AB1-SA1,23,5 1. The jurisdiction has laws or practices that prevent the effective exchange of information, for tax purposes, with other governments on taxpayers benefiting from the tax regime.

AB1-SA1,23,10 2. The details of the legislative, legal, or administrative provisions of the jurisdiction's tax regime are not publicly available and apparent or are not consistently applied to similarly situated taxpayers or the information needed by tax authorities to determine a taxpayer's correct tax liability, including accounting records and underlying documentation, is not adequately available.

AB1-SA1,23,13 3. The jurisdiction facilitates the establishment of foreign-owned entities without requiring a local substantive presence or prohibits such entities from having any commercial impact on the local economy.

AB1-SA1,23,16 4. The tax regime explicitly or implicitly excludes the jurisdiction's resident taxpayers from taking advantage of the tax regime's benefits or prohibits enterprises that benefit from the regime from operating in the jurisdiction's domestic market.

AB1-SA1,23,20 5. The jurisdiction has created a tax regime that is favorable for tax avoidance, based upon an overall assessment of relevant factors, including whether the jurisdiction has a significant untaxed offshore financial or other services sector relative to its overall economy.

AB1-SA1,23,22 (i) "Taxpayer member" means a corporation that is subject to tax under s. 71.23 (1) or (2) and that is a member of a combined group.

AB1-SA1,24,19 (j) "Unitary business" means a single economic enterprise that consists of separate parts of a single business entity or of a commonly controlled group of business entities that are sufficiently interdependent, integrated, and interrelated by their activities so as to provide a synergy and a mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts. For purposes of this section, 2 or more business entities are considered a unitary business if the entities have unity of ownership, operation, and use, as indicated by centralized management or a centralized executive force; centralized purchasing, advertising, or accounting; intercorporate sales or leases; intercorporate services; intercorporate debts; intercorporate use of proprietary materials; interlocking directorates; or interlocking corporate officers. Any business conducted by a pass-through entity that is owned directly or indirectly by a corporation is considered conducted by the corporation, to the extent of the corporation's distributive share of the pass-through entity's income, regardless of the percentage of the corporation's ownership interest. A business conducted directly or indirectly by one corporation is unitary with that portion of a business conducted by another corporation through its direct or indirect interest in a pass-through entity, if the corporations are sufficiently interdependent, integrated, and interrelated by their activities so as to provide a synergy and a mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts and the two corporations are members of the same commonly controlled group.

AB1-SA1,24,24 (2) Corporations required to use combined reporting. (a) A corporation engaged in a unitary business with any other corporation shall file a combined report that includes the income, determined under sub. (3), and apportionment factor, determined under sub. (5) and s. 71.25, of the following members of the unitary business:

AB1-SA1,25,4 1. Any member incorporated in the United States, including the District of Columbia and any territory or possession of the United States, or formed under the laws of any state, the District of Columbia, or any territory or possession of the United States.

AB1-SA1,25,6 2. Any member, regardless of where the entity is incorporated or formed, if the average of the following ratios is 20 percent or more:

AB1-SA1,25,13 a. The value of the member's real property and tangible personal property located in the United States, including the District of Columbia and any territory or possession of the United States, not including property that is used to produce nonapportionable income, divided by the value of all of the member's real property and tangible personal property, not including property that is used to produce nonapportionable income. For purposes of this subd. 2. a., the value of property that the member rents is the net annual rental amount for the property, multiplied by 8.

AB1-SA1,25,21 b. The amount of the member's payroll that is paid in the United States, including the District of Columbia and any territory or possession of the United States, divided by the amount of the member's total payroll. For purposes of this subd. 2. b., payroll includes compensation paid to employees, but does not include payroll used to produce nonapportionable income. The payroll paid in the United States, including the District of Columbia and any territory or possession of the United States, shall be determined in the same manner as payroll is determined for this state under s. 71.25 (8) (b) 1. to 5.

