SB44-SSA1-SA15,1,4 3" Section 1580eb. 71.04 (4) of the statutes is renumbered 71.04 (4) (intro.) and
4amended to read:
SB44-SSA1-SA15,2,115 71.04 (4) Nonresident allocation and apportionment formula. (intro.)
6Nonresident individuals and nonresident estates and trusts engaged in business
7within and without the state shall be taxed only on such income as is derived from
8business transacted and property located within the state. The amount of such
9income attributable to Wisconsin may be determined by an allocation and separate
10accounting thereof, when the business of such nonresident individual or nonresident
11estate or trust within the state is not an integral part of a unitary business, but the
12department of revenue may permit an allocation and separate accounting in any case

1in which it is satisfied that the use of such method will properly reflect the income
2taxable by this state. In all cases in which allocation and separate accounting is not
3permissible, the determination shall be made in the following manner: for all
4businesses except air carriers, financial organizations, pipeline companies, public
5utilities, railroads, sleeping car companies and car line companies there shall first
6be deducted from the total net income of the taxpayer the part thereof (less related
7expenses, if any) that follows the situs of the property or the residence of the
8recipient. The remaining net income shall be apportioned to Wisconsin this state by
9use of an apportionment fraction composed of a sales factor representing 50% of the
10fraction, a property factor representing 25% of the fraction and a payroll factor
11representing 25% of the fraction.
the following:
SB44-SSA1-SA15, s. 1580ec 12Section 1580ec. 71.04 (4) (a) of the statutes is created to read:
SB44-SSA1-SA15,2,1613 71.04 (4) (a) For taxable years beginning before January 1, 2004, an
14apportionment fraction composed of a sales factor under sub. (7) representing 50%
15of the fraction, a property factor under sub. (5) representing 25% of the fraction, and
16a payroll factor under sub. (6) representing 25% of the fraction.
SB44-SSA1-SA15, s. 1580ed 17Section 1580ed. 71.04 (4) (b) of the statutes is created to read:
SB44-SSA1-SA15,2,2118 71.04 (4) (b) For taxable years beginning after December 31, 2003, and before
19January 1, 2005, an apportionment fraction composed of a sales factor under sub. (7)
20representing 60% of the fraction, a property factor under sub. (5) representing 20%
21of the fraction, and a payroll factor under sub. (6) representing 20% of the fraction.
SB44-SSA1-SA15, s. 1580ee 22Section 1580ee. 71.04 (4) (c) of the statutes is created to read:
SB44-SSA1-SA15,3,223 71.04 (4) (c) For taxable years beginning after December 31, 2004, and before
24January 1, 2006, an apportionment fraction composed of a sales factor under sub. (7)

1representing 80% of the fraction, a property factor under sub. (5) representing 10%
2of the fraction, and a payroll factor under sub. (6) representing 10% of the fraction.
SB44-SSA1-SA15, s. 1580ef 3Section 1580ef. 71.04 (4) (d) of the statutes is created to read:
SB44-SSA1-SA15,3,54 71.04 (4) (d) For taxable years beginning after December 31, 2005, an
5apportionment fraction composed of the sales factor under sub. (7).
SB44-SSA1-SA15, s. 1580eg 6Section 1580eg. 71.04 (4) (e) of the statutes is created to read:
SB44-SSA1-SA15,3,137 71.04 (4) (e) For taxable years beginning after December 31, 2003, and before
8January 1, 2006, the apportionment fraction for the remaining net income of a
9financial organization shall include a sales factor that represents more than 50% of
10the apportionment fraction, as determined by rule by the department. For taxable
11years beginning after December 31, 2005, the apportionment fraction for the
12remaining net income of a financial organization is composed of a sales factor, as
13determined by rule by the department.
SB44-SSA1-SA15, s. 1580eh 14Section 1580eh. 71.04 (4m) of the statutes is created to read:
SB44-SSA1-SA15,3,1915 71.04 (4m) Apportionment formula computation. (a) 1. For taxable years
16beginning before January 1, 2006, if both the numerator and the denominator of the
17sales factor under sub. (7) related to a taxpayer's remaining net income are zero, the
18sales factor under sub. (7) is eliminated from the apportionment formula to
19determine the taxpayer's remaining net income under sub. (4).
