Explanation of agency authority: Section 71.80 (1) (c), Stats., provides that the department may make such regulations as it shall deem necessary in order to carry out chapter 71 of the Wisconsin Statutes, relating to income and franchise taxes. Section 77.65 (3), Stats., provides that the department may promulgate rules to administer compliance with the streamlined sales and use tax agreement. Section 78.79, Stats., provides that the department may promulgate reasonable rules relating to the administration and enforcement of chapter 78 of the Wisconsin Statutes, relating to vehicle and general aviation fuel taxes. This provision applies to the revisions of ss. Tax 4.001, 4.53, and 4.54. Section 125.03 (1), Stats., provides that the department may promulgate rules consistent with chapters 125 and 139 of the Wisconsin Statutes, relating to alcohol beverages regulation and beverage, controlled substances, and tobacco taxes, and to provide for registration of wine collectors and establishing standards of eligibility for registration as a wine collector. This provision applies to the revisions of ss. Tax 7.001, 8.001, 8.03, 9.001, and 9.70. Section 227.11 (2), Stats., provides statutory rule-making authority as follows: (a)
"Each agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute...”(b)
"Each agency authorized to exercise discretion in deciding individual cases may formalize the general policies evolving from its decisions by promulgating the policies as rules …"Related statute or rule: There are no other applicable statutes or rules.
Plain language analysis: As required under sec. 227.29, Wis. Stats., the department performed a complete review of the Wisconsin's Administrative Code as it relates to income, franchise, withholding, excise, sales, and use taxes to determine if the rules are unauthorized, obsolete, unnecessary, duplicative, superseded, in conflict, economically burdensome, or outdated. The report submitted to the legislature's Joint Committee for Review of Administrative Rules on March 31, 2021, identified the following sections as needing updates:
a.
Chapter Tax 1 - General Administrationb.
Chapter Tax 2 - Income Taxation, Returns, Records and Gross Income
Section Tax 2.02: Add reference to the department's new online tool for creating estimated payment vouchers.
Section Tax 2.085: Update rule to be consistent with the department's update to Form 804, Claim for Decedent’s Wisconsin Income Tax Refund. The form may now be submitted with the income tax return when filed instead of waiting to receive the refund check in the mail.
Section Tax 2.67: Eliminate references to Forms A-1 and A-2, which calculate the percentage of income attributable to Wisconsin for multi-state businesses. These forms have been replaced with Schedules A-01 through A-11.
Tax 2.92: Update rule to reflect federal changes to withholding; withholding allowances no longer apply for federal purposes.
Tax 2.99: Repeal this section of the rule since this rule is only useful to those who are eligible to claim new credits, and no new dairy and livestock farm investment credit claims may be made for taxable years beginning after December 31, 2013, pursuant to secs. 71.07 (3n) (g), 71.28 (3n) (g), and 71.47 (3n) (g), Wis. Stats.c.
Chapter Tax 4 - Motor Vehicle and General Aviation Fuel Taxation
Section Tax 4.001: Update email address for excise tax.
Section Tax 4.53: Update rule to direct customers to Form MF-207, Certificate of Authorization for Bulk Alternate Fuel Purchasers, on the department's website.
Section Tax 4.54: Update rule to provide an increased dollar threshold for when the department must describe the reasons for requiring security before obtaining a fuel tax license, and update rule to eliminate certificates of deposit as a form of security since the department no longer accepts such form of security.d.
Chapter Tax 7 - Fermented Malt Beverages
Section Tax 7.001: Update email address for excise tax.e.
Chapter Tax 8 - Intoxicating Liquors
Section Tax 8.001: Update email address for excise tax.
Section Tax 8.03: Update mailing address for new mail stop.f.
Chapter Tax 9 – Cigarette Tax
Section Tax 9.001: Update mailing address for new mail stop.g.
Chapter Tax 11 – Sales and Use Tax
Section Tax 11.32: Remove reference to Form S-218 as this form is discontinued because it was duplicative of Form S-213.
Section Tax 11.63: Update rule to reflect that radio or television stations may be required to collect Wisconsin sales tax if they are a marketplace provider, as provided in 2019 Wisconsin Act 10.
Section Tax 11.66: Remove reference to internet access services as such services are no longer taxable after June 30, 2020, as a result of 2017 Wisconsin Act 59.
Section Tax 11.67: Remove note relating to ruling requests for whether a specific transaction is a sale of a prototype or a research and development service with the prototype transferred incidental to the research and development service as they are no longer received. Any taxpayer can submit a request for ruling as described in the department's Publication 111, How to Get a Private Letter Ruling.
Section Tax 11.68: Remove references to stadium tax as baseball stadium taxes ended March 31, 2020, as provided in 2019 Wisconsin Act 28, and repeal s. Tax 11.68 (4) (fm) as the exemption for sports and entertainment arena facilities no longer applies after July 31, 2019, which is one year after the Secretary of Administration issued certification.h.
Chapter Tax 14 – Homestead Credit
Section Tax 14.03: Update rule to reflect repeal of sec. 46.27, Stats., in 2019 Wisconsin Act 9. Rule will be updated to reference sec. 46.27, 2017 Stats.Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states: Rules in adjacent states would not impact the changes in this proposed rule order.
