SB510,8,1812 49.155 (1m) (c) 3. If the individual was eligible for a child care subsidy under
13s. 49.191 (2), 1997 stats., on or after May 10, 1996, and received a child care subsidy
14on or after May 10, 1996, but lost the subsidy solely because of increased income, the
15gross income of the individual's family is at or below 200% 225 percent of the poverty
16line for a family the size of the individual's family. This subdivision does not apply
17to an individual whose family's gross income increased to more than 200% 225
18percent of the poverty line for a family the size of the individual's family.

SB510,8,2220 59.58 (6) (cb) The authority shall be responsible for sponsoring, developing,
21constructing, and operating a commuter rail transit system connecting the cities of
22Kenosha, Racine, and Milwaukee, to be known as the KRM commuter rail link.

SB510,9,224 59.58 (6) (cr) The authority may hire staff, conduct studies, and expend funds
25essential to the preparation of the report specified in par. (e) and in furtherance of

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1its responsibility under par. (cb) to develop and construct the KRM commuter rail
2link.

SB510,9,74 59.58 (6) (e) 3g. A study on the feasibility of adding a commuter rail stop and
5station at points where any proposed commuter rail route would intersect National
6Avenue in the city of Milwaukee or Greenfield Avenue in the city of Milwaukee or
7both.

SB510,9,119 59.58 (6) (e) 3m. A study on the feasibility of extending any proposed commuter
10rail project through the 30th Street corridor in the city of Milwaukee to the northern
11county line of Milwaukee County.

SB510,9,1814 59.58 (6) (f) 1. The authority may issue bonds, the principal and interest on
15which are payable exclusively from all or a portion of any revenues received by the
16authority. The authority may secure its bonds by a pledge of any income or revenues
17from any operations, rent, aids, grants, subsidies, contributions, or other source of
18moneys whatsoever.

SB510,9,2219 2. The authority may issue bonds in an aggregate principal amount not to
20exceed $50,000,000, excluding bonds issued to refund outstanding bonds issued
21under this subdivision, for the purpose of providing funds for the anticipated local
22funding share required for initiating KRM commuter rail link service.

SB510,9,2423 3. Neither the governing body of the authority nor any person executing the
24bonds is personally liable on the bonds by reason of the issuance of the bonds.

SB510,10,5

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14. The bonds of the authority are not a debt of the counties that created the
2authority. Neither these counties nor the state are liable for the payment of the
3bonds. The bonds of the authority shall be payable only out of funds or properties
4of the authority. The bonds of the authority shall state the restrictions contained in
5this subdivision on the face of the bonds.

SB510,10,196 5. Bonds of the authority shall be authorized by resolution of the authority's
7governing body. The bonds may be issued under such a resolution or under a trust
8indenture or other security instrument. The bonds may be issued in one or more
9series and may be in the form of coupon bonds or registered bonds under s. 67.09.
10The bonds shall bear the dates, mature at the times, bear interest at the rates, be in
11the denominations, have the rank or priority, be executed in the manner, be payable
12in the medium of payment and at the places, and be subject to the terms of
13redemption, with or without premium, as the resolution, trust indenture, or other
14security instrument provides. The authority may sell the bonds at public or private
15sales at the price or prices determined by the authority. If a member of the governing
16body of the authority whose signature appears on any bonds or coupons ceases to be
17a member of the governing body of the authority before the delivery of such
18obligations, the member's signature shall, nevertheless, be valid for all purposes as
19if the member had remained a member until delivery of the bonds.

SB510,11,620 6. The authority may issue refunding bonds for the purpose of paying any of
21its bonds at or prior to maturity or upon acceleration or redemption. The authority
22may issue refunding bonds at such time prior to the maturity or redemption of the
23refunded bonds as the authority deems to be in the public interest. The refunding
24bonds may be issued in sufficient amounts to pay or provide the principal of the bonds
25being refunded, together with any redemption premium on the bonds, any interest

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1accrued or to accrue to the date of payment of the bonds, the expenses of issue of the
2refunding bonds, the expenses of redeeming the bonds being refunded, and such
3reserves for debt service or other capital or current expenses from the proceeds of
4such refunding bonds as may be required by the resolution, trust indenture, or other
5security instruments. To the extent applicable, refunding bonds are subject to subd.
65.

SB510,11,107 (g) The governing bodies of the counties of Kenosha, Milwaukee, and Racine,
8and of the most populous city in each of these 3 counties, may submit to the electors
9in an advisory referendum the question of supporting an increase in the fees that
10may be imposed by the authority under subch. XIII of ch. 77.