SB44-SSA1-SA15,3,2320 2. For taxable years beginning after December 31, 2005, if both the numerator
21and the denominator of the sales factor under sub. (7) related to a taxpayer's
22remaining net income are zero, none of the taxpayer's remaining net income is
23apportioned to this state.
SB44-SSA1-SA15,4,324 (b) 1. For taxable years beginning before January 1, 2006, if the numerator of
25the sales factor under sub. (7) related to a taxpayer's remaining net income is a

1negative number and the denominator of the sales factor under sub. (7) related to a
2taxpayer's remaining net income is a positive number, a negative number, or zero,
3the sales factor under sub. (7) is zero.
SB44-SSA1-SA15,4,84 2. For taxable years beginning after December 31, 2005, if the numerator of the
5sales factor under sub. (7) related to a taxpayer's remaining net income is a negative
6number and the denominator of the sales factor under sub. (7) related to a taxpayer's
7remaining net income is a positive number, a negative number, or zero, none of the
8taxpayer's remaining net income is apportioned to this state.
SB44-SSA1-SA15,4,139 (c) 1. For taxable years beginning before January 1, 2006, if the numerator of
10the sales factor under sub. (7) related to a taxpayer's remaining net income is a
11positive number and the denominator of the sales factor under sub. (7) related to a
12taxpayer's remaining net income is zero or a negative number, the sales factor under
13sub. (7) is one.
SB44-SSA1-SA15,4,1814 2. For taxable years beginning after December 31, 2005, if the numerator of the
15sales factor under sub. (7) related to a taxpayer's remaining net income is a positive
16number and the denominator of the sales factor under sub. (7) related to a taxpayer's
17remaining net income is zero or a negative number, all of the taxpayer's remaining
18net income is apportioned to this state.
SB44-SSA1-SA15, s. 1580ej 19Section 1580ej. 71.04 (5) (intro.) of the statutes is amended to read:
SB44-SSA1-SA15,4,2120 71.04 (5) Property factor. (intro.) For purposes of sub. (4) and for taxable
21years beginning before January 1, 2006
:
SB44-SSA1-SA15, s. 1580ek 22Section 1580ek. 71.04 (6) (intro.) of the statutes is amended to read:
SB44-SSA1-SA15,4,2423 71.04 (6) Payroll factor. (intro.) For purposes of sub. (4) and for taxable years
24beginning before January 1, 2006
:
SB44-SSA1-SA15, s. 1580eL 25Section 1580eL. 71.04 (7) (d) of the statutes is amended to read:
SB44-SSA1-SA15,5,8
171.04 (7) (d) Sales, other than sales of tangible personal property, are in this
2state if the income-producing activity is performed in this state. If the
3income-producing activity is performed both in and outside this state the sales shall
4be divided between those states having jurisdiction to tax such business in
5proportion to the direct costs of performance incurred in each such state in rendering
6this service. Services performed in states which do not have jurisdiction to tax the
7business shall be deemed to have been performed in the state to which compensation
8is allocated by sub. s. 71.04 (6) , 2001 stats.
SB44-SSA1-SA15, s. 1580em 9Section 1580em. 71.04 (8) (b) of the statutes is renumbered 71.04 (8) (b) 1. and
10amended to read:
SB44-SSA1-SA15,5,1711 71.04 (8) (b) 1. "Public For taxable years beginning before January 1, 2004,
12"public
utility", as used in this section, means any business entity described under
13subd. 2. and
any business entity which owns or operates any plant, equipment,
14property, franchise, or license for the transmission of communications or the
15production, transmission, sale, delivery, or furnishing of electricity, water or steam,
16the rates of charges for goods or services of which have been established or approved
17by a federal, state or local government or governmental agency. " Public
SB44-SSA1-SA15,5,23 182. In this section, for taxable years beginning after December 31, 2003, "public
19utility" also means any business entity providing service to the public and engaged
20in the transportation of goods and persons for hire, as defined in s. 194.01 (4),
21regardless of whether or not the entity's rates or charges for services have been
22established or approved by a federal, state or local government or governmental
23agency.
