SB197-AA2,15,63 (d) From the amount determined under par. (c) for each member of a combined
4reporting group, subtract nonapportionable income, net of related expenses, and add
5nonapportionable losses, net of related expenses, to determine each member's
6apportionable net income or apportionable net loss.
SB197-AA2,15,97 (e) Calculate the apportionment factors under sub. (7) and multiply each
8member's apportionable net income or apportionable net loss, as determined under
9par. (d), by the member's apportionment factor as determined under sub. (7).
SB197-AA2,15,1110 (f) For each corporation, combine the amounts determined under par. (e) for
11each trade or business.
SB197-AA2,15,1412 (g) To the amounts determined under par. (f), add each member's
13nonapportionable income attributable to this state and subtract each member's
14nonapportionable losses attributable to this state.
SB197-AA2,15,1615 (h) If the combined reporting group is not filing a group return, combine the
16amounts determined under par. (g) for all members of the combined reporting group.
SB197-AA2,15,1917 (i) If the combined reporting group is filing a group return, combine the
18amounts determined under par. (g) for all members of the combined reporting group
19that join in filing the group return.
SB197-AA2,15,2120 (j) From the amount determined under par. (h) or (i), as appropriate, subtract
21the combined reporting group's net operating loss as determined under sub. (8).
SB197-AA2,15,23 22(7) Apportionment factor computation under combined reporting. For the
23purposes of sub. (2), this state's apportionment factors are determined as follows:
SB197-AA2,16,3
1(a) 1. Determine the numerator and the denominator of the apportionment
2factors as determined under s. 71.25 or 71.45, as appropriate, for each member of the
3combined reporting group, except as provided in subd. 2.
SB197-AA2,16,134 2. If a member of a combined reporting group is not subject to the tax imposed
5under s. 71.23 or 71.43 because it does not have sufficient connection to this state as
6a separate entity for income or franchise tax purposes, as determined by the
7department, the numerator of the member's sales factor under s. 71.25 (9) or
8apportionment factor under s. 71.45 (3) is zero. If a member of a combined reporting
9group is a corporation engaged in business wholly within this state, as provided
10under s. 71.25 (4), the numerator and denominator of the member's apportionment
11factors is the same. If a member of a combined reporting group is not subject to an
12income or franchise tax as a separate entity in the state to which a sale is attributed,
13the sale is attributed to this state.
SB197-AA2,16,1514 (b) Subtract intercompany transactions under sub. (6) (c) from both the
15numerators and the denominators as determined under par. (a).
SB197-AA2,16,1816 (c) Add the denominators of the apportionment factors for each member of the
17combined reporting group, as determined under par. (b), to arrive at the combined
18denominator.
SB197-AA2,16,2119 (d) Compute each corporation's apportionment factors by dividing the
20corporation's numerator as determined under par. (b) by the combined denominator
21as determined under par. (c).
SB197-AA2,17,5 22(8) Net business loss carry-over. (a) For taxable years beginning after
23December 31, 2002, any net business loss of a corporation that is a member of a
24combined reporting group as determined under sub. (6) for the taxable year that is
25not offset against the net income of the other members of the combined reporting

1group in the same taxable year may be carried forward as provided under s. 71.26
2(4), except that any net business loss carried forward to a subsequent taxable year
3may be offset against either the net income of the corporation that incurred the net
4business loss or the net income of the combined reporting group of which the
5corporation is a member, in the manner prescribed by rule by the department.
SB197-AA2,17,96 (b) A corporation that is a member of a combined reporting group may not carry
7forward a net business loss from a taxable year beginning before January 1, 2003,
8if the corporation was not subject to the tax imposed under s. 71.23 or 71.43 for the
9same taxable year.
SB197-AA2,17,2010 (c) A corporation that is a member of a combined reporting group and that
11incurred a Wisconsin net business loss in a taxable year beginning before January
121, 2003, that has not been offset against the corporation's net income in subsequent
13taxable years, may offset the remaining net business loss against the corporation's
14net income as determined under sub. (6). If the corporation joins in filing a group
15return under sub. (5) and the corporation's remaining net business loss exceeds the
16corporation's net income as determined under sub. (6) for the first taxable year
17beginning after December 31, 2002, that the corporation is subject to this section, the
18corporation may annually offset up to 20% of the remaining net business loss against
19the net income of the other members of the combined reporting group that join in
20filing a group return under sub. (5).
