Amendment JR2 AA3-ASA1-AB1

AB1-ASA1-AA3,2,2 71.04 (4) (bg) For taxable years beginning after December 31, 2005, an apportionment fraction composed of the sales factor under sub. (7).".

AB1-ASA1-AA3,2,4 5. Page 65, line 16: delete "2003" and substitute "2002, and before January 1, 2006,".

AB1-ASA1-AA3,2,5 6. Page 65, line 18: delete "55%" and substitute "more than 50%".

AB1-ASA1-AA3,2,9 7. Page 65, line 19: after the period insert "For taxable years beginning after December 31, 2005, the apportionment fraction for the remaining net income of a financial organization is composed of a sales factor, as determined by rule by the department.".

AB1-ASA1-AA3,2,10 8. Page 65, line 19: after that line insert:

AB1-ASA1-AA3,2,11 " Section 170fd. 71.04 (4m) of the statutes is created to read:

AB1-ASA1-AA3,2,16 71.04 (4m) Apportionment formula computation. (a) 1. For taxable years beginning before January 1, 2006, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, the sales factor under sub. (7) is eliminated from the apportionment formula to determine the taxpayer's remaining net income under sub. (4).

AB1-ASA1-AA3,2,20 2. For taxable years beginning after December 31, 2005, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, none of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3,3,2 (b) 1. For taxable years beginning before January 1, 2006, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, the sales factor under sub. (7) is zero.

AB1-ASA1-AA3,3,7 2. For taxable years beginning after December 31, 2005, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, none of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3,3,12 (c) 1. For taxable years beginning before January 1, 2006, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, the sales factor under sub. (7) is one.

AB1-ASA1-AA3,3,17 2. For taxable years beginning after December 31, 2005, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, all of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3, s. 170fe Section 170fe. 71.04 (5) (intro.) of the statutes is amended to read:

AB1-ASA1-AA3,3,20 71.04 (5) Property factor. (intro.) For purposes of sub. (4) and for taxable years beginning before January 1, 2006:

AB1-ASA1-AA3, s. 170fg Section 170fg. 71.04 (6) (intro.) of the statutes is amended to read:

AB1-ASA1-AA3,3,23 71.04 (6) Payroll factor. (intro.) For purposes of sub. (4) and for taxable years beginning before January 1, 2006:

AB1-ASA1-AA3, s. 170fh Section 170fh. 71.04 (7) (d) of the statutes is amended to read:

AB1-ASA1-AA3,4,8 71.04 (7) (d) Sales, other than sales of tangible personal property, are in this state if the income-producing activity is performed in this state. If the income-producing activity is performed both in and outside this state the sales shall be divided between those states having jurisdiction to tax such business in proportion to the direct costs of performance incurred in each such state in rendering this service. Services performed in states which do not have jurisdiction to tax the business shall be deemed to have been performed in the state to which compensation is allocated by sub. s. 71.04 (6) , 1999 stats.".

AB1-ASA1-AA3,4,9 9. Page 66, line 15: after that line insert:

AB1-ASA1-AA3,4,10 " Section 170hd. 71.04 (10) of the statutes is amended to read:

AB1-ASA1-AA3,4,21 71.04 (10) Department may waive factor. Where, in the case of any nonresident individual or nonresident estate or trust engaged in business within and without the state of Wisconsin and required to apportion its income as provided in this section, it shall be shown to the satisfaction of the department of revenue that the use of any one of the 3 factors provided under sub. (4) gives an unreasonable or inequitable final average ratio because of the fact that such nonresident individual or nonresident estate or trust does not employ, to any appreciable extent in its trade or business in producing the income taxed, the factors made use of in obtaining such ratio, this factor may, with the approval of the department of revenue, be omitted in obtaining the final average ratio which is to be applied to the remaining net income. This subsection does not apply to taxable years beginning after December 31, 2005.".

AB1-ASA1-AA3,4,22 10. Page 88, line 4: after "2003," insert "and before January 1, 2005,".

AB1-ASA1-AA3,4,23 11. Page 88, line 5: delete "55%" and substitute "70%".

AB1-ASA1-AA3,4,24 12. Page 88, line 6: on lines 6 and 7, delete "22.5%" and substitute "15%".

AB1-ASA1-AA3,5,1 13. Page 88, line 7: after that line insert:

AB1-ASA1-AA3,5,2 " Section 192gd. 71.25 (6) (bd) of the statutes is created to read:

AB1-ASA1-AA3,5,7 71.25 (6) (bd) For taxable years beginning after December 31, 2004, and before January 1, 2006, an apportionment fraction composed of the sales factor under sub. (7) representing 80% of the fraction, a property factor under sub. (9) representing 10% of the fraction, and a payroll factor under sub. (8) representing 10% of the fraction.

AB1-ASA1-AA3, s. 192gg Section 192gg. 71.25 (6) (bg) of the statutes is created to read:

AB1-ASA1-AA3,5,10 71.25 (6) (bg) For taxable years beginning after December 31, 2005, an apportionment fraction composed of the sales factor under sub. (9).".

AB1-ASA1-AA3,5,12 14. Page 88, line 9: delete "2003" and substitute "2002, and before January 1, 2006".

AB1-ASA1-AA3,5,13 15. Page 88, line 11: delete "55%" and substitute "more than 50%".

AB1-ASA1-AA3,5,17 16. Page 88, line 12: after the period insert "For taxable years beginning after December 31, 2005, the apportionment fraction for the remaining net income of a financial organization is composed of a sales factor, as determined by rule by the department.".

