71.10(6)(c)(c) Marital property agreements. The department of revenue shall notify a taxpayer whose separate return is under audit that a marital property agreement or unilateral statement under ch. 766 is effective for tax purposes for any period during which both spouses are domiciled in this state only if it is filed with the department before any assessment resulting from the audit is issued. A marital property agreement or unilateral statement under ch. 766 does not affect the determination of the income that is taxable by this state, or of the person who is required to report taxable income to this state, during the period that one or both spouses are not domiciled in this state or if it was not filed with the department before an assessment was issued.

71.10(6)(d)(d) Part-year residents and nonresidents. If a spouse is not domiciled in this state for the entire taxable year, the tax liability and reporting obligation of both spouses during the period a spouse is not domiciled in this state shall be determined without regard to ch. 766 except as provided in this chapter.

71.10(6)(e)(e) Application for relief. A person who seeks relief from liability under par. (a) or (b) shall apply for relief with the department, on a form prescribed by the department, within 2 years after the date on which the department first begins collection activities after July 27, 2005.

71.10(6m)(a)(a) Except as provided in par. (c), a formerly married or remarried person filing a return for a period during which the person was married may be relieved of liability for the tax, interest, penalties, fees, additions to tax and additional assessments under this chapter from that period as if the person were a spouse under section 66 (c) of the Internal Revenue Code. The department may not apply ch. 766 in assessing the former spouse of the person with respect to marital property income that the former spouse did not report if that former spouse failed to notify the person about the amount and nature of the income before the due date, including extensions, for filing the return for the taxable year during which the income was derived. The department shall include all of that marital property income in the gross income of the former spouse and exclude all of that marital property income from the gross income of the person.

71.10(6m)(b)(b) The department may not apply ch. 766 or s. 71.55 (1), 71.61 (1) or 71.80 (3) or (3m) to collect from an individual for any tax liability owed to the department by the individual or by the former spouse of the individual if a judgment of divorce under ch. 767 apportions that liability to the former spouse of the individual and if the individual includes with his or her tax return a copy of that portion of the judgment of divorce that relates to the apportionment of tax liability.

71.10(6m)(c)(c) A person who seeks relief from liability under par. (a) shall apply for relief with the department as provided under sub. (6) (e).

71.10(7)(a)(a) For purposes of income tax reciprocity reached with the state of Minnesota under s. 71.05 (2), whenever the income taxes on residents of one state which would have been paid to the 2nd state without reciprocity exceed the income taxes on residents of the 2nd state which would have been paid to the first state without reciprocity, the state with the net revenue loss shall receive from the other state the amount of the loss. Interest shall be payable on all delinquent balances relating to taxable years beginning after the first December 31 after the date identified in the notice under 2023 Wisconsin Act 147, section 4 (2). The secretary of revenue may enter into agreements with the state of Minnesota specifying the reciprocity payment due date, conditions constituting delinquency, interest rates and the method of computing interest due on any delinquent amounts.

71.10(7)(b)(b) The data used for computing the loss to either state shall be determined by the respective departments of revenue of both states on or before November 1 of the year following the close of the previous calendar year. If an agreement cannot be reached as to the amount of the loss, the secretary of revenue of this state and the commissioner of taxation of the state of Minnesota shall each appoint a member of a board of arbitration and these members shall appoint a 3rd member of the board. The board shall select one of its members as chairperson. The board may administer oaths, take testimony, subpoena witnesses and require their attendance, require the production of books, papers and documents and hold hearings at such places as it deems necessary. The board shall then make a determination as to the amount to be paid the other state which shall be conclusive. This state shall pay no more than one-half of the cost of such arbitration.

71.10(7)(c)(c) For taxable years beginning after the first December 31 after the date identified in the notice under 2023 Wisconsin Act 147, section 4 (2), this state shall pay Minnesota interest on any reciprocity payment that is due under this subsection. Interest shall be calculated according to the Laws of Minnesota 2002 Chapter 377, or at another rate and under another method of calculation that is agreed to by Minnesota and Wisconsin.

