, the corporation may apply the separate estimated payments to the combined return. The designated agent shall report the separate estimated payments in the manner described in sub. (2) (b).
Tax 2.66(4)(e)2. 2. If the corporation discovers the error prior to the time the designated agent files the combined return for the taxable year, but the corporation has already filed a separate return for the period that should have been included in the combined return, the corporation shall file an amended separate return showing no net income, overpayment, or underpayment, and stating that the corporation will join in the filing of a combined return and identifying the designated agent of the combined group. Unless the corporation specifies otherwise on the amended return, the department will not refund the erroneously paid amounts. When the designated agent files the combined return including that corporation, the corporation may apply the separate estimated payments to the combined return unless the corporation specified otherwise on its amended return or has otherwise received a refund of the separate estimated payments. The designated agent shall report the separate estimated payments so applied in the manner described in sub. (2) (b).
Tax 2.66(4)(e)3. 3. If the corporation discovers the error after the designated agent has filed the combined return for the taxable year, but the corporation has not filed a separate return or otherwise received a refund of the separate estimated payments, the designated agent shall file an amended combined return and apply the corporation's separate estimated payments to the amount due on the amended combined return. The designated agent shall report the separate estimated payments so applied in the manner described in sub. (2) (b).
Tax 2.66(4)(e)4. 4. If the corporation discovers the error after the designated agent has filed the combined return for the taxable year and after the corporation has already filed a separate return for the period that should have been included in the combined return, the corporation shall file an amended separate return and the combined group shall file an amended combined return. The provisions of subd. 2. apply with respect to the amended separate return. The corporation may apply the separate estimated payments to the amended combined return unless the corporation specified otherwise on its amended return or has otherwise received a refund of the separate estimated payments. The designated agent shall report the separate estimated payments so applied in the manner described in sub. (2) (b).
Tax 2.66 Note Note: If an allocation described in sub. (4) (a), (c) 2., or (d) is necessary and the department has not prescribed a form to use to notify the department of the allocation, send correspondence notifying the department of the allocation to: Corporation Processing Unit, Wisconsin Department of Revenue, P.O. Box 8908, Madison, WI 53708-8908.
Tax 2.66 Note Note: Section Tax 2.66 interprets ss. 71.255 (7), 71.29, and 71.84 (2), Stats.
Tax 2.66 History History: EmR1001: emerg. cr. eff. 1-15-10; CR 09-064: cr. Register April 2010 No. 652, eff. 5-1-10.
Tax 2.66 Annotation Cross References: See s. Tax 2.60 for definitions that relate to this section. See s. Tax 2.65 for more information on the duties of the designated agent. See s. Tax 2.67 for more information on combined returns.
Tax 2.67 Tax 2.67 Combined returns.
Tax 2.67(1)(1) Scope. This section provides rules relating to the filing of combined returns by corporations required to use combined reporting under s. 71.255, Stats. This section explains the filing requirements for combined returns, provides rules relating to defining the taxable year included in a combined return, and describes how interest, penalties, and statutes of limitations apply to combined returns.
Tax 2.67(2) (2)Filing requirements for combined returns.
Tax 2.67(2)(a)(a) General. The designated agent of a combined group shall file a combined return on behalf of the group. For each combined group member included in the combined return, the combined return satisfies the member's requirement for filing returns under ss. 71.24 (1) or (1m) or 71.44 (1) or (1m), Stats., as applicable. The combined return shall be filed by the date provided in ss. 71.24 (1), (1m), and (7) or 71.44 (1), (1m), and (3), Stats., as applicable.
Tax 2.67(2)(b) (b) Electronic filing. All combined returns shall be filed electronically. The secretary of revenue may waive the requirement to file a combined return electronically when the secretary determines that the requirement causes an undue hardship, if the person requests the waiver in writing and clearly indicates why the requirement causes an undue hardship. In determining whether the electronic filing requirement causes an undue hardship, the secretary of revenue may consider the following factors:
Tax 2.67(2)(b)1. 1. Unusual circumstances that may prevent the person from filing electronically.
Tax 2.67 Note Example: The person does not have access to a computer that is connected to the Internet.
