Publication 102 - Wisconsin Tax Treatment Of Tax-Option (S) Corporations And Their Shareholders Page 14
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30Publication 102
4. Wisconsin’s Temporary Recycling Surcharge
The temporary recycling surcharge is payable by the
15th day of the 3rd month following the close of the
taxable period, regardless of the due date of the corpora-
For taxable years ending after April 1, 1991, and ending
tion’s Wisconsin franchise or income tax return.
before April 1, 1999, a temporary recycling surcharge
applies to tax-option (S) corporations that are required to
file Wisconsin franchise or income tax returns, with
If the surcharge is delinquent, the corporation’s share-
certain exceptions. The surcharge doesn’t apply to:
holders are jointly and severally liable for it.
•
Corporations organized under Wisconsin law that
E. Making Corporate Estimated Tax Payments
don’t have any business activities in Wisconsin.
A tax-option (S) corporation which expects the sum of its net
•
Corporations not organized under Wisconsin law
franchise tax measured by certain federal, state, and munici-
that don’t have nexus with Wisconsin. “Nexus”
pal government interest (tax minus credits) and temporary
refers to the degree of activity necessary before a
recycling surcharge to be $500 or more generally must make
state has jurisdiction to impose an income tax or
quarterly estimated tax and surcharge payments using
franchise tax measured by net income on the tax-
Wisconsin Form 4-ES.
payer.
However, a corporation isn’t required to make estimated tax
•
Corporations that have less than $4,000 of total
payments to prepay the Wisconsin built-in gains tax. The
receipts from all activities. “Total receipts from all
built-in gains tax is payable in full within 2½ months after
activities” means gross receipts, gross sales, gross
the end of the corporation’s taxable year.
dividends, gross interest income, gross rents, gross
royalties, the gross sales price from the disposition
Special rules apply to Wisconsin estimated tax payments
of capital assets and business assets, and all other
made before October 14, 1997:
receipts that are included in gross income for Wis-
consin franchise or income tax purposes.
•
Any increase in estimated tax payments due before
October 14, 1997, solely as a result of the enactment of
A portion of the temporary recycling surcharge pay-
1997 Wisconsin Act 27, which retroactively adopted the
ments collected, including interest and penalties, is
1996 federal law changes relating to S corporations,
deposited in Wisconsin’s recycling fund. These revenues
shall be prorated among, and paid with, estimated tax
are used to fund grants to county and municipal govern-
payments due after October 14, 1997.
ments for implementing recycling programs and other
solid waste reduction efforts.
•
A corporation that may be treated as a tax-option (S)
corporation or a QSSS because of the enactment of 1997
For taxable years beginning in 1997, the surcharge is the
Wisconsin Act 27 may elect to treat any portion of its
greater of $25 or 0.4345% (.004345) of the corporation’s
estimated tax payments for its taxable year that begins in
Wisconsin net income, but not more than $9,800. The
1997 made before October 14, 1997, as payments made
rate of the temporary recycling surcharge is subject to
by the corporation’s shareholders on October 14, 1997.
change for taxable years beginning on or after January 1,
The corporation must make the election on or before the
1998.
original due date of the corporation’s 1997 Wisconsin
franchise or income tax return, Form 5S. Once made, this
Wisconsin net income for a tax-option (S) corporation
election is irrevocable.
doing business only in Wisconsin is the amount from
1997 Wisconsin Schedule 5K, line 23, column d. In the
To make the election, attach a statement to the front of
case of a corporation engaged in business in and outside
the corporation’s tax return indicating the name, social
Wisconsin, Wisconsin net income is the portion of the
security number, and amount of estimated tax payments
amount on Schedule 5K, line 23, column d, which is
allocated to each shareholder. If the corporation has
attributable to Wisconsin. Unitary, multistate corpora-
received an extension of time to file its return, send a
tions determine the net income attributable to Wisconsin
letter with this information to the Wisconsin Department
using the apportionment method. Nonunitary, multistate
of Revenue, P.O. Box 8908, Madison, WI 53708-8908,
corporations use separate accounting. The net income
by the original due date of the return.
generally includes interest income from federal, state,
and local government obligations.
12
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