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 WISCONSIN INCOME TAX LAW 
 
 WITH EXPLANATORY NOTES 
 
 FOURTH EDITION 
 
 ISSUED BY 
 
 WISCONSIN TAX COMMISSION 
 
 Madison, Wis, 
 
 1919 
 
 MADISON, WISCONSIN 
 Democrat Printing Company, State Printeb 
 
a Cornell University 
 j Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924030221356 
 
THE 
 
 WISCONSIN INCOME TAX LAW 
 
 WITH EXPLANATORY NOTES 
 
 FOURTH EDITION 
 
 ISSUED BY 
 
 
 WISCONSIN TAX COMMISSION 
 
 
 Madison, Wis. 
 
 
 1919 
 
 /■ 
 
 
 ,-J 1- .,. 
 
 MADISON, WISCONSIN 
 Democbat Printing Company, State Pmnter 
 
 <y &^ 
 
P\4^tooo 
 
PREFACE 
 
 The fundamental principle of the income tax law is to tax an- 
 nually net incomes within the jurisdiction of this state. This 
 basic principle should not be lost sight of either by taxpayers or 
 tax officials when dealing with income taxation. Net income is 
 what remains of gross income after deducting the expenses of 
 producing it and certain other charges specifically allowed as 
 deductions by statute. No deductions from gross income are 
 allowable except such as are authorized by law. 
 
 Every individual receiving taxable income is required to re- 
 port annually to the assessor of incomes in his district on forms 
 prepared by the tax commission the amounts of income received 
 by him during the previous year from all sources. All corpora- 
 tions doing business in this state must make like reports to the 
 tax commission. Corporations and individuals should also re- 
 port on the same blank used in reporting income all necessary 
 expenses incurred in producing the same and all statutory de- 
 ductions. 
 
 If it were perfectly clear in all cases just what under the law 
 is income and just what is legally deductible and all taxpayers 
 religiously complied with the law in making returns, the task of 
 the tax commission and of income tax assessors would be simple. 
 But failure on the part of taxpayers to understand fully just 
 where the line runs between receipts that are income and those 
 that are not and to distinguish between expenditures that are de- 
 ductible and those that are not, opens up an extensive field for 
 investigation on the .part of tax officials. 
 
 This pamphlet contains the Wisconsin income tax law of 1911, 
 as amended in 1913, 1915, 1917, and 1919, together with citations 
 to decisions of the supreme court, and to some of the important 
 .rulings of the tax commission under appropriate sections. It is 
 published as an aid to assessors of incomes and taxpayers in per- 
 forming the important duties imposed upon them. Familiarity 
 
i PREFACE 
 
 with the law and conscientious observance of it on the part of 
 taxpayers will simplify the preparation of income tax returns, 
 limit the scope of inquiry on the part of tax officials, and in every 
 way promote efficient and satisfactory administration. 
 
 Taxpayers are invited to seek the advice and counsel of the 
 tax commission and assessors of incomes, either in person or by 
 letter when in doubt as to what the law requires of them. 
 
 Wisconsin Tax Commission. 
 
THE WISCONSIN INCOME TAX LAW 
 
 Chapter 658, Laws of 1911; sections 1087m — 1 to 1087m — 80 
 of the statutes. 
 
 PART I 
 
 For what period tax levied 
 
 Section 1087m — 1. There shall be assessed, levied, collected 
 and paid a tax upon incomes received during the year ending 
 December 31, 1911, and upon incomes received annually there- 
 after, by such persons and from such sources as hereinafter de- 
 scribed; provided, that firms, copartnerships, corporations, joint 
 stock companies and associations which customarily close their 
 annual accounts on a date other than December 31, or which 
 customarily estimate their income or profits on a basis other than 
 of actual cash receipts and disbursements, may, with the consent 
 and approval of the tax commission, return for assessment and 
 taxation the income or profits earned during the business year 
 for which the accounts of such person are customarily made up. 
 
 In general, all persons must make their returns for the in- 
 come received during the calendar year; but firms, copartner- 
 ships, corporations, etc., may, by securing the consent of the tax 
 commission, base their returns upon their respective fiscal years. 
 
 Definition of "person" 
 
 Section 1087m — 2. 1. The term "person,'.' as used in this 
 act, shall mean and include any individual, firm, copartnership, 
 and every corporation, joint stock company or association or- 
 ganized for profit, and having a capital stock represented by 
 shares, unless otherwise expressly stated. 
 