AB1-ASA1-AA3,5,18 17. Page 88, line 12: after that line insert:

AB1-ASA1-AA3,5,19 " Section 192hd. 71.25 (6m) of the statutes is created to read:

AB1-ASA1-AA3,5,24 71.25 (6m) Apportionment formula computation. (a) 1. For taxable years beginning before January 1, 2006, if both the numerator and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income are zero, the sales factor under sub. (9) is eliminated from the apportionment formula to determine the taxpayer's remaining net income under sub. (6).

AB1-ASA1-AA3,6,4 2. For taxable years beginning after December 31, 2005, if both the numerator and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income are zero, none of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3,6,9 (b) 1. For taxable years beginning before January 1, 2006, if the numerator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, the sales factor under sub. (9) is zero.

AB1-ASA1-AA3,6,14 2. For taxable years beginning after December 31, 2005, if the numerator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, none of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3,6,19 (c) 1. For taxable years beginning before January 1, 2006, if the numerator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income is zero or a negative number, the sales factor under sub. (9) is one.

AB1-ASA1-AA3,6,24 2. For taxable years beginning after December 31, 2005, if the numerator of the sales factor under sub. (9) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (9) related to a taxpayer's remaining net income is zero or a negative number, all of the taxpayer's remaining net income is apportioned to this state.

AB1-ASA1-AA3, s. 192hf Section 192hf. 71.25 (7) (intro.) of the statutes is amended to read:

AB1-ASA1-AA3,7,2 71.25 (7) Property factor. (intro.) For purposes of sub. (5) (6) and for taxable years beginning before January 1, 2006:

AB1-ASA1-AA3, s. 192hg Section 192hg. 71.25 (8) (intro.) of the statutes is amended to read:

AB1-ASA1-AA3,7,5 71.25 (8) Payroll factor. (intro.) For purposes of sub. (5) (6) and for taxable years beginning before January 1, 2006:

AB1-ASA1-AA3, s. 192hi Section 192hi. 71.25 (9) (d) of the statutes is amended to read:

AB1-ASA1-AA3,7,14 71.25 (9) (d) Sales, other than sales of tangible personal property, are in this state if the income-producing activity is performed in this state. If the income-producing activity is performed both in and outside this state the sales shall be divided between those states having jurisdiction to tax such business in proportion to the direct costs of performance incurred in each such state in rendering this service. Services performed in states which do not have jurisdiction to tax the business shall be deemed to have been performed in the state to which compensation is allocated by sub. s. 71.25 (8) , 1999 stats.".

AB1-ASA1-AA3,7,15 18. Page 89, line 8: after that line insert:

AB1-ASA1-AA3,7,16 " Section 192kd. 71.25 (11) of the statutes is amended to read:

AB1-ASA1-AA3,8,2 71.25 (11) Department may waive factor. Where, in the case of any corporation engaged in business within and without the state of Wisconsin and required to apportion its income as provided in sub. (6), it shall be shown to the satisfaction of the department of revenue that the use of any one of the 3 factors provided in sub. (6) gives an unreasonable or inequitable final average ratio because of the fact that such corporation does not employ, to any appreciable extent in its trade or business in producing the income taxed, the factors made use of in obtaining such ratio, this factor may, with the approval of the department of revenue, be omitted in obtaining the final average ratio which is to be applied to the remaining net income. This subsection does not apply to taxable years beginning after December 31, 2005.".

AB1-ASA1-AA3,8,3 19. Page 137, line 20: delete lines 20 to 25 and substitute:

AB1-ASA1-AA3,8,9 "71.45 (3d) Phase in; domestic insurers. (a) For taxable years beginning after December 31, 2003, and before January 1, 2005, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by an apportionment fraction composed of the percentage under sub. (3) (a) representing 70% of the fraction and the percentage under sub. (3) (b) 1. representing 30% of the fraction.

AB1-ASA1-AA3,8,15 (b) For taxable years beginning after December 31, 2004, and before January 1, 2006, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by an apportionment fraction composed of the percentage under sub. (3) (a) representing 80% of the fraction and the percentage under sub. (3) (b) 1. representing 20% of the fraction.

AB1-ASA1-AA3,8,19 (c) For taxable years beginning after December 31, 2005, a domestic insurer that is subject to apportionment under sub. (3) and this subsection shall multiply the net income figure derived by the application of sub. (2) by the percentage under sub. (3) (a).

AB1-ASA1-AA3, s. 231fd Section 231fd. 71.45 (3e) of the statutes is created to read:

AB1-ASA1-AA3,9,2 71.45 (3e) Apportionment formula computation. (a) 1. For taxable years beginning before January 1, 2006, if both the numerator and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income are zero, the percentage under sub. (3) (a) is eliminated from the apportionment formula to determine the taxpayer's income under sub. (3).

AB1-ASA1-AA3,9,6 2. For taxable years beginning after December 31, 2005, if both the numerator and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income are zero, none of the taxpayer's net income is apportioned to this state.

AB1-ASA1-AA3,9,11 (b) 1. For taxable years beginning before January 1, 2006, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a negative number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a positive number, a negative number, or zero, the percentage under sub. (3) (a) is zero.

AB1-ASA1-AA3,9,16 2. For taxable years beginning after December 31, 2005, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a negative number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a positive number, a negative number, or zero, none of the taxpayer's net income is apportioned to this state.

AB1-ASA1-AA3,9,21 (c) 1. For taxable years beginning before January 1, 2006, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a positive number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is zero or a negative number, the percentage under sub. (3) (a) is one.

AB1-ASA1-AA3,9,24 2. For taxable years beginning after December 31, 2005, if the numerator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is a positive number and the denominator used to determine the percentage under sub. (3) (a) related to a taxpayer's net income is zero or a negative number, all of the taxpayer's net income is apportioned to this state.".

AB1-ASA1-AA3,10,3 (End)