Amendment SA2-SSA1-SB55

SB55-SSA1-SA2,285,10 (a) 1. Determine the numerator and the denominator of the apportionment factors as determined under s. 71.25 or 71.45, as appropriate, for each member of the combined reporting group, except as provided in subd. 2.

SB55-SSA1-SA2,285,20 2. If a member of a combined reporting group is not subject to the tax imposed under s. 71.23 or 71.43 because it does not have sufficient connection to this state as a separate entity for income or franchise tax purposes, as determined by the department, the numerator of the member's sales factor under s. 71.25 (9) or apportionment factor under s. 71.45 (3) is zero. If a member of a combined reporting group is a corporation engaged in business wholly within this state, as provided under s. 71.25 (4), the numerator and denominator of the member's apportionment factors is the same. If a member of a combined reporting group is not subject to an income or franchise tax as a separate entity in the state to which a sale is attributed, the sale is attributed to this state.

SB55-SSA1-SA2,285,22 (b) Subtract intercompany transactions under sub. (6) (c) from both the numerators and the denominators as determined under par. (a).

SB55-SSA1-SA2,285,25 (c) Add the denominators of the apportionment factors for each member of the combined reporting group, as determined under par. (a), to arrive at the combined denominators.

SB55-SSA1-SA2,286,4 (d) Compute the apportionment factors for each member of the combined reporting group by dividing the numerator of a member of the combined reporting group as determined under par. (a) by the combined denominator as determined under par. (c).

SB55-SSA1-SA2,286,13 (8) Net business loss carry-over. (a) For taxable years beginning after December 31, 2001, any net business loss of a corporation that is a member of a combined reporting group as determined under sub. (6) for the taxable year that is not offset against the net income of the other members of the combined reporting group in the same taxable year may be carried forward as provided under s. 71.26 (4), except that any net business loss carried forward to a subsequent taxable year may be offset against either the net income of the corporation that incurred the net business loss or the net income of the combined reporting group of which the corporation is a member, in the manner prescribed by rule by the department.

SB55-SSA1-SA2,286,17 (b) A corporation that is a member of a combined reporting group may not carry forward a net business loss from a taxable year beginning before January 1, 2002, if the corporation was not subject to the tax imposed under s. 71.23 or 71.43 for the same taxable year.

SB55-SSA1-SA2,287,3 (c) A corporation that is a member of a combined reporting group and that incurred a Wisconsin net business loss in a taxable year beginning before January 1, 2002, that has not been offset against the corporation's net income in subsequent taxable years, may offset the remaining net business loss against the corporation's net income as determined under sub. (6) (i). If the corporation joins in filing a group return under sub. (5) and the corporation's remaining net business loss exceeds the corporation's net income as determined under sub. (6) (i) for the first taxable year beginning after December 31, 2001, that the corporation is subject to this section, the corporation may annually offset up to 20% of the remaining net business loss against the net income of the other members of the combined reporting group that join in filing a group return under sub. (5).

SB55-SSA1-SA2,287,13 (9) Net income or loss for corporations with different accounting periods. If a taxpayer member has a different accounting period than the common accounting period of the combined reporting group, the combined reporting group shall assign the combined report income or loss for the combined reporting group, as determined under sub. (6) (i), proportionally to the number of months in the taxpayer member's taxable year that are wholly or partly within the combined reporting group's common accounting period. The total amount of income or loss assigned to a taxpayer member under this subsection for the common accounting period shall be used to attribute the taxpayer member's apportionable income to the combined reporting group for the common accounting period.

SB55-SSA1-SA2,287,15 (10) Net tax liability. (a) A corporation that files a separate return under this section shall determine its net tax liability as follows:

SB55-SSA1-SA2,287,17 1. Multiply the amount determined under sub. (6) (i) for the corporation by the tax rate under s. 71.27 or 71.46, as appropriate.

SB55-SSA1-SA2,287,22 2. From the amount determined under subd. 1., subtract the corporation's tax credits under s. 71.28 or 71.47 based on the corporation's expenses. A corporation may not offset any of its tax credits, or tax credit carry forwards, against the tax liability of any other member of the combined reporting group to which the corporation belongs.

SB55-SSA1-SA2,287,24 (b) A combined reporting group that files a group return under this section shall determine its net tax liability as follows:

SB55-SSA1-SA2,288,2 1. Multiply the amount determined under sub. (6) (i) for the combined reporting group by the tax rate under s. 71.27 or 71.46, as appropriate.

SB55-SSA1-SA2,288,4 2. From the amount determined under subd. 1., subtract the tax credits under s. 71.27 and 71.47 for all taxpayer members of the combined reporting group.