AB1-SA1,26,2 c. The member's sales in the United States, including the District of Columbia and any territory or possession of the United States, divided by the member's total sales. For purposes of this subd. 2. c., sales include items identified in s. 71.25 (9) (e), but not items identified in s. 71.25 (9) (f), and the situs of a sale shall be determined in the same manner as for state sales in s. 71.25 (9) (b), (d), (df), and (dh), not including s. 71.25 (9) (b) 2m. and 3., (c), (df) 3., and (dh) 4.

AB1-SA1,26,6 3. Any member that is a domestic international sales corporation as described in sections 991 to 994 of the Internal Revenue Code, a foreign sales corporation as described in sections 921 to 927 of the Internal Revenue Code, or an export trade corporation as described in sections 970 to 971 of the Internal Revenue Code.

AB1-SA1,26,15 4. Any member that is a controlled foreign corporation as defined in section 957 of the Internal Revenue Code, to the extent of the member's income that is defined in section 952 of of the Internal Revenue Code, including any lower-tier subsidiary's distribution of such income that was previously taxed, determined without regard to federal treaties, and the apportionment factors related to that income. For purposes of this subdivision, any item of income received by a controlled foreign corporation is excluded if the income was subject to an income tax imposed by a foreign country at an effective tax rate greater than 90 percent of the maximum tax rate specified in section 11 of the Internal Revenue Code.

AB1-SA1,26,19 5. Any member that earns more than 20 percent of its income, directly or indirectly, from intangible property or service-related activities that are deductible against the business income of other members of the combined group, to the extent of that income and the apportionment factors related to that income.

AB1-SA1,26,25 6. Any member that is doing business in a tax haven, if the member is engaged in an activity that is sufficient for that tax haven jurisdiction to impose a tax under federal law. If the member's business activity in a tax haven is entirely outside the scope of the laws and practices that cause the jurisdiction to be a tax haven, the member's business activity is not considered to be conducted in a tax haven for purposes of this section.

AB1-SA1,27,5 7. Any member not described in subds. 1. to 6., to the extent that its income is derived from or attributable to sources within the United States, including the District of Columbia and any territory or possession of the United States, as determined under the Internal Revenue Code and by its apportionment factors related to that income.

AB1-SA1,27,11 (b) The department may require that a combined report filed under this section include the income and associated apportionment factors of any persons not described under par. (a) that are members of a unitary business to reflect the proper apportionment of income of the entire unitary business, including persons that are not, or would not be, subject to the taxes imposed under this chapter if doing business in this state.

AB1-SA1,27,14 (3) Components of income subject to tax. Each taxpayer member is responsible for the tax imposed under this chapter based on its taxable income or loss apportioned or allocated to this state, including:

AB1-SA1,27,16 (a) Its share of any business income apportionable to this state of each of the combined groups of which it is a member, as determined under subs. (4) and (5).

AB1-SA1,27,19 (b) Its share of any business income apportionable to this state of a distinct business activity conducted in and outside this state wholly by the taxpayer member, as determined under s. 71.25.

AB1-SA1,27,21 (c) Its income from a business conducted wholly by the taxpayer member entirely in this state.

AB1-SA1,27,23 (d) Its income sourced to this state from the sale or exchange of capital or assets and from involuntary conversions, as determined under sub. (4) (a) 8.

AB1-SA1,27,24 (e) Its nonbusiness income or loss allocable to this state.

AB1-SA1,28,2 (f) Its income or loss allocated or apportioned in an earlier year that is state source income during the income year, other than a net business loss carry-forward.

AB1-SA1,28,9 (g) Its net business loss carry-forward. If the taxable income computed under this subsection and subs. (4) and (5) results in a loss for a taxpayer member of the combined group, the taxpayer member has a net business loss, subject to the net business loss limitations and carry-forward provisions in s. 71.26 (4). The business loss is applied as a deduction in a subsequent year only if the taxpayer member has net income sourced to this state, regardless of whether the taxpayer is a member of a combined group in the subsequent year.

AB1-SA1,28,11 (4) Business income of the combined group. The business income of a combined group is determined as follows:

AB1-SA1,28,15 (a) Compute the sum of the income of each member of the combined group as determined for federal income tax purposes, as if the members were not consolidated for federal purposes, and modified as provided under s. 71.26. Each member of the combined group shall determine its income as follows: