71.02
71.02
Imposition of tax. 71.02(1)(1) For the purpose of raising revenue for the state and the counties, cities, villages and towns, there shall be assessed, levied, collected and paid a tax on all net incomes of individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds subject to the tax under
s. 71.23 (2), by every natural person residing within the state or by his or her personal representative in case of death, and trusts administered within the state; by every nonresident natural person and trust of this state, upon such income as is derived from property located or business transacted within the state including, but not limited by enumeration, income derived from a limited partner's distributive share of partnership income, income derived from a limited liability company member's distributive share of limited liability company income, the state lottery under
ch. 565, any multistate lottery under
ch. 565 if the winning lottery ticket or lottery share was purchased from a retailer, as defined in
s. 565.01 (6), located in this state or from the department and pari-mutuel wager winnings or purses under
ch. 562, and also by every nonresident natural person upon such income as is derived from the performance of personal services within the state, except as exempted under
s. 71.05 (1) to
(3). Every natural person domiciled in the state shall be deemed to be residing within the state for the purposes of determining liability for income taxes and surtaxes.
71.02(2)
(2) In determining whether or not an individual resides within this state for purposes of this section, the following are not relevant:
71.02(2)(a)
(a) Contributions made to charitable organizations in this state.
71.02(2)(b)
(b) Directorships in corporations operating in this state.
71.02(2)(d)
(d) Corpuses of trusts, in which the individual is a trustee or a beneficiary, located in this state.
71.02(2)(e)
(e) Retention of professional services of brokers, as defined in
s. 408.303, and of attorneys and accountants located in this state.
71.02(3)
(3) This section shall not be construed to prevent or affect the correction of errors or omissions in the assessments of income for former years under
s. 71.74 (1) and
(2).
71.03
71.03
Filing returns; certain claims. 71.03(1)
(1)
Definition. In this section, "gross income" means all income, from whatever source derived and in whatever form realized, whether in money, property or services, which is not exempt from Wisconsin income taxes. "Gross income" includes, but is not limited to, the following items: compensation for services, including salaries, wages and fees, commissions and similar items; gross income derived from business; interest; rents; royalties; dividends; alimony and separate maintenance payments; annuities; income from life insurance and endowment contracts; pensions; income from discharge of indebtedness; distributive shares of partnership gross income except distributive shares of the income of publicly traded partnerships treated as corporations under
s. 71.22 (1); distributive shares of limited liability company gross income except distributive shares of the income of limited liability companies treated as corporations under
s. 71.22 (1); income in respect of a decedent; and income from an interest in an estate or trust. "Gross income" from a business or farm consists of the total gross receipts without reduction for cost of goods sold, expenses or any other amounts. The gross rental amounts received from rental properties are included in gross income without reduction for expenses or any other amounts. "Gross income" from the sale of securities, property or other assets consists of the gross selling price without reduction for the cost of the assets, expenses of sale or any other amounts. "Gross income" from an annuity, retirement plan or profit sharing plan consists of the gross amount received without reduction for the employe's contribution to the annuity or plan.
71.03(2)
(2) Persons required to file; other requirements. The following shall report in accordance with this section:
71.03(2)(a)1.
1. Every natural person domiciled in this state during the entire taxable year having gross income of $5,200 or more if under 65 years of age, or $5,700 or more if 65 years of age or over, or $7,040 or more if the natural person files as a head of household, and every married person who files jointly and is domiciled in this state during the entire taxable year having gross income during the year when the joint gross income of the married person and his or her spouse is $7,200 or more if both are under 65 years of age; $7,700 or more if one spouse is under 65 years of age and the other spouse is 65 years of age or over; or $8,200 or more if both are 65 years of age or over; and every married person who files separately and is domiciled in this state during the entire taxable year and has gross income of $3,420 or more. The department of revenue shall annually adjust the dollar amounts of the filing requirements so as to reflect changes in the standard deduction, the rates under
s. 71.06 or the exemption under
s. 71.07 (8) (a).
71.03(2)(a)2.
