Amendment SSA3-SB197

SB197-SSA3,25,10 (b) Adjust each member's income, as determined under par. (a), as provided under s. 71.30.

SB197-SSA3,25,16 (c) From the amount determined under par. (b), subtract intercompany transactions, as provided by rule by the department, such that intercompany accounts of assets, liabilities, equities, income, costs, or expenses are excluded from the income determination to accurately reflect the income, the apportionment factors, and the tax credits in a combined report that is filed under this section. An intercompany transaction includes the following:

SB197-SSA3,25,19 1. Income or gain from sales, exchanges, contributions, or other transfers of tangible or intangible property from a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,25,21 2. Annual rent paid by a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,25,23 3. Annual license fees or royalties paid by a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,26,3 4. Loans, advances, receivables, and similar items that one member of the combined reporting group owes to another member of the combined reporting group, including interest income and interest expense related to these items.

SB197-SSA3,26,5 5. Stock or other equity of a member of the combined reporting group that is owned or controlled by another member of the combined reporting group.

SB197-SSA3,26,8 6. Except as provided by rule by the department, dividends paid out of earnings or profits and paid by a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,26,10 7. Management or service fees paid by a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,26,12 8. Income or expenses allocated or charged by a member of the combined reporting group to another member of the combined reporting group.

SB197-SSA3,26,16 (d) From the amount determined under par. (c) for each member of a combined reporting group, subtract nonapportionable income, net of related expenses, and add nonapportionable losses, net of related expenses, to determine each member's apportionable net income or apportionable net loss.

SB197-SSA3,26,19 (e) Calculate the apportionment factors under sub. (7) and multiply each member's apportionable net income or apportionable net loss, as determined under par. (d), by the member's apportionment factor as determined under sub. (7).

SB197-SSA3,26,21 (f) For each corporation, combine the amounts determined under par. (e) for each trade or business.

SB197-SSA3,26,24 (g) To the amounts determined under par. (f), add each member's nonapportionable income attributable to this state and subtract each member's nonapportionable losses attributable to this state.

SB197-SSA3,27,2 (h) If the combined reporting group is not filing a group return, combine the amounts determined under par. (g) for all members of the combined reporting group.

SB197-SSA3,27,5 (i) If the combined reporting group is filing a group return, combine the amounts determined under par. (g) for all members of the combined reporting group that join in filing the group return.

SB197-SSA3,27,7 (j) From the amount determined under par. (h) or (i), as appropriate, subtract the combined reporting group's net operating loss as determined under sub. (8).

SB197-SSA3,27,9 (7) Apportionment factor computation under combined reporting. For the purposes of sub. (2), this state's apportionment factors are determined as follows:

SB197-SSA3,27,12 (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.

SB197-SSA3,27,22 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.

SB197-SSA3,27,24 (b) Subtract intercompany transactions under sub. (6) (c) from both the numerators and the denominators as determined under par. (a).

SB197-SSA3,28,3 (c) Add the denominators of the apportionment factors for each member of the combined reporting group, as determined under par. (b), to arrive at the combined denominator.

SB197-SSA3,28,6 (d) Compute each corporation's apportionment factors by dividing the corporation's numerator as determined under par. (b) by the combined denominator as determined under par. (c).

SB197-SSA3,28,15 (8) Net business loss carry-over. (a) For taxable years beginning after December 31, 2003, 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.

SB197-SSA3,28,19 (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, 2004, if the corporation was not subject to the tax imposed under s. 71.23 or 71.43 for the same taxable year.

SB197-SSA3,29,5 (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, 2004, 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). 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) for the first taxable year beginning after December 31, 2003, 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).

SB197-SSA3,29,15 (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), 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 portions of the common accounting period that are included in the taxpayer member's taxable period shall be aggregated or netted to determine the taxpayer member's apportionable income.

SB197-SSA3,29,17 (10) Net tax liability. (a) A corporation that files a separate return under this section shall determine its net tax liability as follows:

SB197-SSA3,29,19 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.

SB197-SSA3,29,24 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. The 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.

SB197-SSA3,30,2 (b) A combined reporting group that files a group return under this section shall determine its net tax liability as follows:

SB197-SSA3,30,4 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.

SB197-SSA3,30,6 2. From the amount determined under subd. 1., subtract the tax credits under ss. 71.28 and 71.47 for all taxpayer members of the combined reporting group.