SB44-SSA1-SA15, s. 1580en 24Section 1580en. 71.04 (8) (c) of the statutes is amended to read:
SB44-SSA1-SA15,6,5
171.04 (8) (c) The net business income of railroads, sleeping car companies, car
2line companies, pipeline companies, financial organizations, air carriers, and public
3utilities requiring apportionment shall be apportioned pursuant to rules of the
4department of revenue, but the income taxed is limited to the income derived from
5business transacted and property located within the state.
SB44-SSA1-SA15, s. 1580ep 6Section 1580ep. 71.04 (10) of the statutes is amended to read:
SB44-SSA1-SA15,6,177 71.04 (10) Department may waive factor. Where, in the case of any nonresident
8individual or nonresident estate or trust engaged in business within in and without
9the
outside of this state of Wisconsin and required to apportion its income as provided
10in this section, it shall be shown to the satisfaction of the department of revenue that
11the use of any one of the 3 factors provided under sub. (4) gives an unreasonable or
12inequitable final average ratio because of the fact that such nonresident individual
13or nonresident estate or trust does not employ, to any appreciable extent in its trade
14or business in producing the income taxed, the factors made use of in obtaining such
15ratio, this factor may, with the approval of the department of revenue, be omitted in
16obtaining the final average ratio which is to be applied to the remaining net income.
17This subsection does not apply to taxable years beginning after December 31, 2005.".
SB44-SSA1-SA15,6,18 182. Page 633, line 4: after that line insert:
SB44-SSA1-SA15,6,20 19" Section 1582dpb. 71.25 (6) of the statutes is renumbered 71.25 (6) (intro.)
20and amended to read:
SB44-SSA1-SA15,7,1621 71.25 (6) Allocation and separate accounting and apportionment formula.
22(intro.) Corporations engaged in business within and without the state shall be taxed
23only on such income as is derived from business transacted and property located
24within the state. The amount of such income attributable to Wisconsin may be

1determined by an allocation and separate accounting thereof, when the business of
2such corporation within the state is not an integral part of a unitary business, but
3the department of revenue may permit an allocation and separate accounting in any
4case in which it is satisfied that the use of such method will properly reflect the
5income taxable by this state. In all cases in which allocation and separate accounting
6is not permissible, the determination shall be made in the following manner: for all
7businesses except air carriers, financial organizations, pipeline companies, public
8utilities, railroads, sleeping car companies, car line companies and corporations or
9associations that are subject to a tax on unrelated business income under s. 71.26 (1)
10(a) there shall first be deducted from the total net income of the taxpayer the part
11thereof (less related expenses, if any) that follows the situs of the property or the
12residence of the recipient. The remaining net income shall be apportioned to
13Wisconsin this state by use of an apportionment fraction composed of a sales factor
14under sub. (9) representing 50% of the fraction, a property factor under sub. (7)
15representing 25% of the fraction and a payroll factor under sub. (8) representing 25%
16of the fraction.
the following:
SB44-SSA1-SA15, s. 1582dpc 17Section 1582dpc. 71.25 (6) (a) of the statutes is created to read:
SB44-SSA1-SA15,7,2118 71.25 (6) (a) For taxable years beginning before January 1, 2004, an
19apportionment fraction composed of a sales factor under sub. (9) representing 50%
20of the fraction, a property factor under sub. (7) representing 25% of the fraction, and
21a payroll factor under sub. (8) representing 25% of the fraction.
SB44-SSA1-SA15, s. 1582dpd 22Section 1582dpd. 71.25 (6) (b) of the statutes is created to read:
SB44-SSA1-SA15,8,223 71.25 (6) (b) For taxable years beginning after December 31, 2003, and before
24January 1, 2005, an apportionment fraction composed of a sales factor under sub. (9)

1representing 60% of the fraction, a property factor under sub. (7) representing 20%
2of the fraction, and a payroll factor under sub. (8) representing 20% of the fraction.
SB44-SSA1-SA15, s. 1582dpe 3Section 1582dpe. 71.25 (6) (c) of the statutes is created to read:
SB44-SSA1-SA15,8,74 71.25 (6) (c) For taxable years beginning after December 31, 2004, and before
5January 1, 2006, an apportionment fraction composed of a sales factor under sub. (9)
6representing 80% of the fraction, a property factor under sub. (7) representing 10%
7of the fraction, and a payroll factor under sub. (8) representing 10% of the fraction.