Tax 2.67(2)(b)2. 2. Any other factor that the secretary determines is pertinent.
Tax 2.67 Note Note: Written requests should be e-mailed to DORWaiverRequest@revenue.wi.gov, faxed to (608) 267-1030, or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, P.O. Box 8949, Madison, WI 53708-8949.
Tax 2.67 Note Note: Forms not filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to the address specified on the form or in the instructions.
Tax 2.67(2)(c) (c) Components of combined return. A combined return shall include the following items, and shall be considered incomplete if any of these items are excluded:
Tax 2.67(2)(c)1. 1. One Wisconsin Form 4, Income or Franchise Tax Return, for the combined group as a whole.
Tax 2.67(2)(c)2. 2. One Wisconsin Form 4R, Federal Taxable Income Reconciliation for Combined Groups, for the combined group as a whole. The purpose of Form 4R is to reconcile federal taxable income per the federal consolidated return and separate returns, as applicable, with the amount on Form 4, line 1. Form 4R shall be considered complete only if the designated agent submits a supporting schedule which identifies each corporation to which each reconciling amount is attributable, and a schedule which identifies each corporation in the commonly controlled group which is not included in either the federal consolidated return or the combined return.
Tax 2.67(2)(c)3. 3. One Wisconsin Form 4M, Combined Group Member-Level Data, for each member of the combined group. The purpose of Form 4M is to identify the members of the combined group, provide information regarding the member's items included in the combined return, and account for payments to be applied to the combined return.
Tax 2.67(2)(c)4. 4. If the combined group is using apportionment, one Wisconsin Form 4A, Apportionment Data for Combined Groups, and the apportionment factor computation for each member of the combined group as performed on Form 4A-1, Apportionment Data for Single Factor Formulas, or Form 4A-2, Apportionment Data for Multiple Factor Formulas, as applicable.
Tax 2.67(2)(c)5. 5. Any other required supporting forms and schedules listed in s. Tax 2.03, as applicable. Unless stated otherwise in the instructions, supporting forms and schedules shall be prepared separately for each combined group member.
Tax 2.67(2)(c)6. 6. A copy of the complete federal return for each combined group member, including all supporting schedules and any amended returns, for the member's taxable year included in the combined return. For combined group members that also file in a federal consolidated return, any of the following alternatives shall be considered to satisfy this requirement:
Tax 2.67(2)(c)6.a. a. A copy of the federal consolidated return, including all supporting forms, schedules, and statements for each corporation included in the consolidated return, as submitted to the internal revenue service.
Tax 2.67(2)(c)6.b. b. Pro forma federal returns prepared separately for each combined group member, including all supporting forms and schedules prepared separately for each combined group member.
Tax 2.67(2)(c)6.c. c. A spreadsheet showing the line-by-line computation of taxable income of each combined group member included in the federal consolidated return, including consolidating adjustments, plus the supporting forms, schedules, and statements filed with the internal revenue service pertaining to each member. The supporting statements shall include balance sheets as of the beginning and end of the tax year, a reconciliation of income per books with income per return, and a reconciliation of retained earnings, to the extent the member was required to submit these items to the internal revenue service.
Tax 2.67(2)(c)7. 7. For combined groups that also file in a federal consolidated return, a copy of federal Form 851, Affiliations Schedule.
Tax 2.67(2)(d) (d) Separate entity items.
Tax 2.67(2)(d)1.1. Subject to the provisions of s. Tax 2.65 (3) (b), if any combined group member has separate entity items, the designated agent shall include those separate entity items in the combined return. If a corporation that would otherwise be a combined group member has no items that are subject to combination under the water's edge rules of s. Tax 2.61 (4), the designated agent may include that corporation's separate entity items in the combined return, in which case the combined return shall include the items specified in sub. (2) (c) 3., 5., and 6. and subd. 3. for that corporation as if it is a combined group member. Alternatively, the corporation may file a separate Wisconsin return to report those items.
