AB1-SA1,27,1615 (a) Its share of any business income apportionable to this state of each of the
16combined groups of which it is a member, as determined under subs. (4) and (5).
AB1-SA1,27,1917 (b) Its share of any business income apportionable to this state of a distinct
18business activity conducted in and outside this state wholly by the taxpayer member,
19as determined under s. 71.25.
AB1-SA1,27,2120 (c) Its income from a business conducted wholly by the taxpayer member
21entirely in this state.
AB1-SA1,27,2322 (d) Its income sourced to this state from the sale or exchange of capital or assets
23and from involuntary conversions, as determined under sub. (4) (a) 8.
AB1-SA1,27,2424 (e) Its nonbusiness income or loss allocable to this state.
AB1-SA1,28,2
1(f) Its income or loss allocated or apportioned in an earlier year that is state
2source income during the income year, other than a net business loss carry-forward.
AB1-SA1,28,93 (g) Its net business loss carry-forward. If the taxable income computed under
4this subsection and subs. (4) and (5) results in a loss for a taxpayer member of the
5combined group, the taxpayer member has a net business loss, subject to the net
6business loss limitations and carry-forward provisions in s. 71.26 (4). The business
7loss is applied as a deduction in a subsequent year only if the taxpayer member has
8net income sourced to this state, regardless of whether the taxpayer is a member of
9a combined group in the subsequent year.
AB1-SA1,28,11 10(4) Business income of the combined group. The business income of a
11combined group is determined as follows:
AB1-SA1,28,1512 (a) Compute the sum of the income of each member of the combined group as
13determined for federal income tax purposes, as if the members were not consolidated
14for federal purposes, and modified as provided under s. 71.26. Each member of the
15combined group shall determine its income as follows:
AB1-SA1,28,2016 1. For any member incorporated in the United States, including the District of
17Columbia and any territory or possession of the United States, or included in a
18consolidated federal corporate income tax return, the income included in the total
19income of the combined group is the corporation's taxable income as determined
20under s. 71.26.
AB1-SA1,28,2321 2. Except as provided in subd. 3, for any member not included in subd. 1., the
22income included in the total income of the combined group shall be determined as
23follows:
AB1-SA1,29,3
1a. Each foreign branch or foreign corporation shall prepare a profit and loss
2statement in the currency in which the branch's or corporation's books of account are
3regularly maintained.
AB1-SA1,29,64 b. The member shall adjust any statement prepared under subd. 2. a. to
5conform to the accounting principles generally accepted in the United States for the
6preparation of profit and loss statements.
AB1-SA1,29,97 c. The member shall adjust any statement prepared under subd. 2. a. to
8conform to the tax accounting standards required by the department for the
9administration of this chapter.
AB1-SA1,29,1210 d. Each member of the combined group shall translate its profit and loss
11statements, and the related apportionment factors, into the currency in which the
12parent corporation maintains its books and records.
AB1-SA1,29,1413 e. Each member shall express in U.S. dollars the income apportioned to this
14state.
AB1-SA1,30,215 3. If the department determines that the income determination under this
16subsection reasonably approximates income as determined under s. 71.26, any
17member not included in subd. 1. may determine its income based on a consolidated
18profit and loss statement that includes the member and that is prepared for the
19purpose of filing, by related corporations, with the securities and exchange
20commission. If the member is not required to file with the securities and exchange
21commission, the department may allow, for purposes of this subdivision, the use of
22the consolidated profit and loss statement prepared for reporting to shareholders
23and subject to review by an independent auditor. If a statement described in this
24subdivision does not reasonably approximate income as determined under s. 71.26,
25the department may accept the statement if the member makes appropriate

1adjustments to the statement, as determined by the department, to approximate the
2income determined under s. 71.26.
AB1-SA1,30,53 4. If a unitary business includes income from a pass-through entity, the total
4income of the combined group includes the member's direct and indirect distributive
5share of the pass-through entity's unitary business income.
AB1-SA1,30,106 5. All dividends paid by one member to another are not included in the
7recipients income, if the dividends are paid out of the earnings and profits of the
8unitary business in the current taxable year or in an earlier taxable year. This
9subdivision does not apply to dividends received from members of a unitary business
10that are not a part of the combined group.
