Opinion ID: 1927202
Heading Depth: 1
Heading Rank: 4

Heading: Major Wisconsin Participation.

Text: We reach a conclusion contrary to that of the trial court. Our analysis of the nature of the sales of Globe-Union persuades us that the participation of the Wisconsin office in the total sales picture was crucial. Compared to the sales activities which were performed outside of Wisconsin, what was done within Wisconsin was major and significant. The basic contracts were executed by the Wisconsin officers. The entire price structure, insofar as it was influenced by Globe-Union's negotiations, was the product of activities of the Wisconsin office. Cost determinations as well as engineering specifications were calculated in Wisconsin. Payments were made to Wisconsin, and the books were kept at the home office in this state. If the competitive-price negotiations were activated under the Sears contract, the deliberations of Globe-Union on this subject would be conducted in Wisconsin. The renegotiations  of billings were to be handled by the home office in Wisconsin. All of these considerations demonstrate that Wisconsin's participation in the sales picture was far more than the incidental management referred to in United States Glue Co. v. Oak Creek (1915), 161 Wis. 211, 219, 153 N. W. 241, affirmed, 247 U. S. 321, 38 Sup. Ct. 499, 62 L. Ed. 1135. In Department of Taxation v. Ansul Chemical Co. (1951), 260 Wis. 96, 102, 49 N. W. (2d) 893, we stated the following: The activities of the Wisconsin office which Ansul relies on to show it was a vendor go far beyond the limits of the incidental management of a branch's business. They are an important part of Ansul's sale to the customer and must certainly be construed as business transacted in Wisconsin, through the Marinette office, and productive of the income in question. We do not regard the case of American Stores Dairy Co. v. Department of Taxation (1945), 246 Wis. 396, 17 N. W. (2d) 596, as controlling. Although the taxpayer in that case had its office in Illinois, it was held that its income had a Wisconsin situs. However, the sales of the product in the American Stores Dairy Co. Case were made by the taxpayer as a wholly owned subsidiary to its parent corporation. Its home office (in Illinois) did not play a significant role in effectuating sales, which the home office of Globe-Union did perform in conducting arm's-length negotiations with Sears and its other customers. Although the company in its tax returns for the years in question reported all sales of roller skates as Wisconsin sales, it took a contrary position before the board of tax appeals. All the roller skates were manufactured in Wisconsin, but frequent requisitions were made from warehouses outside of Wisconsin. The company contends that roller-skate orders which were filled from inventories in Los Angeles  and Philadelphia should be treated as sales made outside Wisconsin for purposes of the sales factor in computing its Wisconsin tax returns. The treasurer of Globe-Union testified that the majority of the orders for the sale of roller skates that did not go to Sears were produced and handled in the same manner as the company's Centralab products. In view of the taxpayer's concession that all Centralab sales are Wisconsin sales, we consider that this should apply to the sale of roller skates. Our conclusion is that Wisconsin had not only more than an incidental role in the sales of all products, but also by comparison to the sales activities conducted outside of Wisconsin, the role of the Wisconsin office was a major factor in all sales of Globe-Union.