Wisconsin Taxation Committee

Meeting Notes of January 25, 2006 

The meeting was called at to order at 12:08 p.m.

A motion was made by Richard Scott to approve the minutes from the September 7, 2005 meeting, seconded by Steve Feurer.

Tammy Hofstede provided an update on the following:   

• Substantial equivalency legislation.   May 14^th is the target to get passed.

• Search for next Executive Director. 

• LeRoy’s retirement on 10/31/06.

• New Executive Director to be hired by September 1^st providing sufficient time to transition with LeRoy.

 

Court Case Update

• Perisian case – provided by Brian Kelley calling everyone’s attention to the procedural issues of properly claiming a refund.

• Schweitzer case– reviewed by John Mitchell dealt with gifts in contemplation of death.  John also called attention to the fact that Wisconsin has not conformed to the federal changes in estate taxation. 

 

WI Sales and Use Tax Update

1.    A reminder was made that beginning January 1^st, 2006 the direct exemption for fuel and electricity consumed in manufacturing went into effect.  Mr. Ohland noted and lead a discussion paid vs. accrued tax.  Mr. Ertmer discussed issues where an item was denied on a prior audit and how that could adversely impact the ability for taxpayers to get relief under the new exemption. 

2. Brian Kelly noted that there was a January hearing on contractor’s s/u tax issues.  Attempt to get de minimus  rule (i.e., 10% or less of the contract relates to tpp then the entire contract would be considered real property).

 

Income Tax Update

1. Pass-through Entity Tax – 2/1/06 Department of Revenue to have forms set up.  Department of Revenue put transitional provision for estimated tax paid by non-resident shareholder.  Handouts on this issue were distributed to committee.
    

2. Legislation not yet introduced to let non-resident shareholders opt-out provision.  Department of Revenue is supporting the introduction of such legislation.
    

3. It was reminded that the new apportionment rules for sourcing of services and receipts from computer software are in affect.

Other  

1. Members to watch AB 893 related to the add-back of related party expenses.
    

2. Bank Audits  ≈ 70 settled, ≈ 30 NOT SETTLED.
    
• Department of Revenue now granting 6 – 9 month extensions (previously 3 month extensions.
   

3. Handout distributed regarding “WMC’s Tax Collection in Wisconsin Report”
    

4. There was a brief discussion regarding the use of waivers by WDOR.
    

5. Changes in the coverage of Large Case supervisors in Milwaukee were noted.
    

6. Greg Butler discussed the Built in Gain tax issue in Wisconsin for S-Corps.
    

7. IRS/WDOR LIASON MEETING – Wisconsin Department of Revenue representatives attended last liaison meeting.  The Wisconsin Taxation committee has been invited to send a couple of members to attend.  The committee agreed that it would be helpful to have representatives attend. 
    

8. Terms for Vise Chair and Chair were discussed.  A motion was made by Ertmer, seconded by Austin to extend the term for each to two years.  It was unanimously approved.  Brian Kelly will serve for one more year.  Rocky Cummings will succeed Brian when his term expires.  
    

9. The next meeting is scheduled for May 24, 2006.

Motion to adjourn was made by Richard Scott, seconded by Brian Ertmer.  Thereafter, the meeting was adjourned at 12:58 p.m.

Next meeting scheduled for September 6, 2006.

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