Tax 2.67(2)(d)2. 2. The joint and several liability provisions of s. Tax 2.65 (3) (f) do not apply to any tax, interest, or penalty attributable to separate entity items. Although the department may send correspondence, notices, refunds, assessments, or other documents relating to any combined group member's separate entity items to the designated agent, and the designated agent may choose to pay any tax, interest, or penalty on behalf of a combined group member, the tax, interest, or penalty attributable to separate entity items is ultimately the responsibility of the combined group member or members to which the separate entity items are attributable.
Tax 2.67(2)(d)3. 3. The separate entity net income or loss and apportionment factors included in the combined return shall be reported on Wisconsin Form 4N, Nonapportionable and Separately Apportioned Income. The designated agent shall complete and submit Form 4N with the combined return for each applicable corporation and carry forward the total Form 4N amounts to the appropriate line on Form 4. For purposes of the requirement of s. 71.255 (2) (d), Stats., separate entity items reported on Form 4N shall be considered filed on a separate return. However, for purposes of determining a combined group member's net income, tax, interest, underpayment interest, economic development surcharge, and the statute of limitations, the separate entity amounts shall be added to its amounts, if any, computed in the unitary combination.
Tax 2.67(2)(d)4. 4. If a corporation is a member of more than one combined group at the same time, the corporation shall include its separate entity items, if any, in the combined return of only one group.
Tax 2.67(2)(e) (e) Amended returns. If a corporation erroneously fails to join in the filing of a combined return, the designated agent shall file an amended combined return adding the corporation and, if a separate return was filed by the corporation, the corporation shall file an amended separate return showing no net income, overpayment, or underpayment, and stating that the corporation has joined in the filing of a combined return and identifying the designated agent of the combined group in which the corporation has been included.
Tax 2.67(3) (3)Taxable year of combined return. The taxable year included in a combined return is the combined group's taxable year as determined in s. 71.255 (8), Stats. For purposes of determining the taxable year and the items includable in the combined group's taxable year, the following rules apply:
Tax 2.67(3)(a) (a) Combined group's taxable year. If two or more members of the combined group file in a federal consolidated return, the combined group's taxable year is the taxable year of that federal consolidated return. If no federal consolidated return applies or there is more than one federal consolidated return, the combined group's taxable year is the taxable year of the designated agent. In any case, s. Tax 2.65 (2) (a) requires that the designated agent's taxable year shall be the same as the combined group's taxable year.
Tax 2.67(3)(b) (b) Methods for members with differing taxable years. If the taxable year of a combined group member differs from the taxable year of the combined group, the designated agent shall include that member's net income or loss and apportionment factors in the combined return by using one of the following methods:
Tax 2.67(3)(b)1. 1. Preparing a separate income statement from the member's books and records for the months included in the combined group's taxable year and using that income statement to determine the amounts includable in the combined return.
Tax 2.67(3)(b)2. 2. Using the net income or loss for the member's taxable year that ends during the combined group's taxable year to determine the amounts includable in the combined return.
Tax 2.67(3)(c) (c) Election of method. If the designated agent converts a combined group member's taxable year to the combined group's taxable year as described in par. (b) 1. or 2., it shall use the same method for each combined group member subject to the election. Once the designated agent files the first combined return including a member whose taxable year is properly converted, the designated agent may not file an amended return to change the election, except that if the original return was not filed under extension, the designated agent may file an amended return to change the election on or before the end of the automatic seven-month extension period provided in ss. 71.24 (7) or 71.44 (3), Stats., as applicable. The designated agent shall use the same method in each subsequent taxable year unless it obtains written approval from the department to use the other method.
Tax 2.67 Note Note: Send written requests for approval to change the election to: Audit Bureau, Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906.
Tax 2.67(3)(d) (d) Part-year members. If, during a combined group's taxable year, a corporation ceases to be a member of the combined group or a new corporation becomes a member, the designated agent shall include that corporation's items attributable to the portion of the taxable year that the corporation was a member in the combined return covering the combined group's entire taxable year. For the portion of the taxable year when the corporation was not a member of the combined group, the corporation shall file a separate return or file in the combined return of another combined group, as applicable.
Tax 2.67(4) (4)Interest, penalties, and statutes of limitations.