2. Every nonresident person and every person who changes domicile into or out of this state during the taxable year shall file a return if the person is unmarried and has gross income of $2,000 or more, or if the person is married and the combined gross income of the person and his or her spouse is $2,000 or more.
71.03(2)(a)3.
3. For taxable years beginning before January 1, 1993, every natural person for whom a deduction from tax under
s. 71.07 (8) (b) is allowable to another taxpayer for the taxable year shall file a return if that natural person has any amount of unearned income and that person has gross income of $550 or more.
71.03(2)(a)4.
4. For taxable years beginning after December 31, 1992, and before January 1, 1994, every natural person for whom a deduction from tax under
s. 71.07 (8) (b) is allowable to another taxpayer for the taxable year shall file a return if that natural person has any amount of unearned income and that person has gross income of $600 or more.
71.03(2)(a)5.
5. For taxable years beginning on or after January 1, 1994, every natural person for whom a deduction from tax under
s. 71.07 (8) (b) is allowable to another taxpayer for the taxable year shall file a return if that natural person has any amount of unearned income and that person has gross income of at least $500 adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the internal revenue code. The department of revenue shall incorporate the changes in the income tax forms and instructions.
71.03(2)(b)
(b)
Deceased person. The executor, administrator or other person charged with the property of a decedent shall file a return of such individual required under this section.
71.03(2)(c)
(c)
Person to make return for individual unable to file. The guardian, custodian or other person charged with the care of the person or property of an individual who is unable to make a return required under this section shall file a return for such individual.
71.03(2)(d)1.1. Except as provided in
subds. 2. and
3. and
par. (e), a husband and a wife may file a joint return for income tax purposes even though one of the spouses has no gross income or no deductions.
71.03(2)(d)2.
2. No joint return may be filed if either the husband or wife at any time during the taxable year is a nonresident alien, unless an election is in effect for the taxable year under section
6013 (g) or (h) of the internal revenue code.
71.03(2)(d)3.
3. No joint return may be filed if the husband and wife have different taxable years, except that if their taxable years begin on the same day and end on different days because of the death of either or both the joint return may be filed with respect to the taxable year of each unless the surviving spouse remarries before the close of his or her taxable year or unless the taxable year of either spouse is a fractional part of a year under section
443 (a) (1) of the internal revenue code.
71.03(2)(e)
(e)
Death of a spouse; joint returns. For the taxable year in which the death of one spouse or both spouses occurs:
71.03(2)(e)1.
1. A joint return may be filed and shall be signed by both the decedent's personal representative and the surviving spouse, if any, if a personal representative is appointed before the last day prescribed by law, including extensions, for filing the return of the surviving spouse.
71.03(2)(e)2.
2. A joint return may be filed by the surviving spouse with respect to both that spouse and the decedent if no return for the taxable year has been filed by the decedent and no personal representative is appointed at the time the joint return is filed or before the last day prescribed by law, including extensions, for filing the return of the surviving spouse.
71.03(2)(e)3.
3. If a personal representative of the decedent is appointed after the filing of the joint return by the surviving spouse, the personal representative may disaffirm the joint return by filing, within one year after the last day prescribed by law for filing the return of the surviving spouse, a separate return for the taxable year of the decedent with respect to which the joint return was filed. If the joint return is disaffirmed, the return filed by the survivor is the survivor's separate return and the tax on the return shall be determined by excluding all items properly includable in the return of the decedent spouse.
71.03(2)(f)
(f)
Election by a spouse. The election under
par. (d) may be made by a spouse if the requirements of section
6013 (f) of the internal revenue code are met.
71.03(2)(g)
(g)
Joint return following separate return. Except as provided in
par. (i), if an individual has filed a separate return for a taxable year for which a joint return could have been filed by the individual and the individual's spouse under
par. (d) or
(e) and the time prescribed by law for timely filing the return for that taxable year has expired, the individual and the individual's spouse may file a joint return for that taxable year. A joint return filed by the husband and wife under this paragraph is their return for that taxable year, and all payments, credits, refunds or other repayments made or allowed with respect to the separate return of each spouse for that taxable year shall be taken into account in determining the extent to which the tax based upon the joint return has been paid. If a joint return is filed under this paragraph, any election, other than the election to file a separate return, made by either spouse in that spouse's separate return for that taxable year with respect to the treatment of any income, deduction or credit of that spouse may not be changed in the filing of the joint return if that election would have been irrevocable if the joint return had not been filed.