SB510,11,1212 71.05 (1) (c) 9. The regional transit authority under s. 59.58 (6) (f).

SB510,11,1914 71.22 (9) "Person" includes corporations, unless the context requires
15otherwise. "Person" may include, as determined by the department, any individual,
16partnership, general partner of a partnership, limited liability company, registered
17limited liability partnership, foreign limited liability partnership, syndicate, estate,
18trust, trustee in bankruptcy, receiver, executor, administrator, assignee, or
19organization.

SB510,11,21 2171.255 Combined reporting. (1) Definitions. In this section:

SB510,11,2422 (a) "Combined group" means the group of all persons whose income and
23apportionment factors are considered under sub. (2) to determine the taxpayer's
24share of the net business income or loss that is apportionable to this state.

SB510,12,3

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1(b) "Combined report" means a return under s. 71.24 that is filed on a form
2prescribed by the department that specifies the income, credits, and tax of each
3taxpayer member of a commonly controlled group operating as a unitary business.

SB510,12,54 (c) "Commonly controlled group" means any of the following, but does not
5include an insurer that is exempt from taxation under s. 71.45 (1):

SB510,12,126 1. A parent corporation and any corporation or chain of corporations that are
7connected to the parent corporation by direct or indirect ownership by the parent
8corporation if the parent corporation owns stock representing more than 50 percent
9of the voting power of at least one of the connected corporations or if the parent
10corporation or any of the connected corporations owns stock that cumulatively
11represents more than 50 percent of the voting power of each of the connected
12corporations.

SB510,12,1513 2. Any 2 or more corporations if a common owner, regardless of whether or not
14the owner is a corporation, directly or indirectly owns stock representing more than
1550 percent of the voting power of the corporations or the connected corporations.

SB510,12,1716 3. Any 2 or more corporations if stock representing more than 50 percent of the
17voting power in each corporation are interests that cannot be separately transferred.

SB510,12,2218 4. Any 2 or more corporations if stock representing more than 50 percent of the
19voting power in each corporation is directly owned by, or for the benefit of, family
20members. In this subdivision, "family member" means an individual related by
21blood, marriage, or adoption within the 2nd degree of kinship as computed under s.
22852.03 (2), 1995 stats., or the spouse of such an individual.

SB510,13,423 (d) "Corporation" means a corporation, as defined in s. 71.22 (1k), that,
24regardless of where the corporation is located, would be subject to the taxes imposed
25under this chapter, if the corporation were doing business in this state. For purposes

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1of this section, the business conducted by a pass-through entity that is directly or
2indirectly held by a corporation is considered the corporation's business
3proportionate to the corporation's distributive share of the pass-through entity's
4income. "Corporation" does not include a tax-option corporation.

SB510,13,55 (e) "Department" means the department of revenue.

SB510,13,96 (f) "Internal Revenue Code" means the Internal Revenue Code as defined in s.
771.22 (4) and (4m), including any provision of a federal tax treaty that expressly
8applies to the states of the United States, but not including any other application of
9a federal tax treaty.

SB510,13,1410 (g) "Pass-through entity" means a general or limited partnership, any
11organization that is treated as a partnership for purposes of this chapter, a real
12estate investment trust, a regulated investment company, a real estate mortgage
13investment conduit, a financial asset securitization investment trust, a trust, or an
14estate.

SB510,13,1815 (h) "Tax haven" means a jurisdiction that, for any taxable year, is identified by
16the organization for economic cooperation and development as a tax haven or as
17having a harmful, preferential tax regime or has no, or a nominal, effective tax on
18income and all of the following apply:

SB510,13,2119 1. The jurisdiction has laws or practices that prevent the effective exchange of
20information, for tax purposes, with other governments on taxpayers benefiting from
21the tax regime.

SB510,14,222 2. The details of the legislative, legal, or administrative provisions of the
23jurisdiction's tax regime are not publicly available and apparent or are not
24consistently applied to similarly situated taxpayers or the information needed by tax

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1authorities to determine a taxpayer's correct tax liability, including accounting
2records and underlying documentation, is not adequately available.

SB510,14,53 3. The jurisdiction facilitates the establishment of foreign-owned entities
4without requiring a local substantive presence or prohibits such entities from having
5any commercial impact on the local economy.

SB510,14,86 4. The tax regime explicitly or implicitly excludes the jurisdiction's resident
7taxpayers from taking advantage of the tax regime's benefits or prohibits enterprises
8that benefit from the regime from operating in the jurisdiction's domestic market.

