Wis. Stat. § 71.10
This is the official text of Wis. Stat. § 71.10, part of Wisconsin’s Wisconsin Statutes — the complete compiled statutory law of Wisconsin, organized into numbered chapters by subject.
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General provisions.
Official statutory text
(1) Allocation of gross income, deductions, credits between 2 or more businesses. In any case of 2 or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States, whether or not affiliated, and whether or not unitary) owned or controlled directly or indirectly by the same interests, the secretary or the secretary’s delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if the secretary determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses. The authority granted under this subsection is in addition to, and not a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45. , 71.26 (2) (a) 7. and 8. , 71.34 (1k) (j) and (k) , 71.45 (2) (a) 16. and 17. , and 71.80 (23) .
(1m) Transactions without economic substance.
(a) If any person, directly or indirectly, engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Wisconsin tax, the department shall determine the amount of a taxpayer’s taxable income or tax so as to reflect what would have been the taxpayer’s taxable income or tax if not for the transaction or transactions without economic substance causing the reduction in taxable income or tax.
(b) A transaction has economic substance only if the transaction is treated as having economic substance as determined under section 7701 (o) of the Internal Revenue Code, except that the tax effect shall be determined using federal, state, local, or foreign taxes, rather than only the federal income tax effect.
(c) With respect to a transaction between members of a controlled group, as defined in section 267 (f) (1) of the Internal Revenue Code, the transaction shall be presumed to lack economic substance, and the taxpayer shall bear the burden of establishing by clear and satisfactory evidence that the transaction or the series of transactions between the taxpayer and one or more members of the controlled group has economic substance.
(2) Assessment of income distributable to a nonresident beneficiary. The income of a trust distributable or distributed to a nonresident beneficiary shall be assessed as the income of other nonresidents is assessed. No personal exemptions shall be allowed in assessing the income of such nonresident beneficiary unless that person makes a complete return under this chapter.
(4) Computation order. Notwithstanding any other provisions in this chapter, all persons other than corporations computing liability for the tax under s. 71.02 shall make computations in the following order:
(a) Tax under s. 71.06 .
(c) The credit under s. 71.07 (5) .
(cd) Postsecondary education credit under s. 71.07 (5r) .
(ce) Water consumption credit under s. 71.07 (5rm) .
(cm) The armed forces member tax credit under s. 71.07 (6m) .
(cn) Biodiesel fuel production credit under s. 71.07 (3h) .
(co) Long-term care insurance assessment credit under s. 71.07 (12) , except as provided under par. (i) .
(cp) Health Insurance Risk-Sharing Plan assessments credit under s. 71.07 (5g) .
(cq) Veteran employment credit under s. 71.07 (6n) .
(cs) Additional child and dependent care tax credit under s. 71.07 (9g) .
(ct) Stillbirth tax credit under s. 71.07 (8n) .
(ctm) Additional employer-provided child care credit under s. 71.07 (8s) .
(cu) Rail infrastructure modernization credit under s. 71.07 (8t) .
(cv) Rail infrastructure maintenance credit under s. 71.07 (8v) .
(cw) Qualifying transportation services credit under s. 71.07 (11) .
(d) School property tax credit under s. 71.07 (9) .
(du) Working families tax credit under s. 71.07 (5m) .
07 (8n) .
(ctm) Additional employer-provided child care credit under s. 71.07 (8s) .
(cu) Rail infrastructure modernization credit under s. 71.07 (8t) .
(cv) Rail infrastructure maintenance credit under s. 71.07 (8v) .
(cw) Qualifying transportation services credit under s. 71.07 (11) .
(d) School property tax credit under s. 71.07 (9) .
(du) Working families tax credit under s. 71.07 (5m) .
(e) Employee college savings account contribution credit under s. 71.07 (10) .
(es) Community rehabilitation program credit under s. 71.07 (5k) .
(eu) Research facilities credit under s. 71.07 (4n) .
(fb) Low-income housing credit under s. 71.07 (8b) .
(fm) Supplement to federal historic rehabilitation credit under s. 71.07 (9m) .
(fn) Manufacturing and agriculture credit under s. 71.07 (5n) .
(fp) State historic rehabilitation credit under s. 71.07 (9r) .
(fr) Research credit under s. 71.07 (4k) , except as provided under par. (i) .
(fs) Film production company investment credit under s. 71.07 (5h) .
(ft) Film production services credit under s. 71.07 (5f) (b) 1. and 3.
(g) Married persons credit under s. 71.07 (6) .
(gb) The manufacturing sales tax credit under s. 71.07 (3s) .
(gbb) Manufacturing investment credit under s. 71.07 (3t) .
(gbm) Dairy investment credit under s. 71.07 (3n) .
