State Codes and Statutes

Statutes > Wisconsin > 71 > 71.04

71.04

71.04 Situs of income; allocation and apportionment.

71.04(1)

(1) Situs.

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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. A nonresident limited liability company member's distributive share of limited liability company income shall follow the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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 multijurisdictional 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. Income of nonresident individuals, estates and trusts from winnings from a casino or bingo hall that is located in this state and that is operated by a Native American tribe or band shall follow the situs of the casino or bingo hall. Income derived by a nonresident individual from a covenant not to compete is taxable by this state to the extent that the covenant was based on a Wisconsin-based activity. 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), except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

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(1)(b)3.

3. The residence of an estate or trust shall be as provided under s. 71.14.

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.

71.04(4)

(4) Nonresident allocation and apportionment formula. Nonresident individuals and nonresident estates and trusts engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such nonresident individual or nonresident estate or trust within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies and car line companies there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

71.04(4)(a)

(a) For taxable years beginning before January 1, 2006, an apportionment fraction composed of a sales factor under sub. (7) representing 50% of the fraction, a property factor under sub. (5) representing 25% of the fraction, and a payroll factor under sub. (6) representing 25% of the fraction.

71.04(4)(b)

(b) For taxable years beginning after December 31, 2005, and before January 1, 2007, an apportionment fraction composed of a sales factor under sub. (7) representing 60% of the fraction, a property factor under sub. (5) representing 20% of the fraction, and a payroll factor under sub. (6) representing 20% of the fraction.

71.04(4)(c)

(c) For taxable years beginning after December 31, 2006, and before January 1, 2008, an apportionment fraction composed of a sales factor under sub. (7) representing 80% of the fraction, a property factor under sub. (5) representing 10% of the fraction, and a payroll factor under sub. (6) representing 10% of the fraction.

71.04(4)(d)

(d) For taxable years beginning after December 31, 2007, an apportionment fraction composed of the sales factor under sub. (7).

71.04(4)(e)

(e) For taxable years beginning after December 31, 2005, and before January 1, 2008, the apportionment fraction for the remaining net income of a financial organization shall include a sales factor that represents more than 50% of the apportionment fraction, as determined by rule by the department. For taxable years beginning after December 31, 2007, the apportionment fraction for the remaining net income of a financial organization is composed of a sales factor, as determined by rule by the department.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.41, Wis. adm. code.

71.04(4m)

(4m) Apportionment formula computation.

71.04(4m)(a)

(a)

71.04(4m)(a)1.

1. For taxable years beginning before January 1, 2008, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, the sales factor under sub. (7) is eliminated from the apportionment formula to determine the taxpayer's remaining net income under sub. (4).

71.04(4m)(a)2.

2. For taxable years beginning after December 31, 2007, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(b)

(b)

71.04(4m)(b)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, the sales factor under sub. (7) is zero.

71.04(4m)(b)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(c)

(c)

71.04(4m)(c)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, the sales factor under sub. (7) is one.

71.04(4m)(c)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, all of the taxpayer's remaining net income is apportioned to this state.

71.04(5)

(5) Property factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(5)(a)

(a) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period. Cash on hand or in the bank, shares of stock, notes, bonds, accounts receivable, or other evidence of indebtedness, special privileges, franchises, goodwill, or property the income of which is not taxable or is separately allocated, shall not be considered tangible property nor included in the apportionment.

71.04(5)(b)

(b) Property used in the production of nonapportionable income or losses shall be excluded from the numerator and denominator of the property factor. Property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the property factor so as to exclude, as near as possible, the portion of such property producing the nonapportionable income or loss.

71.04(5)(c)

(c) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 8 times the net annual rental. Net annual rental is the annual rental paid by the taxpayer less any annual rental received by the taxpayer from sub-rentals.

71.04(5)(d)

(d) The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the secretary of revenue may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property.

71.04(6)

(6) Payroll factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(6)(a)

(a) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.

71.04(6)(b)

(b) Compensation is paid in this state if:

71.04(6)(b)1.

1. The individual's service is performed entirely within this state;

71.04(6)(b)2.

2. The individual's service is performed within and without this state, but the service performed without this state is incidental to the individual's service within this state;

71.04(6)(b)3.

3. A portion of the service is performed within this state and the base of operations of the individual is in this state;

71.04(6)(b)4.

4. A portion of the service is performed within this state and, if there is no base of operations, the place from which the individual's service is directed or controlled is in this state;

71.04(6)(b)5.

5. A portion of the service is performed within this state and neither the base of operations of the individual nor the place from which the service is directed or controlled is in any state in which some part of the service is performed, but the individual's residence is in this state; or

71.04(6)(b)6.

6. The individual is neither a resident of nor performs services in this state but is directed or controlled from an office in this state and returns to this state periodically for business purposes and the state in which the individual resides does not have jurisdiction to impose income or franchise taxes on the employer.

71.04(6)(c)

(c) Compensation related to the operation, maintenance, protection or supervision of property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the payroll factor so as to exclude, as near as possible, the portion of pay related to the operation, maintenance, protection and supervision of property used in the production of nonapportionable income.

71.04(6)(d)

(d) Payments made to an independent contractor or any person not properly classified as an employee are excluded from the payroll factor.

71.04(6)(e)

(e) If the taxpayer has no employees or the department determines that employees are not a substantial income-producing factor, the department may order or permit the elimination of the payroll factor.

71.04(7)

(7) Sales factor. For purposes of sub. (4):

71.04(7)(a)

(a) The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period. For sales of tangible personal property, the numerator of the sales factor is the sales of the taxpayer during the tax period under par. (b) 1. and 2. plus 100 percent of the sales of the taxpayer during the tax period under pars. (b) 2m. and 3. and (c). For purposes of applying pars. (b) 2m. and 3. and (c), if a taxpayer is within another state's jurisdiction for income or franchise tax purposes for any part of the taxable year, it is considered to be within that state's jurisdiction for income or franchise tax purposes for the entire taxable year.

