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1. TAXPAYERS.

(a) INDIVIDUALS.

Liability to assessment depends both on whether the taxpayer is resident within or without the State and upon the source of the income. Every person residing within the State (or his personal representative in case of death) pays tax upon all income from sources within the State and upon such income from sources without as is allocated for tax purposes to residence. Non-residents are liable to tax upon such income from property located or business transacted within the State as is not exempted.

The provision allocating certain items of income for taxation exclusively at source and others exclusively at residence is as follows:

“Income derived from rentals and royalties from real estate or tangible personal property, or from the operation of any farm, mine or quarry, or from the sale of real property or tangible personal property shall follow the situs of the property from which derived. All other income, including royalties from patents, income derived from personal services, professions and vocations and from land contracts, mortgages, stocks, bonds and securities or from the sale of similar intangible personal property, shall follow the residence of the recipient, except as provided in section 71.095” (regarding fiduciaries) (Statute 71.02 (c)).

(b) PARTNERSHIPS.

In regard to partnerships each individual partner is responsible for the tax on his distributive share of partnership income, whether distributed or not, and the partnership is not taxed as such. Income allocable to residence follows the residence of the individual partners. Income from business or tangible property is taxable if the situs is in Wisconsin, irrespective of where the partners are resident.

The following figures will illustrate the relative importance of income-tax in entire fiscal system and comparative yield: The income-tax of Wisconsin produced in the year ending June 30th, 1931, 11.33 per cent of the total State and local tax revenue — i.e., approximately $20,812,439 out of a total revenue of approximately $183,683,744. The principal levy is the general property-tax yielding $120,855,119. Other levies include various special property and other special taxes ($17,787,691), inheritance taxes ($2,810,216) and motor-vehicle taxes ($21,418,269).

(c) COMPANIES.

The liability of companies depends upon their place of residence and on the source of the income. A corporation is regarded as being resident in the State of Wisconsin if it was incorporated there, or if, though incorporated abroad, it carries on or transacts its principal business there (Wisconsin Statute 71.03 (e)). By “principal business” is meant the place where a preponderance of the income is produced and not necessarily the place where the directors meet or the general office is situated. In practice, it has been found that the head office, or real administrative centre, usually coincides with the place where the principal business is located.

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