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Wisconsin Tax Appeals Commission finds intangible holding company has no liability, but reserves right to assess operating company

The Wisconsin Tax Appeals Commission (WTAC) recently concluded that an out-of-state intangible holding company did not have a Wisconsin corporation income or franchise tax liability. Under the law in effect during the tax periods at issue, the taxpayer’s income-producing activity occurred completely outside Wisconsin, resulting in a sales factor of zero. Based on this conclusion, the WTAC did not reach the issue of whether imposition of the tax on the intangible holding company violated either the Due Process or Commerce Clauses of the United States Constitution. However, a separate tax assessment against the holding company’s parent operating company for the same period remains outstanding.

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