71.04(7)(b)

(b) Sales of tangible personal property are in this state if any of the following occur:

71.04(7)(b)1.

1. The property is delivered or shipped to a purchaser, other than the federal government, within this state regardless of the f.o.b. point or other conditions of the sale.

71.04(7)(b)2.

2. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government within this state regardless of the f.o.b. point or other conditions of sale.

71.04(7)(b)2m.

2m. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government outside this state and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(b)3.

3. The property is shipped from an office, store, warehouse, factory or other place of storage in this state to a purchaser other than the federal government and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(c)

(c) Sales of tangible personal property by an office in this state to a purchaser in another state and not shipped or delivered from this state are in this state if the taxpayer is not within the jurisdiction for income tax purposes of either the state from which the property is delivered or shipped or of the destination state.

71.04(7)(df)

(df)

71.04(7)(df)1.

1. Gross receipts from the use of computer software are in this state if the purchaser or licensee uses the computer software at a location in this state.

71.04(7)(df)2.

2. Computer software is used at a location in this state if the purchaser or licensee uses the computer software in the regular course of business operations in this state, for personal use in this state, or if the purchaser or licensee is an individual whose domicile is in this state. If the purchaser or licensee uses the computer software in more than one state, the gross receipts shall be divided among those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the computer software in those states. To determine computer software use in this state, the department may consider the number of users in each state where the computer software is used, the number of site licenses or workstations in this state, and any other factors that reflect the use of computer software in this state.

71.04(7)(dh)

(dh)

71.04(7)(dh)1.

1. Gross receipts from services are in this state if the purchaser of the service received the benefit of the service in this state.

71.04(7)(dh)2.

2. The benefit of a service is received in this state if any of the following applies:

71.04(7)(dh)2.a.

a. The service relates to real property that is located in this state.

71.04(7)(dh)2.b.

b. The service relates to tangible personal property that is located in this state at the time that the service is received or tangible personal property that is delivered directly or indirectly to customers in this state.

71.04(7)(dh)2.c.

c. The service is provided to an individual who is physically present in this state at the time that the service is received.

71.04(7)(dh)2.d.

d. The service is provided to a person engaged in a trade or business in this state and relates to that person's business in this state.

71.04(7)(dh)3.

3. If the purchaser of a service receives the benefit of a service in more than one state, the gross receipts from the performance of the service are included in the numerator of the sales factor according to the portion of the service received in this state.

71.04(7)(dj)

(dj)

71.04(7)(dj)1.

1. Except as provided in par. (df), gross royalties and other gross receipts received for the use or license of intangible property, including patents, copyrights, trademarks, trade names, service names, franchises, licenses, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals, technical know-how, contracts, and customer lists, are sales in this state if any of the following applies:

71.04(7)(dj)1.a.

a. The purchaser or licensee uses the intangible property in the operation of a trade or business at a location in this state. If the purchaser or licensee uses the intangible property in the operation of a trade or business in more than one state, the gross royalties and other gross receipts from the use of the intangible property shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dj)1.b.

b. The purchaser or licensee is billed for the purchase or license of the use of the intangible property at a location in this state.

71.04(7)(dj)1.c.

c. The purchaser or licensee of the use of the intangible property has its commercial domicile in this state.

71.04(7)(dk)

(dk)

71.04(7)(dk)1.

1. Sales of intangible property, excluding securities, are sales in this state if any of the following applies:

71.04(7)(dk)1.a.

a. The purchaser uses the intangible property in the regular course of business operations in this state or for personal use in this state. If the purchaser uses the intangible property in more than one state, the sales shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dk)1.b.

b. The purchaser is billed for the purchase of the intangible property at a location in this state.

71.04(7)(dk)1.c.

c. The purchaser of the intangible property has its commercial domicile in this state.

71.04(7)(e)

(e) In this subsection, "sales" includes, but is not limited to, the following items related to the production of business income:

71.04(7)(e)1.

1. Gross receipts from the sale of inventory.

71.04(7)(e)2.

2. Gross receipts from the operation of farms, mines and quarries.

71.04(7)(e)3.

3. Gross receipts from the sale of scrap or by-products.

71.04(7)(e)4.

4. Gross commissions.

71.04(7)(e)5.

5. Gross receipts from personal and other services.

71.04(7)(e)6.

6. Gross rents from real property or tangible personal property.

71.04(7)(e)7.

7. Interest on trade accounts and trade notes receivable.

71.04(7)(e)8.

8. A partner's or member's share of the partnership's or limited liability company's gross receipts.

71.04(7)(e)9.

9. Gross management fees.

71.04(7)(e)10.

10. Gross royalties from income-producing activities.

71.04(7)(e)11.

11. Gross franchise fees from income-producing activities.

71.04(7)(f)

(f) The following items are among those that are not included in "sales" in this subsection:

71.04(7)(f)1.

1. Gross receipts and gain or loss from the sale of tangible business assets, except those under par. (e) 1., 2. and 3.

71.04(7)(f)2.

2. Gross receipts and gain or loss from the sale of nonbusiness real or tangible personal property.

71.04(7)(f)3.

3. Gross rents and rental income or loss from real property or tangible personal property if that real property or tangible personal property is not used in the production of business income.

71.04(7)(f)4.

4. Royalties from nonbusiness real property or nonbusiness tangible personal property.

71.04(7)(f)5.

5. Proceeds and gain or loss from the redemption of securities.

71.04(7)(f)6.

6. Interest, except interest under par. (e) 7., and dividends.

71.04(7)(f)7.

7. Gross receipts and gain or loss from the sale of intangible assets, except those under par. (e) 1.

71.04(7)(f)8.

8. Dividends deductible by corporations in determining net income.

71.04(7)(f)9.

9. Gross receipts and gain or loss from the sale of securities.

71.04(7)(f)10.

