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
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
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
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
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
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
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
Quick Update: California, Wisconsin and Idaho
In this episode of the SALT Shaker Podcast, host Chris Lee discusses a California income tax matter concerning the sourcing of an individual’s income, a Wisconsin corporate income tax matter involving the dividends received deduction, and two Idaho individual income tax decisions addressing domicile.
Questions or comments? Email SALTonline@eversheds-sutherland.com.
Wisconsin DOR issues guidance on remote learning materials
The Wisconsin Department of Revenue has published a guidance document on the taxation of traditional and remote learning materials. Live in-person and digital online educational services are generally a non-taxable educational service. The guidance provides that the sale of a pre-recorded webinar is generally taxable as the sale of personal property, although it may be
Tough cheese: Wisconsin Tax Appeals Commission clarifies the scope of property tax manufacturing exemption
The Wisconsin Tax Appeals Commission recently clarified the applicability of the state’s property tax exemption for machinery, tools, and patterns (“MTP”) under Wis. Stat. § 70.111(27), which took effect in 2018. At issue in this appeal was which of a taxpayer’s property items were eligible for the exemption, which applies to all MTP unless the