71.25 Situs of income; allocation and apportionment.
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/wi/chapter-71/71-25A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
71.25 Situs of income; allocation and apportionment. For purposes of determining the situs of income under this section and s. 71.255
(a)1. and 2. :
(1)Beneficiaries. 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.
(2)Grantor trusts. 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.
(4)Corporations engaged in business wholly within this state. For corporations engaged in business wholly within this state, all income is subject to, or included in the measure of, the Wisconsin income or franchise tax.
(5)Corporations engaged in business both within and without the state.
(a)Apportionable income. Except as provided in sub.
(6), corporations engaged in business both within and without this state are subject to apportionment. Income gain or loss from the sources listed in this paragraph is presumed apportionable as unitary or operational income or other income that has a taxable presence in this state. Apportionable income includes all income or loss of corporations, other than nonapportionable income as specified in par.
(b), including, but not limited to, income, gain or loss from the following sources:
1. Sale of inventory.
2. Farms, mines and quarries.
3. Sale of scrap and by-products.
4. Commissions.
5. Sale of real property or tangible personal property used in the production of business income.
6. Royalties from intangible assets.
7. Redemption of securities.
8. Interest on trade accounts and trade notes receivable.
9. Interest and dividends if the operations of the payer are unitary with those of the payee, or if those operations are not unitary but the investment activity from which that income is derived is an integral part of a unitary business and the payer and payee are neither affiliates nor related as parent company and subsidiary. In this subdivision, “investment activity” includes decision making relating to the purchase and sale of stocks and other securities, investing surplus funds and the management and record keeping associated with corporate investments, not including activities of a broker or other agent in maintaining an investment portfolio.
10. Sale of intangible assets if the operations of the company in which the investment was made were unitary with those of the investing company, or if those operations were not unitary but the investment activity from which that gain or loss was derived is an integral part of a unitary business and the companies were neither affiliates nor related as parent company and subsidiary. In this subdivision, “investment activity” has the meaning given under subd. 9.
11. Management fees.
12. Franchise fees.
13. Treble damages.
14. A partner’s share of income or loss from a partnership or a member’s share of income or loss from a limited liability company.
16. Foreign exchange gain or loss.
17. Sale of receivables.
18. Rentals of, or royalties from, real property or tangible personal property if that real property or tangible personal property is used in the business.
19. Sale or exchange of petroleum at the wellhead.
20. Personal services performed by employees of the corporation.
21. Patents, copyrights, trademarks, trade names, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals and technical know-how.