Summary of factual data and analytical methodologies: No data analysis was used in the preparation of this proposed rule order.
Analysis and supporting documents used to determine effect on small business:
Applicants for fuel tax licenses (sec. Tax 4.54):
Increase the dollar threshold for when the department must describe the reasons for requiring security before obtaining a fuel tax license. The current rule provides that the department must describe the reasons for requiring security if the security is over $100. Current rule also provides that the security amount is equal to the average quarterly fuel tax liability, increased to the next $100. Most fuel tax license applicants have over $1,000 quarterly tax liability. It is anticipated that raising the threshold to $1,000 will not alleviate the department from describing the reasons for requiring security for most applicants.
Eliminate certificates of deposit as a form of security. Certificates of Deposit (CD's) are not an acceptable form of security because an investor may redeem a CD by presenting the account number and their driver's license to the financial institution. The department could be left holding an original CD that has no value. In addition, the department has not accepted such form of security for license applicants since September 30, 2019.Anticipated costs incurred by private sector: This proposed rule does not have a fiscal effect on the private sector.
Effect on small business: This rule order primarily makes changes to reflect current law and administration. However, the changes to sec. Tax 4.54 may affect applicants for a fuel tax license. See the description in the analysis above.
Agency contact person: Please contact Jen Olson at (608) 266-8253 or jennifer.olson@wisconsin.gov, if you have any questions regarding this proposed rule. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Jen Olson
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Text of Rule
SECTION 1. Tax 1.06 is amended to read:
Tax 1.06 Application of federal income tax regulations. To the extent that any provision of the internal revenue code has application in the determination of Wisconsin taxable income, Wisconsin net income, or Wisconsin income or franchise tax or Wisconsin minimum tax or alternative minimum tax of any natural person, fiduciary or corporation, including tax−option (S) corporations, any United States treasury regulation interpreting the provision shall be deemed a tax rule of the Wisconsin Administrative Code.
SECTION 2. Tax 1.13 (1) (b) is amended to read:
Tax 1.13 (1) (b) The power of attorney requirement applies to income, franchise, alternative minimum, withholding, sales and use, county sales and use, estate, motor fuel, general aviation fuel, special fuel, fermented malt beverage, intoxicating liquor, cigarette and tobacco products tax matters of individuals, partnerships and corporations, including (S) corporations, and homestead and farmland preservation credit matters, and unclaimed property matters.
SECTION 3. Tax 2.02 (11) (a) (Note) is created to read:
SECTION 4. Tax 2.085 (1) is repealed and recreated to read:
Tax 2.085 (1) If a claimant is filing a deceased taxpayer's income tax return and is due a refund, the claimant shall file Form 804, "Claim for Decedent's Wisconsin Income Tax Refund," with the income tax return. If the claimant did not file Form 804 with the income tax return, a refund check is issued in the deceased taxpayer's name. If the claimant is unable to cash the refund check, the claimant shall file Form 804.
SECTION 5. Tax 2.085 (3) is amended to read:
Tax 2.085 (3) Forms required to be filed under sub. (1) shall be mailed to Wisconsin Department of Revenue, Tax Operations Bureau — Mail Stop 3−164, P.O. Box 8903, Madison, WI 53708−8903.
SECTION 6. Tax 2.67 (2) (c) 4. is renumbered Tax 2.67 (2) (c) 4. (intro.) and amended to read:
Tax 2.67 (2) (c) 4. (intro.) If the combined group is using apportionment, one Form A−1, Apportionment Data for Single Factor Formulas, or Form A−2, Apportionment Data for Multiple Factor Formulas one of the following forms, per member as applicable.:
SECTION 7. Tax 2.67 (2) (c) 4. a. to k. is created to read:
a. Schedule A-01, Wisconsin Single Sales Factor Apportionment Data for Nonspecialized Industries.
b. Schedule A-02, Wisconsin Apportionment Percentage for Interstate Financial Institutions.
c. Schedule A-03, Wisconsin Apportionment Percentage for Interstate Motor Carriers.
d. Schedule A-04, Wisconsin Apportionment Percentage for Interstate Telecommunications Companies.
e. Schedule A-05, Wisconsin Premium Factor for Insurance Companies.
f. Schedule A-06, Wisconsin Receipts Factor for Interstate Brokers-Dealers, Investment Advisors, Investment Companies, and Underwriters.
g. Schedule A-07, Wisconsin Apportionment Percentage for Interstate Air Carriers.
h. Schedule A-08, Wisconsin Apportionment Percentage for Broadcasters.
i. Schedule A-09, Wisconsin Apportionment Percentage for Interstate Railroads.
j. Schedule A-10, Wisconsin Apportionment Percentage for Interstate Pipeline Companies.
k. Schedule A-11, Wisconsin Apportionment Percentage for Interstate Air Freight Forwarders Affiliated with a Direct Air Carrier.
SECTION 8. Tax 2.92 (1) is repealed and recreated to read:
Tax 2.92 (1) An employee is required to provide a completed Form WT-4, "Employee's Withholding Exemption Certificate/New Hire Reporting," to their employer.