71.03(2)(h)
(h)
Death of a spouse after separate return. In the taxable year in which the death of one or both spouses occurs, a joint return may be filed by the decedent's personal representative and the surviving spouse, if any, under this paragraph if one or both spouses filed a separate return for a taxable year for which a joint return could have been filed. If any condition under
par. (i) occurs before a personal representative is appointed, a joint return may not be filed under this paragraph.
71.03(2)(i)
(i)
Election precluded. The election under
par. (g) or
(h) may not be made if any of the following conditions applies:
71.03(2)(i)1.
1. The amount shown as tax upon that joint return is not paid in full at or before the time the joint return is filed.
71.03(2)(i)2.
2. Four or more years from the last day prescribed by law for filing the return for that taxable year have elapsed, determined without regard to any extension of time granted to either spouse.
71.03(2)(i)3.
3. There has been mailed to either spouse, with respect to that taxable year, a notice of adjustment under
ss. 71.74 to
71.77 and the spouse, as to that notice, files a petition for redetermination under
subch. XIV, except that, if both spouses request and the department consents, the election under
par. (g) may be made.
71.03(2)(i)4.
4. Either spouse has commenced a suit in any court for the recovery of any part of the tax for that taxable year.
71.03(2)(i)5.
5. Either spouse has entered into a closing agreement with respect to that taxable year or if any civil or criminal case arising against either spouse with respect to that taxable year has been compromised.
71.03(2)(j)
(j)
Joint return assumed. For purposes of
subchs. XII and
XIII, a joint return is deemed to have been filed under this section if any of the following conditions applies:
71.03(2)(j)1.
1. Both spouses filed separate returns before filing the joint return, on the day when the last separate return was filed, but not earlier than the last day prescribed by law for filing the return of either spouse.
71.03(2)(j)2.
2. Only one spouse filed a separate return before filing the joint return and the other spouse had less than $3,420 of gross income for that taxable year, on the day of the filing of that separate return, but not earlier than the last day prescribed by law for the filing of that separate return.
71.03(2)(j)3.
3. Only one spouse filed a separate return before filing the joint return and the other spouse had $3,420 or more of gross income for that taxable year, on the date the joint return was filed.
71.03(2)(k)
(k)
Filing date assumed. For purposes of
s. 71.75, a joint return filed under this section is deemed to be filed on the last day prescribed by law for filing the return for that taxable year, determined without regard to any extension of time granted to either spouse.
71.03(2)(L)
(L)
Limits extended. If a joint return is filed under this section, the periods of limitations under
ss. 71.74 to
71.77 and
subch. XV on the making of assessments and the beginning of levy or of a proceeding in court for collection shall, with respect to the return, be extended to the extent necessary to include one year immediately after the date of the filing of the joint return, computed without regard to
par. (j).
71.03(2)(m)
(m)
Separate return following joint return. 71.03(2)(m)1.1. Except as provided in
subds. 3. and
5., for a taxable year for which a joint return has been filed, separate returns may be filed by the spouses on or before the last day prescribed by law for timely filing the return of either has elapsed.
71.03(2)(m)2.
2. If a husband and wife change from a joint return to separate returns within the time prescribed in
subd. 1., the tax paid on the joint return shall be allocated between them in proportion to the tax liability shown on each separate return.
71.03(2)(m)3.