SB510,14,129 5. The jurisdiction has created a tax regime that is favorable for tax avoidance,
10based upon an overall assessment of relevant factors, including whether the
11jurisdiction has a significant untaxed offshore financial or other services sector
12relative to its overall economy.

SB510,14,1413 (i) "Taxpayer member" means a corporation that is subject to tax under s. 71.23
14(1) or (2) and that is a member of a combined group.

SB510,15,1115 (j) "Unitary business" means a single economic enterprise that consists of
16separate parts of a single business entity or of a commonly controlled group of
17business entities that are sufficiently interdependent, integrated, and interrelated
18by their activities so as to provide a synergy and a mutual benefit that produces a
19sharing or exchange of value among them and a significant flow of value to the
20separate parts. For purposes of this section, 2 or more business entities are
21considered a unitary business if the entities have unity of ownership, operation, and
22use, as indicated by centralized management or a centralized executive force;
23centralized purchasing, advertising, or accounting; intercorporate sales or leases;
24intercorporate services; intercorporate debts; intercorporate use of proprietary
25materials; interlocking directorates; or interlocking corporate officers. Any business

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1conducted by a pass-through entity that is owned directly or indirectly by a
2corporation is considered conducted by the corporation, to the extent of the
3corporation's distributive share of the pass-through entity's income, regardless of
4the percentage of the corporation's ownership interest. A business conducted
5directly or indirectly by one corporation is unitary with that portion of a business
6conducted by another corporation through its direct or indirect interest in a
7pass-through entity, if the corporations are sufficiently interdependent, integrated,
8and interrelated by their activities so as to provide a synergy and a mutual benefit
9that produces a sharing or exchange of value among them and a significant flow of
10value to the separate parts and the two corporations are members of the same
11commonly controlled group.

SB510,15,16 12(2) Corporations required to use combined reporting. (a) A corporation
13engaged in a unitary business with any other corporation shall file a combined report
14that includes the income, determined under sub. (3), and apportionment factor,
15determined under sub. (5) and s. 71.25, of the following members of the unitary
16business:

SB510,15,2017 1. Any member incorporated in the United States, including the District of
18Columbia and any territory or possession of the United States, or formed under the
19laws of any state, the District of Columbia, or any territory or possession of the
20United States.

SB510,15,2221 2. Any member, regardless of where the entity is incorporated or formed, if the
22average of the following ratios is 20 percent or more:

SB510,16,423 a. The value of the member's real property and tangible personal property
24located in the United States, including the District of Columbia and any territory or
25possession of the United States, not including property that is used to produce

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1nonapportionable income, divided by the value of all of the member's real property
2and tangible personal property, not including property that is used to produce
3nonapportionable income. For purposes of this subd. 2. a., the value of property that
4the member rents is the net annual rental amount for the property, multiplied by 8.

SB510,16,125 b. The amount of the member's payroll that is paid in the United States,
6including the District of Columbia and any territory or possession of the United
7States, divided by the amount of the member's total payroll. For purposes of this
8subd. 2. b., payroll includes compensation paid to employees, but does not include
9payroll used to produce nonapportionable income. The payroll paid in the United
10States, including the District of Columbia and any territory or possession of the
11United States, shall be determined in the same manner as payroll is determined for
12this state under s. 71.25 (8) (b) 1. to 5.

SB510,16,1813 c. The member's sales in the United States, including the District of Columbia
14and any territory or possession of the United States, divided by the member's total
15sales. For purposes of this subd. 2. c., sales include items identified in s. 71.25 (9) (e),
16but not items identified in s. 71.25 (9) (f), and the situs of a sale shall be determined
17in the same manner as for state sales in s. 71.25 (9) (b), (d), (df), and (dh), not
18including s. 71.25 (9) (b) 2m. and 3., (c), (df) 3., and (dh) 4.

SB510,16,2219 3. Any member that is a domestic international sales corporation as described
20in sections 991 to 994 of the Internal Revenue Code, a foreign sales corporation as
21described in sections 921 to 927 of the Internal Revenue Code, or an export trade
22corporation as described in sections 970 to 971 of the Internal Revenue Code.

SB510,17,6234. Any member that is a controlled foreign corporation as defined in section 957
24of the Internal Revenue Code, to the extent of the member's income that is defined
25in section 952 of of the Internal Revenue Code, including any lower-tier subsidiary's

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1distribution of such income that was previously taxed, determined without regard
2to federal treaties, and the apportionment factors related to that income. For
3purposes of this subdivision, any item of income received by a controlled foreign
4corporation is excluded if the income was subject to an income tax imposed by a
5foreign country at an effective tax rate greater than 90 percent of the maximum tax
6rate specified in section 11 of the Internal Revenue Code.

