71.775(1)(a)
(a) "Nonresident" includes an individual who is not domiciled in this state; a partnership, limited liability company, or corporation whose commercial domicile is outside the state; and an estate or a trust that is a nonresident under
s. 71.14 (1) to
(3m).
71.775(1)(b)
(b) "Pass-through entity" means a partnership, a limited liability company, a tax-option corporation, an estate, or a trust that is treated as a pass-through entity for federal income tax purposes.
71.775(2)(a)(a) For the privilege of doing business in this state or deriving income from property located in this state, a pass-through entity that has Wisconsin income for the taxable year that is allocable to a nonresident partner, member, shareholder, or beneficiary shall pay a withholding tax. The amount of the tax imposed under this subsection to be withheld from the income distributable to each nonresident partner, member, shareholder, or beneficiary is equal to the nonresident partner's, member's, shareholder's, or beneficiary's share of income attributable to this state, multiplied by the following:
71.775(2)(a)1.
1. For an individual, an estate, or a trust, the highest tax rate for a single individual for the taxable year under
s. 71.06.
71.775(2)(a)2.
2. For a partnership, a limited liability company, or a corporation, the highest tax rate for the taxable year under
s. 71.27.
71.775(2)(b)
(b) A pass-through entity that is also a member of another pass-through entity is subject to withholding under this subsection and shall pay the tax based on the share of income that is distributable to each of the entity's nonresident partners, members, shareholders, or beneficiaries.
71.775(3)(a)(a) A nonresident partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state shall not be included in determining the withholding under
sub. (2) if any of the following applies:
71.775(3)(a)1.
1. The partner, member, shareholder, or beneficiary is exempt from taxation under this chapter. For purposes of this subdivision, the pass-through entity may rely on a written statement from the partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter, if the pass-through entity attaches a copy of the statement to its return for the taxable year and if the statement specifies the name, address, federal employer identification number, and reason for claiming an exemption for each partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter.
71.775(3)(a)2.
2. The partner, member, shareholder, or beneficiary has no Wisconsin income other than his or her share of income from the pass-through entity that is attributable to this state and his or her share of such income is less than $1,000.
71.775(3)(b)
(b) A pass-through entity that is a joint venture is not subject to the withholding under
sub. (2), if the pass-through entity has elected not to be treated as a partnership under section
761 of the Internal Revenue Code.
71.775(3)(cm)
(cm) A pass-through entity that is a publicly traded partnership, as defined under section
7704 (b) of the Internal Revenue Code, that is treated as a partnership under the Internal Revenue Code is not subject to the withholding under
sub. (2), if the entity files with the department an information return that reports the name, address, taxpayer identification number, and any other information requested by the department for each unit holder with an income in this state from the entity in excess of $500.
71.775(4)(a)(a) Each pass-through entity that is subject to the withholding under
sub. (2) shall pay the amount of the tax withheld to the department no later than:
71.775(4)(a)1.
1. For tax-option corporations, the 15th day of the 3rd month following the close of the taxable year.
71.775(4)(a)2.
2. For partnerships, limited liability companies, estates, and trusts, the 15th day of the 4th month following the close of the taxable year.
71.775(4)(b)1.1. If the pass-through entity has an extension of time to file its return, the tax withheld under
sub. (2) is due on the unextended due date of the entity's return as provided under
s. 71.13 (1),
71.20 (1), or
71.24 (1).
71.775(4)(b)2.
2. A pass-through entity that pays the tax withheld under
sub. (2) as provided under
subd. 1. is not subject to an underpayment of estimated tax under
s. 71.09 or
71.29, if 90 percent of the tax that is due for the current taxable year is paid by the unextended due date or if 100 percent of the tax that is due for the taxable year immediately preceding the current taxable year is paid by the unextended due date and the taxable year immediately preceding the current taxable year was a 12-month period. Interest at the rate of 12 percent shall be imposed on the unpaid amount of the tax withheld under
sub. (2) during any extension period and interest at the rate of 18 percent shall be imposed on the unpaid amount of the tax withheld under
sub. (2) for the period beginning with the extended due date and ending with the date that the unpaid amount is paid in full.