AB1-SA1,30,1711 6. Except as provided by the department by rule, business income or loss from
12an intercompany transaction between members of the same combined group shall be
13deferred in a manner similar to 26 CFR 1.1502-13. Upon the occurrence of any of
14the following events, deferred business income or loss resulting from an
15intercompany transaction between members of a combined group shall be included
16in the income of the seller and shall be apportioned as business income earned
17immediately before the event:
AB1-SA1,30,1918 a. The object of the deferred intercompany transaction is sold by the buyer to
19an entity that is not a member of the combined group.
AB1-SA1,30,2220 b. The object of the deferred intercompany transaction is sold by the buyer to
21an entity that is a member of the combined group for use outside the unitary business
22in which the buyer and seller are engaged.
AB1-SA1,30,2423 c. The object of the deferred intercompany transaction is converted by the buyer
24to a use outside the unitary business in which the buyer and seller are engaged.
AB1-SA1,31,2
1d. The buyer and seller are no longer members of the same combined group,
2regardless of whether the members remain a unitary business.
AB1-SA1,31,143 7. A charitable expense incurred by a member of a combined group, to the
4extent allowable as a deduction under section 170 of the Internal Revenue Code,
5shall be subtracted first from the business income of the combined group, subject to
6the income limitations of section 170 of the Internal Revenue Code as it applies to
7the entire business income of the group, and any remaining amount shall be treated
8as a nonbusiness expense allocable to the member that incurred the expense, subject
9to the income limitations of section 170 of the Internal Revenue Code as it applies
10to the nonbusiness income of that member. Any charitable deduction described
11under this subdivision that is allowed as a carryover deduction in a subsequent year
12is considered to be originally incurred in the subsequent year by the same member,
13and this section applies in the subsequent year for purposes of determining the
14allowable deduction in that year.
AB1-SA1,31,1815 8. Gain or loss from the sale or exchange of capital assets, property described
16in section 1231 (a) (3) of the Internal Revenue Code, and property subject to an
17involuntary conversion, is removed from the total separate net income of each
18member of a combined group and is apportioned and allocated as follows:
AB1-SA1,31,2319 a. For short-term capital gains or losses, long-term capital gains or losses,
20gains or losses under section 1231 of the Internal Revenue Code, and involuntary
21conversions, the business gain and loss of all members are combined within each
22class of net business gain or loss and each such class is separately apportioned to each
23member using the member's apportionment percentage determined under sub. (5).
AB1-SA1,32,424 b. Each taxpayer member shall net its apportioned business gain or loss for all
25classes, as determined under subd. 8. a., including any such apportioned business

1gain and loss from other combined groups, against the taxpayer member's
2nonbusiness gain and loss for all classes allocated to this state as provided under
3sections 1231 and 1222 of the Internal Revenue Code, not including nonbusiness
4items allocated to another state.
AB1-SA1,32,85 c. Any resulting state source income or loss, if the loss is not subject to section
61211 of the Internal Revenue Code, of a taxpayer member produced by the
7application of subd. 8. a. and b. shall then be applied to all other state source income
8or loss of that member.
AB1-SA1,32,129d. Any resulting state source loss of a member that is subject to section 1211
10of the Internal Revenue Code shall be carried forward or carried back by that
11member and shall be treated as state source short-term capital loss incurred by that
12member for the year for which the carry-forward or carry-back applies.
AB1-SA1,32,1613 9. Any expense of one member of the unitary business that is directly or
14indirectly attributable to the nonbusiness or exempt income of another member of
15the unitary business shall be allocated to that other member as corresponding
16nonbusiness or exempt expense, as appropriate.
AB1-SA1,32,1917 (b) Subtract any nonbusiness income of the combined group from the amount
18determined under par. (a) and add any nonbusiness expense or loss of the combined
19group to the amount determined under par. (a).
AB1-SA1,32,24 20(5) Taxpayer's share of business income of a combined group. The taxpayer's
21share of the business income apportionable to this state of each combined group of
22which it is a member shall be the product of the business income of the combined
23group as determined under sub. (4) and the taxpayer member's sales factor
24percentage, determined under s. 71.25, modified as follows:
AB1-SA1,33,2
1(a) Include in the numerator the taxpayer member's sales associated with the
2combined group's unitary business in this state.
