Wisconsin Administrative Code › Department of Revenue › Chapter Tax 2 - Income Taxation, Returns, Records And Gross Income › Section Tax 2.49 - Apportionment of apportionable income of interstate financial institutions

Current through June 24, 2024
(1)
			 SCOPE. A financial institution that is engaged in business both in and outside
			 this state shall apportion its apportionable income as provided in this
			 section, except if the financial institution is in a combined group, its
			 Wisconsin share of the combined group's apportionable income is computed as
			 provided in s.
			 71.255(5),
			 Stats., and further detailed in s.
			 Tax
			 2.61(7). Nonapportionable income
			 shall be allocated as provided in s.
			 71.25(5)
			 (b), Stats.
Note:
A financial institution that is a
				corporation may be in a combined group for taxable years beginning on or after
				January 1, 2009. See s.
				Tax
				2.61(2) for a description of
				corporations required to use combined reporting.
(2) DEFINITIONS. In this section:
(a) "Billing address" means the address
			 indicated in the taxpayer's books and records on the first day of the taxable
			 year, or on a later date in the taxable year when the customer relationship
			 began, to which a taxpayer under this section regularly sends any notice,
			 statement, or bill to the taxpayer's customer. The billing address of a
			 customer who is a natural person means the address of that person's
			 domicile.
(b) "Borrower located in
			 this state" means either of the following:
1.
			 A borrower that is engaged in a trade or business and uses the loan proceeds in
			 trade or business activities in this state. If it cannot be determined where
			 the funds are used, "borrower located in this state" means a borrower whose
			 billing address is in this state.
2. A borrower whose billing address is in
			 this state, but is not engaged in a trade or business.
(c) "Commercial domicile" means the location
			 from which a trade or business is principally managed and directed. If the
			 taxpayer is organized under the laws of a foreign country, the commonwealth of
			 Puerto Rico, or any territory or possession of the United States, "commercial
			 domicile" shall be deemed for the purposes of this section to be the state of
			 the United States or the District of Columbia from which the taxpayer's trade
			 or business in the United States is principally managed and directed. It shall
			 be rebuttably presumed that the location from which a trade or business is
			 principally managed and directed is the state of the United States or the
			 District of Columbia at which the greatest number of the taxpayer's employees
			 work, have their office or base of operations, or are directed or controlled,
			 as of the last day of the taxable year.
(d) "Credit card" includes a credit card,
			 debit card, purchase card, charge card, and a travel or entertainment card.
(dm) "Credit card bank" means an
			 institution that is primarily engaged in credit card operations, which does not
			 accept demand deposits or deposits that the depositor may withdraw by check or
			 similar means for payment to third parties or others, and which does not engage
			 in the business of making commercial loans.
(e) "Credit card issuer's reimbursement fee"
			 means the fee that a taxpayer receives from a merchant's bank because a person
			 to whom the taxpayer has issued a credit card has paid for merchandise or
			 services sold by the merchant with the credit card.
(f) "Domicile" means a natural person's true,
			 fixed, and permanent home where that person intends to remain permanently and
			 indefinitely and to which, whenever absent, that person intends to return. A
			 natural person may have only one domicile at any time.
(fm) "Engaged in business in and outside this
			 state" has the same meaning as in s.
			 Tax
			 2.39(2) (b).
(g) "Financial institution" means any
			 financial organization whether incorporated or organized under federal law or
			 under the laws of any state or foreign country that is one of the following:
1. A bank holding company as defined in s.
			 221.0901(2)
			 (c), Stats., including a federal bank holding
			 company, an in-state bank holding company, an out-of-state bank holding
			 company, and a foreign bank holding company.
2. A bank as defined under
			 12
			 USC 1841(c), including a
			 national bank organized and existing as a national bank association pursuant to
			 the provisions of 12 USC ch. 2 and a state bank organized and operating under
			 ch. 221, Stats.
3. A savings and
			 loan holding company as defined under
			 12 USC 1467a(1)
			 (D) or s.
			 215.01(24m),
			 Stats.
4. A savings bank holding
			 company as defined in s.
			 214.01(1)
			 (tm), Stats.
5. A savings association or federal savings
			 bank as defined in
			 12
			 USC 1813(b), including a
			 savings and loan association, building and loan association, or cooperative
			 bank, and an association as defined in s.
			 215.01(1),
			 Stats., and a savings bank as defined in s.
			 214.01(1)
			 (t), Stats.
6. A trust company operating as a fiduciary
			 under ch. 223, Stats., or a corporation, limited liability company,
			 association, partnership, business trust, or other legal entity authorized to
			 act as a trustee, personal representative, executor, administrator, guardian,
			 conservator, assignee, or agent or in any other fiduciary capacity for
			 individuals and businesses in the administration of trust funds, estates, and
			 custodial arrangements, in stock and bond transfer and registration, in
			 fiduciary investment and estate planning, and other related services.