3. In the taxable year in which the death of one or both spouses occurs, a separate return may be filed under this paragraph within the time prescribed in
subd. 1., or as provided for a personal representative under
par. (e) if a joint return has been filed under
par. (e) by the surviving spouse or by the decedent's personal representative and the surviving spouse. If a separate return is filed by the surviving spouse or by the decedent's personal representative under this paragraph, the joint return previously filed shall be the separate return of the surviving spouse or the decedent for whom the separate return was not filed, unless both the surviving spouse and the decedent's personal representative file a separate return under this paragraph. The tax on the separate return of the surviving spouse shall be determined by excluding all items properly includable in the separate return of the decedent, and the tax on the separate return of the decedent shall be determined by excluding all items properly includable in the return of the surviving spouse.
71.03(2)(m)4.
4. The time allowed the personal representative to disaffirm the joint return by the filing of a separate return does not establish a new due date for the return of the deceased spouse, and
sub. (8) and
ss. 71.91 and
71.92 apply to that return.
71.03(2)(m)5.
5. A separate return may not be filed unless the amount shown upon that separate return is paid in full on or before the date when the separate return is filed.
71.03(3)
(3) Fractional part of year. If a natural person or fiduciary files a federal income tax return for a fractional part of the year, the person shall file a Wisconsin income tax return for that fractional year. That person shall compute and report income on the basis of the period for which that return is filed, and that fractional year shall constitute a taxable year.
71.03(4)
(4) Election to have department compute tax. 71.03(4)(a)(a) Natural persons whose total income is not in excess of $10,000 and consists entirely of wages subject to withholding for Wisconsin tax purposes and not more than $200 total of dividends, interest and other wages not subject to Wisconsin withholding, and who have elected the Wisconsin standard deduction and have not claimed either the credit for homestead property tax relief or deductions for expenses incurred in earning such income, shall, at their election, not be required to record on their income tax returns the amount of the tax imposed on their Wisconsin taxable income. Married persons shall be permitted this election only if the joint income of the husband and wife does not exceed $10,000, if both report their incomes on the same joint income tax return form, and if both make this election.
71.03(4)(b)
(b) The tax on income reported by persons making the election under
par. (a) shall be computed by the department of revenue. After applying all known applicable credits, the department shall notify the taxpayer by mail of the amount of taxes due or the amount of taxes to be refunded.
71.03(5)
(5) Copy of federal return. To the extent necessary for the administration of the tax imposed by this chapter, when required under rules prescribed or orders issued by the department or upon the written request of the department, natural persons and fiduciaries subject to this chapter shall file with the department a true and complete copy of their federal income tax return and any other return or statement filed with, or made to, or any document received from, the internal revenue service.
71.03(6)(a)(a) Reports required under this section shall be made on or before April 15 following the close of a year referred to in
sub. (2) (a), or if such person's fiscal year is other than the calendar year then on or before the 15th day of the 4th month following the close of such fiscal year, or if the return is for less than a full taxable year on the date applicable for federal income taxes under the internal revenue code, to the department of revenue, in the manner and form prescribed by the department of revenue, whether notified to do so or not. Such persons shall be subject to the same penalties for failure to report as those who receive notice. If the taxpayer is unable to make his or her own return, the return shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of such taxpayer.
71.03(6)(b)
(b) Nothing in this section precludes the department of revenue from requiring any person other than a corporation to file an income tax return when in the judgment of the department a return should be filed.
71.03(6m)
(6m) Time to file claims; no return required. A claim for a credit under
s. 71.07 (3m) or
subch. VIII or
IX that is filed by a natural person who is not required to file a report under
sub. (2) (a) shall be filed on a calendar year basis in conformity with the filing requirements in
subs. (6) and
(7).