10. Proceeds and gain or loss from the sale of receivables.

71.04(7)(f)11.

11. Refunds, rebates and recoveries of amounts previously expended or deducted.

71.04(7)(f)12.

12. Other items not includable in apportionable income.

71.04(7)(f)13.

13. Foreign exchange gain or loss.

71.04(7)(f)14.

14. Royalties and income from passive investments in the property under s. 71.25 (5) (a) 21.

71.04(7)(f)16.

16. Pari-mutuel wager winnings or purses under ch. 562.

71.04(8)

(8) Railroads, financial organizations and public utilities.

71.04(8)(a)

(a)

71.04(8)(a)1.

1. "Financial organization", as used in this section, means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, credit union, cooperative bank, small loan company, sales finance company, investment company, brokerage house, underwriter or any type of insurance company.

71.04(8)(a)2.

2. As used in this section, "financial organization" includes any subsidiary of an entity described in subd. 1., if a significant purpose for the subsidiary is to hold investments or if the subsidiary primarily functions to hold investments.

71.04(8)(b)

(b)

71.04(8)(b)1.

1. For taxable years beginning before January 1, 2006, "public utility", as used in this section, means any business entity described under subd. 2. and any business entity which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications or the production, transmission, sale, delivery, or furnishing of electricity, water or steam, the rates of charges for goods or services of which have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(b)2.

2. In this section, for taxable years beginning after December 31, 2005, "public utility" means any business entity providing service to the public and engaged in the transportation of goods and persons for hire, as defined in s. 194.01 (4), regardless of whether or not the entity's rates or charges for services have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(c)

(c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.46, 2.47, 2.475, 2.49, 2.495, 2.50, and 2.502, Wis. adm. code.

71.04(9)

(9) Nonresident income from multistate tax-option corporation. Nonresident individuals and nonresident estates and trusts deriving income from a tax-option corporation which is engaged in business within and without this state shall be taxed only on the income of the corporation derived from business transacted and property located in this state and losses and other items of the corporation deductible by such shareholders shall be limited to their proportionate share of the Wisconsin loss or other item, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. For purposes of this subsection, all intangible income of tax-option corporations passed through to shareholders is business income that follows the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

71.04(10)

(10) Department may waive factor. Where, in the case of any nonresident individual or nonresident estate or trust engaged in business in and outside of this state and required to apportion its income as provided in this section, it shall be shown to the satisfaction of the department of revenue that the use of any one of the 3 factors provided under sub. (4) gives an unreasonable or inequitable final average ratio because of the fact that such nonresident individual or nonresident estate or trust does not employ, to any appreciable extent in its trade or business in producing the income taxed, the factors made use of in obtaining such ratio, this factor may, with the approval of the department of revenue, be omitted in obtaining the final average ratio which is to be applied to the remaining net income. This subsection does not apply to taxable years beginning after December 31, 2007.

71.04(11)

(11) Department may apportion by rule. If the income of any such nonresident individual or nonresident estate or trust properly assignable to the state of Wisconsin cannot be ascertained with reasonable certainty by the methods under this section, then the same shall be apportioned and allocated under such rules as the department of revenue may prescribe.

71.04 - ANNOT.

History: 1987 a. 312; 1987 a. 411 ss. 34 to 40, 61; 1989 a. 31; 1989 a. 56 s. 259; 1991 a. 39, 189, 269; 1993 a. 112, 204, 491; 1995 a. 27; 1997 a. 27, 237; 1999 a. 9; 2003 a. 37; 2005 a. 25; 2007 a. 20; 2009 a. 2, 28.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.39, Wis. adm. code.

State Codes and Statutes

Statutes > Wisconsin > 71 > 71.04

71.04

71.04 Situs of income; allocation and apportionment.

71.04(1)

(1) Situs.

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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. A nonresident limited liability company member's distributive share of limited liability company income shall follow the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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 multijurisdictional 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. Income of nonresident individuals, estates and trusts from winnings from a casino or bingo hall that is located in this state and that is operated by a Native American tribe or band shall follow the situs of the casino or bingo hall. Income derived by a nonresident individual from a covenant not to compete is taxable by this state to the extent that the covenant was based on a Wisconsin-based activity. 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), except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

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(1)(b)3.

3. The residence of an estate or trust shall be as provided under s. 71.14.

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.

71.04(4)

(4) Nonresident allocation and apportionment formula. Nonresident individuals and nonresident estates and trusts engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such nonresident individual or nonresident estate or trust within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies and car line companies there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

71.04(4)(a)

(a) For taxable years beginning before January 1, 2006, an apportionment fraction composed of a sales factor under sub. (7) representing 50% of the fraction, a property factor under sub. (5) representing 25% of the fraction, and a payroll factor under sub. (6) representing 25% of the fraction.

71.04(4)(b)

(b) For taxable years beginning after December 31, 2005, and before January 1, 2007, an apportionment fraction composed of a sales factor under sub. (7) representing 60% of the fraction, a property factor under sub. (5) representing 20% of the fraction, and a payroll factor under sub. (6) representing 20% of the fraction.

71.04(4)(c)

(c) For taxable years beginning after December 31, 2006, and before January 1, 2008, an apportionment fraction composed of a sales factor under sub. (7) representing 80% of the fraction, a property factor under sub. (5) representing 10% of the fraction, and a payroll factor under sub. (6) representing 10% of the fraction.

71.04(4)(d)

(d) For taxable years beginning after December 31, 2007, an apportionment fraction composed of the sales factor under sub. (7).

71.04(4)(e)

(e) For taxable years beginning after December 31, 2005, and before January 1, 2008, the apportionment fraction for the remaining net income of a financial organization shall include a sales factor that represents more than 50% of the apportionment fraction, as determined by rule by the department. For taxable years beginning after December 31, 2007, the apportionment fraction for the remaining net income of a financial organization is composed of a sales factor, as determined by rule by the department.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.41, Wis. adm. code.

