AB40-ASA1-AA7,3,2017 71.04 (7) (df) 3. If the taxpayer is not subject to income tax in the state in which
18the gross receipts are considered received under this paragraph, but the taxpayer's
19commercial domicile is in this state, 50 percent of those gross receipts shall be
20included in the numerator of the sales factor.
AB40-ASA1-AA7, s. 1754e 21Section 1754e. 71.04 (7) (dh) 4. of the statutes is created to read:
AB40-ASA1-AA7,4,222 71.04 (7) (dh) 4. If the taxpayer is not subject to income tax in the state in which
23the benefit of the service is received, the benefit of the service is received in this state
24to the extent that the taxpayer's employees or representatives performed services
25from a location in this state. Fifty percent of the taxpayer's receipts that are

1considered received in this state under this paragraph shall be included in the
2numerator of the sales factor.
AB40-ASA1-AA7, s. 1754f 3Section 1754f. 71.04 (7) (dj) of the statutes is repealed.
AB40-ASA1-AA7, s. 1754g 4Section 1754g. 71.04 (7) (dk) of the statutes is repealed.
AB40-ASA1-AA7, s. 1754h 5Section 1754h. 71.04 (8) (a) 1. of the statutes is renumbered 71.04 (8) (a).
AB40-ASA1-AA7, s. 1754j 6Section 1754j. 71.04 (8) (a) 2. of the statutes is repealed.".
AB40-ASA1-AA7,4,8 76. Page 691, line 22: delete the material beginning with that line and ending
8with page 692, line 3.
AB40-ASA1-AA7,4,9 97. Page 692, line 3: after that line insert:
AB40-ASA1-AA7,4,10 10" Section 1755h. 71.05 (6) (a) 24. of the statutes is amended to read:
AB40-ASA1-AA7,4,1511 71.05 (6) (a) 24. The amount deducted or excluded under the Internal Revenue
12Code for interest expenses, and rental expenses, intangible expenses, and
13management fees
that are directly or indirectly paid, accrued, or incurred to, or in
14connection directly or indirectly with one or more direct or indirect transactions with,
15one or more related entities.".
AB40-ASA1-AA7,4,16 168. Page 693, line 11: after that line insert:
AB40-ASA1-AA7,4,17 17" Section 1760d. 71.05 (6) (b) 46. of the statutes is amended to read:
AB40-ASA1-AA7,4,2318 71.05 (6) (b) 46. An amount added, pursuant to par. (a) 24. or s. 71.26 (2) (a) 7.,
1971.34 (1k) (j), or 71.45 (2) (a) 16., to the federal income of a related entity that paid
20interest expenses, or rental expenses , intangible expenses, or management fees to
21the individual or fiduciary, to the extent that the related entity could not offset such
22amount with the deduction allowable under subd. 45. or s. 71.26 (2) (a) 8., 71.34 (1k)
23(k), or 71.45 (2) (a) 17.".
AB40-ASA1-AA7,4,24 249. Page 693, line 12: delete lines 12 to 25.
AB40-ASA1-AA7,5,2
110. Page 694, line 4: delete the material beginning with that line and ending
2with page 696, line 19.
AB40-ASA1-AA7,5,4 311. Page 707, line 11: delete that line and substitute "(b) 1. and 2. (d), (df) 1.
4and 2.
, and (dh) 1., 2., and 3., (dj) 1. and (dk) 1. and research expenses".
AB40-ASA1-AA7,5,6 512. Page 729, line 10: delete the material beginning with that line and ending
6with page 730, line 15.
AB40-ASA1-AA7,5,7 713. Page 730, line 16: delete lines 16 to 25.
AB40-ASA1-AA7,5,8 814. Page 731, line 1: delete lines 1 to 8.
AB40-ASA1-AA7,5,9 915. Page 731, line 8: after that line insert:
AB40-ASA1-AA7,5,10 10" Section 1884d. 71.10 (1) of the statutes is amended to read:
AB40-ASA1-AA7,5,2211 71.10 (1) Allocation of gross income, deductions, credits between 2 or more
12businesses.