71.03(7)
(7) Extension of time to file. Returns of natural persons and fiduciaries that require a statement of amounts or information contained or entered on a corresponding return under the internal revenue code shall be filed within the time fixed under that code for filing of the corresponding federal return. Any extension of time granted by law or by the internal revenue service for the filing of that corresponding federal return extends the time for filing under this chapter if a copy of the taxpayer's application to the internal revenue service requesting the extension is filed with the return under this chapter or if a copy of any request for an extension required by the internal revenue service is filed with the return under this chapter or at an earlier date that the department prescribes by rule and if the taxpayer pays the Wisconsin tax in the manner applicable to federal income taxes under the internal revenue code. Taxes payable upon the filing of the return do not become delinquent during the period of an extension but are subject to interest at the rate of 12% per year during such period except as follows:
71.03(7)(a)
(a) For taxable years beginning after December 31, 1989, and before January 1, 1991, for persons who served in support of Operation Desert Shield, Operation Desert Storm or an operation that is a successor to Operation Desert Shield or Operation Desert Storm in the United States, or for persons who served in Egypt, Israel, Diego Garcia or Germany, or for persons who qualify for a federal extension of time to file under
26 USC 7508, who served outside the United States because of their participation in Operation Desert Shield, Operation Desert Storm or an operation that is a successor to Operation Desert Shield or Operation Desert Storm in the Desert Shield or Desert Storm theater of operations.
71.03(7)(b)
(b) For taxable years beginning after December 31, 1994, and before January 1, 1997, for persons who served in support of Operation Balkan Endeavor or an operation that is a successor to Operation Balkan Endeavor, or for persons who served in Croatia, Bosnia and Herzegovina, Serbia, Macedonia, Montenegro, Hungary, Austria, Slovakia, Czech Republic or Slovenia, or for persons who qualify for a federal extension of time to file under
26 USC 7508, who served outside the United States because of their participation in Operation Balkan Endeavor or an operation that is a successor to Operation Balkan Endeavor in the Balkan Endeavor theater of operations.
71.03(8)(a)(a) All income and franchise taxes shall be paid to the department of revenue, at its office at Madison or at such other place the department designates.
71.03(8)(b)
(b) The final payment of taxes on incomes of persons other than corporations who file on a calendar year basis shall be made on or before April 15 following the close of the calendar year, except for persons electing to have the department compute their tax under
sub. (4). If the return of a person other than a corporation is made on the basis of a fiscal year, such final payment shall be made on or before the 15th day of the 4th month following the close of such fiscal year, except for persons electing to have the department compute their tax under
sub. (4).
71.03(8)(c)
(c) If the taxpayer elects under
sub. (4) (a) to have the department compute the tax on his or her income and the taxpayer files his or her return on or before the date on which such return is required to be filed, the amount of taxes due thereon, as stated in the notice from the department under
sub. (4) (b), shall become delinquent if not paid on or before the due date stated in the notice to the taxpayer. Such amounts of taxes due shall not be subject to any interest, other than extension interest, prior to the date of delinquency. Taxes due on returns filed after the date on which returns are required to be filed shall be deemed delinquent as of the due date of the return.
71.03(8)(d)
(d) The department of revenue shall accept in advance income taxes and surtaxes from taxpayers desirous of making such payments before the same shall become due and payable. Advance payment of taxes under this provision shall not relieve the taxpayer from additional taxes which may result from subsequent legislation or from additional taxable income disclosed or discovered subsequent to such payment.
71.03(8)(e)
(e) No person is required to pay a balance due of less than $1.
71.03 History
History: 1987 a. 312,
411;
1989 a. 31;
1991 a. 3,
39,
269,
301,
305,
315;
1993 a. 16,
112,
204,
213,
491;
1995 a. 255,
428.
71.03 Note
NOTE: 1991 Wis. Act 301, which affected this section, contains extensive legislative council notes.
