PUBLIC UTILITY TAXATION
Returns for public utilities.
The exemption for a waste treatment facility otherwise taxable under s. 76.13
, Stats., is contained in s. 76.025 (1)
Requests for approval by public utilities subject to taxation under s. 76.13
, Stats., for each waste treatment facility shall be made by completing the form entitled "Report of Exempted Waste Treatment Facility-Utility". All actual costs of purchase or construction of the facility must be reflected on this form. The completed form is due January 15 of each year and is to be filed annually except in years subsequent to purchase or construction where no capital changes have occurred to the waste treatment facility, in which case a summary sheet may be submitted for these facilities. For good cause shown upon application by the applicant, the department may grant an extension of time not exceeding 120 days in which to file the application form.
The completed form "Report of Exempted Waste Treatment Facility-Utility" should be sent to the Division of State and Local Finance.
Tax 6.40 Note
Note: The address for mailing the application form is Wisconsin Department of Revenue, Division of State and Local Finance, PO Box 8971, Madison WI 53708-8971.
The words "waste," "treatment" and "facility" are deemed to have the following meanings:
"Waste" means that which is left over as superfluous, discarded or fugitive material. In addition, "industrial wastes
" is defined by reference to s. 281.01 (5)
, Stats., as including liquid or other wastes resulting from any process of industry, manufacture, trade, business or the development of any natural resource. "Air contaminant
" is defined by reference to s. 285.01 (1)
, Stats., as dust, fumes, mist, liquid, smoke, other particulate matter, vapor, gas, odorous substances or any combination thereof but shall not include uncombined water vapor.
"Waste treatment facility" means tangible property that is built, constructed or installed as a unit so as to be readily identifiable as directly removing, altering or storing leftover, superfluous, discarded or fugitive material.
The exemption for industrial waste treatment facilities does not apply to conversion of an industrial furnace from one type of fuel to another type of fuel, or to the increased height of a smoke stack to diffuse emissions over a wide area or increments to property held for the production of income but which may be indirectly related to pollution abatement. However, the installation of a scrubber or electrostatic precipitator in a smoke stack could qualify for exemption.
Tax 6.40 History
Cr. Register, July, 1979, No. 283
, eff. 8-1-79; r. (3) (d), Register, March, 1980, No. 291
, eff. 4-1-80; r. (1) (b), cr. (2) (c) and (d), am. (3) (a) 1. and (b), Register, January, 1989, No. 397
, eff. 2-1-89; CR 02-053
: am. (2) (b), (3) (a) 2., 4., (b) and (c), renum. (3) (a) 1. and 3. to be (3) (a) 3. and 1. and am., cr. (3) (d) Register November 2002 No. 563
, eff. 12-1-02; corrections in (1) and (3) made under s. 13.93 (2m) (b) 7., Stats., Register November 2002 No. 563
correction in (2) (c) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register March 2013 No. 687
; CR 13-037: am. (2) (a), (b) Register February 2014 No. 698, eff. 3-1-14.
The entire operating property of any company enumerated in s. 76.02
, Stats., shall be valued together as a unit at full market value unless, in the opinion of the department, any of the property is so segregated that a separate assessment is warranted. The department shall apply recognized appraisal methods in determining full market value. The cost, stock and debt, and capitalized income indicators of value and reasonable variations shall be applied by the department in accordance with the general principles set forth in subs. (4)
"Going concern value" is the enhanced value of assets due to their existence within an operating business that is expected to continue its operation in the foreseeable future with no intention or necessity of liquidation or the material alteration of the scale of operation.
"Operating property" is real and personal property including all rights, franchises and privileges used in and necessary to conduct the business of the enterprise subject to taxation under s. 76.02
"Present worth" is the value today of something to be received in the future. It is calculated by a discounting process that takes into consideration the time-interest concept of money by the application of a present worth factor.
Tax 6.50 Annotation
Example: If a cash benefit of $1,000 is to be received some years hence, the value today of such benefit is equal to $1,000 multiplied by the appropriate present worth factor.
"Present worth factor" is that ratio, expressed as a decimal equivalent, as shown in a compound interest table at a specific interest or discount rate for the appropriate period.
The method whereby the investment expenditure required to purchase the land or land rights, materials, labor and services necessary to bring a new property into existence is estimated and which is commonly referred to in appraisal and valuation literature as the cost method. Indicators of value within the cost method include:
Replacement cost to currently replace the property with its functional equivalent.
The method whereby the investment expenditure required to purchase an existing property is estimated and which is commonly referred to in appraisal and valuation literature as the market method. Where there are few unit sales, value under the market method shall be computed by using the stock and debt indicator of value. Indicators of value within the market method include:
The capitalization of the estimated future income to the present owner or to a prospective purchaser. The estimated future income is that income which remains after book depreciation and federal tax expenses actually paid have been subtracted.
The discounted or the present value of the estimated future cash flow to the present owner or to a prospective purchaser. The estimated future cash flow is that cash flow which remains after the asset replacement expenditures and the federal income taxes paid have been subtracted.
"Unit valuation" is the appraisal as a whole of an integrated property operated as a going concern without any reference to the value of its component parts.
The validity of a determination of value may be measured against the supporting evidence and documented data from which the determination of value was derived. Accordingly the department shall consider and weigh, in its best judgment any or all available indicators of full market value enumerated in sub. (2) (g) 1.
In this correlation process it shall consider the following:
Actual sales of comparable properties in an arm's-length transaction between independent parties;
In the case of regulated utilities, a sale is comparable only if there is the sale of an entire operation capable of functioning independently and the parties thereto are subject to regulatory policies similar to those of Wisconsin.
(9) Correction of errors.
Errors which are agreed to be palpable or computational and which are discovered after issuance of the assessment shall be adjusted by the department in the next subsequent assessment year and the department shall provide the company with evidence of such adjustment.
Tax 6.50 Note
This section interprets s. 76.07 (5)