In any case of 2 or more organizations, trades or businesses (whether or
13not incorporated, whether or not organized in the United States, and whether or not
14affiliated, and whether or not unitary) owned or controlled directly or indirectly by
15the same interests, the secretary or the secretary's delegate may distribute,
16apportion or allocate gross income, deductions, credits or allowances between or
17among such organizations, trades or businesses, if the secretary determines that
18such distribution, apportionment or allocation is necessary in order to prevent
19evasion of taxes or clearly to reflect the income of any of such organizations, trades
20or businesses. The authority granted under this subsection is in addition to, and not
21a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26
22(2) (a) 7. and 8., 71.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).
AB40-ASA1-AA7, s. 1884e 23Section 1884e. 71.10 (1m) of the statutes is repealed.".
AB40-ASA1-AA7,5,24 2416. Page 731, line 10: delete lines 10 and 11.
AB40-ASA1-AA7,6,2
117. Page 734, line 25: delete the material beginning with that line and ending
2with page 735, line 4.
AB40-ASA1-AA7,6,3 318. Page 735, line 4: after that line insert:
AB40-ASA1-AA7,6,4 4" Section 1889nb. 71.22 (1g) of the statutes is amended to read:
AB40-ASA1-AA7,6,105 71.22 (1g) For purposes of s. 71.25 (9) (df), and (dh), (dj), and (dk), "commercial
6domicile" means the location from which a trade or business is principally managed
7and directed, based on any factors the department determines are appropriate,
8including the location where the greatest number of employees of the trade or
9business work, have their office or base of operations, or from which the employees
10are directed or controlled.
AB40-ASA1-AA7, s. 1889nk 11Section 1889nk. 71.22 (1r) of the statutes is amended to read:
AB40-ASA1-AA7,7,312 71.22 (1r) "Doing business in this state" includes , except as prohibited under
13P.L. 86-272,
issuing credit, debit, or travel and entertainment cards to customers in
14this state; regularly selling products or services of any kind or nature to customers
15in this state that receive the product or service in this state; regularly soliciting
16business from potential customers in this state; regularly performing services
17outside this state for which the benefits are received in this state; regularly engaging
18in transactions with customers in this state that involve intangible property and
19result in receipts flowing to the taxpayer from within this state; holding loans
20secured by real or tangible personal property located in this state;
owning, directly
21or indirectly, a general or limited partnership interest in a partnership that does
22business in this state, regardless of the percentage of ownership; and owning,
23directly or indirectly, an interest in a limited liability company that does business in
24this state, regardless of the percentage of ownership, if the limited liability company

1is treated as a partnership for federal income tax purposes. A taxpayer doing
2business in this state for any part of the taxable year is considered to be doing
3business in this state for the entire taxable year.
AB40-ASA1-AA7, s. 1889nL 4Section 1889nL. 71.22 (1t) of the statutes is amended to read:
AB40-ASA1-AA7,7,95 71.22 (1t) For purposes of s. 71.25 (9) (df), and (dh), (dj), and (dk), "domicile"
6means an individual's true, fixed, and permanent home where the individual intends
7to remain permanently and indefinitely and to which, whenever absent, the
8individual intends to return, except that no individual may have more than one
9domicile at any time.
AB40-ASA1-AA7, s. 1889nm 10Section 1889nm. 71.22 (3g) of the statutes is repealed.
AB40-ASA1-AA7, s. 1889nn 11Section 1889nn. 71.22 (3h) of the statutes is repealed.
AB40-ASA1-AA7, s. 1889np 12Section 1889np. 71.22 (3m) of the statutes is amended to read:
AB40-ASA1-AA7,7,1513 71.22 (3m) For purposes of ss. s. 71.26 (2) (a) 7. and 9. and 71.255 (2) (d) 1.,
14"interest expenses" means interest that would otherwise be deductible under section
15163 of the Internal Revenue Code, as modified under s. 71.26 (3).".
AB40-ASA1-AA7,7,17 1619. Page 751, line 14: delete the material beginning with that line and ending
17with page 753, line 5, and substitute:
AB40-ASA1-AA7,7,18 18" Section 1891e. 71.22 (6d) of the statutes is repealed.
AB40-ASA1-AA7, s. 1891f 19Section 1891f. 71.22 (9g) of the statutes is amended to read:
AB40-ASA1-AA7,7,2320 71.22 (9g) For purposes of s. 71.25 (9) (df), and (dh), (dj), and (dk), "state" means
21a state of the United States, the District of Columbia, the commonwealth of Puerto
22Rico, or any territory or possession of the United States, unless the context requires
23that "state" means only the state of Wisconsin.