 In the following pages the word "individuals" is used where 
 natural persons are referred to and the word "corporations" 
 as the equivalent of "corporation, joint stock company or asso- 
 ciation organized for profit." 
 
6 WISCONSIN INCOME TAX LAW 
 
 What income includes 
 
 Section 1087m — 2. 2. The term "income," as used in this 
 act, shall include : 
 
 (a) All rent of real estate. (1917 c. 374.) 
 
 (b) All dividends derived from stocks and all interest de- 
 rived from money loaned or invested in notes, mortgages, bonds 
 or other evidence of debt of any kind whatsoever, provided, that 
 the term "dividends" as used in this section shall be held to 
 mean any distribution made by a corporation, joint stock com- 
 pany or association, out of its earnings or profits accrued since 
 January 1, 1911, and paid to its shareholders whether in cash 
 or in stock of the corporation, joint company or association. 
 (1917 c, 247.) 
 
 (c) All wages, salaries or fees derived from services; pro- 
 vided, that compensation to public officers for public service 
 shall not be computed as a part of the taxable income in such 
 cases where the taxation thereof would be repugnant to the con- 
 stitution. 
 
 (d) All profits derived from the transaction of business or 
 from the sale of real estate or other capital assets; provided, 
 that for the purpose of ascertaining the gain or loss resulting 
 from the sale or other disposition of property, real or personal, 
 acquired prior to January 1, 1911, the fair market value of such 
 property as of January 1, 1911, shall be the basis for determin- 
 ing the amount of such gain or loss. (1917 c 248.) 
 
 (e) All royalties derived from mines or the possession or use 
 of franchises or legalized privileges of any kind. 
 
 (f ) And all other gains, profits or income of any kind derived 
 from any source whatever except such as hereinafter exempted. 
 (1913 c. 720.) 
 
 It will be observed that the meaning of the term "income" as 
 defined in the income tax law of 1911 was modified by the amend- 
 ments of 1917 in the following respects : 
 
 1st. ' ' Estimated rental of residence property occupied by the 
 owner" was eliminated. 
 
 2d. "Dividends" were limited to a distribution of corporate 
 earnings accrued since January 1, 1911. 
 
 3d. The fair market value of capital assets acquired prior to 
 January 1, 1911, and sold during any subsequent year was fixed 
 as the basis from which to determine the profit or loss on the sale. 
 
 Whatever property or thing of value the taxpayer had at the 
 time the income tax law took effect was capital and no part of 
 such capital could be made into income by legislative enactment. 
 State ex rel. Bundy vs. Nygaard, 163 Wis. 307. 
 
WISCONSIN INCOME TAX LAW 7 
 
 The word "income" as used in the constitution means the 
 profit or gain derived from capital or labor, or both combined. 
 State .ex rel. Wisconsin Trust Co. vs. Widule, 164 Wis. 56. It 
 may be money or that which is convertible into money. Income 
 Tax Cases, 148 Wis. 456. 
 
 Strictly speaking, income as contrasted with capital denotes 
 that amount of wealth which flows in during a definite period 
 and which is at the disposal of the owner for purposes of con- 
 sumption so that in consuming it his capital remains unimpaired. 
 Seligman on Income Tax, 19. 
 
 The amendment to sec. 1, art. VIII of the constitution author- 
 izes the legislature to tax incomes in any case where the state 
 has power to impose such a tax and hence includes the power 
 to tax the salaries of all state and local officers, including the 
 salaries of circuit judges elected before the income tax law was 
 adopted. State ex rel. Wickham v. Nygaard, 159 Wis. 396. In 
 the same case the court intimated that salaries of federal of- 
 ficers and compensation of employes of the federal government 
 are not subject to taxation under state income tax laws and the 
 attorney general has advised to the same effect. See also Dob- 
 bins v. Erie County, 16 Peters, 435, and Purnell v. Page, 133 N. 
 C. 125. Neither the state nor federal government has power to 
 tax the agencies or instrumentalities employed by the other in 
 carrying on its governmental functions. It would seem to fol- 
 low from this principle that interest on United States bonds or 
 other securities issued by the federal government is not taxable 
 under our income tax law and assessors of incomes are advised 
 to omit such income in making their assessments. 
 