SB197-AA2,18,5 21(9) Net income or loss for corporations with different accounting periods.
22If a taxpayer member has a different accounting period than the common accounting
23period of the combined reporting group, the combined reporting group shall assign
24the combined report income or loss for the combined reporting group, as determined
25under sub. (6), proportionally to the number of months in the taxpayer member's

1taxable year that are wholly or partly within the combined reporting group's common
2accounting period. The total amount of income or loss assigned to a taxpayer member
3under this subsection for the portions of the common accounting period that are
4included in the taxpayer member's taxable period shall be aggregated or netted to
5determine the taxpayer member's apportionable income.
SB197-AA2,18,7 6(10) Net tax liability. (a) A corporation that files a separate return under this
7section shall determine its net tax liability as follows:
SB197-AA2,18,98 1. Multiply the amount determined under sub. (6) (i) for the corporation by the
9tax rate under s. 71.27 or 71.46, as appropriate.
SB197-AA2,18,1410 2. From the amount determined under subd. 1., subtract the corporation's tax
11credits under s. 71.28 or 71.47 based on the corporation's expenses. The corporation
12may not offset any of its tax credits, or tax credit carry forwards, against the tax
13liability of any other member of the combined reporting group to which the
14corporation belongs.
SB197-AA2,18,1615 (b) A combined reporting group that files a group return under this section shall
16determine its net tax liability as follows:
SB197-AA2,18,1817 1. Multiply the amount determined under sub. (6) (i) for the combined reporting
18group by the tax rate under s. 71.27 or 71.46, as appropriate.
SB197-AA2,18,2019 2. From the amount determined under subd. 1., subtract the tax credits under
20ss. 71.28 and 71.47 for all taxpayer members of the combined reporting group.
SB197-AA2,19,2 21(11) Estimated tax payments. (a) For the first 2 taxable years that a group
22return is filed under this section, estimated taxes under ss. 71.29 and 71.48 may be
23paid on a group basis or on a separate basis. The amount of any separate estimated
24taxes paid in the first 2 taxable years that a group return is filed shall be credited
25against the group's tax liability. The designated agent shall notify the department

1of any estimated taxes paid on a separate basis in the first 2 taxable years that a
2group return is filed.
SB197-AA2,19,153 (b) If a group return is filed for 2 consecutive taxable years, estimated taxes
4under ss. 71.29 and 71.48 shall be paid on a group basis for each subsequent taxable
5year until such time as separate returns are filed by the corporations that were
6members of a combined reporting group that filed group returns under this section.
7For each taxable year in which combined estimated taxes are paid under this
8subsection, the department shall consider the combined reporting group filing a
9group return to be one taxpayer for purposes of computing interest on the
10underpayment of estimated taxes. If a corporation subject to this section files a
11separate return in a taxable year following a year in which the corporation joined in
12filing a group return, the amount of any estimated tax payments made on a group
13basis for the previous year shall be credited against the tax liability of the corporation
14that files a separate return, as allocated by the designated agent with the
15department's approval.
SB197-AA2,19,2016 (c) If a combined reporting group pays estimated taxes on a group basis for a
17taxable year or for any part of a taxable year, and the members of the combined
18reporting group file separate returns for the taxable year, the designated agent, with
19the department's approval, shall allocate the estimated tax payments among the
20members of the combined reporting group.
SB197-AA2,19,2521 (d) If estimated taxes are paid on a group basis for a taxable year but the group
22does not file a group return for the taxable year and did not file a group return for
23the previous taxable year, the estimated tax shall be credited to the member of the
24combined reporting group that made the estimated tax payment on the group's
25behalf.
SB197-AA2,20,3
1(e) If a combined reporting group that will file a group return applies for a
2refund of estimated taxes under s. 71.29 (3m), the department shall determine the
3combined reporting group's eligibility for a refund on a group basis.