AB1-SA1,33,63 (b) Include in the numerator the taxpayer member's sales associated with the
4combined group's unitary business to another state in which the taxpayer member
5is not engaged in business, regardless of whether another member of the combined
6group is engaged in business in the other state.
AB1-SA1,33,97 (c) Include in the denominator the sales of all members of the combined group,
8including the taxpayer, that are associated with the combined group's unitary
9business regardless of where that business is located.
AB1-SA1,33,1410 (d) Include sales of a pass-through entity owned directly or indirectly by a
11corporation in proportion to a ratio the numerator of which is the amount of the
12corporation's distributive share of the pass-through entity's unitary income included
13in the income of the combined group in under sub. (4) and the denominator of which
14is the amount of the pass-through entity's total unitary income.
AB1-SA1,33,1515 (e) Exclude sales between members of the combined group.
AB1-SA1,33,1816 (f) If a member of a combined group is not subject to the taxes imposed under
17s. 71.23 because it is not engaged in business in this state, the numerator of the
18member's sales factor is zero.
AB1-SA1,33,23 19(6) Credits and post-apportionment deductions. No tax credit or
20post-apportionment deduction earned by one member of the combined group, but not
21completed, used by, or allowed to that member, may be used in whole or in part by
22another member of the combined group or applied in whole or in part against the total
23income of the combined group.
AB1-SA1,34,10 24(7) Designated agent. (a) For purposes of administering this section, each
25combined group shall appoint a sole designated agent. The designated agent is the

1parent corporation of the combined group, if the parent corporation is a taxpayer
2member of the combined group and the income of the parent corporation is included
3in the combined report. If there is no such parent corporation, the designated agent
4may be appointed by the taxpayer members. If there is no such parent corporation
5and no taxpayer member is appointed, the designated agent is the taxpayer member
6that has the most significant operations in this state on a recurring basis, as
7determined by the department. The designated agent may change only when the
8designated agent is no longer subject to the tax imposed under s. 71.23 (1) or (2), in
9which case the combined group shall notify the department of such a change in the
10manner prescribed by the department.
AB1-SA1,34,1211 (b) The designated agent is responsible for acting on behalf of the taxpayer
12members of the combined group and shall do all of the following:
AB1-SA1,34,1313 1. File with the department a combined report under sub. (1) (b).
AB1-SA1,34,1414 2. File any extensions under s. 71.24.
AB1-SA1,34,1515 3. File any amended combined reports and claims for refund or credit.
AB1-SA1,34,1716 4. Send and receive all correspondence with the department regarding the
17combined report.
AB1-SA1,34,2118 5. Remit all taxes, including estimated taxes, to the department. For purposes
19of computing interest on late payments, all payments remitted are considered to be
20made on a proportionate basis by all taxpayer members of the combined group,
21unless otherwise specified by the designated agent.
AB1-SA1,35,222 6. Participate on behalf of the combined group members in any investigation
23or hearing requested by the department regarding a combined report, produce all
24information requested by the department regarding the combined report, and file

1any appeal related to a combined report. Any appeal filed by the designated agent
2is considered filed by all members of the combined group.
AB1-SA1,35,63 7. Execute any waiver, closing agreement, power of attorney, or other document
4regarding the combined report filed under sub. (1) (b). Any waiver, agreement, or
5document executed by the designated agent is considered executed by all members
6of the combined group.
AB1-SA1,35,97 8. Receive notices regarding the combined report. Any such notice the
8department sends to the designated agent is considered sent to all taxpayer members
9of the combined group.
AB1-SA1,35,1210 9. Receive refunds regarding the combined report. Any such refund shall be
11paid to and in the name of the designated agent and shall discharge any liability of
12the state to any member of the combined group regarding the refund.
AB1-SA1,35,1713 (c) The department may relieve the designated agent from any of the duties
14described in par. (b) to the extent that the duties relate to income, expense, or loss
15that is not includable in the business income of the combined group under sub. (4).
16Unless the department provides for such relief by rule, a designated agent shall
17obtain written approval from the department to be relieved of any such duties.