71.04(4m)

(4m) Apportionment formula computation.

71.04(4m)(a)

(a)

71.04(4m)(a)1.

1. For taxable years beginning before January 1, 2008, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, the sales factor under sub. (7) is eliminated from the apportionment formula to determine the taxpayer's remaining net income under sub. (4).

71.04(4m)(a)2.

2. For taxable years beginning after December 31, 2007, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(b)

(b)

71.04(4m)(b)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, the sales factor under sub. (7) is zero.

71.04(4m)(b)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(c)

(c)

71.04(4m)(c)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, the sales factor under sub. (7) is one.

71.04(4m)(c)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, all of the taxpayer's remaining net income is apportioned to this state.

71.04(5)

(5) Property factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(5)(a)

(a) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period. Cash on hand or in the bank, shares of stock, notes, bonds, accounts receivable, or other evidence of indebtedness, special privileges, franchises, goodwill, or property the income of which is not taxable or is separately allocated, shall not be considered tangible property nor included in the apportionment.

71.04(5)(b)

(b) Property used in the production of nonapportionable income or losses shall be excluded from the numerator and denominator of the property factor. Property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the property factor so as to exclude, as near as possible, the portion of such property producing the nonapportionable income or loss.

71.04(5)(c)

(c) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 8 times the net annual rental. Net annual rental is the annual rental paid by the taxpayer less any annual rental received by the taxpayer from sub-rentals.

71.04(5)(d)

(d) The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the secretary of revenue may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property.

71.04(6)

(6) Payroll factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(6)(a)

(a) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.

71.04(6)(b)

(b) Compensation is paid in this state if:

71.04(6)(b)1.

1. The individual's service is performed entirely within this state;

71.04(6)(b)2.

2. The individual's service is performed within and without this state, but the service performed without this state is incidental to the individual's service within this state;

71.04(6)(b)3.

3. A portion of the service is performed within this state and the base of operations of the individual is in this state;

71.04(6)(b)4.

4. A portion of the service is performed within this state and, if there is no base of operations, the place from which the individual's service is directed or controlled is in this state;

71.04(6)(b)5.

5. A portion of the service is performed within this state and neither the base of operations of the individual nor the place from which the service is directed or controlled is in any state in which some part of the service is performed, but the individual's residence is in this state; or

71.04(6)(b)6.

6. The individual is neither a resident of nor performs services in this state but is directed or controlled from an office in this state and returns to this state periodically for business purposes and the state in which the individual resides does not have jurisdiction to impose income or franchise taxes on the employer.

71.04(6)(c)

(c) Compensation related to the operation, maintenance, protection or supervision of property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the payroll factor so as to exclude, as near as possible, the portion of pay related to the operation, maintenance, protection and supervision of property used in the production of nonapportionable income.

71.04(6)(d)

(d) Payments made to an independent contractor or any person not properly classified as an employee are excluded from the payroll factor.

71.04(6)(e)

(e) If the taxpayer has no employees or the department determines that employees are not a substantial income-producing factor, the department may order or permit the elimination of the payroll factor.

71.04(7)

(7) Sales factor. For purposes of sub. (4):

71.04(7)(a)

(a) The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period. For sales of tangible personal property, the numerator of the sales factor is the sales of the taxpayer during the tax period under par. (b) 1. and 2. plus 100 percent of the sales of the taxpayer during the tax period under pars. (b) 2m. and 3. and (c). For purposes of applying pars. (b) 2m. and 3. and (c), if a taxpayer is within another state's jurisdiction for income or franchise tax purposes for any part of the taxable year, it is considered to be within that state's jurisdiction for income or franchise tax purposes for the entire taxable year.

71.04(7)(b)

(b) Sales of tangible personal property are in this state if any of the following occur:

71.04(7)(b)1.

1. The property is delivered or shipped to a purchaser, other than the federal government, within this state regardless of the f.o.b. point or other conditions of the sale.

71.04(7)(b)2.

2. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government within this state regardless of the f.o.b. point or other conditions of sale.

71.04(7)(b)2m.

2m. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government outside this state and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(b)3.

3. The property is shipped from an office, store, warehouse, factory or other place of storage in this state to a purchaser other than the federal government and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(c)

(c) Sales of tangible personal property by an office in this state to a purchaser in another state and not shipped or delivered from this state are in this state if the taxpayer is not within the jurisdiction for income tax purposes of either the state from which the property is delivered or shipped or of the destination state.

71.04(7)(df)

(df)

71.04(7)(df)1.

1. Gross receipts from the use of computer software are in this state if the purchaser or licensee uses the computer software at a location in this state.

71.04(7)(df)2.

2. Computer software is used at a location in this state if the purchaser or licensee uses the computer software in the regular course of business operations in this state, for personal use in this state, or if the purchaser or licensee is an individual whose domicile is in this state. If the purchaser or licensee uses the computer software in more than one state, the gross receipts shall be divided among those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the computer software in those states. To determine computer software use in this state, the department may consider the number of users in each state where the computer software is used, the number of site licenses or workstations in this state, and any other factors that reflect the use of computer software in this state.

71.04(7)(dh)

(dh)

71.04(7)(dh)1.

1. Gross receipts from services are in this state if the purchaser of the service received the benefit of the service in this state.

71.04(7)(dh)2.

2. The benefit of a service is received in this state if any of the following applies:

71.04(7)(dh)2.a.

a. The service relates to real property that is located in this state.

71.04(7)(dh)2.b.

b. The service relates to tangible personal property that is located in this state at the time that the service is received or tangible personal property that is delivered directly or indirectly to customers in this state.

71.04(7)(dh)2.c.

c. The service is provided to an individual who is physically present in this state at the time that the service is received.

71.04(7)(dh)2.d.

d. The service is provided to a person engaged in a trade or business in this state and relates to that person's business in this state.