SB197-AA2,20,6 4(12) Interest for underpayment of estimated tax. (a) General. The amount
5of interest that is due for an underpayment of estimated taxes under sub. (11) shall
6be computed as follows:
SB197-AA2,20,107 1. For the first year in which a combined reporting group files a group return,
8the amount of interest that is due for an underpayment of estimated taxes shall be
9determined by using the aggregate of the tax and income shown on the returns filled
10by the members of the combined reporting group for the previous year.
SB197-AA2,20,1511 2. For any year in which a combined reporting group files a group return, the
12department shall determine if the combined reporting group qualifies for the
13exception to interest under s. 71.29 (7) (b) by using the aggregate of the amount of
14the tax liability and the amount of the net income of all members of the combined
15reporting group.
SB197-AA2,20,2016 3. For any year in which a combined reporting group files a group return, the
17department shall determine if the installment provisions under s. 71.29 (9) or (10)
18apply to the combined reporting group by using the aggregate of the amount of the
19tax liability and the amount of the net income of all members of the combined
20reporting group.
SB197-AA2,21,221 4. For estimated taxes paid under sub. (11) (c), the amount of interest that is
22due from a member of a combined reporting group for an underpayment of estimated
23taxes paid by the member shall be determined by using the member's separate items
24from the group return filed for the previous year and the member's allocated share
25of the combined estimated tax payments for the current year. The designated agent

1shall report the member's allocated share of the combined estimated tax payments
2for the current year to the department, in the manner prescribed by the department.
SB197-AA2,21,63 (b) Entering a group. If a corporation becomes a member of a combined
4reporting group during a common accounting period under sub. (4), the combined
5reporting group shall make the following adjustments to determine the amount of
6interest that is due for an underpayment of estimated taxes:
SB197-AA2,21,117 1. If a corporation becomes a member of a combined reporting group at the
8beginning of a common accounting period, the combined reporting group shall
9include with the corresponding items on the group return for the previous common
10accounting period the separate items shown on the corporation's return for the
11previous taxable year.
SB197-AA2,21,1612 2. If a corporation is not a member of a combined reporting group for an entire
13common accounting period, the combined reporting group shall include with the
14corresponding items on the group return for the current taxable year the
15corporation's separate items for that portion of the common accounting period that
16the corporation was not a member of the combined reporting group.
SB197-AA2,21,2217 3. To determine the separate items under subds. 1. and 2., if a corporation is
18a member of a combined reporting group during a portion of a common accounting
19period in which the corporation becomes a member of another combined reporting
20group, the corporation's separate items shall include the separate items that are
21attributed to the corporation by the designated agent of the first combined reporting
22group.
SB197-AA2,22,223 (c) Leaving a group. If a corporation leaves a combined reporting group during
24a common accounting period under sub. (4), the combined reporting group shall make

1the following adjustments to determine the amount of interest that is due for an
2underpayment of estimated taxes:
SB197-AA2,22,73 1. If a corporation leaves a combined reporting group before the first day of a
4common accounting period, the combined reporting group shall exclude the separate
5items that the designated agent of the combined reporting group attributed to the
6corporation for the preceding common accounting period from the corresponding
7items of the combined reporting group for the preceding common accounting period.
SB197-AA2,22,128 2. If a corporation leaves a combined reporting group after the first day of a
9common accounting period, the combined reporting group shall exclude the separate
10items that the designated agent of the combined reporting group attributed to the
11corporation for the common accounting period from the corresponding items of the
12combined reporting group for the current common accounting period.
SB197-AA2,22,2013 3. A corporation that leaves a combined reporting group shall use the separate
14items that the designated agent of the combined reporting group attributed to the
15corporation to determine the amount of interest that is owed for any underpayment
16of estimated taxes under sub. (11) for the first taxable year beginning after the day
17that the corporation leaves the combined reporting group or, for a corporation that
18has a different accounting period than the combined reporting group, for the portion
19of the corporation's separate taxable year that remains after the day that the
20corporation leaves the combined reporting group.