AB1-SA1,36,3 18(8) Taxable year of the combined group. (a) Except as provided in par. (b), the
19combined group's taxable year is the designated agent's taxable year. If a member's
20taxable year is different from the combined group's taxable year, the designated
21agent may elect to determine the portion of each member's income to be included in
22the combined report either from a separate income statement from each member that
23is prepared by the member's books and records for the months that are included in
24the combined group's taxable year or by including in the combined report all of the
25income of each member for the year that ends during the combined group's taxable

1year. Any election made under this paragraph remains in effect for subsequent years
2unless the designated agent submits a request to the department to change the
3election and the department approves in writing.
AB1-SA1,36,64 (b) If 2 or more members of a combined group file a federal consolidated return,
5the combined group's taxable year is the taxable year that corresponds to the federal
6consolidated return.
AB1-SA1,36,13 7(9) Part-year members of a combined group. If a corporation becomes a
8member of a combined group, or ceases to be a member of a combined group, after
9the beginning of the combined group's taxable year, the corporation's income shall
10be determined as provided under subs. (3), (4), and (5) for that portion of the year in
11which the corporation was a member of the combined group, and the income shall be
12included in the combined report. The income for the remaining short period shall be
13reported on a separate return or separate combined report.
AB1-SA1,36,18 14(10) Presumptions and burden of proof. A commonly controlled group is
15presumed to be engaged in a unitary business and all of the income of the unitary
16business is presumed to be apportionable business income under this section. A
17corporation has the burden of proving that it is not a member of a combined group
18that is subject to this section.
AB1-SA1, s. 9de 19Section 9de. 71.26 (1m) (j) of the statutes is created to read:
AB1-SA1,36,2020 71.26 (1m) (j) Those issued under s. 59.58 (6) (f).
AB1-SA1, s. 9df 21Section 9df. 71.26 (3) (x) of the statutes is amended to read:
AB1-SA1,36,2522 71.26 (3) (x) Sections 1501 to 1505, 1551, 1552, 1563 and 1564 (relating to
23consolidated returns) are excluded, except as provided under section 1502 of the U.S.
24treasury regulations as it relates to deferred gain or loss from an intercompany
25transaction under s. 71.255 (4) (a) 6
.
AB1-SA1, s. 9dg
1Section 9dg. 71.27 (1) of the statutes is amended to read:
AB1-SA1,37,32 71.27 (1) The taxes to be assessed, levied and collected upon Wisconsin net
3incomes of corporations shall be computed at the rate of 7.9% 7.8 percent.
AB1-SA1, s. 9dh 4Section 9dh. 71.27 (2) of the statutes is amended to read:
AB1-SA1,37,65 71.27 (2) The corporation franchise tax imposed under s. 71.23 (2) and
6measured by Wisconsin net income shall be computed at the rate of 7.9% 7.8 percent.
AB1-SA1, s. 9di 7Section 9di. 71.28 (5e) (b) of the statutes is amended to read:
AB1-SA1,37,158 71.28 (5e) (b) Filing claims. Subject to the limitations provided in this
9subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first
10taxable year following the taxable year in which the claimant claims an exemption
11a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against
12the taxes imposed under s. 71.23, up to the amount of those taxes, in each taxable
13year for 2 years, the amount certified by the department of commerce that resulted
14from
the claimant claimed as an exemption claiming a deduction under s. 77.54 (48)
1577.585 (9).
AB1-SA1, s. 9dj 16Section 9dj. 71.28 (5e) (c) 1. of the statutes is amended to read:
AB1-SA1,37,1817 71.28 (5e) (c) 1. No credit may be allowed under this subsection unless the
18claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
AB1-SA1, s. 9dk 19Section 9dk. 71.28 (5e) (c) 3. of the statutes is amended to read:
AB1-SA1,37,2320 71.28 (5e) (c) 3. The total amount of the credits and exemptions the sales and
21use tax resulting from the deductions claimed under s. 77.585 (9)
that may be claimed
22by all claimants under this subsection and ss. 71.07 (5e), 71.47 (5e), and 77.54 (48)
2377.585 (9) is $7,500,000, as determined by the department of commerce.