SB55-SSA1-SA2,288,11 (11) Estimated tax payments. (a) For the first 2 taxable years that a group return is filed under this section, estimated taxes under s. 71.29 and 71.48 may be paid on a group basis or on a separate basis. The amount of any separate estimated taxes paid in the first 2 taxable years that a group return is filed shall be credited against the group's tax liability. The designated agent shall notify the department of any estimated taxes paid on a separate basis in the first 2 taxable years that a group return is filed.

SB55-SSA1-SA2,288,24 (b) If a group return is filed for 2 consecutive taxable years, estimated taxes under s. 71.29 and 71.48 shall be paid on a group basis for each subsequent taxable year until such time as separate returns are filed by the corporations that were members of a combined reporting group that filed group returns under this section. For each taxable year in which combined estimated taxes are paid under this subsection, the department shall consider the combined reporting group filing a group return to be one taxpayer for purposes of computing interest on the underpayment of estimated taxes. If a corporation subject to this section files a separate return in a taxable year following a year in which the corporation joined in filing a group return, the amount of any estimated tax payments made on a group basis for the previous year shall be credited against the tax liability of the corporation that files a separate return, as allocated by the designated agent with the department's approval.

SB55-SSA1-SA2,289,5 (c) If a combined reporting group pays estimated taxes on a group basis for a taxable year or for any part of a taxable year, and the members of the combined reporting group file separate returns for the taxable year, the designated agent, with the department's approval, shall allocate the estimated tax payments among the members of the combined reporting group.

SB55-SSA1-SA2,289,10 (d) If estimated taxes are paid on a group basis for a taxable year but the group does not file a group return for the taxable year and did not file a group return for the previous taxable year, the estimated tax shall be credited to the member of the combined reporting group that made the estimated tax payment on the group's behalf.

SB55-SSA1-SA2,289,13 (e) If a combined reporting group that will file a group return applies for a refund of estimated taxes under s. 71.29 (3m), the department shall determine the combined reporting group's eligibility for a refund on a group basis.

SB55-SSA1-SA2,289,16 (12) Interest for underpayment of estimated tax. (a) General. The amount of interest that is due for an underpayment of estimated taxes under sub. (11) shall be computed as follows:

SB55-SSA1-SA2,289,20 1. For the first year in which a combined reporting group files a group return, the amount of interest that is due for an underpayment of estimated taxes shall be determined by using the aggregate of the tax and income shown on the returns filled by the members of the combined reporting group for the previous year.

SB55-SSA1-SA2,289,25 2. For any year in which a combined reporting group files a group return, the department shall determine if the combined reporting group qualifies for the exception to interest under s. 71.29 (7) (b) by using the aggregate of the amount of the tax liability and the amount of the net income of all members of the combined reporting group.

SB55-SSA1-SA2,290,5 3. For any year in which a combined reporting group files a group return, the department shall determine if the installment provisions under s. 71.29 (9) or (10) apply to the combined reporting group by using the aggregate of the amount of the tax liability and the amount of the net income of all members of the combined reporting group.

SB55-SSA1-SA2,290,12 4. For estimated taxes paid under sub. (11) (c), the amount of interest that is due from a member of a combined reporting group for an underpayment of estimated taxes paid by the member shall be determined by using the member's separate items from the group return filed for the previous year and the member's allocated share of the combined estimated tax payments for the current year. The designated agent shall report the member's allocated share of the combined estimated tax payments for the current year to the department, in the manner prescribed by the department.

SB55-SSA1-SA2,290,16 (b) Entering a group. If a corporation becomes a member of a combined reporting group during a common accounting period under sub. (4), the combined reporting group shall make the following adjustments to determine the amount of interest that is due for an underpayment of estimated taxes:

SB55-SSA1-SA2,290,21 1. If a corporation becomes a member of a combined reporting group at the beginning of a common accounting period, the combined reporting group shall include with the corresponding items on the group return for the previous common accounting period the separate items shown on the corporation's return for the previous taxable year.

SB55-SSA1-SA2,291,2 2. If a corporation is not a member of a combined reporting group for an entire common accounting period, the combined reporting group shall include with the corresponding items on the group return for the current taxable year the corporation's separate items for that portion of the common accounting period that the corporation was a member of the combined reporting group.

SB55-SSA1-SA2,291,8 3. To determine the separate items under subds. 1. and 2., if a corporation is a member of a combined reporting group during a portion of a common accounting period in which the corporation becomes a member of another combined reporting group, the corporation's separate items shall include the separate items that are attributed to the corporation by the designated agent of the first combined reporting group.