SB197-AA2,23,11 21(13) Assessment notice. If the department sends a notice of taxes that are
22owed by a combined reporting group to the designated agent of a combined reporting
23group, the notice shall name each corporation that joined in filing the group return
24related to the notice during any part of the period covered by the notice. The
25department's failure to name a corporation on a notice under this subsection shall

1not invalidate the notice as to the unnamed corporation. Any levy, lien, or other
2proceeding to collect the amount of a tax assessment under this section shall name
3the corporation from which the department shall collect the assessment. If a
4corporation that joined in the filing of a group return leaves the combined reporting
5group, the department shall send the corporation a copy of any notice sent to the
6combined reporting group under this subsection if the corporation notifies the
7department that the corporation is no longer a member of the combined reporting
8group and if the corporation requests in writing that the department send notices
9under this subsection to the corporation. The department's failure to comply with
10a corporation's request to receive a notice does not affect the tax liability of the
11corporation.
SB197-AA2,23,17 12(14) Liability for tax, interest, and penalty. If members of a combined
13reporting group file a group return, the members of the combined reporting group
14shall be jointly and severally liable for any combined tax, interest, or penalty. The
15liability of a member of a combined reporting group for any combined tax, interest,
16or penalty shall not be reduced by an agreement with another member of the
17combined reporting group or by an agreement with another person.
SB197-AA2,23,23 18(15) Presumptions and burden of proof. A commonly controlled group shall
19be presumed to be engaged in a unitary business and all of the income of the unitary
20business shall be presumed to be apportionable business income under this section.
21A corporation, partnership, or limited liability company has the burden of proving
22that it is not a member of a commonly controlled group that is subject to this section.
23The department shall promulgate rules to implement this subsection.
SB197-AA2,24,3 24(16) Information. (a) A member of a commonly controlled group shall retain
25any information, and provide such information to the department at the

1department's request, that the department considers necessary to administer this
2section, including all documents submitted to or obtained from the Internal Revenue
3Service or other states regarding income and taxing jurisdiction.
SB197-AA2,24,84 (b) A member of a commonly controlled group shall identify, at the department's
5request, the name, job title, and address of the member's principal officers or
6employees who have substantial knowledge of, and access to, documents that specify
7the pricing policies, profit centers, cost centers, and methods of allocating income and
8expenses among cost centers related to the operations of the member.
SB197-AA2,24,139 (c) A member of a commonly controlled group shall retain all information
10provided under par. (a) during any period for which the member's tax liability to this
11state is subject to adjustment, including any period in which the state may assess
12additional income or franchise taxes, an appeal of the member's tax assessment is
13pending, or a suit related to the member's tax liability is pending.
SB197-AA2,24,18 14(17) Corporations not filing. If a corporation that is required to report under
15this section directly or indirectly owns or controls any other corporation, or is directly
16or indirectly owned or controlled by another corporation, the department may
17require that such other corporations join in filing a combined report under this
18section.
SB197-AA2, s. 26e 19Section 26e. 71.26 (3) (x) of the statutes is amended to read:
SB197-AA2,24,2420 71.26 (3) (x) Sections 1501 to 1505, 1551, 1552, 1563 and 1564 (relating to
21consolidated returns) are excluded, except to the extent that they pertain to
22intercompany transactions and the carry forward of net business loss under s. 71.255
23and except that they are modified so that more than 50% ownership is substituted
24for at least 80% ownership
.
SB197-AA2, s. 26f 25Section 26f. 71.26 (4) of the statutes is amended to read:
SB197-AA2,25,17
171.26 (4) Net business loss carry-forward. A corporation, except a tax-option
2corporation or an insurer to which s. 71.45 (4) applies, may offset against its
3Wisconsin net business income any Wisconsin net business loss sustained in any of
4the next 15 preceding taxable years, if the corporation was subject to taxation under
5this chapter in the taxable year in which the loss was sustained, to the extent not
6offset by other items of Wisconsin income in the loss year and by Wisconsin net
7business income of any year between the loss year and the taxable year for which an
8offset is claimed. For purposes of this subsection Wisconsin net business income or
9loss shall consist of all the income attributable to the operation of a trade or business
10in this state, less the business expenses allowed as deductions in computing net
11income. The Wisconsin net business income or loss of corporations engaged in
12business within and without the state shall be determined under s. 71.255 or 71.25
13(6) and (10) to (12). Nonapportionable losses having a Wisconsin situs under s. 71.25
14(5) (b) shall be included in Wisconsin net business loss; and nonapportionable income
15having a Wisconsin situs under s. 71.25 (5) (b), whether taxable or exempt, shall be
16included in other items of Wisconsin income and Wisconsin net business income for
17purposes of this subsection.
