Iowa:
Not applicable.
Michigan:
Not applicable.
Minnesota:
Not applicable.
Summary of factual data and analytical methodologies
The department reviewed statutes, Acts, and the rules presented in this order to determine which rules needed to be repealed or revised.
Small Business Impact
The rules will not have a fiscal effect on businesses.
Fiscal Estimate
State fiscal effect
None.
Local government fiscal effect
None.
Private sector fiscal effect
None.
Long-range fiscal implications
None known.
Agency Contact Person
Pat Benesh, Quality Assurance Program Spec-Senior
Division of Quality Assurance
1 West Wilson Street, Room 534
Madison, WI 53701
Phone:   608-264-9896
Fax:   608-267-0352
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That pursuant to ss. 73.029 and 227.11 (2) (a), Stats., the Department of Revenue will hold a public hearing to consider rules revising Chapters Tax 1, 2, and 3, relating to electronic funds transfer; original and amended corporation franchise and income tax returns; information returns and wage statements; returns of persons other than corporations; the recycling surcharge; estimated tax requirements; addback and disclosure of related entity expenses; pass-through entity withholding; and the dividends received deduction for corporations.
Hearing Information
The hearing will be held:
Date:   August 13, 2010
Time:   1:00 PM
Location:   Events Room
  State Revenue Building
  2135 Rimrock Road
  Madison, Wisconsin
Handicap access is available at the hearing location.
Copies of Proposed Rules
A copy of the full text of the proposed rule order and the full fiscal estimate may be obtained at no cost by contacting the department. See Agency Contact Person listed below.
Submission of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person shown under Agency Contact Person listed below no later than August 20, 2010, and will be given the same consideration as testimony presented at the hearing.
Analysis Prepared by the Department of Revenue
Statutes interpreted
Statutory authority
Sections 73.029 and 227.11 (2) (a), Stats.
Explanation of agency authority
Section 73.029, Stats., provides that the department may require electronic funds transfer only by promulgating rules. Section 227.11 (2) (a), Stats., provides that each agency may promulgate rules interpreting the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute.
Related statute or rule
Sections Tax 2.60 to 2.67, Wisconsin Administrative Code.
Plain language analysis
The proposed rule order will:
  Expand the taxes, fees, and other amounts required to be paid or deposited using electronic funds transfer (EFT) and the returns, reports, and refund claims the department may require be filed electronically.
  Incorporate the statutory provisions of 2009 Wisconsin Acts 2 and 28 into the administrative provisions of Chapters Tax 1, 2, and 3.
  Provide further interpretation and explanation of the statutory provisions for disclosure of related entity expenses and the related addition and subtraction modifications.
  Provide additional guidance with respect to the statutory provisions for pass-through entity withholding tax.
Comparison with federal regulations
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule order.
Comparison with rules in adjacent states
Illinois:
Illinois Administrative Code, title 86, sec. 100.2430, provides that addbacks are required for interest and intangible expenses paid to 80-20 companies (companies that cannot be included in unitary group because 80% or more of their activities are outside U.S.), to the extent such amounts exceed taxable dividends received.
Iowa:
Iowa Admin. Code r. 701-46.4(2) provides that withholding is required against income distributable to nonresident individuals.
Summary of factual data and analytical methodologies
The department processes hundreds of thousands of paper checks, refund claims, reports, and returns each year. Each one costs more to process and takes more staff time to handle than if submitted electronically. The department has determined that in order to operate in the most cost effective and efficient manner possible, it is necessary to expand its electronic filing and payment requirements.
In addition, this rule order has been created to incorporate and provide further interpretation, explanation, and guidance with respect to the statutory provisions of 2009 Wisconsin Acts 2 and 28 and the statutory provisions relating to related entity expenses and pass-through entity withholding.
Analysis and supporting documents used to determine effect on small business
The department provides methods to electronically file and pay taxes with little or no cost. In addition, an exception to the requirements to file and pay electronically for situations where an undue hardship is caused is provided in the rule. Based on this, the department has concluded that this rule order does not have a significant effect on small business.
As explained above, this proposed rule order also has been created to reflect changes in and provide further interpretation, explanation, and guidance with respect to Wisconsin's tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Small Business Impact
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
The provisions relating to 2009 Wisconsin Acts 2 and 28 and related entity expenses interpret existing statutes and therefore have no fiscal effect. The provisions relating to treatment of withholding for pass-through entities are expected to generate minimal administrative savings. The provisions relating to electronic fund transfer payments and to electronic filing of returns, reports, and refund claims are anticipated to reduce administrative expenditures by an estimated $152,900 annually as described below.
The Department of Revenue estimates a potential 88% decrease in paper sales tax filings (from 422,000 to 48,000 annually) under the proposed rule, which translates into a cost savings of $152,900. This also would result in electronic sales tax filings increasing from 52% to 95% of all sales tax filings (increasing from 462,300 to 835,900 of 884,259 total sales tax returns based on a recent 12-month period). Additional cost savings may also be achieved as other filings, especially individual income tax withholdings, are shifted to electronic form. The timeline for cost savings, however, will be dependent on the pace at which this shift is implemented. Cost savings will also be reduced to the degrees to which waivers from the proposed rule are granted.
Anticipated costs incurred by private sector
This proposed rule order does not have a significant fiscal effect on the private sector.
Agency Contact Person
Dale Kleven, Dept. of Revenue
Mail Stop 6-40
2135 Rimrock Road
PO Box 8933
Madison, WI 53708-8933
Phone: (608) 266-8253
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That pursuant to s. 227.21 (2) (a), Stats., the Department of Revenue will hold a public hearing to consider the creation of Tax 4.001, 7.001, 8.001, and 9.001 and revision of Tax 11.01, relating to motor vehicle, alternate fuels, and general aviation fuel tax return and refund claim forms; fermented malt beverage tax return and refund claim forms; intoxicating liquor report, tax return, and refund claim forms; cigarette and tobacco products report, tax return, and refund claim forms; and sales and use tax, local exposition tax, and premier resort area tax return forms.
Hearing Information
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Links to Admin. Code and Statutes in this Register are to current versions, which may not be the version that was referred to in the original published document.