71.775(4)(c)
(c) On or before the due date, including extensions, of the entity's return, a pass-through entity that withholds tax under
sub. (2) shall annually notify each of its nonresident partners, members, shareholders, or beneficiaries of the amount of the tax withheld under
sub. (2) that the pass-through entity paid on the nonresident partner's, member's, shareholder's, or beneficiary's behalf. The pass-through entity shall provide a copy of the notice to the department with the return that it files for the taxable year.
71.775(4)(d)
(d) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under
sub. (2) on his or her behalf. For purposes of this paragraph, the amount withheld under
sub. (2) is considered to be paid on the last day of the pass-through entity's taxable year for which the tax is paid.
71.775(4)(e)
(e) Any tax withheld under this section shall be held in trust for this state, and a pass-through entity subject to withholding under this section shall be liable to the department for the payment of the tax withheld. No partner, member, shareholder, or beneficiary of a pass-through entity shall have any right of action against the pass-through entity with respect to any amount withheld and paid in compliance with this section.
71.775(4)(f)
(f) If a pass-through entity subject to withholding under this section fails to withhold tax as required by this section, the pass-through entity shall be liable for any tax, interest, and penalties. If a nonresident partner, member, shareholder, or beneficiary of the pass-through entity files a return and pays the tax due, the pass-through entity shall not be liable for the tax, but shall be liable for any interest and penalties otherwise applicable for failure to withhold, as provided under
ss. 71.82 (2) (d) and
71.83.
71.775 History
History: 2005 a. 25,
254.
71.78
71.78
Confidentiality provisions. 71.78(1)
(1)
Divulging information. Except as provided in
subs. (4),
(4m) and
(10), no person may divulge or circulate or offer to obtain, divulge or circulate any information derived from an income, franchise, withholding, fiduciary, partnership, limited liability company or gift tax return or tax credit claim, including information which may be furnished by the department as provided in this section. This subsection does not prohibit publication by any newspaper of information lawfully derived from such returns or claims for purposes of argument or prohibit any public speaker from referring to such information in any address. This subsection does not prohibit the department from publishing statistics classified so as not to disclose the identity of particular returns, or claims or reports and the items thereof. This subsection does not prohibit employees or agents of the department of revenue from offering or submitting any return, including joint returns of a spouse or former spouse, separate returns of a spouse, individual returns of a spouse or former spouse and combined individual income tax returns, or from offering or submitting any claim, schedule, exhibit, writing or audit report or a copy of, and any information derived from, any of those documents as evidence into the record of any contested matter involving the department in proceedings or litigation on state tax matters if, in the department's judgment, that evidence has reasonable probative value.
71.78(1m)(a)(a) No person, except the person who filed the return or claim, may inspect a return or claim that is filed under this chapter unless that person does so in performing the duties of his or her position. Violation of this paragraph by a state employee is grounds for dismissal.
71.78(1m)(b)
(b) If any person is charged with a violation of
par. (a), the secretary of revenue shall notify each taxpayer whose return or claim was improperly inspected by that person.
71.78(1m)(c)
(c) Any person who is notified under
par. (b) may bring an action for damages in regard to the inspection.
71.78(2)
(2) Disclosure of net tax. The department shall make available upon suitable forms prepared by the department information setting forth the net Wisconsin income tax, Wisconsin franchise tax or Wisconsin gift tax reported as paid or payable in the returns filed by any individual or corporation, and any amount of delinquent taxes owed, as described in
s. 73.03 (62), by any such individual or corporation, for any individual year upon request. Before the request is granted, the person desiring to obtain the information shall prove his or her identity and shall be required to sign a statement setting forth the person's address and reason for making the request and indicating that the person understands the provisions of this section with respect to the divulgement, publication or dissemination of information obtained from returns as provided in
sub. (1). The use of a fictitious name is a violation of this section. Within 24 hours after any information from any such tax return has been so obtained, the department shall mail to the person from whose return the information has been obtained a notification which shall give the name and address of the person obtaining the information and the reason assigned for requesting the information. The department shall collect from the person requesting the information a fee of $4 for each return.
