Wis. Stat. § 71.45 — WI Code / Chapter 71 / Section 71.45
Income computation.
Status: in_force

(1) Exempt and excludable income. There shall be exempt from taxation under this subchapter income as follows:

(a) Income of insurers exempt from federal income taxation pursuant to section 501 (c) (15) of the internal revenue code, town mutuals organized under or subject to ch. 612 , foreign insurers, and domestic insurers engaged exclusively in life insurance business, domestic insurers insuring against financial loss by reason of nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate and corporations organized under ch. 185 , but not including income of cooperative health care associations organized under s. 185.981 , or of a service insurance corporation organized under ch. 613 , that is derived from a health maintenance organization as defined in s. 609.01 (2) or a limited service health organization as defined in s. 609.01 (3) , or operating under subch. I of ch. 616 which are bona fide cooperatives operated without pecuniary profit to any shareholder or member, or operated on a cooperative plan pursuant to which they determine and distribute their proceeds in substantial compliance with s. 185.45 . This paragraph does not apply to income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state.

(d) 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:

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.

(dm) 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. Amounts otherwise deductible under this chapter that are paid directly or indirectly with the grant money are deductible.

(dn) 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 . 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.

(1t) Exemption from the income tax. The interest and income from the following obligations are exempt from the tax imposed under s. 71.43 (1) :

(b) Those issued under s. 66.1201 .

(c) Those issued under s. 66.1333 .

(d) Those issued under s. 66.1335 .

(e) Those issued under s. 234.65 to fund an economic development loan to finance construction, renovation or development of property that would be exempt under s. 70.11 (36) .

(em) Those issued under s. 234.08 or 234.61 , on or after January 1, 2004, if the obligations are issued to fund multifamily affordable housing projects or elderly housing projects.

(f) Those issued under subch. II of ch. 229 .

(g) Those issued under s. 66.0621 by a local professional baseball park district, a local professional football stadium district, or a local cultural arts district.

(h) Those issued under s. 114.70 or 114.74 .

(i) Those issued under s. 231.03 (6) , on or after October 27, 2007, if the proceeds from the obligations that are issued are used by a health facility, as defined in s. 231.01 (5) , to fund the acquisition of information technology hardware or software.

(k) Those issued under s. 66.0304 , if any of the following applies:

1. The bonds or notes are used to fund multifamily affordable housing projects or elderly housing projects in this state, and the Wisconsin Housing and Economic Development Authority has the authority to issue its bonds or notes for the project being funded.

2. The bonds or notes are used by a health facility, as defined in s. 231.01 (5) , to fund the acquisition of information technology hardware or software, in this state, and the Wisconsin Health and Educational Facilities Authority has the authority to issue its bonds or notes for the project being funded.

3. The bonds or notes are issued to fund a redevelopment project in this state or a housing project in this state, and the authority exists for bonds or notes to be issued by an entity described under s. 66.1201 , 66.1333 , or 66.1335 .

(L) Those issued under s. 231.03 (6) , if the bonds or notes are issued for the benefit of a person who is eligible to receive the proceeds of bonds or notes from another entity for the same purpose for which the bonds or notes are issued under s. 231.03 (6) and the interest income received from the other bonds or notes is exempt from taxation under this subchapter.

(m) Those issued by the Wisconsin Housing and Economic Development Authority to provide loans to a public affairs network under s. 234.75 (4) .

(n) Those issued by the Wisconsin Health and Educational Facilities Authority under s. 231.03 (6) , if the bonds or notes are issued in an amount totaling $35,000,000 or less, and to the extent that the interest income received is not otherwise exempt under this subsection.

(2) Determination of net income.

(a) Insurers subject to taxation under this chapter shall pay a tax according to or measured by net income. Such tax is payable under s. 71.44 (1) . Except as provided in sub. (5) , “net income” of an insurer subject to taxation under this chapter means federal taxable income as determined in accordance with the provisions of the internal revenue code adjusted as follows:

1. By adding to federal taxable income the amount of any loss carry-forward or carry-back, including any capital loss carry-forward or carry-back, deducted in the calculation of federal taxable income.

2. By adding to federal taxable income, if not already included therein, the amount of any federal tax refund or portion thereof previously applied to reduce the amount of tax payable under this chapter.

3. For insurers subject to taxation under s. 71.43 (1) , by adding to federal taxable income the amount of any interest income, except interest under sub. (1t) , that is not included in federal taxable income except the amount of any interest income which is by federal law exempt from taxation by this state and, for insurers subject to taxation under s. 71.43 (2) , by adding to federal taxable income the amount of any interest income which is not included in federal taxable income.

4. By adding to federal taxable income an amount equal to dividend income received during the taxable year to the extent such dividend income was used as a deduction in determining federal taxable income.

5. By adding to federal taxable income the amount of taxes imposed by this or any other state, or the District of Columbia, that are value-added taxes, single business taxes or taxes on or measured by net income, gross income, gross receipts or capital stock, if any, that are deducted in the calculation of federal taxable income except that gross receipts taxes assessed in lieu of property taxes are deductible from gross income.

5m. By adding to federal taxable income the amount of the environmental tax that is imposed under section 59A of the internal revenue code and that is deducted in calculating federal taxable income.

6. By adding or subtracting, as appropriate, the difference between the federal basis and the Wisconsin basis of any asset sold, exchanged, abandoned or otherwise disposed of in a taxable transaction during the taxable year.

8. By subtracting from federal taxable income dividends received that are deductible under s. 71.26 (3) (j) and are included in federal taxable income.

9. By subtracting from federal taxable income any net capital losses not offset against capital gains to the extent that subtraction is allowed to other corporations in computing net income under s. 71.26 (2) .

10. By adding to federal taxable income the amount of credit computed under all of the following and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership’s, limited liability company’s, or tax-option corporation’s income under s. 71.21 (4) or 71.34 (1k) (g) :

a. Section 71.47 (1dm) .

b. Section 71.47 (1dx) .

c. Section 71.47 (1dy) .

d. Section 71.47 (3g) .

e. Section 71.47 (3h) .