71.34 Definitions.
1,807 words·~8 min read·
/wi/chapter-71/71-34A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
71.34 Definitions. In this subchapter:
(1am)“Aggregate effective tax rate” means the sum of the effective tax rates imposed by a state, U.S. possession, foreign country, or any combination thereof, on the person or entity.
(1b)“Effective tax rate” means the maximum tax rate imposed by the state, U.S. possession, or foreign country, multiplied by the apportionment percentage, if any, applicable to the person or entity under the laws of that state, U.S. possession, or foreign country.
(1c)For purposes of sub.
(j)and
(L), “intangible expenses” include the following, to the extent that the amounts would otherwise be deductible in computing Wisconsin adjusted gross income:
(a)Expenses, losses, and costs for, related to, or directly or indirectly in connection with the acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property.
(b)Losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions.
(c)Royalty, patent, technical, and copyright fees.
(d)Licensing fees.
(e)Other similar expenses, losses, and costs.
(1d)“Intangible property” includes stocks, bonds, financial instruments, patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.
(1e)For purposes of sub.
(j)and
(L), “interest expenses” means interest that would otherwise be deductible under section 163 of the Internal Revenue Code and deductible in the computation of Wisconsin adjusted gross income.
(a)For taxable years beginning after December 31, 2022, for tax option corporations, “Internal Revenue Code” means the federal Internal Revenue Code as amended to December 31, 2022, except as provided in pars.
(b),
(c), and
(e)and s. 71.98 , and subject to par.
(d).
71.34 Note NOTE: The cross-references to pars. (b), (c), and
(e)were changed from subds. 2., 3., and 5. and the cross-reference to par.
(d)was changed from subd. 4. by the legislative reference bureau under s. 13.92
(bm)2. to reflect the renumbering under s. 13.92
(bm)2. of s. 71.34
(1g)(n).
(b)For purposes of this subsection, “Internal Revenue Code” does not include the following provisions of federal public laws for taxable years beginning after December 31, 2022: sections 1, 3, 4, and 5 of P.L. 106-519 ; sections 101, 102, and 422 of P.L. 108-357 ; sections 1310 and 1351 of P.L. 109-58 ; section 11146 of P.L. 109-59 ; section 403
(q)of P.L. 109-135 ; section 513 of P.L. 109-222 ; section 104 of P.L. 109-432 ; sections 8233 and 8235 of P.L. 110-28 ; section 11
(e)and
(g)of P.L. 110-172 ; section 301 of P.L. 110-245 ; section 15351 of P.L. 110-246 ; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343 ; sections 1232, 1251, 1501, and 1502 of division B of P.L. 111-5 ; sections 211, 212, 213, 214, and 216 of P.L. 111-226 ; section 2122 of P.L. 111-240 ; sections 754 and 760 of P.L. 111-312 ; sections 104, 318, 322, 323, 326, 327, and 411 of P.L. 112-240 ; P.L. 114-7 ; section 1101 of P.L. 114-74 ; section 305 of division P of P.L. 114-113 ; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 326, and 411 of division Q of P.L. 114-113 ; sections 11011, 11012, 13201
(a)to
(e)and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97 ; sections 40304, 40305, 40306, and 40412 of P.L. 115-123 ; section 101
(c)of division T of P.L. 115-141 ; sections 101
(d)and (e), 102, 201 to 207, 301, 302, and 401
(47)and (195),
(b)(13), (17),
(22)and (30), and
(D)(v), (vi), (xiii), and
(II)of division U of P.L. 115-141 ; sections 104, 114, 115, 116, 130, and 145 of division Q of P.L. 116-94 ; sections 2304 and 2306 of P.L. 116-136 ; sections 111, 114, 115, 116, 118
(a)and (d), 133, 137, 138, and 210 of division EE of P.L. 116-260 ; sections 5003, 9041, 9673, 9675, and 9708 of P.L. 117-2 ; section 307 of division P of P.L. 117-103 ; section 13903
(b)of P.L. 117-169 ; and section 4151 of division FF of P.L. 117-328 .
71.34 Note NOTE: The cross-reference to “this subsection” was changed from “this paragraph” by the legislative reference bureau under s. 13.92
(bm)2. to reflect the renumbering under s. 13.92
(bm)2. of s. 71.34
(1g)(n).
(c)For purposes of this subsection, “Internal Revenue Code” does not include amendments to the federal Internal Revenue Code, including provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, enacted after December 31, 2022.
71.34 Note NOTE: The cross-reference to “this subsection” was changed from “this paragraph” by the legislative reference bureau under s. 13.92
(bm)2. to reflect the renumbering under s. 13.92
(bm)2. of s. 71.34
(1g)(n).