71.04(7)(dh)3.

3. If the purchaser of a service receives the benefit of a service in more than one state, the gross receipts from the performance of the service are included in the numerator of the sales factor according to the portion of the service received in this state.

71.04(7)(dj)

(dj)

71.04(7)(dj)1.

1. Except as provided in par. (df), gross royalties and other gross receipts received for the use or license of intangible property, including patents, copyrights, trademarks, trade names, service names, franchises, licenses, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals, technical know-how, contracts, and customer lists, are sales in this state if any of the following applies:

71.04(7)(dj)1.a.

a. The purchaser or licensee uses the intangible property in the operation of a trade or business at a location in this state. If the purchaser or licensee uses the intangible property in the operation of a trade or business in more than one state, the gross royalties and other gross receipts from the use of the intangible property shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dj)1.b.

b. The purchaser or licensee is billed for the purchase or license of the use of the intangible property at a location in this state.

71.04(7)(dj)1.c.

c. The purchaser or licensee of the use of the intangible property has its commercial domicile in this state.

71.04(7)(dk)

(dk)

71.04(7)(dk)1.

1. Sales of intangible property, excluding securities, are sales in this state if any of the following applies:

71.04(7)(dk)1.a.

a. The purchaser uses the intangible property in the regular course of business operations in this state or for personal use in this state. If the purchaser uses the intangible property in more than one state, the sales shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dk)1.b.

b. The purchaser is billed for the purchase of the intangible property at a location in this state.

71.04(7)(dk)1.c.

c. The purchaser of the intangible property has its commercial domicile in this state.

71.04(7)(e)

(e) In this subsection, "sales" includes, but is not limited to, the following items related to the production of business income:

71.04(7)(e)1.

1. Gross receipts from the sale of inventory.

71.04(7)(e)2.

2. Gross receipts from the operation of farms, mines and quarries.

71.04(7)(e)3.

3. Gross receipts from the sale of scrap or by-products.

71.04(7)(e)4.

4. Gross commissions.

71.04(7)(e)5.

5. Gross receipts from personal and other services.

71.04(7)(e)6.

6. Gross rents from real property or tangible personal property.

71.04(7)(e)7.

7. Interest on trade accounts and trade notes receivable.

71.04(7)(e)8.

8. A partner's or member's share of the partnership's or limited liability company's gross receipts.

71.04(7)(e)9.

9. Gross management fees.

71.04(7)(e)10.

10. Gross royalties from income-producing activities.

71.04(7)(e)11.

11. Gross franchise fees from income-producing activities.

71.04(7)(f)

(f) The following items are among those that are not included in "sales" in this subsection:

71.04(7)(f)1.

1. Gross receipts and gain or loss from the sale of tangible business assets, except those under par. (e) 1., 2. and 3.

71.04(7)(f)2.

2. Gross receipts and gain or loss from the sale of nonbusiness real or tangible personal property.

71.04(7)(f)3.

3. Gross rents and rental income or loss from real property or tangible personal property if that real property or tangible personal property is not used in the production of business income.

71.04(7)(f)4.

4. Royalties from nonbusiness real property or nonbusiness tangible personal property.

71.04(7)(f)5.

5. Proceeds and gain or loss from the redemption of securities.

71.04(7)(f)6.

6. Interest, except interest under par. (e) 7., and dividends.

71.04(7)(f)7.

7. Gross receipts and gain or loss from the sale of intangible assets, except those under par. (e) 1.

71.04(7)(f)8.

8. Dividends deductible by corporations in determining net income.

71.04(7)(f)9.

9. Gross receipts and gain or loss from the sale of securities.

71.04(7)(f)10.

10. Proceeds and gain or loss from the sale of receivables.

71.04(7)(f)11.

11. Refunds, rebates and recoveries of amounts previously expended or deducted.

71.04(7)(f)12.

12. Other items not includable in apportionable income.

71.04(7)(f)13.

13. Foreign exchange gain or loss.

71.04(7)(f)14.

14. Royalties and income from passive investments in the property under s. 71.25 (5) (a) 21.

71.04(7)(f)16.

16. Pari-mutuel wager winnings or purses under ch. 562.

71.04(8)

(8) Railroads, financial organizations and public utilities.

71.04(8)(a)

(a)

71.04(8)(a)1.

1. "Financial organization", as used in this section, means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, credit union, cooperative bank, small loan company, sales finance company, investment company, brokerage house, underwriter or any type of insurance company.

71.04(8)(a)2.

2. As used in this section, "financial organization" includes any subsidiary of an entity described in subd. 1., if a significant purpose for the subsidiary is to hold investments or if the subsidiary primarily functions to hold investments.

71.04(8)(b)

(b)

71.04(8)(b)1.

1. For taxable years beginning before January 1, 2006, "public utility", as used in this section, means any business entity described under subd. 2. and any business entity which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications or the production, transmission, sale, delivery, or furnishing of electricity, water or steam, the rates of charges for goods or services of which have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(b)2.

2. In this section, for taxable years beginning after December 31, 2005, "public utility" means any business entity providing service to the public and engaged in the transportation of goods and persons for hire, as defined in s. 194.01 (4), regardless of whether or not the entity's rates or charges for services have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(c)

(c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.46, 2.47, 2.475, 2.49, 2.495, 2.50, and 2.502, Wis. adm. code.