71.10(7)(d)1.a.a. The agreement applies to wages, salaries, tips, and commissions received as an employee by persons who reside in this state or Minnesota for at least 183 days during their taxable years and who return to their state of residence at least once per month.

71.10(7)(d)1m.1m. As soon as possible after the department reaches an agreement with the state of Minnesota, the department shall present the agreement to the governor and submit a copy of the agreement to the legislature under s. 13.172 (2).

71.10(7)(d)1s.1s. After the governor issues a written notice of approval of the agreement under subd. 1. bm., the department shall notify the joint committee on finance in writing of the agreement. The agreement may take effect if within 14 working days of the notification the committee does not schedule a meeting for the purpose of reviewing the proposed agreement. If the committee schedules a meeting for the purpose of reviewing the agreement, the agreement may not take effect unless the committee approves the agreement.

71.10(7)(d)2.b.b. An agreement entered into under this subsection may provide for making estimated payments during a year and for a final payment for the year to be made after computing the amount of the loss for the year as described in par. (b).

71.10(7)(d)3.3. An agreement entered into under this subsection that takes effect on or after March 23, 2024, may not be revised unless the department notifies the joint committee on finance in writing of the proposed revised agreement. The proposed revised agreement may take effect if within 14 working days of the notification the committee does not schedule a meeting for the purpose of reviewing the proposed revised agreement. If the committee schedules a meeting for the purpose of reviewing the proposed revised agreement, the proposed revised agreement may not take effect unless the committee approves the proposed revised agreement.

71.10(7)(d)4.4. An agreement entered into under this subsection may require that a study be conducted no more than once every 5 years to obtain information necessary to determine payments under this subsection.

71.10(7e)(a)(a) For purposes of income tax reciprocity reached with the state of Illinois under s. 71.05 (2), whenever the income taxes on residents of one state which would have been paid to the 2nd state without reciprocity exceed the income taxes on residents of the 2nd state which would have been paid to the first state without reciprocity, the state with the net revenue loss shall receive from the other state the amount of the loss. Interest shall be payable on all delinquent balances relating to taxable years beginning after December 31, 1999. The secretary of revenue may enter into agreements with the state of Illinois specifying the reciprocity payment due date, conditions constituting delinquency, interest rates and the method of computing interest due on any delinquent amounts.

71.10(7e)(b)(b) The data used for computing the loss to either state shall be determined by the respective departments of revenue of both states on or before December 1 of the year following the close of the previous calendar year. If an agreement cannot be reached as to the amount of the loss, the secretary of revenue of this state and the director of taxation of the state of Illinois shall each appoint a member of a board of arbitration and these members shall appoint a 3rd member of the board. The board shall select one of its members as chairperson. The board may administer oaths, take testimony, subpoena witnesses and require their attendance, require the production of books, papers and documents and hold hearings at such places as it considers necessary. The board shall then make a determination as to the amount to be paid the other state which shall be conclusive. This state shall pay no more than 50 percent of the cost of such arbitration.

71.10(7e)(c)(c) The payments under this subsection may be made only if the secretary of revenue of this state and the director of taxation of the state of Illinois enter into a written agreement relating to income tax reciprocity that applies to taxable years beginning after December 31, 1997.

71.10(7m)(7m) Discharge of indebtedness; modifications. If a person excludes from gross income an amount of income from a discharge of indebtedness because of discharges of debts described under section 108 (a) of the internal revenue code, the person shall make the adjustments specified in section 108 (b) of the internal revenue code, but the net operating loss under s. 71.01 (14), not the federal net operating loss, and Wisconsin credits, not federal credits, and the capital loss carry-forward as limited under s. 71.05 (10) (c), not the federal capital loss carry-forward, shall be applied, and the reduction rate for a credit carry-over is 6.93 percent, not 33 1/3 percent.