71.78(3)
(3) Disclosure limitation. The information described in
sub. (2) shall not be made available to any nonresident or to any resident who is making the request for such information for the use or benefit, directly or indirectly, of a nonresident person or firm or a foreign corporation except to the extent that similar information in the state of residence of such person or firm or the state of incorporation of such foreign corporation is made available to residents of Wisconsin or Wisconsin corporations. As part of the statement required by
sub. (2), the department shall require any person desiring to obtain such information to declare whether the person is a nonresident of the state and whether the information is desired for the use or benefit of a nonresident person or firm or a foreign corporation. No copy of any return shall be supplied to any person except as permitted by
sub. (4).
71.78(4)
(4) Persons qualified to examine returns for specified purposes. Subject to
subs. (5) and
(6) and to rules of the department, any returns or claims specified under
sub. (1) or any schedules, exhibits, writings or audit reports pertaining to the returns or claims on file with the department shall be open to examination by only the following persons and the contents thereof may be divulged or used only as follows:
71.78(4)(a)
(a) The secretary of revenue or any officer, agent or employee of the department.
71.78(4)(b)
(b) The attorney general and department of justice employees.
71.78(4)(c)
(c) Members of any legislative committee on organization or its authorized agents provided the examination is approved by a majority vote of a quorum of its members and the tax return or claim information is disclosed only in a meeting closed to the public. The committee may disclose tax return or claim information to the senate or assembly or to other legislative committees if the information does not disclose the identity of particular returns, claims or reports and the items thereof. The department of revenue shall provide assistance to the committees or their authorized agents in order to identify returns and claims deemed necessary by them to accomplish the review and analysis of tax policy.
71.78(4)(d)
(d) Public officers of the federal government or other state governments or the authorized agents of such officers, where necessary in the administration of the tax laws of such governments, to the extent that such government accords similar rights of examination or information to officials of this state.
71.78(4)(e)
(e) The person who filed or submitted the return or claim, or to whom the return or claim relates or by the person's authorized agent or attorney.
71.78(4)(f)
(f) Any person examining a return or claim pursuant to a court order duly obtained upon a showing to the court that the information contained in the return or claim is relevant to a pending court action or pursuant to a subpoena signed by a judge of a court of record ordering the department's custodian of returns or claims to produce a return or claim in open court in a court action pending before the judge.
71.78(4)(g)
(g) Employees of this state, to the extent that the department of revenue deems the examination necessary for the employees to perform their duties under contracts or agreements between the department and any other department, division, bureau, board or commission of this state relating to the administration of tax laws or child and spousal support enforcement under
s. 49.22.
71.78(4)(h)1.1. A member of the board of arbitration established under
s. 71.10 (7) or a consultant under joint contract with the states of Minnesota and Wisconsin for the purpose of determining the reciprocity loss to which either state is entitled.
71.78(4)(h)2.
2. A member of the board of arbitration established under
s. 71.10 (7e) or a consultant under joint contract with the states of Illinois and Wisconsin for the purpose of determining the reciprocity loss to which either state is entitled.
71.78(4)(i)
(i) The office of the commissioner of insurance with respect to information compiled under
s. 71.80 (13).
71.78(4)(j)
(j) Employees of the legislative fiscal bureau to the extent that the department of revenue deems the examination necessary for those employees to perform their duties under contracts or agreements between the department and the bureau relating to the review and analysis of tax policy and the analysis of state revenue collections.
71.78(4)(k)
(k) The spouse or former spouse of the person who filed the return or claim if the spouse or former spouse may be liable, or the property of the spouse or former spouse is subject to collection, for the delinquency, or the department has issued an assessment or denial of a claim to the spouse or former spouse regarding the return or claim.
71.78(4)(L)
(L) The administrator of the lottery division in the department for the purpose of withholding lottery winnings under
s. 565.30 (5).
71.78(4)(m)
(m) The secretary of commerce and employees of that department to the extent necessary to administer the development zone program under
subch. VI of ch. 560.
71.78(4)(o)
(o) A licensing department or the supreme court, if the supreme court agrees, for the purpose of denial, nonrenewal, discontinuation and revocation of a license based on tax delinquency under
s. 73.0301.
71.78(4)(p)
(p) The secretary of revenue and employees of that department for the purpose of calculating the penalty under
s. 71.83 (1) (d).
71.78(4)(q)
(q) Employees of the department of corrections involved in the administration of the sex offender registry under
s. 301.45, for the purpose of verifying information provided by a person required to register as a sex offender.
71.78(4)(r)
(r) The secretary of revenue and employees of that department for the purpose of preparing and maintaining the list of persons with unpaid tax obligations as described in
s. 73.03 (62) so that the list of such persons is available for public inspection.
71.78(4m)
(4m) Disclosure of certain dates to spouses and former spouses. The department may disclose to the spouse or former spouse of the person who filed a return or claim specified under
sub. (1) whether an extension for filing the return or claim was obtained, the extended due date for filing the return or claim and the date on which the return or claim was filed with the department.
71.78(5)
(5) Agreement with department. Copies of returns and claims specified in
sub. (1) and related schedules, exhibits, writings or audit reports shall not be furnished to the persons listed under
sub. (4), except persons under
sub. (4) (e),
(k),
(n),
(o) and
(q) or under an agreement between the department of revenue and another agency of government.
71.78(6)
(6) Restriction on use of information. The use of information obtained under
sub. (4) or
(5) is restricted to the discharge of duties imposed upon the persons by law or by the duties of their office or by order of a court as provided under
sub. (4) (f).
71.78(7)
(7) Charge for costs. The department of revenue may charge for the reasonable cost of divulging information under this section.
71.78(8)
(8) District attorneys. District attorneys may examine tax and claim information of persons on file with the department of revenue as follows:
71.78(8)(a)
(a) Such information may be examined for use in preparation for any judicial proceeding or any investigation which may result in a judicial proceeding involving any of the taxes or tax credits specified in
sub. (1) if:
71.78(8)(a)1.
1. The taxpayer is or may be a party to such proceeding;
71.78(8)(a)2.
2. The treatment of an item reflected in such information is or may be related to the resolution of an issue in the proceeding or investigation; or
71.78(8)(a)3.
3. The information relates or may relate to a transactional relationship between the taxpayer or credit claimant and a person who is or may be a party to the proceeding which affects or may affect the resolution of an issue in such proceeding or investigation.
71.78(8)(b)
(b) When the department of revenue allows examination of information under
par. (a):
71.78(8)(b)1.
1. If the department has referred the case to a district attorney, the department may make disclosure on its own motion.
71.78(8)(b)2.
2. If a district attorney requests examination of tax or tax credit information relating to a person, the request must be in writing, clearly identify the requester and the person to whom the information relates and explain the need for the information. The department may then allow the examination of information so requested and the information may be examined and used solely for the proceeding or investigation for which it was requested.
71.78(8)(c)
(c) Such information may be examined for use in preparation for any administrative or judicial proceeding or an investigation which may result in such proceeding pertaining to the enforcement of a specifically designated state criminal statute not involving tax administration to which this state or a governmental subdivision thereof is a party. Such information may be used solely for the proceeding or investigation for which it is requested.
71.78(8)(d)
(d) The department may allow an examination of information under
par. (c) only if a district attorney petitions a court of record in this state for an order allowing the examination and the court issues an order after finding:
71.78(8)(d)1.
1. There is reasonable cause to believe, based on information believed to be reliable, that a specific criminal act has been committed;
71.78(8)(d)2.
2. There is reason to believe that such information is probative evidence of a matter in issue related to the commission of the criminal act; and
71.78(8)(d)3.
3. The information sought to be examined cannot reasonably be obtained from any other source, unless it is determined that, notwithstanding the reasonable availability of the information from another source, the information constitutes the most probative evidence of a matter in issue relating to the commission of such criminal act.
71.78(8)(e)
(e) If the department determines that examination of information ordered under
par. (d) would identify a confidential informant or seriously impair a civil or criminal tax investigation, the department may deny access and shall certify the reason therefor to the court.
71.78(9)
(9) Disclosure of debtor address. The department may supply the address of a debtor to an agency certifying a debt of that debtor under
s. 71.93 or to a municipality or county certifying a debt of a debtor under
s. 71.935.
71.78(10)
(10) Divulging information to requester. The department shall inform each requester of the total amount of taxes withheld under
subch. X during any reporting period and reported on a return filed by any city, village, town, county, school district, special purpose district or technical college district; whether that amount was paid by the statutory due date; the amount of any tax, fees, penalties or interest assessed by the department; and the total amount due or assessed under
subch. X but unpaid by the filer, except that the department may not divulge tax return information that in the department's opinion violates the confidentiality of that information with respect to any person other than the units of government and districts specified in this subsection. The department shall provide to the requester a written explanation if it fails to divulge information on grounds of confidentiality. The department shall collect from the person requesting the information a fee of $4 for each return.
71.78 History
History: 1987 a. 312;
1987 a. 411 ss.
99,
100,
188;
1991 a. 269,
301;
1993 a. 112,
399;
1995 a. 27 ss.
3420x to
3423g,
9116 (5);
1995 a. 233,
404;
1997 a. 27,
63,
237,
323;
1999 a. 32,
89;
2005 a. 25.
71.78 Note
NOTE: 1991 Wis. Act 301, which affected this section, contains extensive legislative council notes.
71.78 Cross-reference
Cross Reference: See also ss.
Tax 1.11 and
1.13, Wis. adm. code.
71.80
71.80
General administrative provisions. 71.80(1)
(1)
Department duties and powers. 71.80(1)(a)(a) The department shall assess incomes as provided in this chapter and in performance of such duty the department shall possess all powers now or hereafter granted by law to the department in the assessment of personal property and also the power to estimate incomes.
71.80(1)(b)
(b) In any case of 2 or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the secretary or the secretary's delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if the secretary determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses.
71.80(1)(c)
(c) The department may make such regulations as it shall deem necessary in order to carry out this chapter.
71.80(1)(d)
(d) The department may employ such clerks and specialists as are necessary to carry into effective operation this chapter. Salaries and compensations of such clerks and specialists shall be charged to the proper appropriation for the department.
71.80(1)(e)
(e) Representatives of the department directed by it to accept payment of income or franchise taxes shall file bonds with the secretary of administration in such amount and with such sureties as the state treasurer shall direct and approve.
71.80(2)
(2) Notice to taxpayer by department. The department shall notify each taxpayer by mail of the amount of income or franchise taxes assessed against the taxpayer and of the date when the taxes become delinquent.
71.80(3)
(3) Crediting of overpayments on individual or separate returns. In the case of any overpayment, refundable credit or refund on an individual or separate return, the department, within the applicable period of limitations, may credit the amount of overpayment, refundable credit or refund including any interest allowed, against any liability in respect to any tax collected by the department, a debt under
s. 71.93 or
71.935 or a certification under
s. 49.855 on the part of the person who made the overpayment or received the refundable credit or the refund and shall refund any balance to the person. The department shall presume that the overpayment, refundable credit or refund is nonmarital property of the filer. Within 2 years after the crediting, the spouse or former spouse of the person filing the return may file a claim for a refund of amounts credited by the department if the spouse or former spouse shows by clear and convincing evidence that all or part of the state tax overpayment, refundable credit or refund was nonmarital property of the nonobligated spouse.
71.80(3m)
(3m) Crediting of overpayments on joint returns. For married persons, unless within 20 days after the date of the notice under
par. (c) the nonobligated spouse shows by clear and convincing evidence that the overpayment, refundable credit or refund is the nonmarital property of the nonobligated spouse, notwithstanding
s. 766.55 (2) (d), the department may credit overpayments, refundable credits and refunds, including any interest allowed, resulting from joint returns under this chapter as follows:
71.80(3m)(a)
(a) Against any liability of either spouse or both spouses in respect to an amount owed the department, a certification under
s. 49.855 that is subject to
s. 766.55 (2) (b) or a debt under
s. 71.93 or
71.935 that is subject to
s. 766.55 (2) (b) and that was incurred during marriage by a spouse after December 31, 1985, or after both spouses are domiciled in this state, whichever is later, except as provided in
s. 71.10 (6) (a) and
(b) and
(6m).