SB55-SSA1-SA2,291,12 (c) Leaving a group. If a corporation leaves a combined reporting group during a common accounting period under sub. (4), the combined reporting group shall make the following adjustments to determine the amount of interest that is due for an underpayment of estimated taxes:

SB55-SSA1-SA2,291,18 1. If a corporation leaves a combined reporting group before the first day of a common accounting period, the commonly controlled group shall exclude the separate items that the designated agent of the combined reporting group attributed to the corporation for the preceding common accounting period from the corresponding items of the combined reporting group for the preceding common accounting period.

SB55-SSA1-SA2,291,23 2. If a corporation leaves a combined reporting group after the first day of a common accounting period, the combined reporting group shall exclude the separate items that the designated agent of the combined reporting group attributed to the corporation for the common accounting period from the corresponding items of the combined reporting group for the current common accounting period.

SB55-SSA1-SA2,292,6 3. A corporation that leaves a combined reporting group shall use the separate items that the designated agent of the combined reporting group attributed to the corporation to determine the amount of interest that is owed for any underpayment of estimated taxes under sub. (12) for the first taxable year beginning after the day that the corporation leaves the combined reporting group or, for a corporation that has a different accounting period than the combined reporting group, for the portion of the corporation's separate taxable year that remains after the day that the corporation leaves the combined reporting group.

SB55-SSA1-SA2,292,22 (13) Assessment notice. If the department sends a notice of taxes that are owed by a combined reporting group to the designated agent of a combined reporting group, the notice shall name each corporation that joined in filing the group return related to the notice during any part of the period covered by the notice. The department's failure to name a corporation on a notice under this subsection shall not invalidate the notice as to the unnamed corporation. Any levy, lien or other proceeding to collect the amount of a tax assessment under this section shall name the corporation from which the department shall collect the assessment. If a corporation that joined in the filing of a group return leaves the combined reporting group, the department shall send the corporation a copy of any notice sent to the combined reporting group under this subsection if the corporation notifies the department that the corporation is no longer a member of the combined reporting group and if the corporation requests in writing that the department send notices under this subsection to the corporation. The department's failure to comply with a corporation's request to receive a notice does not affect the tax liability of the corporation.

SB55-SSA1-SA2,293,3 (14) Liability for tax, interest and penalty. If members of a combined reporting group file a group return, the members of the combined reporting group shall be jointly and severally liable for any combined tax, interest or penalty. The liability of a member of a combined reporting group for any combined tax, interest or penalty shall not be reduced by an agreement with another member of the combined reporting group or by an agreement with another person.

SB55-SSA1-SA2,293,9 (15) Presumptions and burden of proof. A commonly controlled group shall be presumed to be engaged in a unitary business and all of the income of the unitary business shall be presumed to be apportionable business income under this section. A corporation, partnership or limited liability company has the burden of proving that it is not a member of a commonly controlled group that is subject to this section. The department shall promulgate rules to implement this subsection.

SB55-SSA1-SA2,293,14 (16) Information. (a) A member of a commonly controlled group shall retain any information, and provide such information to the department at the department's request, that the department considers necessary to administer this section, including all documents submitted to or obtained from the Internal Revenue Service or other states regarding income and taxing jurisdiction.

SB55-SSA1-SA2,293,19 (b) A member of a commonly controlled group shall identify, at the department's request, the name, job title, and address of the member's principal officers or employees who have substantial knowledge of, and access to, documents that specify the pricing policies, profit centers, cost centers, and methods of allocating income and expenses among cost centers related to the operations of the member.

SB55-SSA1-SA2,293,24 (c) A member of a commonly controlled group shall retain all information provided under par. (a) during any period for which the member's tax liability to this state is subject to adjustment, including any period in which the state may assess additional income or franchise taxes, an appeal of the member's tax assessment is pending, or a suit related to the member's tax liability is pending.".

SB55-SSA1-SA2,294,1 929. Page 768, line 17: delete lines 17 to 19.

SB55-SSA1-SA2,294,2 930. Page 768, line 24: delete "and (5)" and substitute "(5), and (9t)".

SB55-SSA1-SA2,294,3 931. Page 769, line 1: delete "(1ds) and, and (3g)" and substitute "(1ds), and".