AB40-ASA1-AA7, s. 1891g 24Section 1891g. 71.25 (intro.) of the statutes is amended to read:
AB40-ASA1-AA7,8,3
171.25 Situs of income; allocation and apportionment. (intro.) For
2purposes of determining the situs of income under this section and s. 71.255 (5) (a)
31. and 2.
:
AB40-ASA1-AA7, s. 1891h 4Section 1891h. 71.25 (5) (b) of the statutes is renumbered 71.25 (5) (b) 1.
AB40-ASA1-AA7, s. 1891i 5Section 1891i. 71.25 (5) (b) 2. of the statutes is created to read:
AB40-ASA1-AA7,8,116 71.25 (5) (b) 2. All income, gain, or loss from intangible property that is earned
7by a personal holding company, as defined in section 542 of the Internal Revenue
8Code, as amended to December 31, 1974, shall be allocated to the residence of the
9taxpayer, except that all income that is realized from the sale of or purchase and
10subsequent sale or redemption of lottery prizes if the winning tickets were originally
11bought in this state shall be allocated to this state.
AB40-ASA1-AA7, s. 1891j 12Section 1891j. 71.25 (9) (a) of the statutes is amended to read:
AB40-ASA1-AA7,8,2213 71.25 (9) (a) The sales factor is a fraction, the numerator of which is the total
14sales of the taxpayer in this state during the tax period, and the denominator of
15which is the total sales of the taxpayer everywhere during the tax period. For sales
16of tangible personal property, the numerator of the sales factor is the sales of the
17taxpayer during the tax period under par. (b) 1. and 2. plus 100 50 percent of the sales
18of the taxpayer during the tax period under pars. (b) 2m. and 3. and (c). For purposes
19of applying pars. (b) 2m. and 3. and (c), if a taxpayer is within another state's
20jurisdiction for income or franchise tax purposes for any part of the taxable year, it
21is considered to be within that state's jurisdiction for income or franchise tax
22purposes for the entire taxable year.
AB40-ASA1-AA7, s. 1891k 23Section 1891k. 71.25 (9) (d) of the statutes is created to read:
AB40-ASA1-AA7,9,424 71.25 (9) (d) Except as provided in pars. (df) and (dh), sales, other than sales
25of tangible personal property, are in this state if the income-producing activity is

1performed in this state. If the income-producing activity is performed both in and
2outside this state the sales shall be divided between those states having jurisdiction
3to tax such business in proportion to the direct costs of performance incurred in each
4such state in rendering this service.
AB40-ASA1-AA7, s. 1891L 5Section 1891L. 71.25 (9) (df) 3. of the statutes is created to read:
AB40-ASA1-AA7,9,96 71.25 (9) (df) 3. If the taxpayer is not subject to income tax in the state in which
7the gross receipts are considered received under this paragraph, but the taxpayer's
8commercial domicile is in this state, 50 percent of those gross receipts shall be
9included in the numerator of the sales factor.
AB40-ASA1-AA7, s. 1891m 10Section 1891m. 71.25 (9) (dh) 4. of the statutes is created to read:
AB40-ASA1-AA7,9,1611 71.25 (9) (dh) 4. If the taxpayer is not subject to income tax in the state in which
12the benefit of the service is received, the benefit of the service is received in this state
13to the extent that the taxpayer's employees or representatives performed services
14from a location in this state. Fifty percent of the taxpayer's receipts that are
15considered received in this state under this paragraph shall be included in the
16numerator of the sales factor.
AB40-ASA1-AA7, s. 1891n 17Section 1891n. 71.25 (9) (dj) of the statutes is repealed.
AB40-ASA1-AA7, s. 1891p 18Section 1891p. 71.25 (9) (dk) of the statutes is repealed.
AB40-ASA1-AA7, s. 1891q 19Section 1891q. 71.25 (10) (a) 1. of the statutes is renumbered 71.25 (10) (a).
AB40-ASA1-AA7, s. 1891r 20Section 1891r. 71.25 (10) (a) 2. of the statutes is repealed.
AB40-ASA1-AA7, s. 1891s 21Section 1891s. 71.255 of the statutes is repealed.".
AB40-ASA1-AA7,9,22 2220. Page 753, line 17: delete lines 17 to 25.
