2.50 Apportionment of apportionable income

of interstate public utilities. (1) SCOPE. A public utility that is engaged in business both in and outside this state shall ap- portion its apportionable income as provided in this section, ex- cept if the public utility 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 pro- vided in s. 71.25 (5) (b), Stats. Note: A public utility that is a corporation may be in a combined group for tax- able years beginning on or after January 1, 2009. See s. Tax 2.61 (2) for a descrip- tion of corporations required to use combined reporting. (2) DEFINITIONS. In this section: (a) XEngaged in business in and outside this stateY has the same meaning as in s. Tax 2.39 (2) (b). (b) XPayroll factorY means the payroll fraction computed un- der s. 71.04 (6) or 71.25 (8), Stats., and s. Tax 2.39. (c) XProperty factorY means the property fraction computed under s. 71.04 (5) or 71.25 (7), Stats., and s. Tax 2.39. (d) XPublic utilityY means any business entity that owns or operates any plant, equipment, property, franchise, or license for the production, transmission, sale, delivery, or furnishing of elec- tricity, water, or steam the rates of charges for goods or services of which have been established or approved by a federal, state, or local government or governmental agency. (e) XSales factorY means the sales fraction computed under ss. 71.04 (4m) and (7) or 71.25 (6m) and (9), Stats., and s. Tax 2.39. (3) APPORTIONMENT FORMULA COMPUTATION. For taxable years beginning after December 31, 2004, a public utility that is engaged in business in and outside this state shall determine its net income for state franchise or income tax purposes as provided in this section. The public utility shall first deduct from its total net income its nonapportionable income, less related expenses. Nonapportionable income shall be allocated as provided in s. 71.25 (5) (b), Stats. The public utility shall apportion its remain- ing net income to this state as follows: (a) For taxable years beginning before January 1, 2006, appor- tionable income shall be apportioned using an apportionment fraction obtained by taking the arithmetical average of the sales factor, property factor, and payroll factor. (b) For taxable years beginning after December 31, 2005, and before January 1, 2007, apportionable income shall be appor- tioned using an apportionment fraction composed of the sales factor representing 60% of the fraction, the property factor repre- senting 20% of the fraction, and the payroll factor representing 20% of the fraction. (c) For taxable years beginning after December 31, 2006, and before January 1, 2008, apportionable income shall be appor- tioned using an apportionment fraction composed of the sales factor representing 80% of the fraction, the property factor repre- senting 10% of the fraction, and the payroll factor representing 10% of the fraction. (d) For taxable years beginning after December 31, 2007, ap- portionable income shall be apportioned using an apportionment fraction composed of the sales factor. Note: Public utilities that are in combined groups must adjust the numerator and denominator of the sales factor as described in s. Tax 2.61 (7). Note: The provisions of s. Tax 2.50 first apply for taxable years beginning on January 1, 2005. Note: Section Tax 2.50 interprets ss. 71.04 (8) (b) and (c) and 71.25 (10) (b) and (c), Stats. History: Cr. Register, August, 1973, No. 212, eff. 9-1-73; am. (1), Register, Feb- ruary, 1990, No. 410, eff. 3-1-90; emerg. r. and recr. eff. 12-5-05; CR 05-117: r. and recr. Register June 2006 No. 606, eff. 7-1-06; corrections in (1) and (3) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register April 2010 No. 652; EmR0943: eff. 12-31- 09 and CR 10-001: am. (1) and (3) (intro.), renum. (2) (a) to (d) to be (2) (b) to (e), cr. (2) (a) Register June 2010 No. 654, eff. 7-1-10. Published under s. 35.93, Stats. Updated on the first day of each month. Entire code is always current. The Register date on each page is the date the chapter was last published. WISCONSIN ADMINISTRATIVE CODE