SB44-SSA1-SA15, s. 1582dpf 8Section 1582dpf. 71.25 (6) (d) of the statutes is created to read:
SB44-SSA1-SA15,8,109 71.25 (6) (d) For taxable years beginning after December 31, 2005, an
10apportionment fraction composed of the sales factor under sub. (9).
SB44-SSA1-SA15, s. 1582dpg 11Section 1582dpg. 71.25 (6) (e) of the statutes is created to read:
SB44-SSA1-SA15,8,1812 71.25 (6) (e) For taxable years beginning after December 31, 2003, and before
13January 1, 2006, the apportionment fraction for the remaining net income of a
14financial organization shall include a sales factor that represents more than 50% of
15the apportionment fraction, as determined by rule by the department. For taxable
16years beginning after December 31, 2005, the apportionment fraction for the
17remaining net income of a financial organization is composed of a sales factor, as
18determined by rule by the department.
SB44-SSA1-SA15, s. 1582dph 19Section 1582dph. 71.25 (6m) of the statutes is created to read:
SB44-SSA1-SA15,8,2420 71.25 (6m) Apportionment formula computation. (a) 1. For taxable years
21beginning before January 1, 2006, if both the numerator and the denominator of the
22sales factor under sub. (9) related to a taxpayer's remaining net income are zero, the
23sales factor under sub. (9) is eliminated from the apportionment formula to
24determine the taxpayer's remaining net income under sub. (6).
SB44-SSA1-SA15,9,4
12. For taxable years beginning after December 31, 2005, if both the numerator
2and the denominator of the sales factor under sub. (9) related to a taxpayer's
3remaining net income are zero, none of the taxpayer's remaining net income is
4apportioned to this state.
SB44-SSA1-SA15,9,95 (b) 1. For taxable years beginning before January 1, 2006, if the numerator of
6the sales factor under sub. (9) related to a taxpayer's remaining net income is a
7negative number and the denominator of the sales factor under sub. (9) related to a
8taxpayer's remaining net income is a positive number, a negative number, or zero,
9the sales factor under sub. (9) is zero.
SB44-SSA1-SA15,9,1410 2. For taxable years beginning after December 31, 2005, if the numerator of the
11sales factor under sub. (9) related to a taxpayer's remaining net income is a negative
12number and the denominator of the sales factor under sub. (9) related to a taxpayer's
13remaining net income is a positive number, a negative number, or zero, none of the
14taxpayer's remaining net income is apportioned to this state.
SB44-SSA1-SA15,9,1915 (c) 1. For taxable years beginning before January 1, 2006, if the numerator of
16the sales factor under sub. (9) related to a taxpayer's remaining net income is a
17positive number and the denominator of the sales factor under sub. (9) related to a
18taxpayer's remaining net income is zero or a negative number, the sales factor under
19sub. (9) is one.
SB44-SSA1-SA15,9,2420 2. For taxable years beginning after December 31, 2005, if the numerator of the
21sales factor under sub. (9) related to a taxpayer's remaining net income is a positive
22number and the denominator of the sales factor under sub. (9) related to a taxpayer's
23remaining net income is zero or a negative number, all of the taxpayer's remaining
24net income is apportioned to this state.
SB44-SSA1-SA15, s. 1582dpi 25Section 1582dpi. 71.25 (7) (intro.) of the statutes is amended to read:
SB44-SSA1-SA15,10,2
171.25 (7) Property factor. (intro.) For purposes of sub. (5) (6) and for taxable
2years beginning before January 1, 2006
:
SB44-SSA1-SA15, s. 1582dpj 3Section 1582dpj. 71.25 (8) (intro.) of the statutes is amended to read:
SB44-SSA1-SA15,10,54 71.25 (8) Payroll factor. (intro.) For purposes of sub. (5) (6) and for taxable
5years beginning before January 1, 2006
:
SB44-SSA1-SA15, s. 1582dpjm 6Section 1582dpjm. 71.25 (9) (a) of the statutes is amended to read:
SB44-SSA1-SA15,10,177 71.25 (9) (a) The sales factor is a fraction, the numerator of which is the total
8sales of the taxpayer in this state during the tax period, and the denominator of
9which is the total sales of the taxpayer everywhere during the tax period. For sales
10of tangible personal property, the numerator of the sales factor is the sales of the
11taxpayer during the tax period under par. (b) 1. and 2. plus 50% of the sales of the
12taxpayer during the tax period under pars. (b) 2m. and 3. and (c). For purposes of
13determining the numerator of the sales factor for a member of a combined reporting
14group under s. 71.255 (7), "taxpayer" means the member of a combined reporting
15group, as defined in s. 71.255 (1) (c), that transferred title to tangible personal
16property or, for sales other than sales of tangible personal property, that made the
17sale.