Tax 2.67(4)(a)(a) Interest. For purposes of computing interest on late payments by or on behalf of combined group members, the following rules apply:
Tax 2.67(4)(a)1. 1. Interest shall be assessed to the designated agent of a combined group based upon the combined tax liability or deficiency shown on the combined return for the combined group's taxable year. However, the joint and several liability provisions of s. Tax 2.65 (3) (f) do not apply to any interest attributable to separate entity items. If a notice of an interest amount due is attributable to separate entity items of a combined group member other than the designated agent, the designated agent may pay the amount due or may submit a written request to the department to reissue the notice or a portion of the amount assessed to the combined group member responsible for the separate entity items. The designated agent shall submit the written request on or before the due date shown on the notice.
Tax 2.67 Note Note: Send written requests to reissue notices relating to separate entity items to: Wisconsin Department of Revenue, Mail Stop 5-257, P.O. Box 8906, Madison, WI 53708-8906.
Tax 2.67(4)(a)2. 2. An extension filed by the designated agent shall be considered an extension filed by all members of the combined group. However, the extension filed by the designated agent does not apply to affiliated corporations that are not combined group members, even if those corporations will be included in the combined return under the provisions of par. (d) 2.
Tax 2.67(4)(a)3. 3. Interest due to underpayment of estimated taxes shall be computed based on the estimated tax requirements and other provisions described in s. Tax 2.66.
Tax 2.67(4)(a)4. 4. If a corporation erroneously fails to join in the filing of the combined return, all payments, credits, and other amounts collected from the corporation which are properly attributable to the combined group's taxable year and attributable to a period of time that the corporation was a member of the combined group shall be treated as having been paid by the combined group.
Tax 2.67(4)(b) (b) Late filing fees. If a combined group fails to timely file a combined return and the late filing fee under s. 71.83 (3), Stats., applies, the amount of the late filing fee shall be the amount provided in s. 71.83 (3), Stats., regardless of the number of combined group members.
Tax 2.67(4)(c) (c) Failure to file. For purposes of the penalty provided in s. 71.83 (1) (a) 1., Stats., the following rules apply:
Tax 2.67(4)(c)1. 1. A corporation which erroneously fails to join in the filing of a combined return, but which timely files a separate Wisconsin return or joins in the timely filing of a combined return for another combined group, may not be subject to a penalty for failure to file. In determining whether the return is timely filed, the taxable year of the erroneously filed return shall be used, rather than the taxable year of the combined group with which the corporation should have filed.
Tax 2.67(4)(c)2. 2. A corporation which erroneously fails to join in the filing of a combined return and which fails, without reasonable cause, to timely file a separate Wisconsin return or join in the timely filing of a combined return for another combined group, shall be subject to the penalty computed based on its share of tax required to be reported on the combined return for its proper combined group, including its tax attributable to separate entity items. Except as provided in sub. (2) (d) 2., the members of the combined group shall be jointly and severally liable for the penalty because under s. 71.255 (1) (n), Stats., joint and several liability may apply to penalties and it is the duty of the designated agent to include the corporation in the combined return. The department may send a notice of assessment of the penalty to the designated agent instead of the corporation which was erroneously omitted from the combined return.
Tax 2.67(4)(d) (d) Statutes of limitations.
Tax 2.67(4)(d)1.1. The designated agent's filing of a combined return shall be considered to be a return filed by each combined group member whose items are included in the combined unitary income reported on that return.
Tax 2.67(4)(d)2. 2. If a combined return includes separate entity items of a corporation that would otherwise be a combined group member but for the water's edge rules of s. Tax 2.61 (4), the designated agent's filing of the combined return shall be considered to be a return filed by that corporation.
Tax 2.67(4)(d)3. 3. For purposes of the statute of limitations in s. 71.77 (7) (a), Stats., allowing the department to make an assessment within six years after the filing of a return, the statute of limitations shall be determined for each combined group member separately based on its total net income reported on its return, which is its net income or loss from the unitary combination as included in the combined return, plus its net income or loss from separate entity items. The six-year statute of limitations applies if a combined group member's total net income reported on its return is less than 75 percent of the net income properly assessable and the tax attributable to the additional income is in excess of $100. The designated agent shall be responsible for any combined group member's return that is open under the 6-year statute of limitations, subject to the provisions of s. Tax 2.65 (3) (f), even if the designated agent's return, as included in the combined return, is not open under the six-year statute of limitations.