(gc) Ethanol and biodiesel fuel pump credit under s. 71.07 (5j) .
(grb) Development zone capital investment credit under s. 71.07 (2dm) .
(grd) Technology zones credit under s. 71.07 (3g) .
(gu) Development zones credit under s. 71.07 (2dx) .
(gv) Economic development tax credit under s. 71.07 (2dy) .
(1m) Transactions without economic substance.
(a) If any person, directly or indirectly, engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Wisconsin tax, the department shall determine the amount of a taxpayer’s taxable income or tax so as to reflect what would have been the taxpayer’s taxable income or tax if not for the transaction or transactions without economic substance causing the reduction in taxable income or tax.
(b) A transaction has economic substance only if the transaction is treated as having economic substance as determined under section 7701 (o) of the Internal Revenue Code, except that the tax effect shall be determined using federal, state, local, or foreign taxes, rather than only the federal income tax effect.
(c) With respect to a transaction between members of a controlled group, as defined in section 267 (f) (1) of the Internal Revenue Code, the transaction shall be presumed to lack economic substance, and the taxpayer shall bear the burden of establishing by clear and satisfactory evidence that the transaction or the series of transactions between the taxpayer and one or more members of the controlled group has economic substance.
(2) Assessment of income distributable to a nonresident beneficiary. The income of a trust distributable or distributed to a nonresident beneficiary shall be assessed as the income of other nonresidents is assessed. No personal exemptions shall be allowed in assessing the income of such nonresident beneficiary unless that person makes a complete return under this chapter.
(4) Computation order. Notwithstanding any other provisions in this chapter, all persons other than corporations computing liability for the tax under s. 71.02 shall make computations in the following order:
(a) Tax under s. 71.06 .
(c) The credit under s. 71.07 (5) .
(cd) Postsecondary education credit under s. 71.07 (5r) .
(ce) Water consumption credit under s. 71.07 (5rm) .
(cm) The armed forces member tax credit under s. 71.07 (6m) .
(cn) Biodiesel fuel production credit under s. 71.07 (3h) .
(co) Long-term care insurance assessment credit under s. 71.07 (12) , except as provided under par. (i) .
(cp) Health Insurance Risk-Sharing Plan assessments credit under s. 71.07 (5g) .
(cq) Veteran employment credit under s. 71.07 (6n) .
(cs) Additional child and dependent care tax credit under s. 71.07 (9g) .
(ct) Stillbirth tax credit under s. 71.07 (8n) .
(ctm) Additional employer-provided child care credit under s. 71.07 (8s) .
(cu) Rail infrastructure modernization credit under s. 71.07 (8t) .
(cv) Rail infrastructure maintenance credit under s. 71.07 (8v) .
(cw) Qualifying transportation services credit under s. 71.07 (11) .
(d) School property tax credit under s. 71.07 (9) .
(du) Working families tax credit under s. 71.07 (5m) .
07 (8n) .
(ctm) Additional employer-provided child care credit under s. 71.07 (8s) .
(cu) Rail infrastructure modernization credit under s. 71.07 (8t) .
(cv) Rail infrastructure maintenance credit under s. 71.07 (8v) .
(cw) Qualifying transportation services credit under s. 71.07 (11) .
(d) School property tax credit under s. 71.07 (9) .
(du) Working families tax credit under s. 71.07 (5m) .
(e) Employee college savings account contribution credit under s. 71.07 (10) .
(es) Community rehabilitation program credit under s. 71.07 (5k) .
(eu) Research facilities credit under s. 71.07 (4n) .
(fb) Low-income housing credit under s. 71.07 (8b) .
(fm) Supplement to federal historic rehabilitation credit under s. 71.07 (9m) .
(fn) Manufacturing and agriculture credit under s. 71.07 (5n) .
(fp) State historic rehabilitation credit under s. 71.07 (9r) .
(fr) Research credit under s. 71.07 (4k) , except as provided under par. (i) .
(fs) Film production company investment credit under s. 71.07 (5h) .
(ft) Film production services credit under s. 71.07 (5f) (b) 1. and 3.
(g) Married persons credit under s. 71.07 (6) .
(gb) The manufacturing sales tax credit under s. 71.07 (3s) .
(gbb) Manufacturing investment credit under s. 71.07 (3t) .
(gbm) Dairy investment credit under s. 71.07 (3n) .
(gc) Ethanol and biodiesel fuel pump credit under s. 71.07 (5j) .
(grb) Development zone capital investment credit under s. 71.07 (2dm) .
(grd) Technology zones credit under s. 71.07 (3g) .
(gu) Development zones credit under s. 71.07 (2dx) .
(gv) Economic development tax credit under s. 71.07 (2dy) .
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