 Dividends declared and paid out of reserves for depreciation, 
 bad accounts, etc., are income and should be assessed either to 
 stockholders receiving them or to corporations paying them. 
 The reason for this is that the reserves set aside from earnings 
 have been overestimated and found to exceed the requirements 
 which they were originally designed to meet. The amount of 
 such excess is definitely determined by its distribution as divi- 
 dends and represents a profit to be accounted for as income. 
 Dividends of this character should not be omitted from income 
 tax returns under the pretense that they are a distribution 
 of capital assets. The U. S. Treasury Department has recently 
 made substantially the same rule under the federal income tax 
 law. T. D. 2540, Income Tax Service, page 433. 
 
8 WISCONSIN income: tax law 
 
 Income of residents and nonresidents 
 
 Section 1087m — 2. 3. The tax shall be assessed, levied and 
 collected upon all income, not hereinafter exempted, received by 
 every person residing within the state, and by every nonresi- 
 dent of the state, upon such income as is derived from property 
 located or business transacted within the state. In determining 
 taxable income, rentals, royalties, and gains or profit from the 
 operation of any farm, mine, or quarry shall follow the situs of 
 the property from which derived, and income from personal 
 service and from land contracts, mortgages, stocks, bonds and 
 securities shall follow the residence of the recipient. "With re- 
 spect to other income, persons engaged in business within and 
 without the state shall be taxed only upon such income as is de- 
 rived from business transacted and property located within the 
 state, which may be determined by an allocation and separate 
 accounting for such income when made in form and manner pre- 
 scribed by the tax commission, but otherwise shall be determined 
 in the manner specified in subdivision (e) of subsection 7 of sec- 
 tion 1770b of the statutes, as far as applicable. (1913 c. 720.) 
 
 A resident of this state is taxable on all his income derived from 
 property located and business transacted within the state and 
 also on all income from personal services, land contracts, mort- 
 gages, stocks, bonds and securities. 
 
 A nonresident is taxable on all income derived from property 
 located and business transacted within this state, but not on in- 
 come derived from personal services, land contracts, mortgages, 
 stocks, bonds and securities. 
 
 An "allocation or separate accounting" is permissible where 
 such an accounting would reflect correctly the incpme fairly at- 
 tributable to Wisconsin. Corporations seldom keep their records 
 by states and a correct separate accounting is ordinarly impos- 
 sible. Consequently the apportionment method prescribed by 
 subdivision (e) of subsection 7 of 1770b must usually be resorted 
 to. This subdivision is as follows : 
 
 "In determining the proportion of capital stock employed in 
 the state, the same shall be computed by taking the gross busi- 
 ness in dollars of the corporation in'the state and add[ing] the 
 same to the full value in dollars of the property of the corpora- 
 tion located in the state. The sum so obtained shall be the nu- 
 merator of a fraction of which the denominator shall consist of 
 the total gross business in dollars of the corporation, both within 
 and without the state, added to the full value in dollars of the 
 entire property of the corporation, both within and without the- 
 
WISCONSIN INCOME TAX LAW 9 
 
 state. The fraction so obtained shall represent the proportion 
 of the capital stock represented within the state." 
 
 In the case of manufacturing corporations the process of ap- 
 portionment under the statute quoted is as follows : to get the 
 numerator of the fraction take the full book value of the prop- 
 erty owned in Wisconsin on December 31 of the income year, 
 excluding land contracts, mortgages, stocks, bonds, and securities, 
 farms, mines, quarries and property yielding rents or royalties, 
 and to this amount add gross sales in "Wisconsin ; from the sum 
 so obtained subtract the factory cost of goods- sold in Wisconsin 
 and add the factory cost of all products manufactured in Wis- 
 consin. To get the denominator apply the same process to prop- 
 erty and business everywhere. 
 
 The following example will illustrate the process: 
 
 1. Pull book value of property in Wisconsin on Decem- 
 
 ber 31st, except as above stated $50,000 
 
 Gross sales in Wisconsin during the year 100,000 
 
 $150,000 
 
 2. Deduct factory cost of products sold in Wisconsin .... 50,000 
 
 $100,000 
 
 3. Factory cost of products manufactured in Wisconsin. . 200,000 
 
 Numerator $300,000 
 
 4. Full book value of property everywhere except as above 
 
 stated $200,000 
 
 Gross sales everywhere 300,000 
 
 $500,000 
 
 5. Deduct factory cost of products sold 200,000 
 
 $300,000 
 
 6. Factory cost of products manufactured everywhere. . . 200,000 
 
 Denominator $500,000 
 
 300,000 
 
 =.60 
 
 500,000 
 
 Net income, $50,000 X .60 = $30,000, taxable in Wieconsin. Tax, 
 
 $1,640.00. 
 