SB510,17,107 5. Any member that earns more than 20 percent of its income, directly or
8indirectly, from intangible property or service-related activities that are deductible
9against the business income of other members of the combined group, to the extent
10of that income and the apportionment factors related to that income.

SB510,17,1611 6. Any member that is doing business in a tax haven, if the member is engaged
12in an activity that is sufficient for that tax haven jurisdiction to impose a tax under
13federal law. If the member's business activity in a tax haven is entirely outside the
14scope of the laws and practices that cause the jurisdiction to be a tax haven, the
15member's business activity is not considered to be conducted in a tax haven for
16purposes of this section.

SB510,17,2117 7. Any member not described in subds. 1. to 6., to the extent that its income is
18derived from or attributable to sources within the United States, including the
19District of Columbia and any territory or possession of the United States, as
20determined under the Internal Revenue Code and by its apportionment factors
21related to that income.

SB510,18,222 (b) The department may require that a combined report filed under this section
23include the income and associated apportionment factors of any persons not
24described under par. (a) that are members of a unitary business to reflect the proper
25apportionment of income of the entire unitary business, including persons that are

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1not, or would not be, subject to the taxes imposed under this chapter if doing business
2in this state.

SB510,18,5 3(3) Components of income subject to tax. Each taxpayer member is
4responsible for the tax imposed under this chapter based on its taxable income or loss
5apportioned or allocated to this state, including:

SB510,18,76 (a) Its share of any business income apportionable to this state of each of the
7combined groups of which it is a member, as determined under subs. (4) and (5).

SB510,18,108 (b) Its share of any business income apportionable to this state of a distinct
9business activity conducted in and outside this state wholly by the taxpayer member,
10as determined under s. 71.25.

SB510,18,1211 (c) Its income from a business conducted wholly by the taxpayer member
12entirely in this state.

SB510,18,1413 (d) Its income sourced to this state from the sale or exchange of capital or assets
14and from involuntary conversions, as determined under sub. (4) (a) 8.

SB510,18,1515 (e) Its nonbusiness income or loss allocable to this state.

SB510,18,1716 (f) Its income or loss allocated or apportioned in an earlier year that is state
17source income during the income year, other than a net business loss carry-forward.

SB510,18,2418 (g) Its net business loss carry-forward. If the taxable income computed under
19this subsection and subs. (4) and (5) results in a loss for a taxpayer member of the
20combined group, the taxpayer member has a net business loss, subject to the net
21business loss limitations and carry-forward provisions in s. 71.26 (4). The business
22loss is applied as a deduction in a subsequent year only if the taxpayer member has
23net income sourced to this state, regardless of whether the taxpayer is a member of
24a combined group in the subsequent year.

SB510,19,2

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1(4) Business income of the combined group. The business income of a
2combined group is determined as follows:

SB510,19,63 (a) Compute the sum of the income of each member of the combined group as
4determined for federal income tax purposes, as if the members were not consolidated
5for federal purposes, and modified as provided under s. 71.26. Each member of the
6combined group shall determine its income as follows:

SB510,19,117 1. For any member incorporated in the United States, including the District of
8Columbia and any territory or possession of the United States, or included in a
9consolidated federal corporate income tax return, the income included in the total
10income of the combined group is the corporation's taxable income as determined
11under s. 71.26.

SB510,19,1412 2. Except as provided in subd. 3, for any member not included in subd. 1., the
13income included in the total income of the combined group shall be determined as
14follows:

SB510,19,1715 a. Each foreign branch or foreign corporation shall prepare a profit and loss
16statement in the currency in which the branch's or corporation's books of account are
17regularly maintained.

SB510,19,2018 b. The member shall adjust any statement prepared under subd. 2. a. to
19conform to the accounting principles generally accepted in the United States for the
20preparation of profit and loss statements.

SB510,19,2321 c. The member shall adjust any statement prepared under subd. 2. a. to
22conform to the tax accounting standards required by the department for the
23administration of this chapter.

SB510,20,3

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1d. Each member of the combined group shall translate its profit and loss
2statements, and the related apportionment factors, into the currency in which the
3parent corporation maintains its books and records.

SB510,20,54 e. Each member shall express in U.S. dollars the income apportioned to this
5state.