SB44-SSA1-SA15, s. 1582dpk 18Section 1582dpk. 71.25 (9) (d) of the statutes is amended to read:
SB44-SSA1-SA15,11,219 71.25 (9) (d) Sales, other than sales of tangible personal property, are in this
20state if the income-producing activity is performed in this state. If the
21income-producing activity is performed both in and outside this state the sales shall
22be divided between those states having jurisdiction to tax such business in
23proportion to the direct costs of performance incurred in each such state in rendering
24this service. Services performed in states which do not have jurisdiction to tax the

1business shall be deemed to have been performed in the state to which compensation
2is allocated by sub. s. 71.25 (8) , 2001 stats.
SB44-SSA1-SA15, s. 1582dpL 3Section 1582dpL. 71.25 (10) (b) of the statutes is renumbered 71.25 (10) (b)
41. and amended to read:
SB44-SSA1-SA15,11,115 71.25 (10) (b) 1. In this section, for taxable years beginning before January 1,
62004,
"public utility" means any business entity described under subd. 2. and any
7business entity which owns or operates any plant, equipment, property, franchise,
8or license for the transmission of communications or the production, transmission,
9sale, delivery, or furnishing of electricity, water or steam the rates of charges for
10goods or services of which have been established or approved by a federal, state or
11local government or governmental agency. "Public
SB44-SSA1-SA15,11,17 122. In this section, for taxable years beginning after December 31, 2003, "public
13utility" also means any business entity providing service to the public and engaged
14in the transportation of goods and persons for hire, as defined in s. 194.01 (4),
15regardless of whether or not the entity's rates or charges for services have been
16established or approved by a federal, state or local government or governmental
17agency.
SB44-SSA1-SA15, s. 1582dpm 18Section 1582dpm. 71.25 (10) (c) of the statutes is amended to read:
SB44-SSA1-SA15,11,2319 71.25 (10) (c) The net business income of railroads, sleeping car companies, car
20line companies, pipeline companies, financial organizations, air carriers, and public
21utilities requiring apportionment shall be apportioned pursuant to rules of the
22department of revenue, but the income taxed is limited to the income derived from
23business transacted and property located within the state.
SB44-SSA1-SA15, s. 1582dpn 24Section 1582dpn. 71.25 (11) of the statutes is amended to read:
SB44-SSA1-SA15,12,11
171.25 (11) Department may waive factor. Where, in the case of any corporation
2engaged in business within in and without the outside of this state of Wisconsin and
3required to apportion its income as provided in sub. (6), it shall be shown to the
4satisfaction of the department of revenue that the use of any one of the 3 factors
5provided in sub. (6) gives an unreasonable or inequitable final average ratio because
6of the fact that such corporation does not employ, to any appreciable extent in its
7trade or business in producing the income taxed, the factors made use of in obtaining
8such ratio, this factor may, with the approval of the department of revenue, be
9omitted in obtaining the final average ratio which is to be applied to the remaining
10net income. This subsection does not apply to taxable years beginning after
11December 31, 2005.
SB44-SSA1-SA15, s. 1582dpo 12Section 1582dpo. 71.255 of the statutes is created to read:
SB44-SSA1-SA15,12,13 1371.255 Combined reporting. (1) Definitions. In this section:
SB44-SSA1-SA15,12,1714 (a) "Brother-sister parent corporation" means a parent corporation that is a
15member of a commonly controlled group, if any members of the commonly controlled
16group are not connected to the parent corporation by stock ownership or interest
17ownership as described in par. (d).
SB44-SSA1-SA15,12,2018 (b) "Combined report" means a form prescribed by the department that
19specifies the income of each taxpayer member of a commonly controlled group
20operating as a unitary business.
SB44-SSA1-SA15,12,2221 (c) "Combined reporting group" means the members of a commonly controlled
22group that are included in a combined report under sub. (2).