71.04
71.04
Situs of income; allocation and apportionment. 71.04(1)(a)(a) All income or loss of resident individuals and resident estates and trusts shall follow the residence of the individual, estate or trust. Income or loss of nonresident individuals and nonresident estates and trusts from business, not requiring apportionment under
sub. (4),
(10) or
(11), shall follow the situs of the business from which derived. All items of income, loss and deductions of nonresident individuals and nonresident estates and trusts derived from a tax-option corporation not requiring apportionment under
sub. (9) shall follow the situs of the business of the corporation from which derived. Income or loss of nonresident individuals and nonresident estates and trusts derived from rentals and royalties from real estate or tangible personal property, or from the operation of any farm, mine or quarry, or from the sale of real property or tangible personal property shall follow the situs of the property from which derived. Income from personal services of nonresident individuals, including income from professions, shall follow the situs of the services. A nonresident limited partner's distributive share of partnership income shall follow the situs of the business. A nonresident limited liability company member's distributive share of limited liability company income shall follow the situs of the business. Income of nonresident individuals, estates and trusts from the state lottery under
ch. 565 is taxable by this state. Income of nonresident individuals, estates and trusts from any multistate lottery under
ch. 565 is taxable by this state, but only if the winning lottery ticket or lottery share was purchased from a retailer, as defined in
s. 565.01 (6), located in this state or from the department. Income of nonresident individuals, nonresident trusts and nonresident estates from pari-mutuel winnings or purses under
ch. 562 is taxable by this state. All other income or loss of nonresident individuals and nonresident estates and trusts, including income or loss derived from land contracts, mortgages, stocks, bonds and securities or from the sale of similar intangible personal property, shall follow the residence of such persons, except as provided in
par. (b) and
sub. (9).
71.04(1)(b)
(b) For purposes of determining the situs of income under this section:
71.04(1)(b)1.
1. The situs of income derived by any taxpayer as the beneficiary of the estate of a decedent or of a trust estate shall be determined as if such income had been received without the intervention of a fiduciary.
71.04(1)(b)2.
2. The situs of income received by a trustee, which income, under the internal revenue code, is taxable to the grantor of the trust or to any person other than the trust, shall be determined as if such income had been actually received directly by such grantor or such other person, without the intervention of the trust.
71.04(2)
(2) Part-year resident liability determination. Liability to taxation for income which follows the residence of the recipient, in the case of persons other than corporations, who move into or out of the state within the year, shall be determined for such year on the basis of the income received (or accrued, if on the accrual basis) during the portion of the year that any such person was a resident of Wisconsin. The net income of such person assignable to the state for such year shall be used in determining the income subject to assessment under this chapter.
71.04(3)
(3) Partners and limited liability company members. 71.04(3)(a)(a) Part-year residents, time of residence. Partners or members who are residents of this state for less than a full taxable year shall compute taxes for that year on their share of partnership or limited liability company income or loss under this chapter on the part of the taxable year during which they are residents in the following manner:
71.04(3)(a)1.
1. Assign an equal portion of each item of income, loss or deduction to each day of the partnership's or limited liability company's taxable year.
71.04(3)(a)2.
2. Multiply each daily portion of those items of income, loss or deduction by a fraction that represents the partner's or member's portion, on that day, of the total partnership or limited liability company interest.
71.04(3)(a)3.
3. Net the items of income, loss or deduction, after the calculation under
subd. 2., for all of the days during which the partner or member was a resident of this state.
71.04(3)(b)
(b)
Part-year residents, nonresidents. All partners or members who are residents of this state for less than a full taxable year or who are nonresidents shall compute taxes for that year on their share of partnership or limited liability company income or loss under this chapter for the part of the taxable year during which they are nonresidents by recognizing their proportionate share of all items of income, loss or deduction attributable to a business in, services performed in, or rental of property in, this state.
71.04(3)(c)
(c)
Disregarding agreements. In computing taxes under this chapter a partner or member shall disregard, for purposes of determining the situs of partnership income of partners, all provisions in partnership or limited liability company agreements that do any of the following:
71.04(3)(c)1.
1. Characterize the consideration for payments to the partner or member as services or the use of capital.
71.04(3)(c)2.
2. Allocate to the partner or member, as income from or gain from sources outside this state, a greater proportion of the partner's or member's distributive share of partnership or limited liability company income or gain than the ratio of partnership or company income or gain from sources outside this state to partnership or company income or gain from all sources.
71.04(3)(c)3.
3. Allocate to a partner or member a greater proportion of a partnership or limited liability company item of loss or deduction from sources in this state than the partner's or member's proportionate share of total partnership or company loss or deduction.
71.04(3)(c)4.
4. Determine a partner's or member's distributive share of an item of partnership or limited liability company income, gain, loss or deduction for federal income tax purposes if the principal purpose of that determination is to avoid or evade the tax under this chapter.