AB40-ASA1-AA7,9,23 2321. Page 753, line 25: after that line insert:
AB40-ASA1-AA7,9,24 24" Section 1896h. 71.26 (2) (a) 7. of the statutes is amended to read:
AB40-ASA1-AA7,10,5
171.26 (2) (a) 7. Plus the amount deducted or excluded under the Internal
2Revenue Code for interest expenses, and rental expenses, intangible expenses, and
3management fees
that are directly or indirectly paid, accrued, or incurred to, or in
4connection directly or indirectly with one or more direct or indirect transactions with,
5one or more related entities.
AB40-ASA1-AA7, s. 1896k 6Section 1896k. 71.26 (2) (a) 9. of the statutes is amended to read:
AB40-ASA1-AA7,10,127 71.26 (2) (a) 9. Minus the amount added, pursuant to subd. 7. or s. 71.05 (6) (a)
824., 71.34 (1k) (j), or 71.45 (2) (a) 16., to the federal income of a related entity that
9paid interest expenses, or rental expenses, intangible expenses, or management fees
10to the corporation, to the extent that the related entity could not offset such amount
11with the deduction allowable under subd. 8. or s. 71.05 (6) (b) 45., 71.34 (1k) (k), or
1271.45 (2) (a) 17.".
AB40-ASA1-AA7,10,13 1322. Page 755, line 14: after that line insert:
AB40-ASA1-AA7,10,14 14" Section 1897m. 71.26 (3) (x) of the statutes is amended to read:
AB40-ASA1-AA7,10,1815 71.26 (3) (x) Sections 1501 to 1505, 1551, 1552, 1563 and 1564 (relating to
16consolidated returns) are excluded, except that U.S. Treasury Regulation 1.1502-13,
17relating to deferred gain or loss from an intercompany transaction, applies to
18transactions between combined group members under s. 71.255 (4) (g)
.".
AB40-ASA1-AA7,10,20 1923. Page 775, line 15: delete the material beginning with that line and ending
20with page 776, line 13.
AB40-ASA1-AA7,10,21 2124. Page 804, line 16: after that line insert:
AB40-ASA1-AA7,10,22 22" Section 1997d. 71.28 (4) (ad) 1. of the statutes is amended to read:
AB40-ASA1-AA7,11,1323 71.28 (4) (ad) 1. Except as provided in subds. 2. and 3., any corporation may
24credit against taxes otherwise due under this chapter an amount equal to 5 percent

1of the amount obtained by subtracting from the corporation's qualified research
2expenses, as defined in section 41 of the Internal Revenue Code, except that
3"qualified research expenses" includes only expenses incurred by the claimant,
4incurred for research conducted in this state for the taxable year, except that a
5taxpayer may elect the alternative computation under section 41 (c) (4) of the
6Internal Revenue Code and that election applies until the department permits its
7revocation, except as provided in par. (af), and except that "qualified research
8expenses" does not include compensation used in computing the credit under subs.
9(1dj) and (1dx), the corporation's base amount, as defined in section 41 (c) of the
10Internal Revenue Code, except that gross receipts used in calculating the base
11amount means gross receipts from sales attributable to Wisconsin under s. 71.25 (9)
12(b) 1. and 2., (d), (df) 1., and 2., (dh) 1., 2., and 3., (dj), and (dk). Section 41 (h) of the
13Internal Revenue Code does not apply to the credit under this paragraph.
AB40-ASA1-AA7, s. 1997e 14Section 1997e. 71.28 (4) (ad) 2. of the statutes is amended to read:
AB40-ASA1-AA7,12,715 71.28 (4) (ad) 2. For taxable years beginning after June 30, 2007, any
16corporation may credit against taxes otherwise due under this chapter an amount
17equal to 10 percent of the amount obtained by subtracting from the corporation's
18qualified research expenses, as defined in section 41 of the Internal Revenue Code,
19except that "qualified research expenses" includes only expenses incurred by the
20claimant for research related to designing internal combustion engines for vehicles,
21including expenses related to designing vehicles that are powered by such engines
22and improving production processes for such engines and vehicles, incurred for
23research conducted in this state for the taxable year, except that a taxpayer may elect
24the alternative computation under section 41 (c) (4) of the Internal Revenue Code
25and that election applies until the department permits its revocation, except as

1provided in par. (af), and except that "qualified research expenses" does not include
2compensation used in computing the credit under subs. (1dj) and (1dx), the
3corporation's base amount, as defined in section 41 (c) of the Internal Revenue Code,
4except that gross receipts used in calculating the base amount means gross receipts
5from sales attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2., (df) 1. and 2., (dh)
61., 2., and 3., (dj), and (dk)
(d). Section 41 (h) of the Internal Revenue Code does not
7apply to the credit under this paragraph.