SB55-SSA1-SA2,294,4 932. Page 793, line 5: after that line insert:

SB55-SSA1-SA2,294,5 " Section 2175dn. 71.26 (3) (L) of the statutes is amended to read:

SB55-SSA1-SA2,294,22 71.26 (3) (L) Section 265 is excluded and replaced by the rule that any amount otherwise deductible under this chapter that is directly or indirectly related to income wholly exempt from taxes imposed by this chapter or to losses from the sale or other disposition of assets the gain from which would be exempt under this paragraph if the assets were sold or otherwise disposed of at a gain is not deductible. In this paragraph, "wholly exempt income", for corporations subject to franchise or income taxes, includes amounts received from affiliated or subsidiary corporations for interest, dividends or capital gains that, because of the degree of common ownership, control or management between the payor and payee, are not subject to taxes under this chapter. In this paragraph, "wholly exempt income", for corporations subject to income taxation under this chapter, also includes interest on obligations of the United States. In this paragraph, "wholly exempt income" does not include income excludable, not recognized, exempt or deductible under specific provisions of this chapter. If any expense or amount otherwise deductible is indirectly related both to wholly exempt income or loss and to other income or loss, a reasonable proportion of the expense or amount shall be allocated to each type of income or loss, in light of all the facts and circumstances.".

SB55-SSA1-SA2,294,23 933. Page 793, line 5: after that line insert:

SB55-SSA1-SA2,294,24 " Section 2175f. 71.26 (3) (e) 1. of the statutes is amended to read:

SB55-SSA1-SA2,295,8 71.26 (3) (e) 1. So that payments for wages, salaries, commissions, and bonuses of employees and officers may be deducted only if the name, address , and amount paid to each resident of this state to whom compensation of $600 or more has been paid during the taxable year is reported or if the department of revenue is satisfied that failure to report has resulted in no revenue loss to this state. A deduction for wages, salaries, commissions, and bonuses paid to an employee or officer shall not exceed an amount equal to the wages, salaries, commissions, and bonuses paid to the corporation's lowest paid full-time employee multiplied by 25.".

SB55-SSA1-SA2,295,9 934. Page 793, line 22: after that line insert:

SB55-SSA1-SA2,295,10 " Section 2176dm. 71.26 (3) (x) of the statutes is amended to read:

SB55-SSA1-SA2,295,14 71.26 (3) (x) Sections 1501 to 1505, 1551, 1552, 1563 and 1564 (relating to consolidated returns) are excluded, except to the extent that they pertain to intercompany transactions and the carry forward of net business loss under s. 71.255.

SB55-SSA1-SA2, s. 2176dp Section 2176dp. 71.26 (4) of the statutes is amended to read:

SB55-SSA1-SA2,296,8 71.26 (4) Net business loss carry-forward. A corporation, except a tax-option corporation or an insurer to which s. 71.45 (4) applies, may offset against its Wisconsin net business income any Wisconsin net business loss sustained in any of the next 15 preceding taxable years, if the corporation was subject to taxation under this chapter in the taxable year in which the loss was sustained, to the extent not offset by other items of Wisconsin income in the loss year and by Wisconsin net business income of any year between the loss year and the taxable year for which an offset is claimed. For purposes of this subsection Wisconsin net business income or loss shall consist of all the income attributable to the operation of a trade or business in this state, less the business expenses allowed as deductions in computing net income. The Wisconsin net business income or loss of corporations engaged in business within and without the state shall be determined under s. 71.255 or 71.25 (6) and (10) to (12). Nonapportionable losses having a Wisconsin situs under s. 71.25 (5) (b) shall be included in Wisconsin net business loss; and nonapportionable income having a Wisconsin situs under s. 71.25 (5) (b), whether taxable or exempt, shall be included in other items of Wisconsin income and Wisconsin net business income for purposes of this subsection.".

SB55-SSA1-SA2,296,9 935. Page 793, line 22: after that line insert:

SB55-SSA1-SA2,296,10 " Section 2176m. 71.28 (1di) (b) 1. of the statutes is amended to read:

SB55-SSA1-SA2,296,18 71.28 (1di) (b) 1. Except as provided in subd. 2., the credit, including any credits carried over, may be offset only against the amount of the tax otherwise due under this chapter attributable to income from the business operations of the claimant in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset the credit, including any credits carried over, against the amount of the tax otherwise due under this chapter attributable to all of the claimant's income; and against the tax attributable to income from directly related business operations of the claimant.

SB55-SSA1-SA2, s. 2176p Section 2176p. 71.28 (1di) (b) 3. of the statutes is amended to read:

SB55-SSA1-SA2,297,12 71.28 (1di) (b) 3. Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of the credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income from all of the partnership's, company's, or corporation's business operations; and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.".

SB55-SSA1-SA2,297,13 936. Page 794, line 5: after "(e)" insert "and (f)".