Tax 2.67 Note Note: Section Tax 2.67 interprets ss. 71.24 (1), (1m), and (7), 71.255 (1) (b), (7) (b), (8), and (9), 71.44 (1), (1m), and (3), 71.77, 71.82, and 71.83, Stats.
Tax 2.67 History History: EmR1001: emerg. cr. eff. 1-15-10; CR 09-064: cr. Register April 2010 No. 652, eff. 5-1-10; CR 12-011: am. (2) (d) 3. Register July 2012 No. 679, eff. 8-1-12.
Tax 2.67 Annotation Cross References: See s. Tax 2.60 for definitions that relate to this section. See s. Tax 2.65 for more information on the duties of the designated agent. See s. Tax 2.66 for more information on combined estimated tax requirements.
Tax 2.82 Tax 2.82 Nexus.
Tax 2.82(1)(1) Background and scope.
Tax 2.82(1)(a)(a) Every domestic corporation, one incorporated under Wisconsin's laws, except those exempt under ss. 71.26 (1) and 71.45 (1), Stats., and every licensed foreign corporation, one not incorporated in Wisconsin, is required to file a complete corporation franchise or income tax return, form 4 or 5, regardless of whether or not business was transacted.
Tax 2.82(1)(b) (b) A foreign corporation is "licensed" if it has obtained a Certificate of Authority from the department of financial institutions to transact business in this state pursuant to s. 180.1501, Stats. A licensed foreign corporation is presumed to be subject to Wisconsin franchise or income taxes.
Tax 2.82(1)(c) (c) An unlicensed foreign corporation is subject to Wisconsin franchise or income taxes if it has nexus with Wisconsin. The purpose of this rule is to provide guidelines for determining what constitutes nexus, that is, what business activities are needed for a foreign corporation to be subject to Wisconsin franchise or income taxes. The rule also explains how nexus applies to a foreign corporation in the context of s. 71.255, Stats., relating to combined reporting, and s. 77.93, Stats., relating to the economic development surcharge.
Tax 2.82(2) (2)Definitions. In this section:
Tax 2.82(2)(a) (a) "Business location" includes a repair shop, parts department, purchasing office, employment office, warehouse, meeting place for directors, sales office, permanent sample or display room, research facility or a recreational facility for use of employees or customers. A residence of an employee or representative is not ordinarily considered a business location of the employer unless the facts indicate otherwise. Facts that may indicate a residence of an employee or representative is a business location include the following: a portion of the residence is used exclusively for the business of the employer, the employee is reimbursed or paid a flat fee for the use of this space by the employer; the employee's phone number is listed in the yellow pages or on the Internet under the name of the employer; the employee uses supplies, equipment or samples furnished by the employer; or the space is used by the employee to interview prospective employees, hold sales meetings, or discuss business with customers.
Tax 2.82(2)(b) (b) "Loans" include any extension of credit resulting from direct negotiations between the taxpayer and its customer, or the purchase, in whole or in part, of an extension of credit from another. "Loans" include participations, syndications, and leases treated as loans for federal income tax purposes. "Loans" do not include properties treated as loans under section 595 of the Internal Revenue Code prior to its repeal by P.L. 104-188; futures or forward contracts; options; notional principal contracts such as swaps; credit card receivables, including purchased credit card relationships; non-interest bearing balances due from depository institutions; cash items in the process of collection; federal funds sold; securities purchased under agreements to resell; assets held in a trading account; securities; or interests in a real estate mortgage investment conduit or other mortgage-backed or asset-backed security.
Tax 2.82(2)(c) (c) "Representative" includes an employee, independent contractor, or any other person or entity engaged in substantial activities that helped the taxpayer to establish or maintain a market in this state.
Tax 2.82 Note Note: Under Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 US. 232 (1987), the U.S. Supreme Court held that it made no difference whether the taxpayer's representatives were classified as independent contractors or employees. Also see Scripto, Inc. v. Carson, 362 U.S. 207 (1960).
Tax 2.82(3) (3)Federal limitations on taxation of foreign corporations.
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