(d)For purposes of this subsection, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this subsection, apply for Wisconsin purposes at the same time as for federal purposes, except as follows:
71.34 Note NOTE: The cross-references to “this subsection” were changed from “this paragraph” by the legislative reference bureau under s. 13.92
(bm)2. to reflect the renumbering under s. 13.92
(bm)2. of s. 71.34
(1g)(n).
1. Changes made by sections 5001, 5002, 5005, 9623, 9624, and 9672 of P.L. 117-2 ; section 2 of P.L. 117-6 ; and sections 80401, 80402, and 80601 of division H of P.L. 117-58 apply for taxable years beginning after December 31, 2022.
2. Changes made by section 1201 of P.L. 108-173 and section 307 of P.L. 109-432 apply for taxable years beginning after December 31, 2010.
(e)For purposes of this subsection, section 1366
(f)of the Internal Revenue Code (relating to pass-through of items to shareholders) is modified by substituting the tax under s. 71.35 for the taxes under sections 1374 and 1375 of the Internal Revenue Code.
71.34 Note NOTE: The cross-reference to “this subsection” was changed from “this paragraph” by the legislative reference bureau under s. 13.92
(bm)2. to reflect the renumbering under s. 13.92
(bm)2. of s. 71.34
(1g)(n).
71.34 Note NOTE: Sub.
(1g)is shown as renumbered from sub.
(n)by the legislative reference bureau under s. 13.92
(bm)2.
(1h)For purposes of sub.
(j)and
(L), “management fees” include expenses and costs, not including interest expenses, pertaining to accounts receivable, accounts payable, employee benefit plans, insurance, legal matters, payroll, data processing, purchasing, taxation, financial matters, securities, accounting, or reporting and compliance matters or similar activities, to the extent that the amounts would otherwise be deductible in the computation of Wisconsin adjusted gross income.
(1k)“Net income or loss” of a tax-option corporation means net income or loss computed under the internal revenue code, as defined under sub.
(1g)and s. 71.98
(3)and
(4), except that:
(af)Section 61 of the Internal Revenue Code is modified so that income received in the form of allocations issued by this state with moneys received from the coronavirus relief fund authorized under 42 USC 801 to be used for any of the following purposes is not taxable income:
1. Broadband expansion.
2. Privately owned movie theater grants.
3. A nonprofit grant program.
4. A tourism grants program.
5. A cultural organization grant program.
6. Music and performance venue grants.
7. Lodging industry grants.
8. Low-income home energy assistance.
9. A rental assistance program.
10. Supplemental child care grants.
11. A food insecurity initiative.
12. A farm support program.
13. Grants to small businesses.
14. Ethanol industry assistance.
15. Wisconsin Eye.
(ag)Section 164
(3)of the internal revenue code is modified so that state taxes and taxes of the District of Columbia that are value-added taxes, single business taxes or taxes on or measured by all or a portion of net income, gross income, gross receipts or capital stock are not deductible.
(ah)Section 61 of the Internal Revenue Code is modified so that income received in the form of a grant issued by the Wisconsin Economic Development Corporation during and related to the COVID-19 pandemic under the ethnic minority emergency grant program is not taxable income. Amounts otherwise deductible under this chapter that are paid directly or indirectly with the grant money are deductible.
(ai)Section 61 of the Internal Revenue Code is modified so that income received in the form of a grant from the restaurant revitalization fund, under section 5003 of the federal American Rescue Plan Act of 2021, P.L. 117-2 , is not taxable income. Amounts otherwise deductible under this chapter that are paid directly or indirectly with the grant money are deductible. Amounts excluded under this paragraph by a tax-option corporation or partnership shall be treated as tax-exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code.
(ar)Section 1363
(a)of the internal revenue code does not apply.
(b)The items referred to in section 1366
(A)of the internal revenue code shall be included.
(c)The deduction referred to in sections 212 and 703
(E)of the internal revenue code shall be allowed.
(d)An addition or subtraction, as appropriate, shall be made for the net amount of state and federal differences including differences arising from the different basis of assets disposed of in a transaction in which gain or loss is recognized for state tax purposes, different depreciation methods or difference in basis of depreciable assets, different elections, or transitional adjustments due to differences in the statutes for taxable years 1986 and 1987 pertaining to the computation of net income of a tax-option corporation.
(f)An addition shall be made for the amount of interest, less related expenses, excluded by reason of section 103 of the internal revenue code (relating to interest received on state and municipal obligations and on volunteer fire department and mass transit obligations) or any other federal law.
(g)An addition shall be made for credits computed by a tax-option corporation under all of the following and passed through to shareholders:
1. Section 71.28
(1dm).
Effective date note NOTE: Subd. 1. is repealed eff. 1-1-43 by 2025 Wis. Act 118 , section 364 .
2. Section 71.28
(1dx).
Effective date note NOTE: Subd. 2. is repealed eff. 1-1-43 by 2025 Wis. Act 118 , section 365 .