Wis. Admin. Code § Tax 2.60 — Definitions relating to combined reporting

Tax 2.60(1) (1) Purpose. This section provides definitions applicable to ss. Tax 2.61 , 2.62 , 2.63 , 2.64 , 2.65 , 2.66 , and 2.67 , which interpret the combined reporting provisions of s. 71.255 , Stats.

Tax 2.60(2) (2) Definitions.

Tax 2.60(2)(a) (a) “Combined group” has the meaning given in s. 71.255 (1) (a) , Stats. The following subdivisions clarify this meaning:

Tax 2.60(2)(a)1. 1. If a group of corporations satisfies all three conditions described in s. Tax 2.61 (2) (a) , it is considered a combined group even if the group is not eligible to apportion its income because all corporations in the group do business solely in Wisconsin.

Tax 2.60(2)(a)2. 2. A combined group remains in existence for as long as two or more corporations meet all three conditions described in s. Tax 2.61 (2) (a) with regard to the same unitary business. The mere addition of new members or departure of existing members does not create a new combined group.

Tax 2.60(2)(a)3. 3. Any commonly controlled group that has made a controlled group election is a combined group, and each member of a commonly controlled group that has made the controlled group election is a combined group member.

Tax 2.60(2)(b) (b) “Combined group member” means a corporation for which any part of the corporation’s net income or loss is subject to combination and therefore required to be included in a combined report, or any member of a commonly controlled group that is subject to a controlled group election.

Tax 2.60(2)(c) (c) “Combined report” has the meaning given in s. 71.255 (1) (b) , Stats. A combined report is considered a return filed pursuant to ss. 71.24 (1) or (1m) or 71.44 (1) or (1m) , Stats., as applicable, by each corporation included in the combined report. For this reason, the term “combined return” is used throughout the rules of this chapter to refer to a combined report.

Tax 2.60(2)(d) (d) “Combined return” has the same meaning as “combined report” as explained in par. (c) . In general, a combined return includes the computation of combined unitary income, the apportionment of the income to each combined group member, as applicable, any separate entity items, loss carryforwards, and credits of each combined group member, and the net tax and economic development surcharge liability of each combined group member. To be considered complete, a combined return shall contain all the items required in s. Tax 2.67 (2) (c) .

Tax 2.60(2)(e) (e) “Combined unitary income” means the combined group’s net income or loss attributable to the unitary business which is subject to combination under s. 71.255 , Stats., before apportionment and net business loss carryforwards. Combined unitary income excludes any amounts that are not subject to combination because of the water’s edge rules.

Tax 2.60(2)(f) (f) “Controlled group election” means an election to include every member of the commonly controlled group in the combined group as provided by s. 71.255 (2m) , Stats., and further described in s. Tax 2.63 .

Tax 2.60(2)(g) (g) “Corporation” includes corporations, publicly traded partnerships treated as corporations in section 7704 of the Internal Revenue Code, limited liability corporations treated as corporations under the Internal Revenue Code, joint stock companies, associations, common law trusts and all other entities treated as corporations under section 7701 of the Internal Revenue Code, unless the context requires otherwise in this chapter or in ch. 71 , Stats.

Tax 2.60(2)(h) (h) “Designated agent” means the corporation in the combined group responsible for acting on behalf of the group for matters relating to the combined return, as further described in s. Tax 2.65 .

Tax 2.60(2)(i) (i) “Income” and “net income” include net losses, unless the context requires otherwise.

Tax 2.60(2)(j) (j) “Intercompany transaction” means a transaction between two members of the same combined group.

Tax 2.60(2)(k) (k) “Internal Revenue Code” has the meaning given in ss. 71.22 (4) and (4m) and 71.42 (2) , Stats., as applicable.

Tax 2.60(2)(L) (L) “Nonincludable corporation” means a corporation that is not required to use combined reporting even if it satisfies all three conditions described in s. Tax 2.61 (2) (a) . A nonincludable corporation cannot be a combined group member even if the nonincludable corporation is a member of a commonly controlled group which has made the controlled group election.

Tax 2.60(2)(Lm) (Lm) “Pre-2009 net business loss carryforward” has the meaning given to “pre-2009 net business loss carry-forward” in s. 71.255 (6) (bm) 1. , Stats.

Tax 2.60(2)(m) (m) “Separate entity item” means a combined group member’s item of net income or loss or apportionment factor amount which is not subject to combination but instead must be accounted for on a separate entity basis. Separate entity items may include those listed in s. Tax 2.61 (5) (b) to (g) . Net business loss carryforwards may be separate entity items if they are non-sharable loss carryforwards as provided in s. Tax 2.61 (9) .

Tax 2.60(2)(n) (n) “State” means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico, or any territory or possession of the United States.

Tax 2.60(2)(o) (o) “Unitary business income” means the net income or loss derived from the unitary business, whether or not the income or loss is subject to combination. “Unitary business” is explained further in s. Tax 2.62 .

Tax 2.60(2)(p) (p) “Unitary combination” means the computation of combined unitary income and of each member’s share of the combined unitary income.

Tax 2.60(2)(q) (q) “Water’s edge rules” means the rules provided under s. Tax 2.61 (4) under which some or all of a corporation’s items attributable to a unitary business are not subject to combination because of the degree of the corporation’s activity outside the United States.