71.30 General provisions.
1,780 words·~8 min read·
/wi/chapter-71/71-30-2A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
71.30 General provisions.
(1)Accounting method.
(a)A corporation shall use a method of accounting authorized under the internal revenue code and shall use the same method used for federal income tax purposes if that method is authorized under the internal revenue code.
(b)A corporation that changes its method of accounting while subject to taxation under this chapter shall make the adjustments required under the internal revenue code, except that in the last year that a corporation is subject to taxation under this chapter it shall take into account all of the remaining adjustments required by this chapter because of a change in method of accounting.
(2)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 his or her delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if he or she 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
(a)24. and
(b)45. , 71.26
(a)7. and 8. , 71.34
(j)and
(k), 71.45
(a)16. and 17. , and 71.80
(23).
(2m)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
(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.
(3)Computations order. Notwithstanding any other provisions in this chapter, corporations computing liability for the tax under s. 71.23
(1)or
(2)shall make computations in the following order:
(a)Tax under s. 71.23
(1)or
(2).
(b)Manufacturing sales tax credit under s. 71.28
(3).
Effective date note NOTE: Par.
(b)is repealed eff. 1-1-32 by 2025 Wis. Act 118 .
(bb)Manufacturing investment credit under s. 71.28
(3t).
Effective date note NOTE: Par.
(bb)is repealed eff. 1-1-29 by 2025 Wis. Act 118 .
(bm)Dairy investment credit under s. 71.28
(3n).
Effective date note NOTE: Par.
(bm)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(bn)Community rehabilitation program credit under s. 71.28
(5k).
(c)Research credit under s. 71.28
(4), except as provided under par.
(f).
(cd)Postsecondary education credit under s. 71.28
(5r).
Effective date note NOTE: Par.
(cd)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(ce)Water consumption credit under s. 71.28
(5rm).
Effective date note NOTE: Par.
(ce)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(cn)Biodiesel fuel production credit under s. 71.28
(3h).
Effective date note NOTE: Par.
(cn)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(cs)Low-income housing credit under s. 71.28
(8b).
(d)Research facilities credit under s. 71.28
(5).
Effective date note NOTE: Par.
(d)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(dm)Health Insurance Risk-Sharing Plan assessments credit under s. 71.28
(5g).
Effective date note NOTE: Par.
(dm)is repealed eff. 1-1-36 by 2025 Wis. Act 118 .
(dn)Manufacturing and agriculture credit under s. 71.28
(5n).
(dp)Veteran employment credit under s. 71.28
(6n).
Effective date note NOTE: Par.
(dp)is repealed eff. 1-1-34 by 2025 Wis. Act 118 .
(ds)Ethanol and biodiesel fuel pump credit under s. 71.28
(5j).
Effective date note NOTE: Par.
(ds)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(e)Community development finance credit under s. 71.28
(1).
Effective date note NOTE: Par.
(e)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(ei)Development zone capital investment credit under s. 71.28
(1dm).
Effective date note NOTE: Par.
(ei)is repealed eff. 1-1-43 by 2025 Wis. Act 118 .
(eL)Development zones credit under s. 71.28
(1dx).
Effective date note NOTE: Par.
(eL)is repealed eff. 1-1-43 by 2025 Wis. Act 118 .
(ema)Economic development tax credit under s. 71.28
(1dy).
Effective date note NOTE: Par.
(ema)is repealed eff. 1-1-37 by 2025 Wis. Act 118 .
(eon)Technology zones credit under s. 71.28
(3g).
Effective date note NOTE: Par.
(eon)is repealed eff. 1-1-41 by 2025 Wis. Act 118 .
(eop)Early stage seed investment credit under s. 71.28
(5b).
(ep)Supplement to federal historic rehabilitation credit under s. 71.28
(6).
(epa)Electronic medical records credit under s. 71.28
(5i).
Effective date note NOTE: Par.
(epa)is repealed eff. 1-1-35 by 2025 Wis. Act 118 .
(epr)Film production company investment credit under s. 71.28
(5h).
(eps)Film production services credit under s. 71.28
(b)1. and 3.
(ey)Employee college savings account contribution credit under s. 71.28
(10).
(f)The total of farmland preservation credit under subch. IX , enterprise zone jobs credit under s. 71.28
(3w), electronics and information technology manufacturing zone credit under s. 71.28
(3wm), business development credit under s. 71.28
(3y), research credit under s. 71.28
(k)1. , film production services credit under s. 71.28
(b)2. , estimated tax payments under s. 71.29 , taxes withheld under subch. X , taxes withheld under s. 71.775 , and deposits made under s. 71.80
(c).
71.30 Note NOTE: Par.
(f)is shown as amended by 2025 Wis. Acts 118 and 137 and as merged by the legislative reference bureau under s. 13.92
(2)(i).
(4)Defense contract renegotiation. If the renegotiation or price redetermination of any corporation defense contract or subcontract by the government of the United States or any agency thereof or the voluntary adjustment of prices, costs or profits on any such contract or subcontract results in a reduction of income, the amount of any repayment or credit pursuant to such renegotiation, price redetermination or adjustment, including any federal income taxes credited as a part thereof, shall be allowed as a deduction from the corporate taxable income of the year in which said income was reported for taxation. Any federal income tax previously paid upon any income so repaid or credited shall be disallowed as a deduction from income of the year in which such tax was originally deducted, to the extent that such tax constituted an allowable deduction for said year. Any corporate taxpayer affected by such renegotiation, price redetermination or voluntary adjustment may within one year after the final determination thereof file a claim for refund and secure the same without interest, and the department of revenue shall make appropriate adjustments on account of said tax deductions without interest, notwithstanding the limitations of s. 71.75 or other applicable statutes.
(5)Disc income combining. In the case of a parent corporation, its DISC or affiliate, the net income of a DISC derived from business transacted with its parent shall be combined with the income of the parent corporation and the net income of a DISC derived from business transacted with the parent’s affiliated corporation shall be combined with the net income of the affiliated corporation to determine the amount of income subject to taxation under this chapter for the DISC, the parent corporation or the affiliate of the parent corporation as separate taxable entities. The net income of the parent corporation shall not include dividends received from the DISC paid from income previously combined for taxation under this subsection. “DISC” (domestic international sales corporation) has the meaning specified in section 992 of the internal revenue code as amended to December 31, 1979. For purposes of this subsection, a corporation is affiliated if at least 50 percent of its total combined voting stock is owned directly or indirectly by its parent corporation.
(6)Installment method; distributions and final year. A corporation entitled to use the installment method of accounting shall take the unreported balance of gain on all installment obligations into income in the taxable year of their distribution, transfer or acquisition by another person or for the final taxable year for which it files or is required to file a return under this chapter, whichever year occurs first.
(7)Penalties. Unless specifically provided in this subchapter, the penalties under subch. XIII apply for failure to comply with the provisions of this subchapter unless the context requires otherwise.
(8)Pricing effect on taxable income.
(a)When any corporation liable to taxation under this chapter conducts its business in such a manner as either directly or indirectly to benefit the members or stockholders thereof or any person interested in such business, by selling its products or the goods or commodities in which it deals at less than the fair price which might be obtained therefor, or where a corporation, a substantial portion of whose capital stock is owned either directly or indirectly by another corporation, acquires and disposes of the products of the corporation so owning a substantial portion of its stock in such a manner as to create a loss or improper net income, the department may determine the amount of taxable income to such corporation for the calendar or fiscal year, having due regard to the reasonable profits which but for such arrangement or understanding might or could have been obtained from dealing in such products, goods or commodities.