SB510,20,186 3. If the department determines that the income determination under this
7subsection reasonably approximates income as determined under s. 71.26, any
8member not included in subd. 1. may determine its income based on a consolidated
9profit and loss statement that includes the member and that is prepared for the
10purpose of filing, by related corporations, with the securities and exchange
11commission. If the member is not required to file with the securities and exchange
12commission, the department may allow, for purposes of this subdivision, the use of
13the consolidated profit and loss statement prepared for reporting to shareholders
14and subject to review by an independent auditor. If a statement described in this
15subdivision does not reasonably approximate income as determined under s. 71.26,
16the department may accept the statement if the member makes appropriate
17adjustments to the statement, as determined by the department, to approximate the
18income determined under s. 71.26.

SB510,20,2119 4. If a unitary business includes income from a pass-through entity, the total
20income of the combined group includes the member's direct and indirect distributive
21share of the pass-through entity's unitary business income.

SB510,21,222 5. All dividends paid by one member to another are not included in the
23recipients income, if the dividends are paid out of the earnings and profits of the
24unitary business in the current taxable year or in an earlier taxable year. This

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1subdivision does not apply to dividends received from members of a unitary business
2that are not a part of the combined group.

SB510,21,93 6. Except as provided by the department by rule, business income or loss from
4an intercompany transaction between members of the same combined group shall be
5deferred in a manner similar to 26 CFR 1.1502-13. Upon the occurrence of any of
6the following events, deferred business income or loss resulting from an
7intercompany transaction between members of a combined group shall be included
8in the income of the seller and shall be apportioned as business income earned
9immediately before the event:

SB510,21,1110 a. The object of the deferred intercompany transaction is sold by the buyer to
11an entity that is not a member of the combined group.

SB510,21,1412 b. The object of the deferred intercompany transaction is sold by the buyer to
13an entity that is a member of the combined group for use outside the unitary business
14in which the buyer and seller are engaged.

SB510,21,1615 c. The object of the deferred intercompany transaction is converted by the buyer
16to a use outside the unitary business in which the buyer and seller are engaged.

SB510,21,1817 d. The buyer and seller are no longer members of the same combined group,
18regardless of whether the members remain a unitary business.

SB510,22,519 7. A charitable expense incurred by a member of a combined group, to the
20extent allowable as a deduction under section 170 of the Internal Revenue Code,
21shall be subtracted first from the business income of the combined group, subject to
22the income limitations of section 170 of the Internal Revenue Code as it applies to
23the entire business income of the group, and any remaining amount shall be treated
24as a nonbusiness expense allocable to the member that incurred the expense, subject
25to the income limitations of section 170 of the Internal Revenue Code as it applies

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1to the nonbusiness income of that member. Any charitable deduction described
2under this subdivision that is allowed as a carryover deduction in a subsequent year
3is considered to be originally incurred in the subsequent year by the same member,
4and this section applies in the subsequent year for purposes of determining the
5allowable deduction in that year.

SB510,22,96 8. Gain or loss from the sale or exchange of capital assets, property described
7in section 1231 (a) (3) of the Internal Revenue Code, and property subject to an
8involuntary conversion, is removed from the total separate net income of each
9member of a combined group and is apportioned and allocated as follows:

SB510,22,1410 a. For short-term capital gains or losses, long-term capital gains or losses,
11gains or losses under section 1231 of the Internal Revenue Code, and involuntary
12conversions, the business gain and loss of all members are combined within each
13class of net business gain or loss and each such class is separately apportioned to each
14member using the member's apportionment percentage determined under sub. (5).

SB510,22,2015 b. Each taxpayer member shall net its apportioned business gain or loss for all
16classes, as determined under subd. 8. a., including any such apportioned business
17gain and loss from other combined groups, against the taxpayer member's
18nonbusiness gain and loss for all classes allocated to this state as provided under
19sections 1231 and 1222 of the Internal Revenue Code, not including nonbusiness
20items allocated to another state.

SB510,22,2421 c. Any resulting state source income or loss, if the loss is not subject to section
221211 of the Internal Revenue Code, of a taxpayer member produced by the
23application of subd. 8. a. and b. shall then be applied to all other state source income
24or loss of that member.

SB510,23,4

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1d. Any resulting state source loss of a member that is subject to section 1211
2of the Internal Revenue Code shall be carried forward or carried back by that
3member and shall be treated as state source short-term capital loss incurred by that
4member for the year for which the carry-forward or carry-back applies.

SB510,23,85 9. Any expense of one member of the unitary business that is directly or
6indirectly attributable to the nonbusiness or exempt income of another member of
7the unitary business shall be allocated to that other member as corresponding
8nonbusiness or exempt expense, as appropriate.

SB510,23,119 (b) Subtract any nonbusiness income of the combined group from the amount
10determined under par. (a) and add any nonbusiness expense or loss of the combined
11group to the amount determined under par. (a).