AB1-SA1, s. 9dL 24Section 9dL. 71.45 (1t) (j) of the statutes is created to read:
AB1-SA1,37,2525 71.45 (1t) (j) Those issued under s. 59.58 (6) (f).
AB1-SA1, s. 9dm
1Section 9dm. 71.46 (1) of the statutes is amended to read:
AB1-SA1,38,32 71.46 (1) The taxes to be assessed, levied and collected upon Wisconsin net
3incomes of corporations shall be computed at the rate of 7.9% 7.8 percent.
AB1-SA1, s. 9dn 4Section 9dn. 71.46 (2) of the statutes is amended to read:
AB1-SA1,38,65 71.46 (2) The corporation franchise tax imposed under s. 71.43 (2) and
6measured by Wisconsin net income shall be computed at the rate of 7.9% 7.8 percent.
AB1-SA1, s. 9do 7Section 9do. 71.46 (3) of the statutes is amended to read:
AB1-SA1,38,158 71.46 (3) The tax imposed under this subchapter on each domestic insurer on
9or measured by its entire net income attributable to lines of insurance in this state
10may not exceed 2% 2 percent of the gross premiums, as defined in s. 76.62, received
11during the taxable year by the insurer on all policies on those lines of insurance if
12the subject of that insurance was resident, located or to be performed in this state
13plus 7.9% 7.8 percent of the income that is realized from the sale of or purchase and
14subsequent sale or redemption of lottery prizes if the winning tickets were originally
15bought in this state.
AB1-SA1, s. 9dp 16Section 9dp. 71.47 (5e) (b) of the statutes is amended to read:
AB1-SA1,38,2417 71.47 (5e) (b) Filing claims. Subject to the limitations provided in this
18subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first
19taxable year following the taxable year in which the claimant claims an exemption
20a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against
21the taxes imposed under s. 71.43, up to the amount of those taxes, in each taxable
22year for 2 years, the amount certified by the department of commerce that resulted
23from
the claimant claimed as an exemption claiming a deduction under s. 77.54 (48)
2477.585 (9).
AB1-SA1, s. 9dq 25Section 9dq. 71.47 (5e) (c) 1. of the statutes is amended to read:
AB1-SA1,39,2
171.47 (5e) (c) 1. No credit may be allowed under this subsection unless the
2claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
AB1-SA1, s. 9dr 3Section 9dr. 71.47 (5e) (c) 3. of the statutes is amended to read:
AB1-SA1,39,74 71.47 (5e) (c) 3. The total amount of the credits and exemptions the sales and
5use tax resulting from the deductions claimed under s. 77.585 (9)
that may be claimed
6by all claimants under this subsection and ss. 71.07 (5e), 71.28 (5e), and 77.54 (48)
777.585 (9) is $7,500,000, as determined by the department of commerce.
AB1-SA1, s. 9ds 8Section 9ds. 73.03 (28e) of the statutes is created to read:
AB1-SA1,39,169 73.03 (28e) To participate as a member state of the streamlined sales tax
10governing board which administers the agreement, as defined in s. 77.65 (2) (a), and
11includes having the governing board enter into contracts that are necessary to
12implement the agreement on behalf of the member states, and to allocate a portion
13of the amount collected under ch. 77 through the agreement to the appropriation
14under s. 20.566 (1) (ho) to pay the dues necessary to participate in the governing
15board. The department shall allocate the remainder of such collections to the general
16fund.
AB1-SA1, s. 9dt 17Section 9dt. 73.03 (50) (d) of the statutes is amended to read:
AB1-SA1,39,2518 73.03 (50) (d) In the case of a sole proprietor, signs the form or, in the case of
19other persons, has an individual who is authorized to act on behalf of the person sign
20the form, or, in the case of a single-owner entity that is disregarded as a separate
21entity under section 7701 of the Internal Revenue Code, the person is the owner. Any
22person who may register under this subsection may designate an agent, as defined
23in s. 77.524 (1) (ag), to register with the department under this subsection in the
24manner prescribed by the department. In this paragraph, "sign" has the meaning
25given in s. 77.51 (17r).
AB1-SA1, s. 9dv
1Section 9dv. 73.03 (50b) of the statutes is created to read:
Loading...
Loading...