SB55-SSA1-SA2,297,14 937. Page 796, line 5: after that line insert:

SB55-SSA1-SA2,297,22 "(hm) Credits claimed under this subsection, including any credits carried over, may be offset only against the amount of the tax otherwise due under this subchapter attributable to income from the business operations of the claimant in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset credits, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income; and against the tax attributable to income from directly related business operations of the claimant.".

SB55-SSA1-SA2,298,2 938. Page 796, line 17: after "zone" insert "; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income from all of the partnership's, company's, or corporation's business operations;".

SB55-SSA1-SA2,298,3 939. Page 797, line 24: after that line insert:

SB55-SSA1-SA2,298,4 " Section 2178k. 71.28 (1dx) (b) (intro.) of the statutes is amended to read:

SB55-SSA1-SA2,298,10 71.28 (1dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3) or 560.797 (4), any person may claim as a credit against taxes imposed on the person's income from the person's business activities in a development zone under this subchapter the following amounts:

SB55-SSA1-SA2, s. 2178m Section 2178m. 71.28 (1dx) (be) of the statutes is created to read:

SB55-SSA1-SA2,298,16 71.28 (1dx) (be) Offset. A claimant in a development zone under s. 560.795 (1) (e) may offset any credits claimed under this subsection, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income and against the tax attributable to income from directly related business operations of the claimant.

SB55-SSA1-SA2, s. 2178p Section 2178p. 71.28 (1dx) (bg) of the statutes is created to read:

SB55-SSA1-SA2,299,7 71.28 (1dx) (bg) Other entities. For claimants in a development zone under s. 560.795 (1) (e), partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners, or members. The corporation, partnership, or company shall compute the amount of the credit that may be claimed by each of its shareholders, partners, or members and shall provide that information to each of its shareholders, partners, or members. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit based on the partnership's, company's, or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from all of the partnership's, company's, or corporation's business operations and against the tax attributable to their income from the partnership's, company's, or corporation's directly related business operations.".

SB55-SSA1-SA2,299,9 940. Page 797, line 25: delete the material beginning with that line and ending on page 798, line 22.

SB55-SSA1-SA2,299,10 941. Page 798, line 22: after that line insert:

SB55-SSA1-SA2,299,11 " Section 2179m. 71.29 (2) of the statutes is amended to read:

SB55-SSA1-SA2,299,14 71.29 (2) Who shall pay. Every Except as provided in s. 71.255 (11), every corporation subject to tax under s. 71.23 (1) or (2) and every virtually exempt entity subject to tax under s. 71.125 or 71.23 (1) or (2) shall pay an estimated tax.".

SB55-SSA1-SA2,299,15 942. Page 798, line 22: after that line insert:

SB55-SSA1-SA2,299,16 " Section 2179d. 71.28 (9t) of the statutes is created to read:

SB55-SSA1-SA2,299,18 71.28 (9t) Artistic endowment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB55-SSA1-SA2,299,23 (b) Filing claims. For taxable years beginning after December 31, 2002, subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, an amount equal to 25% of the amount contributed to the artistic endowment fund under s. 25.78, up to a maximum $500 contribution in a taxable year.

SB55-SSA1-SA2,300,4 (c) Limitations and conditions. 1. No new claim may be filed under this subsection for a taxable year that begins after December 31 of the year in which the department determines that the total amount of revenues received by the endowment fund equals $50,150,000.

SB55-SSA1-SA2,300,6 2. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB55-SSA1-SA2,300,8 (d) Administration. Subsection (4) (e) and (g), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB55-SSA1-SA2, s. 2179h Section 2179h. 71.30 (3) (bm) of the statutes is created to read:

SB55-SSA1-SA2,300,10 71.30 (3) (bm) Artistic endowment credit under s. 71.28 (9t).".

SB55-SSA1-SA2,300,11 943. Page 799, line 1: delete lines 1 and 2.

SB55-SSA1-SA2,300,12 944. Page 799, line 5: delete "(1dx) and, (3)," and substitute "(1dx), and (3)".

SB55-SSA1-SA2,300,13 945. Page 799, line 6: delete "and (3g)".

SB55-SSA1-SA2,300,14 946. Page 821, line 17: after that line insert:

SB55-SSA1-SA2,300,15 " Section 2184d. 71.44 (1) (e) of the statutes is created to read:

SB55-SSA1-SA2,300,18 71.44 (1) (e) A corporation that is a member of a commonly controlled group, as defined in s. 71.255 (1) (d), and engaged in a unitary business, as defined in s. 71.255 (1) (m), shall file a tax return under s. 71.255.".

SB55-SSA1-SA2,300,20 947. Page 822, line 7: delete the material beginning with that line and ending with page 826, line 6.