X. Other Issues Affecting Combined Filers

X1.1. How is the economic development surcharge computed for a combined group?

All corporations engaged in business in Wisconsin are subject to the economic development surcharge. If at least one member of a combined group is conducting unitary business in Wisconsin, all corporations in the group are considered to be doing business in Wisconsin (sec. 71.255(5)(a), Wis. Stats.).

Each corporation in a combined group is considered a separate corporation for purposes of computing the economic development surcharge. Therefore, the $4,000,000 gross receipts threshold, the $25 minimum economic development surcharge, and the $9,800 maximum economic development surcharge must be determined separately for each entity in the combined group.

Example:

A Wisconsin combined group is made up of corporations A, B, C and D. The following gross receipts and gross tax liabilities are reported:

Corporation Gross Receipts Gross Tax
A $4,200,000 $0
B $51,000,0000 $330,000
C $350,000 $0
D $250,000 $7,000

Corporation A's gross receipts are greater than $4,000,000; therefore, the economic development surcharge must be calculated. The minimum economic development surcharge is 3% of the tax or $25, whichever is greater. Since 3% of the tax is $0, the economic development surcharge is $25.

Corporation B's gross receipts are greater than $4,000,000; therefore, the economic development surcharge must be calculated. The maximum economic development surcharge is 3% of the tax but not more than $9,800. Since 3% of the tax is $9,900, the economic development surcharge is $9,800.

Corporations C and D are not subject to a economic development surcharge because their gross receipts are less than $4,000,000.

The economic development surcharge for the Wisconsin combined group is $9,825, which is the sum of the individual corporations' economic development surcharges of $25, $9,800, $0 and $0.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Phone: (608) 266-1143
Email additional questions to DORCombinedReporting@revenue.wi.gov

January 3, 2014