SB197-SSA3,30,13 (11) Estimated tax payments. (a) For the first 2 taxable years that a group return is filed under this section, estimated taxes under ss. 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.

SB197-SSA3,31,2 (b) If a group return is filed for 2 consecutive taxable years, estimated taxes under ss. 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.

SB197-SSA3,31,7 (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.

SB197-SSA3,31,12 (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.

SB197-SSA3,31,15 (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.

SB197-SSA3,31,18 (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:

SB197-SSA3,31,22 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.

SB197-SSA3,32,2 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.

SB197-SSA3,32,7 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.

SB197-SSA3,32,14 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.

SB197-SSA3,32,18 (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:

SB197-SSA3,32,23 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.

SB197-SSA3,33,3 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 not a member of the combined reporting group.

SB197-SSA3,33,9 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.

SB197-SSA3,33,13 (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:

SB197-SSA3,33,18 1. If a corporation leaves a combined reporting group before 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 preceding common accounting period from the corresponding items of the combined reporting group for the preceding common accounting period.

SB197-SSA3,33,23 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.

SB197-SSA3,34,6 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. (11) 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.

SB197-SSA3,34,22 (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.

SB197-SSA3,35,3 (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.

SB197-SSA3,35,9 (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.

SB197-SSA3,35,14 (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.

SB197-SSA3,35,19 (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.

SB197-SSA3,35,24 (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.

SB197-SSA3,36,5 (17) Corporations not filing. If a corporation that is required to report under this section directly or indirectly owns or controls any other corporation, or is directly or indirectly owned or controlled by another corporation, the department may require that such other corporations join in filing a combined report under this section.

SB197-SSA3, s. 31 Section 31. 71.26 (3) (x) of the statutes is amended to read:

SB197-SSA3,36,11 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 and except that they are modified so that more than 50% ownership is substituted for at least 80% ownership.

SB197-SSA3, s. 32 Section 32. 71.26 (4) of the statutes is amended to read:

SB197-SSA3,37,4 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.

SB197-SSA3, s. 33 Section 33. 71.29 (2) of the statutes is amended to read:

SB197-SSA3,37,8 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.

SB197-SSA3, s. 34 Section 34. 71.44 (1) (a) of the statutes is amended to read:

SB197-SSA3,38,2 71.44 (1) (a) Every Except as provided in par. (e), every corporation, except corporations all of whose income is exempt from taxation and except as provided in sub. (1m), shall furnish to the department a true and accurate statement, on or before March 15 of each year, except that returns for fiscal years ending on some other date than December 31 shall be furnished on or before the 15th day of the 3rd month following the close of such fiscal year and except that returns for less than a full taxable year shall be furnished on or before the date applicable for federal income taxes under the internal revenue code, in such manner and form and setting forth such facts as the department deems necessary to enforce this chapter. Every corporation that is required to furnish a statement under this paragraph and that has income that is not taxable under this subchapter shall include with its statement a report that identifies each item of its nontaxable income. The statement shall be subscribed by the president, vice president, treasurer, assistant treasurer, chief accounting officer or any other officer duly authorized so to act. In the case of a return made for a corporation by a fiduciary, the fiduciary shall subscribe the return. The fact that an individual's name is subscribed on the return shall be prima facie evidence that the individual is authorized to subscribe the return on behalf of the corporation.

SB197-SSA3, s. 35 Section 35. 71.44 (1) (e) of the statutes is created to read:

SB197-SSA3,38,6 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.

SB197-SSA3, s. 36 Section 36. 71.45 (3) (intro.) of the statutes is amended to read:

SB197-SSA3,38,16 71.45 (3) Apportionment. (intro.) With respect Except as provided in sub. (3d), to determine Wisconsin income for purposes of the franchise tax, domestic insurers not engaged in the sale of life insurance but which that, in the taxable year, have collected received premiums, other than life insurance premiums, written on subjects of for insurance on property or risks resident, located or to be performed outside this state, there shall be subtracted from multiply the net income figure derived by application of sub. (2) (a) to arrive at Wisconsin income constituting the measure of the franchise tax an amount calculated by multiplying such adjusted federal taxable income by the arithmetic average of the following 2 percentages:

SB197-SSA3, s. 37 Section 37. 71.45 (3) (a) of the statutes is amended to read:

