The rule specifies that the aggregate of the corporations' and the subsidiaries' Wisconsin tax liability is the greater of the Wisconsin tax liability calculated using the alternative apportionment method or the tax liability calculated using the standard apportionment method as if the corporate restructuring had not occurred. These calculations and the calculations using the standard method of apportionment after corporate restructuring must be filed for each taxable year with the returns of the corporation and subsidiaries to the Department's Audit Bureau. This last calculation measures the change in tax revenues attributable to the provision.
Once granted, the alternative apportionment method continues in subsequent years until revoked. If upon audit or review the Department finds that the use of the standard apportionment method no longer results in unfair representation of the degree of business activity in the state, the corporation and subsidiaries must recalculate their Wisconsin tax liabilities for each year the alternative method was used and unfair representation did not exist.
Once the alternative method is granted, unfair representation of business activity continues to exist if there is a substantial amount of difference between the tax liability calculated under the standard apportionment method and the tax liability had the restructuring not occurred. If a substantial difference in tax liability does not exist for three consecutive years, the corporation may no longer use the alternative apportionment method.
If the Department terminates the alternative method, the corporation may request and the Department will resubmit the proposed alternative method to the co-chairpersons of the joint committee for review of administrative rules.
Fiscal Effect
Since the determination to grant an alternative apportionment method is based on projections of income of restructured corporations, the Department does not have actual data to estimate the fiscal effect of this provision. Because a change in a corporation's apportionment ratio could either raise or lower it's tax, the fiscal effect could be positive or negative in any given year. Discussions with other states that have similar provisions indicate that corporations seek changes in apportionment ratio in limited instances, which implies a small fiscal effect. However, apportionment ratio changes can have a substantial effect on a corporation's tax liability, so that the change in any year could be significant.
Administrative Rules Filed With The
Revisor Of Statutes Bureau
The following administrative rules have been filed with the Revisor of Statutes Bureau and are in the process of being published. The date assigned to each rule is the projected effective date. It is possible that the publication of these rules could be delayed. Contact the Revisor of Statutes Bureau at (608) 266-7275 for updated information on the effective dates for the listed rules.
Architects, Landscape Architects, Professional Geologists, Professional Engineers, Designers and Land Surveyors Examining Board
(CR 98-30):
An order affecting chs. A-E 1 to 10, relating to the registration and regulation of architects, landscape architects, professional geologists, professional engineers, designers and land surveyors.
Effective 02-01-99.
An order creating s. Comm 69.18 (2) (a) 2.c., relating to the exemption of elevator access to certain areas within government-owned or -operated buildings or facilities.
Effective 01-01-99.
An order affecting ch. ILHR 57, subch. II, relating to the exemption of accessibility requirements for certain multilevel, multifamily dwelling units.
Effective 01-01-99.
An order affecting ss. Ins 6.58 and 6.59 and ch. Ins 28, relating to the requirements for continuing education for insurance intermediaries.
Effective 02-01-99.
An order affecting ss. Ins 6.59 and 6.61 and ch. Ins 26, relating to the application process and requirements of prelicensing education for insurance agents.
Effective 02-01-99.
An order affecting s. Ins 4.10, relating to changes in the requirements for the Wisconsin Insurance Plan.
Effective 01-01-99.
An order affecting ss. NR 113.05, 113.07, 113.09 and 113.11, relating to septage management.
Effective 02-01-99.
An order affecting chs. NR 12 and 19, relating to the wildlife damage abatement and claims program (WDACP).
Effective 02-01-99.
An order amending s. NR 20.037 (2), relating to readjustment of daily bag limits for walleye in response to tribal harvest.
Effective 02-01-99.
An order amending ss. NR 25.02 (25) and 25.05 (1) (d), relating to commercial fishing for chubs on Lake Michigan.
Effective 02-01-99.
An order affecting ss. NR 46.15, 46.16 and 46.17, relating to the definition of “human residence” as it pertains to the forest tax law landowners.
Effective 01-02-99.
An order affecting ch. Trans 29, relating to accommodating utility facilities on state-owned railroad corridors.
Effective 02-01-99.
The State of Wisconsin
Department of Administration
Bureau of Integrated Document Services
Document Sales and Distribution Section
P.O. Box 7840
Dated Material. Please Do Not Delay!