SB44-SSA1-SA15,12,2423 (d) "Commonly controlled group" means any of the following, but does not
24include an insurer that is exempt from taxation under s. 71.45 (1):
SB44-SSA1-SA15,13,6
11. A parent corporation and any corporation or chain of corporations that are
2connected to the parent corporation by direct or indirect ownership by the parent
3corporation if the parent corporation owns stock representing more than 50% of the
4voting power of at least one of the connected corporations or if the parent corporation
5or any of the connected corporations owns stock that cumulatively represents more
6than 50% of the voting power of each of the connected corporations.
SB44-SSA1-SA15,13,97 2. Any 2 or more corporations if a common owner directly or indirectly owns
8stock representing more than 50% of the voting power of the corporations or the
9connected corporations.
SB44-SSA1-SA15,13,1310 3. A partnership or limited liability company if a parent corporation or any
11corporation connected to the parent corporation by common ownership directly or
12indirectly owns more than a 50% interest in the capital and profits of the partnership
13or limited liability company.
SB44-SSA1-SA15,13,1514 4. Any 2 or more corporations if stock representing more than 50% of the voting
15power in each corporation are interests that cannot be separately transferred.
SB44-SSA1-SA15,13,2016 5. Any 2 or more corporations if stock representing more than 50% of the voting
17power in each corporation is directly owned by, or for the benefit of, family members.
18In this subdivision, "family members" means an individual related by blood,
19marriage, or adoption within the 2nd degree of kinship as computed under s. 852.03
20(2), 1995 stats., or the spouse of such an individual.
SB44-SSA1-SA15,13,2521 6. A corporation, partnership, or limited liability company if a parent
22corporation or any corporation connected to the parent corporation by common
23ownership does not hold more than a 50% ownership interest in the corporation,
24partnership, or limited liability company but effectively controls the corporation,
25partnership, or limited liability company.
SB44-SSA1-SA15,14,1
1(e) "Corporation" has the meaning given in s. 71.22 (1) or 71.42 (1).
SB44-SSA1-SA15,14,22 (f) "Department" means the department of revenue.
SB44-SSA1-SA15,14,53 (g) "Designated agent" means the taxpayer member of a commonly controlled
4group who files a group return on behalf of the taxpayer members of a combined
5reporting group.
SB44-SSA1-SA15,14,76 (h) "Group return" means a tax return filed on behalf of the taxpayer members
7of a combined reporting group.
SB44-SSA1-SA15,14,108 (i) "Intercompany transaction" means a transaction between corporations,
9partnerships, or limited liability companies that become members of the same
10combined reporting group immediately after the transaction.
SB44-SSA1-SA15,14,1211 (im) "Partnership" means any entity considered a partnership under section
127701 of the Internal Revenue Code.
SB44-SSA1-SA15,14,1513 (j) "Separate return" means a return filed by a corporation, regardless of
14whether the corporation is a member of a combined reporting group or is required
15to file a tax return under s. 71.24 or 71.44.
SB44-SSA1-SA15,14,1816 (k) "Taxpayer member" means a corporation that is subject to tax under s. 71.23
17(1) or (2) or 71.43, that is a member of a combined reporting group, and that files a
18combined report under this section.
SB44-SSA1-SA15,14,2419 (L) "Top tier corporation" means a member of a commonly controlled group that
20is not connected with a parent corporation by stock ownership or interest ownership
21as described in par. (d), is a parent corporation, or is a brother-sister parent
22corporation, regardless of whether it is doing business in this state or deriving
23income from sources in this state, and regardless of whether its income and
24apportionment factors are excluded from a combined report filed under this section.
SB44-SSA1-SA15,15,9
1(m) "Unitary business" includes the business activities or operations of an
2entity that are of mutual benefit to, integrated with, or dependent upon or that
3contribute to activities of at least one other entity, including transactions that serve
4an operational function, as determined by the department. Two or more businesses
5are presumed to be a unitary business if the businesses have unity of ownership,
6operation, and use as indicated by centralized management or a centralized
7executive force; centralized purchasing, advertising, or accounting; intercorporate
8sales or leases; intercorporate services; intercorporate debts; intercorporate use of
9proprietary materials; interlocking directorates; or interlocking corporate officers.
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