The Wisconsin Court of Appeals upheld a sales tax assessment against StubHub for the sale of tickets made through StubHub’s online marketplace. Between 2008 and 2013, more than $150 million tickets sales occurred between ticketholders and ticket buyers on StubHub’s platform for events that took place in Wisconsin. StubHub earned revenue from listing fees and
Wisconsin
Wisconsin Tax Appeals Commission rejects taxpayer’s look-through sourcing position
By Scott Wright & Madison Ball on
Posted in Income Tax
The Wisconsin Tax Appeals Commission held that a taxpayer could not look through an intermediary and source receipts to the location of software use by end-users.
The taxpayer created database management system software to be used by the software developers. Epic Systems Corporation (Epic), a Wisconsin-based software developer, created and licensed software used in the…
Wisconsin holds that aircraft lease charges can’t fly past sales tax
By Scott Wright & Dennis Jansen on
Posted in Sales and Use Tax
The Wisconsin Supreme Court recently held that the state’s sales tax exemption for the sale of aircraft parts and maintenance does not apply to per-flight-hour aircraft lease charges for repairs and maintenance.
Under Wis. Stat. § 77.51(15b)(a), sales tax applies to the total amount of consideration that the taxpayer receives for leasing its aircraft, without…
Wisconsin Tax Appeals Commission finds Skechers’ intercompany transactions lacked a valid business purpose and economic substance
By Eric Tresh & Eversheds Sutherland SALT on
Posted in Noteworthy Cases
On February 24, 2023, the Wisconsin Tax Appeals Commission upheld the Department’s assessment that Skechers’ licensing transaction with its wholly owned subsidiary, Skechers USA Inc. II (SKII), lacked a valid business purpose and economic substance. On the formation of SKII, Skechers entered into a license agreement with its subsidiary that generated significant royalty deductions, which…
Out-of-state travel business subject to tax
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
The Wisconsin Tax Appeals Commission ruled that an out-of-state travel agent that used independent travel consultants in Wisconsin was doing business in Wisconsin and is responsible for the Wisconsin franchise tax. The company argued, among other things, that it was in the business of selling SaaS that did not produce income taxable in Wisconsin; however,…
Wisconsin marketplace providers responsible for collecting premier resort area taxes
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy, Marketplace
The Wisconsin Department of Revenue recently published updated guidance that states that marketplace providers are responsible for the collection and remittance of the Wisconsin premier resort taxes. For purposes of collection and remittance responsibilities, a marketplace provider in Wisconsin is a person who facilitates a retail sale on a seller’s behalf by listing or advertising…
Wisconsin private letter ruling determines taxability of online learning plans
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
In a recently released private letter ruling (issued October 13, 2021), the Wisconsin Department of Revenue concluded that certain online learning platform services were not subject to sales tax, whereas others were a bundled transaction and potentially taxable. The company’s platform is a virtual learning environment where students stream on-demand digital academic courses that consist
…
Eco-friendly but not so taxpayer friendly: Wisconsin Tax Appeals Commission finds automaker’s sale of environmental credits generates apportionable income
By Charlie Kearns & Annie Rothschild on
Posted in Income Tax
The Wisconsin Tax Appeals Commission sided with the Department of Revenue, ruling that American Honda Motor Co.’s sale of environmental credits generated apportionable income for corporate income and franchise tax purposes. American Honda bought vehicles from related companies and resold them to car dealerships and other retailers in the U.S.
When American Honda sold its…
Wisconsin Department of Revenue updates digital goods publication
By Jonathan Feldman, Jeremy Gove & Alla Raykin on
Posted in Digital Economy
In November 2021, the Wisconsin Department of Revenue published its updated Publication 240 regarding the taxability of digital goods. Among other updates, the publication clarifies that taxable “other news or information products” are those products that “disseminate news or information,” for example charges for access to online databases or websites where the payer may perform…
Practice What You Preach: Court Finds Wisconsin DOR’s Denial of Dividends-Received Deduction Contrary to Guidance
Posted in Income Tax
The Wisconsin Court of Appeals held that guidance issued by the Department of Revenue required the Department to allow a dividends-received deduction for cash distributions received by a taxpayer from a foreign partnership that was classified as a corporation for federal purposes. The taxpayer based its claim to the deduction on published guidance in effect…