71.04(9)

(9) Nonresident income from multistate tax-option corporation. Nonresident individuals and nonresident estates and trusts deriving income from a tax-option corporation which is engaged in business within and without this state shall be taxed only on the income of the corporation derived from business transacted and property located in this state and losses and other items of the corporation deductible by such shareholders shall be limited to their proportionate share of the Wisconsin loss or other item, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. For purposes of this subsection, all intangible income of tax-option corporations passed through to shareholders is business income that follows the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

71.04(10)

(10) Department may waive factor. Where, in the case of any nonresident individual or nonresident estate or trust engaged in business in and outside of this state and required to apportion its income as provided in this section, it shall be shown to the satisfaction of the department of revenue that the use of any one of the 3 factors provided under sub. (4) gives an unreasonable or inequitable final average ratio because of the fact that such nonresident individual or nonresident estate or trust does not employ, to any appreciable extent in its trade or business in producing the income taxed, the factors made use of in obtaining such ratio, this factor may, with the approval of the department of revenue, be omitted in obtaining the final average ratio which is to be applied to the remaining net income. This subsection does not apply to taxable years beginning after December 31, 2007.

71.04(11)

(11) Department may apportion by rule. If the income of any such nonresident individual or nonresident estate or trust properly assignable to the state of Wisconsin cannot be ascertained with reasonable certainty by the methods under this section, then the same shall be apportioned and allocated under such rules as the department of revenue may prescribe.

71.04 - ANNOT.

History: 1987 a. 312; 1987 a. 411 ss. 34 to 40, 61; 1989 a. 31; 1989 a. 56 s. 259; 1991 a. 39, 189, 269; 1993 a. 112, 204, 491; 1995 a. 27; 1997 a. 27, 237; 1999 a. 9; 2003 a. 37; 2005 a. 25; 2007 a. 20; 2009 a. 2, 28.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.39, Wis. adm. code.

State Codes and Statutes

State Codes and Statutes

Statutes > Wisconsin > 71 > 71.04

71.04

71.04 Situs of income; allocation and apportionment.

71.04(1)

(1) Situs.

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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. A nonresident limited liability company member's distributive share of limited liability company income shall follow the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. 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 multijurisdictional 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. Income of nonresident individuals, estates and trusts from winnings from a casino or bingo hall that is located in this state and that is operated by a Native American tribe or band shall follow the situs of the casino or bingo hall. Income derived by a nonresident individual from a covenant not to compete is taxable by this state to the extent that the covenant was based on a Wisconsin-based activity. 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), except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

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(1)(b)3.

3. The residence of an estate or trust shall be as provided under s. 71.14.

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.

71.04(4)

(4) Nonresident allocation and apportionment formula. Nonresident individuals and nonresident estates and trusts engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such nonresident individual or nonresident estate or trust within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies and car line companies there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

71.04(4)(a)

(a) For taxable years beginning before January 1, 2006, an apportionment fraction composed of a sales factor under sub. (7) representing 50% of the fraction, a property factor under sub. (5) representing 25% of the fraction, and a payroll factor under sub. (6) representing 25% of the fraction.

71.04(4)(b)

(b) For taxable years beginning after December 31, 2005, and before January 1, 2007, an apportionment fraction composed of a sales factor under sub. (7) representing 60% of the fraction, a property factor under sub. (5) representing 20% of the fraction, and a payroll factor under sub. (6) representing 20% of the fraction.

71.04(4)(c)

(c) For taxable years beginning after December 31, 2006, and before January 1, 2008, an apportionment fraction composed of a sales factor under sub. (7) representing 80% of the fraction, a property factor under sub. (5) representing 10% of the fraction, and a payroll factor under sub. (6) representing 10% of the fraction.

71.04(4)(d)

(d) For taxable years beginning after December 31, 2007, an apportionment fraction composed of the sales factor under sub. (7).

71.04(4)(e)

(e) For taxable years beginning after December 31, 2005, and before January 1, 2008, the apportionment fraction for the remaining net income of a financial organization shall include a sales factor that represents more than 50% of the apportionment fraction, as determined by rule by the department. For taxable years beginning after December 31, 2007, the apportionment fraction for the remaining net income of a financial organization is composed of a sales factor, as determined by rule by the department.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.41, Wis. adm. code.

71.04(4m)

(4m) Apportionment formula computation.

71.04(4m)(a)

(a)

71.04(4m)(a)1.

1. For taxable years beginning before January 1, 2008, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, the sales factor under sub. (7) is eliminated from the apportionment formula to determine the taxpayer's remaining net income under sub. (4).

71.04(4m)(a)2.

2. For taxable years beginning after December 31, 2007, if both the numerator and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income are zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(b)

(b)

71.04(4m)(b)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, the sales factor under sub. (7) is zero.

71.04(4m)(b)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a negative number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number, a negative number, or zero, none of the taxpayer's remaining net income is apportioned to this state.

71.04(4m)(c)

(c)

71.04(4m)(c)1.

1. For taxable years beginning before January 1, 2008, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, the sales factor under sub. (7) is one.

71.04(4m)(c)2.

2. For taxable years beginning after December 31, 2007, if the numerator of the sales factor under sub. (7) related to a taxpayer's remaining net income is a positive number and the denominator of the sales factor under sub. (7) related to a taxpayer's remaining net income is zero or a negative number, all of the taxpayer's remaining net income is apportioned to this state.

71.04(5)

(5) Property factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(5)(a)

(a) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period. Cash on hand or in the bank, shares of stock, notes, bonds, accounts receivable, or other evidence of indebtedness, special privileges, franchises, goodwill, or property the income of which is not taxable or is separately allocated, shall not be considered tangible property nor included in the apportionment.

71.04(5)(b)

(b) Property used in the production of nonapportionable income or losses shall be excluded from the numerator and denominator of the property factor. Property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the property factor so as to exclude, as near as possible, the portion of such property producing the nonapportionable income or loss.

71.04(5)(c)

(c) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 8 times the net annual rental. Net annual rental is the annual rental paid by the taxpayer less any annual rental received by the taxpayer from sub-rentals.

71.04(5)(d)

(d) The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the secretary of revenue may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property.

71.04(6)

(6) Payroll factor. For purposes of sub. (4) and for taxable years beginning before January 1, 2008:

71.04(6)(a)

(a) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.

71.04(6)(b)

(b) Compensation is paid in this state if:

71.04(6)(b)1.