SB197-SSA3,39,8 71.45 (3) (a) The Subject to sub. (3d), the percentage of total determined by dividing the sum of direct premiums written on all property and risks for insurance other than life insurance, with respect to all property and risks resident, located, or to be performed in this state, and assumed premiums written for reinsurance, other than life insurance, with respect to all property and risks resident, located, or to be performed in this state, by the sum of direct premiums written for insurance on all property and risks, other than life insurance, wherever located during the taxable year, as reflects, and assumed premiums written on insurance for reinsurance on all property and risks, other than life insurance, where the subject of insurance was resident, located or to be performed outside this state wherever located. In this paragraph, "direct premiums" means direct premiums as reported for the taxable year on an annual statement that is filed by the insurer with the commissioner of insurance under s. 601.42 (1g) (a). In this paragraph, "assumed premiums" means assumed reinsurance premiums from domestic insurance companies as reported for the taxable year on an annual statement that is filed with the commissioner of insurance under s. 601.42 (1g) (a).

SB197-SSA3, s. 38 Section 38. 71.45 (3) (b) of the statutes is renumbered 71.45 (3) (b) 1. and amended to read:

SB197-SSA3,39,15 71.45 (3) (b) 1. The Subject to sub. (3d), the percentage of determined by dividing the payroll, exclusive of life insurance payroll, paid in this state in the taxable year by total payroll, exclusive of life insurance payroll, paid everywhere in the taxable year as reflects such compensation paid outside this state. Compensation.

SB197-SSA3,39,24 2. Under subd. 1., payroll is paid outside in this state if the individual's service is performed entirely outside in this state; or the individual's service is performed both within and without in and outside this state, but the service performed within outside this state is incidental to the individual's service without in this state; or some service is performed without in this state and the base of operations, or if there is no base of operations, the place from which the service is directed or controlled is without in this state, or the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is outside in this state.

SB197-SSA3, s. 39 Section 39. 71.45 (3d) of the statutes is created to read:

SB197-SSA3,40,7 71.45 (3d) Phase in; domestic insurers. (a) Except as provided in par. (d), for taxable years beginning after December 31, 2005, and before January 1, 2007, 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 60% of the fraction and the percentage under sub. (3) (b) 1. representing 40% of the fraction.

SB197-SSA3,40,13 (b) Except as provided in par. (d), for taxable years beginning after December 31, 2006, and before January 1, 2008, 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.

SB197-SSA3,40,17 (c) Except as provided in par. (d), for taxable years beginning after December 31, 2007, 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).

SB197-SSA3,41,2 (d) If a taxpayer who is subject to apportionment under sub. (3) has a net gain of 100 employees in this state in any taxable year beginning after the effective date of this paragraph .... [revisor inserts date], and before January 1, 2008, the taxpayer's remaining net income may, at the taxpayer's option, be apportioned to this state by an apportionment fraction composed of the percentage under sub. (3) (a) beginning with the taxable year in which the employees are hired, except that if the taxpayer does not retain such employees in this state for at least 3 consecutive taxable years, the taxpayer shall apportion the taxpayer's remaining net income as provided under pars. (a) to (c), as appropriate.

SB197-SSA3, s. 40 Section 40. 71.45 (3e) of the statutes is created to read:

SB197-SSA3,41,8 71.45 (3e) Apportionment formula computation. (a) 1. For taxable years beginning before January 1, 2008, 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).

SB197-SSA3,41,12 2. For taxable years beginning after December 31, 2007, 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.

SB197-SSA3,41,17 (b) 1. For taxable years beginning before January 1, 2008, 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.

SB197-SSA3,41,22 2. For taxable years beginning after December 31, 2007, 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.

SB197-SSA3,42,2 (c) 1. For taxable years beginning before January 1, 2008, 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.

SB197-SSA3,42,7 2. For taxable years beginning after December 31, 2007, 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.

SB197-SSA3, s. 41 Section 41. 71.45 (3m) of the statutes is amended to read:

SB197-SSA3,42,16 71.45 (3m) Arithmetic average. The Except as provided in sub. (3d), the arithmetic average of the 2 percentages referred to in sub. (3) shall be applied to the net income figure arrived at by the successive application of sub. (2) (a) and (b) with respect to Wisconsin insurers to which sub. (2) (a) and (b) applies and which have collected received premiums, other than life insurance premiums, written upon for insurance, other than life insurance, where the subject of such insurance was on property or risks resident, located or to be performed outside this state, to arrive at Wisconsin income constituting the measure of the franchise tax.