7. An industrial bank, industrial loan
			 company, or similar organization as described in
			 12
			 USC 1841(c) (2)
			 (H).
8. A safe deposit company that maintains
			 vaults for the deposit and safe-keeping of valuables and rents compartments or
			 boxes to customers who have exclusive access to these compartments or boxes,
			 subject to the oversight and under the rules and regulations of the
			 company.
9. A private banker
			 including an unincorporated entity operated as a partnership that specializes
			 in investing and managing the money of private clients.
10. Any corporation engaged in international
			 or foreign banking that is organized under the provisions of
			 12
			 USC 611 to
			 633.
11. Any agency or branch of a foreign
			 depository as defined in
			 12
			 USC 3101.
12. Any credit union to the extent not exempt
			 under s.
			 71.26(1)
			 (a), Stats., and s.
			 186.113(20),
			 Stats.
13. A production credit
			 association organized under
			 12 USC
			 2071 or a land bank created under the Federal
			 Farm Loan Act.
14. A consumer
			 finance company, small loan company, or a sales finance company licensed under
			 ch. 218, Stats.
15. A mortgage
			 banker as defined in s.
			 224.71(3),
			 Stats.
16. A credit card
			 bank.
17. Any subsidiary of an
			 entity described in subds. 1. to 16., if a significant purpose for the
			 subsidiary is to hold investments or if the subsidiary primarily functions to
			 hold investments, as provided in s.
			 71.25(10)
			 (a) 2, Stats.
(h) "Guarantor of a loan located in this
			 state" means a guarantor whose billing address is in this state.
(hm) "Intangible property" has the same
			 meaning as in s.
			 Tax
			 2.39(2) (cm).
(i) "Investment banking services" include
			 assisting business customers in obtaining new financing by underwriting and
			 selling new securities issued by the customer to the public.
(j) "Loan" means any extension of credit
			 resulting from direct negotiations between the taxpayer and its customer, or
			 the purchase, in whole or in part, of an extension of credit from another.
			 "Loans" include participations, syndications, and leases treated as loans for
			 federal income tax purposes. "Loans" do not include properties treated as loans
			 under section 595 of the Internal Revenue Code prior to its repeal by
			 P.L.
			 104-188; futures or forward contracts; options;
			 notional principal contracts such as swaps; credit card receivables, including
			 purchased credit card relationships; non-interest bearing balances due from
			 depository institutions; cash items in the process of collection; federal funds
			 sold; securities purchased under agreements to resell; assets held in a trading
			 account; securities; interests in a real estate mortgage investment conduit, or
			 other mortgage-backed or asset-backed security; and other similar
			 items.
(k) "Loan secured by real
			 property" means that any of the collateral used to secure a loan or other
			 obligation at the time the original loan or obligation was incurred or during
			 the current taxable year is real property. A loan secured by real property
			 includes an installment sales contract for real property. An "agricultural
			 lien" as defined in s.
			 409.102(1)
			 (b), Stats., or a "fixture filing" as defined
			 in s.
			 409.102(1)
			 (js), Stats., does not by itself constitute a
			 loan secured by real property.
(l)
			 "Loan secured by tangible personal property" means that any of the collateral
			 used to secure a loan or other obligation, other than a loan secured by real
			 property, at the time the original loan or obligation was incurred or during
			 the current taxable year is tangible personal property. A loan secured by
			 tangible personal property includes an installment sales contract for tangible
			 personal property.
(m) "Loan
			 servicing fees" include fees or charges for originating and processing loan
			 applications, such as prepaid interest and loan discounts, and for collecting,
			 tracking, and accounting for loan payments received. "Loan servicing fees" also
			 include gross receipts from the sale of loan servicing rights.
(n) "Merchant discount" means the fee or
			 negotiated discount that is charged to a merchant for accepting a credit card
			 as payment for merchandise or services that are sold to the credit card
			 holder.
(o) "Participation" means
			 an extension of credit in which an undivided ownership interest is held on a
			 pro rata basis in a single loan or pool of loans and related collateral.
Note:
In a loan participation, the credit
				originator initially makes the loan and subsequently resells all or a portion
				of it to other lenders. The participation may or may not be known to the
				borrower.
(p) "Person" means
			 a natural person, estate, trust, partnership, limited liability company,
			 corporation, or any other business entity.
(q) "Regular place of business" means an
			 office at which the taxpayer carries on its business in a regular and
			 systematic manner and which is regularly maintained, occupied, or used by
			 employees of the taxpayer.
(r)
			 "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.
(s) "Syndication" means an
			 extension of credit in which 2 or more persons fund and each person is at risk
			 only up to a specified percentage of the total extension of credit or up to a
			 specified dollar amount.
(t)
			 "Taxpayer" means a financial organization that is subject to apportionment
			 under this section.