1. The individual's service is performed entirely within this state;

71.04(6)(b)2.

2. The individual's service is performed within and without this state, but the service performed without this state is incidental to the individual's service within this state;

71.04(6)(b)3.

3. A portion of the service is performed within this state and the base of operations of the individual is in this state;

71.04(6)(b)4.

4. A portion of the service is performed within this state and, if there is no base of operations, the place from which the individual's service is directed or controlled is in this state;

71.04(6)(b)5.

5. A portion of the service is performed within this state and neither the base of operations of the individual nor the place from which the service is directed or controlled is in any state in which some part of the service is performed, but the individual's residence is in this state; or

71.04(6)(b)6.

6. The individual is neither a resident of nor performs services in this state but is directed or controlled from an office in this state and returns to this state periodically for business purposes and the state in which the individual resides does not have jurisdiction to impose income or franchise taxes on the employer.

71.04(6)(c)

(c) Compensation related to the operation, maintenance, protection or supervision of property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the payroll factor so as to exclude, as near as possible, the portion of pay related to the operation, maintenance, protection and supervision of property used in the production of nonapportionable income.

71.04(6)(d)

(d) Payments made to an independent contractor or any person not properly classified as an employee are excluded from the payroll factor.

71.04(6)(e)

(e) If the taxpayer has no employees or the department determines that employees are not a substantial income-producing factor, the department may order or permit the elimination of the payroll factor.

71.04(7)

(7) Sales factor. For purposes of sub. (4):

71.04(7)(a)

(a) The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period. For sales of tangible personal property, the numerator of the sales factor is the sales of the taxpayer during the tax period under par. (b) 1. and 2. plus 100 percent of the sales of the taxpayer during the tax period under pars. (b) 2m. and 3. and (c). For purposes of applying pars. (b) 2m. and 3. and (c), if a taxpayer is within another state's jurisdiction for income or franchise tax purposes for any part of the taxable year, it is considered to be within that state's jurisdiction for income or franchise tax purposes for the entire taxable year.

71.04(7)(b)

(b) Sales of tangible personal property are in this state if any of the following occur:

71.04(7)(b)1.

1. The property is delivered or shipped to a purchaser, other than the federal government, within this state regardless of the f.o.b. point or other conditions of the sale.

71.04(7)(b)2.

2. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government within this state regardless of the f.o.b. point or other conditions of sale.

71.04(7)(b)2m.

2m. The property is shipped from an office, store, warehouse, factory or other place of storage in this state and delivered to the federal government outside this state and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(b)3.

3. The property is shipped from an office, store, warehouse, factory or other place of storage in this state to a purchaser other than the federal government and the taxpayer is not within the jurisdiction, for income or franchise tax purposes, of the destination state.

71.04(7)(c)

(c) Sales of tangible personal property by an office in this state to a purchaser in another state and not shipped or delivered from this state are in this state if the taxpayer is not within the jurisdiction for income tax purposes of either the state from which the property is delivered or shipped or of the destination state.

71.04(7)(df)

(df)

71.04(7)(df)1.

1. Gross receipts from the use of computer software are in this state if the purchaser or licensee uses the computer software at a location in this state.

71.04(7)(df)2.

2. Computer software is used at a location in this state if the purchaser or licensee uses the computer software in the regular course of business operations in this state, for personal use in this state, or if the purchaser or licensee is an individual whose domicile is in this state. If the purchaser or licensee uses the computer software in more than one state, the gross receipts shall be divided among those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the computer software in those states. To determine computer software use in this state, the department may consider the number of users in each state where the computer software is used, the number of site licenses or workstations in this state, and any other factors that reflect the use of computer software in this state.

71.04(7)(dh)

(dh)

71.04(7)(dh)1.

1. Gross receipts from services are in this state if the purchaser of the service received the benefit of the service in this state.

71.04(7)(dh)2.

2. The benefit of a service is received in this state if any of the following applies:

71.04(7)(dh)2.a.

a. The service relates to real property that is located in this state.

71.04(7)(dh)2.b.

b. The service relates to tangible personal property that is located in this state at the time that the service is received or tangible personal property that is delivered directly or indirectly to customers in this state.

71.04(7)(dh)2.c.

c. The service is provided to an individual who is physically present in this state at the time that the service is received.

71.04(7)(dh)2.d.

d. The service is provided to a person engaged in a trade or business in this state and relates to that person's business in this state.

71.04(7)(dh)3.

3. If the purchaser of a service receives the benefit of a service in more than one state, the gross receipts from the performance of the service are included in the numerator of the sales factor according to the portion of the service received in this state.

71.04(7)(dj)

(dj)

71.04(7)(dj)1.

1. Except as provided in par. (df), gross royalties and other gross receipts received for the use or license of intangible property, including patents, copyrights, trademarks, trade names, service names, franchises, licenses, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals, technical know-how, contracts, and customer lists, are sales in this state if any of the following applies:

71.04(7)(dj)1.a.

a. The purchaser or licensee uses the intangible property in the operation of a trade or business at a location in this state. If the purchaser or licensee uses the intangible property in the operation of a trade or business in more than one state, the gross royalties and other gross receipts from the use of the intangible property shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dj)1.b.

b. The purchaser or licensee is billed for the purchase or license of the use of the intangible property at a location in this state.

71.04(7)(dj)1.c.

c. The purchaser or licensee of the use of the intangible property has its commercial domicile in this state.

71.04(7)(dk)

(dk)

71.04(7)(dk)1.

1. Sales of intangible property, excluding securities, are sales in this state if any of the following applies:

71.04(7)(dk)1.a.

a. The purchaser uses the intangible property in the regular course of business operations in this state or for personal use in this state. If the purchaser uses the intangible property in more than one state, the sales shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

71.04(7)(dk)1.b.

b. The purchaser is billed for the purchase of the intangible property at a location in this state.