 Where a corporation is engaged in buying or selling goods and 
 merchandise within and without the state and does no manufac- 
 turing in the state, it should report the cost of purchases in the 
 state instead of cost of products. 
 
 The rule of apportionment applies to individuals as well as 
 corporations. 
 
10 WISCONSIN INCOME TAX LAW 
 
 Income from rentals, royalites, gains or profits from the op- 
 eration of any farm, mine, or quarry, is not apportionable for 
 the reason, that such income has its situs for taxation purposes 
 at the place where the property from which it is derived is lo- 
 cated. Income from personal services, land contracts, mort- 
 gages, stocks, bonds, and securities is not apportionable for the 
 reason that such income has its situs at the residence of the re- 
 cipient. Nonapportionable income and the property from which 
 it is derived must therefore be disregarded in making an ap- 
 portionment of income from sources within and without the 
 state. If such income is assignable to Wisconsin because of its 
 situs it should be added to the apportionable income assigned to 
 Wisconsin; if not, it is not Wisconsin income, and therefore not 
 taxable. 
 
 The income received by a resident of the state from a copart- 
 nership of which he is a member and which is doing business and 
 has all its property located outside the state, all the profits dis- 
 tributed being derived from sources without the state, is not 
 taxable under this statute. State ex rel. Arpin v. Eberhardt, 
 158 Wis. 20, 22. 
 
 The income of a domestic manufacturing corporation derived 
 from the sale of its products, manufactured in this state, to 
 customers in this and other states, whether delivered directly 
 from the factory to such customers or shipped ,to branch houses 
 in other states and thence delivered to customers residing out- 
 side of the state on sales made either by the home office or by 
 the branch houses, is income "derived from business transacted 
 and property located within this state," within the meaning of 
 sub. 3, sec. 1087m — 2, Stats. 1911. The fact that the business so 
 conducted involves transactions in interstate commerce does not 
 affect the situs of the income; nor does the imposition by the 
 state of a tax upon such income contravene sec. 8, art. 1, Const, 
 of U. S., conferring upon Congress the power to regulate com- 
 merce between the states. That part of the income of such a 
 corporation which is derived from goods produced and pur- 
 chased outside of the state and shipped, either directly or by way 
 of the home office in this state, to branch houses in other states 
 and hence sold and delivered to customers without the state, is 
 not attributable to business transacted within the state and is 
 not taxable under the statute. United States Glue Co. v. Oak 
 Creek, 161 Wis. 211; 247 U. S. 321. 
 
WISCONSIN INCOME TAX LAW H 
 
 DEDUCTIONS ALLOWED CORPORATIONS 
 
 Section 1087m — 3. Every corporation, joint stock com- 
 pany or association shall be allowed to make from its gross in- 
 come the following deductions: 
 
 Wages and salaries 
 
 (a) Payments made within the year for wages of employees 
 and salaries of officers if reasonable in amount, for services ac- 
 tually rendered producing such ineome; provided, there be re- 
 ported the name, address and amount paid each such employee 
 or officer residing within this state to whom a compensation of 
 seven hundred dollars or more shall have been paid during the 
 assessment year. (1913 c. 720.) 
 
 Under this provision the tax commission is aiithorized to dis- 
 allow or reduce salaries which in its judgment are excessive 
 or when the services rendered did not contribute to the income 
 reported. All corporations doing business in the state, whether 
 liable for an income tax or not, are required to furnish a list 
 of their employes and officers residing in Wisconsin who receive 
 a compensation of more than seven hundred dollars a year, and 
 the amount paid to each. Failure to furnish such information 
 will defeat the deduction. 
 
 (b) Other ordinary and necessary expenses and cash bonuses 
 to employees, actually paid within the year out of the income 
 in the maintenance and' operation of its business and property, 
 including a reasonable allowance for depreciation by use, wear 
 and tear of property from which the income is derived and in 
 the case of mines and quarries an allowance for depletion of 
 ores and other natural deposits on the basis of their actual 
 original cost in cash or the equivalent of cash; and including 
 also interest paid during the year in the operation of the busi- 
 ness from which its income is derived; provided, the debtor re- 
 ports the amount so paid, the form of the indebtedness, together 
 with the names and addresses of the parties to whom interest 
 was paid. (1917 c. 231.) 
 
