TAX NEWS - January 2010

Income/Franchise Tax - Wisconsin: New version of comprehensive combined reporting emergency rules issued

Emergency Rules Secs. Tax 2.60 – Tax 2.67, Wisconsin Department of Revenue (eff. 1/15/10). The department has adopted various new emergency rules to implement 2009 legislation that enacted a combined reporting regime for state corporate income taxpayers effective for tax years beginning on or after January 1, 2009. The new rules update, with various amendments, the emergency combined reporting rules issued last year that recently expired on January 4, 2010.

As before, the new emergency rules address:

- Definitions relating to combined reporting,
- Who must use combined reporting,
- Rules for determining whether a corporation is a member of a "commonly controlled group,"
- How to compute a combined group's unitary income, including application of federal regulations that relate to consolidated groups,
- How to apportion combined unitary income and rules that apply to the apportionment computation,
- How to determine the taxable income of combined groups that are not subject to apportionment,
- How to apply net business loss carryforwards, including rules relating to the sharing of net business losses,
- Several presumptions to aid taxpayers in determining whether a unitary business exists,
- Specific rules relating to the inclusion of passive holding companies and pass-through entities in a unitary business,
- How to make a "controlled group" election and how to renew it after its ten-year duration,
- Alternative apportionment for combined groups including specialized industries,
- Estimated tax payments, and
- Electronic filing requirements.