71.04(7)(dk)1.c.

c. The purchaser of the intangible property has its commercial domicile in this state.

71.04(7)(e)

(e) In this subsection, "sales" includes, but is not limited to, the following items related to the production of business income:

71.04(7)(e)1.

1. Gross receipts from the sale of inventory.

71.04(7)(e)2.

2. Gross receipts from the operation of farms, mines and quarries.

71.04(7)(e)3.

3. Gross receipts from the sale of scrap or by-products.

71.04(7)(e)4.

4. Gross commissions.

71.04(7)(e)5.

5. Gross receipts from personal and other services.

71.04(7)(e)6.

6. Gross rents from real property or tangible personal property.

71.04(7)(e)7.

7. Interest on trade accounts and trade notes receivable.

71.04(7)(e)8.

8. A partner's or member's share of the partnership's or limited liability company's gross receipts.

71.04(7)(e)9.

9. Gross management fees.

71.04(7)(e)10.

10. Gross royalties from income-producing activities.

71.04(7)(e)11.

11. Gross franchise fees from income-producing activities.

71.04(7)(f)

(f) The following items are among those that are not included in "sales" in this subsection:

71.04(7)(f)1.

1. Gross receipts and gain or loss from the sale of tangible business assets, except those under par. (e) 1., 2. and 3.

71.04(7)(f)2.

2. Gross receipts and gain or loss from the sale of nonbusiness real or tangible personal property.

71.04(7)(f)3.

3. Gross rents and rental income or loss from real property or tangible personal property if that real property or tangible personal property is not used in the production of business income.

71.04(7)(f)4.

4. Royalties from nonbusiness real property or nonbusiness tangible personal property.

71.04(7)(f)5.

5. Proceeds and gain or loss from the redemption of securities.

71.04(7)(f)6.

6. Interest, except interest under par. (e) 7., and dividends.

71.04(7)(f)7.

7. Gross receipts and gain or loss from the sale of intangible assets, except those under par. (e) 1.

71.04(7)(f)8.

8. Dividends deductible by corporations in determining net income.

71.04(7)(f)9.

9. Gross receipts and gain or loss from the sale of securities.

71.04(7)(f)10.

10. Proceeds and gain or loss from the sale of receivables.

71.04(7)(f)11.

11. Refunds, rebates and recoveries of amounts previously expended or deducted.

71.04(7)(f)12.

12. Other items not includable in apportionable income.

71.04(7)(f)13.

13. Foreign exchange gain or loss.

71.04(7)(f)14.

14. Royalties and income from passive investments in the property under s. 71.25 (5) (a) 21.

71.04(7)(f)16.

16. Pari-mutuel wager winnings or purses under ch. 562.

71.04(8)

(8) Railroads, financial organizations and public utilities.

71.04(8)(a)

(a)

71.04(8)(a)1.

1. "Financial organization", as used in this section, means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, credit union, cooperative bank, small loan company, sales finance company, investment company, brokerage house, underwriter or any type of insurance company.

71.04(8)(a)2.

2. As used in this section, "financial organization" includes any subsidiary of an entity described in subd. 1., if a significant purpose for the subsidiary is to hold investments or if the subsidiary primarily functions to hold investments.

71.04(8)(b)

(b)

71.04(8)(b)1.

1. For taxable years beginning before January 1, 2006, "public utility", as used in this section, means any business entity described under subd. 2. and any business entity which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications or the production, transmission, sale, delivery, or furnishing of electricity, water or steam, the rates of charges for goods or services of which have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(b)2.

2. In this section, for taxable years beginning after December 31, 2005, "public utility" means any business entity providing service to the public and engaged in the transportation of goods and persons for hire, as defined in s. 194.01 (4), regardless of whether or not the entity's rates or charges for services have been established or approved by a federal, state or local government or governmental agency.

71.04(8)(c)

(c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.46, 2.47, 2.475, 2.49, 2.495, 2.50, and 2.502, Wis. adm. code.

71.04(9)

(9) Nonresident income from multistate tax-option corporation. Nonresident individuals and nonresident estates and trusts deriving income from a tax-option corporation which is engaged in business within and without this state shall be taxed only on the income of the corporation derived from business transacted and property located in this state and losses and other items of the corporation deductible by such shareholders shall be limited to their proportionate share of the Wisconsin loss or other item, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. For purposes of this subsection, all intangible income of tax-option corporations passed through to shareholders is business income that follows the situs of the business, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

71.04(10)

(10) Department may waive factor. Where, in the case of any nonresident individual or nonresident estate or trust engaged in business in and outside of this state and required to apportion its income as provided in this section, it shall be shown to the satisfaction of the department of revenue that the use of any one of the 3 factors provided under sub. (4) gives an unreasonable or inequitable final average ratio because of the fact that such nonresident individual or nonresident estate or trust does not employ, to any appreciable extent in its trade or business in producing the income taxed, the factors made use of in obtaining such ratio, this factor may, with the approval of the department of revenue, be omitted in obtaining the final average ratio which is to be applied to the remaining net income. This subsection does not apply to taxable years beginning after December 31, 2007.

71.04(11)

(11) Department may apportion by rule. If the income of any such nonresident individual or nonresident estate or trust properly assignable to the state of Wisconsin cannot be ascertained with reasonable certainty by the methods under this section, then the same shall be apportioned and allocated under such rules as the department of revenue may prescribe.

71.04 - ANNOT.

History: 1987 a. 312; 1987 a. 411 ss. 34 to 40, 61; 1989 a. 31; 1989 a. 56 s. 259; 1991 a. 39, 189, 269; 1993 a. 112, 204, 491; 1995 a. 27; 1997 a. 27, 237; 1999 a. 9; 2003 a. 37; 2005 a. 25; 2007 a. 20; 2009 a. 2, 28.

71.04 - ANNOT.

Cross Reference: See also s. Tax 2.39, Wis. adm. code.