Wisconsin Administrative Code › Department of Revenue › Chapter Tax 2 - Income Taxation, Returns, Records And Gross Income › Section Tax 2.505 - Apportionment of apportionable income of interstate professional sports clubs

Current through June 24, 2024
(1) SCOPE. The apportionable income of
			 professional sports clubs engaged in business in and outside Wisconsin during
			 the year shall be apportioned to Wisconsin using the apportionment fraction
			 described in s.
			 71.25(6),
			 Stats., and the apportionment formula computation described in s.
			 71.25(6m),
			 Stats., if applicable, except if the professional sports club 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). The property, payroll, and
			 sales factors described in s.
			 71.25(6)
			 and (6m), Stats., shall be determined as
			 described in this section.
Note
A professional sports club 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) DEFINITION. In this section, "engaged in
			 business in and outside this state" has the same meaning as in s.
			 Tax
			 2.39(2) (b).
(3) PROPERTY FACTOR. The property factor is a
			 fraction as defined in s.
			 71.25(7),
			 Stats. Owned or rented real and tangible personal property shall be included in
			 the factor as provided in s.
			 71.25(7),
			 Stats., and s.
			 Tax
			 2.39(4). Minor equipment, such as
			 uniforms, and playing and practice equipment, need not be included in the
			 factor.
Note
The property factor does not apply to taxable
				years beginning after December 31, 2007.
(4) PAYROLL FACTOR. The payroll factor is a
			 fraction as defined in s.
			 71.25(8),
			 Stats. Compensation shall be reported as provided in s.
			 71.25(8),
			 Stats., and s.
			 Tax
			 2.39(5). Bonuses and payments shall
			 be included in the payroll factor on a prorated basis in accordance with
			 internal revenue service ruling 71-137, Cum. Bull., 1971-1. Compensation paid
			 for optioned players shall be included in the factor only if paid directly to
			 the player by the taxpayer.
Note
The payroll factor does not apply to taxable
				years beginning after December 31, 2007.
(5) SALES FACTOR. The sales factor is a
			 fraction as defined in s.
			 71.25(9),
			 Stats. Sales shall be included in the factor in accordance with s.
			 71.25(9),
			 Stats., s.
			 Tax
			 2.39(6) and the following rules:
(a)
Gate receipts.
Gate
			 receipts include all receipts from games played at the taxpayer's home facility
			 plus any gate receipts received from games played away from the taxpayer's home
			 facility. The numerator of the sales fraction for taxpayers whose home facility
			 is in Wisconsin shall include all gate receipts from games played in its home
			 facility. The numerator of the sales fraction for taxpayers whose home facility
			 is outside Wisconsin shall include the percentage of gate receipts received
			 from games played in Wisconsin.
(b)
Radio and television receipts.
Radio and television receipts
			 received by the taxpayer as its proportionate share from a league or
			 association contract with the major communications networks are in Wisconsin in
			 proportion to the number of games played in Wisconsin to total games played by
			 the taxpayer covered by the contract during the season. Local television and
			 radio receipts are in Wisconsin if the games are played in Wisconsin.
(c)
Concession income and
			 miscellaneous income.
Concession income is assigned to the numerator
			 if the concession is operated within Wisconsin. Miscellaneous income such as
			 parking lot income, advertising income, and other similar income is assigned to
			 the numerator if the activity is conducted within Wisconsin.
(d)
Player contracts, franchises, and
			 similar sources.
Income from player contract transactions, franchise
			 fees, and other similar sources shall be excluded from the numerator and the
			 denominator of the sales fraction.
Professional sports clubs that are in combined groups must
				adjust the numerator and denominator of the sales factor as described in s.
				Tax
				2.61(7).