AB40-ASA1-AA7, s. 1987ec 8Section 1987ec. 71.28 (4) (ad) 3. of the statutes is amended to read:
AB40-ASA1-AA7,13,29 71.28 (4) (ad) 3. For taxable years beginning after June 30, 2007, any
10corporation may credit against taxes otherwise due under this chapter an amount
11equal to 10 percent of the amount obtained by subtracting from the corporation's
12qualified research expenses, as defined in section 41 of the Internal Revenue Code,
13except that "qualified research expenses" includes only expenses incurred by the
14claimant for research related to the design and manufacturing of energy efficient
15lighting systems, building automation and control systems, or automotive batteries
16for use in hybrid-electric vehicles, that reduce the demand for natural gas or
17electricity or improve the efficiency of its use, incurred for research conducted in this
18state for the taxable year, except that a taxpayer may elect the alternative
19computation under section 41 (c) (4) of the Internal Revenue Code and that election
20applies until the department permits its revocation, except as provided in par. (af),
21and except that "qualified research expenses" does not include compensation used
22in computing the credit under subs. (1dj) and (1dx), the corporation's base amount,
23as defined in section 41 (c) of the Internal Revenue Code, except that gross receipts
24used in calculating the base amount means gross receipts from sales attributable to
25Wisconsin under s. 71.25 (9) (b) 1. and 2., (df) 1. and 2., (dh) 1., 2., and 3., (dj), and

1(dk)
(d). Section 41 (h) of the Internal Revenue Code does not apply to the credit
2under this paragraph.".
AB40-ASA1-AA7,13,4 325. Page 805, line 7: delete that line and substitute "Wisconsin under s. 71.25
4(9) (b) 1. and 2., (d), (df) 1. and 2., and (dh) 1., 2., and 3., (dj), and".
AB40-ASA1-AA7,13,5 526. Page 805, line 8: delete "(dk)" and substitute "(dk)".
AB40-ASA1-AA7,13,7 627. Page 809, line 16: delete the material beginning with that line and ending
7with page 811, line 1.
AB40-ASA1-AA7,13,8 828. Page 811, line 1: after that line insert:
AB40-ASA1-AA7,13,9 9" Section 2011e. 71.30 (2) of the statutes is amended to read:
AB40-ASA1-AA7,13,2110 71.30 (2) Allocation of gross income, deductions, credits between 2 or more
11businesses.
In any case of 2 or more organizations, trades or businesses (whether or
12not incorporated, whether or not organized in the United States, and whether or not
13affiliated, and whether or not unitary) owned or controlled directly or indirectly by
14the same interests, the secretary or his or her delegate may distribute, apportion or
15allocate gross income, deductions, credits or allowances between or among such
16organizations, trades or businesses, if he or she determines that such distribution,
17apportionment or allocation is necessary in order to prevent evasion of taxes or
18clearly to reflect the income of any of such organizations, trades or businesses. The
19authority granted under this subsection is in addition to, and not a limitation of or
20dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26 (2) (a) 7. and 8.,
2171.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).
AB40-ASA1-AA7, s. 2011f 22Section 2011f. 71.30 (2m) of the statutes is repealed.
AB40-ASA1-AA7, s. 2012e 23Section 2012e. 71.34 (1c) of the statutes is repealed.
AB40-ASA1-AA7, s. 2012f 24Section 2012f. 71.34 (1d) of the statutes is repealed.".
AB40-ASA1-AA7,14,1
129. Page 819, line 11: after that line insert:
AB40-ASA1-AA7,14,2 2" Section 2013e. 71.34 (1h) of the statutes is repealed.".
AB40-ASA1-AA7,14,3 330. Page 819, line 12: delete lines 12 to 16.
AB40-ASA1-AA7,14,4 431. Page 819, line 16: after that line insert:
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