SB197-AA2, s. 26g 18Section 26g. 71.29 (2) of the statutes is amended to read:
SB197-AA2,25,2119 71.29 (2) Who shall pay. Every Except as provided in s. 71.255 (11), every
20corporation subject to tax under s. 71.23 (1) or (2) and every virtually exempt entity
21subject to tax under s. 71.125 or 71.23 (1) or (2) shall pay an estimated tax.
SB197-AA2, s. 26h 22Section 26h. 71.44 (1) (a) of the statutes is amended to read:
SB197-AA2,26,1523 71.44 (1) (a) Every Except as provided in par. (e), every corporation, except
24corporations all of whose income is exempt from taxation and except as provided in
25sub. (1m), shall furnish to the department a true and accurate statement, on or before

1March 15 of each year, except that returns for fiscal years ending on some other date
2than December 31 shall be furnished on or before the 15th day of the 3rd month
3following the close of such fiscal year and except that returns for less than a full
4taxable year shall be furnished on or before the date applicable for federal income
5taxes under the internal revenue code, in such manner and form and setting forth
6such facts as the department deems necessary to enforce this chapter. Every
7corporation that is required to furnish a statement under this paragraph and that
8has income that is not taxable under this subchapter shall include with its statement
9a report that identifies each item of its nontaxable income. The statement shall be
10subscribed by the president, vice president, treasurer, assistant treasurer, chief
11accounting officer or any other officer duly authorized so to act. In the case of a return
12made for a corporation by a fiduciary, the fiduciary shall subscribe the return. The
13fact that an individual's name is subscribed on the return shall be prima facie
14evidence that the individual is authorized to subscribe the return on behalf of the
15corporation.
SB197-AA2, s. 26j 16Section 26j. 71.44 (1) (e) of the statutes is created to read:
SB197-AA2,26,1917 71.44 (1) (e) A corporation that is a member of a commonly controlled group,
18as defined in s. 71.255 (1) (d), and engaged in a unitary business, as defined in s.
1971.255 (1) (m), shall file a tax return under s. 71.255.".
SB197-AA2,26,20 204. Page 16, line 2: after that line insert:
SB197-AA2,26,21 21" Section 32d. 71.46 (3) of the statutes is repealed.
SB197-AA2, s. 32e 22Section 32e. 71.48 of the statutes is amended to read:
SB197-AA2,27,3
171.48 Payments of estimated taxes. Sections Except as provided in s.
271.255 (11), ss.
71.29 and 71.84 (2) shall apply to insurers subject to taxation under
3this chapter.
SB197-AA2, s. 32f 4Section 32f. 71.84 (2) (a) of the statutes is amended to read:
SB197-AA2,27,155 71.84 (2) (a) Except as provided in s. 71.29 (7), in the case of any underpayment
6of estimated tax under s. 71.255, 71.29 or 71.48 there shall be added to the aggregate
7tax for the taxable year interest at the rate of 12% per year on the amount of the
8underpayment for the period of the underpayment. For corporations, except as
9provided in par. (b), "period of the underpayment" means the time period from the
10due date of the installment until either the 15th day of the 3rd month beginning after
11the end of the taxable year or the date of payment, whichever is earlier. If 90% of the
12tax shown on the return is not paid by the 15th day of the 3rd month following the
13close of the taxable year, the difference between that amount and the estimated taxes
14paid, along with any interest due, shall accrue delinquent interest under s. 71.91 (1)
15(a).".
SB197-AA2,27,16 165. Page 16, line 13: after that line insert:
SB197-AA2,27,19 17"(2m) Combined reporting. The treatment of sections 71.25 (9) (a), 71.255,
1871.26 (3) (x) and (4), 71.29 (2), 71.44 (1) (e), 71.46 (3), 71.48, and 71.84 (2) (a) of the
19statutes first applies retroactively to taxable years beginning on January 1, 2003.".
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