 Payments made for additions or improvements are not "ordi- 
 nary or necessary expenses" and are not deductible from income. 
 "Repairs" properly defined are deductible, but renewals or 
 
12 WISCONSIN INCOME TAX LAW 
 
 replacements of entire units of property, such as machines, are 
 properly covered by depreciation, past or current, do not con- 
 stitute ' ' repairs, ' ' and cannot be deducted from income. 
 
 Depreciation, if claimed as a deduction, should be entered on the 
 corporation books, to prevent confusion and duplication in re- 
 turns. Depreciation is limited to deterioration or exhaustion 
 "by use, wear and tear," and does not cover fluctations in 
 market value. Depreciation of merchants' stocks cannot be al- 
 lowed as such since it is properly cared for in the inventories, 
 if the goods are still on hand, or if they have been sold, is prop- 
 erly represented in the decreased receipts from sales. Moreover 
 the inventories at the beginning and end of the year must be on 
 the same basis; if at the beginning of the year stock is inven- 
 toried at cost, it must be so inventoried at the end of the year. 
 
 This section removes the limitations on the amount of inter- 
 est deduction that could be allowed corporations contained in 
 the original act. Such deduction is, however, limited to that 
 paid during the year in the operation of the business from which 
 its (taxable) income is derived. Interest paid on borrowed 
 money to carry on operations without the state, the income from 
 which would not be taxable, and interest paid in holding and 
 maintaining unproductive property cannot be allowed as a de- 
 duction. To be a proper deduction the interest paid must be 
 related to and a factor in producing the income taxed. 
 
 Unless the corporation reports the form of the indebtedness, 
 the amount paid, and the names and addresses of the parties 
 who received it, no deduction for interest can be allowed. In 
 order to secure this deduction care should be taken to comply 
 with this section in making income returns. 
 
 By the foregoing subdivision depreciation is limited, 1st, to 
 that occurring during the year in which the income is earned; 
 2nd, to that of property from which the income is derived ; 3rd, 
 to that resulting from "use, wear and tear." Furthermore it 
 must be reasonable in amount. Unless depreciation claimed falls 
 within these limitations it cannot be allowed as a deduction. 
 
 In arriving at the proper amount to be allowed for deprecia- 
 tion the factors to be considered are cost and estimated physical 
 life of the property depreciated. The first factor can usually 
 be determined without difficulty. The second can only be ap- 
 proximated. On page 56 of this pamphlet will be found tables 
 
WISCONSIN INCOME TAX LAW 13 
 
 of depreciation which experience has proved to be fairly cor- 
 rect. Taxpayers in making returns are requested to follow these 
 tables. 
 
 Obsolescence is not a factor in determining depreciation in any 
 case. There is absolutely no rule by which depreciation from 
 obsolescence can be determined in advance and any attempt to 
 do so is pure speculation. Besides depreciation from this cause 
 is clearly excluded by the statute. 
 
 No depreciation of "good will" can be allowed as a deduction. 
 The life of ' ' good will ' ' is indeterminate and in any case would 
 be a mere guess. Neither does it deteriorate from "use, wear 
 and tear. ' ' In fact it not infrequently happens that the ' ' good 
 will" of a business is increasing in value while it is being 
 charged off. 
 
 A stockholder cannot be permitted to deduct under the 
 "guise" of losses depreciation in the value of his stock caused 
 by the distribution of dividends. Van Dyke vs. City of Mil- 
 waukee, 159 Wis. 460. 
 
 In making a return for income taxation the lessee of a mine 
 on a royalty basis is not entitled to make any deductions for ore 
 depletion in addition to the sum paid as royalty. Even if the 
 lease or right to mine is perpetual, it is not, for purposes of in- 
 come taxation equivalent to ownership. Klar Piquett Mining 
 Co. vs. Platteville, 163 Wis. 214, 215. 
 
 Royalties paid the fee owner by a lessee are deductible, 
 whether paid at the date of entering into the lease or in annual 
 payments, or both. 
 
 Cash bonuses voluntarily paid to employees over and above 
 their regular wages may be deducted by the employer as ex- 
 penses and in consequence should be reported as wages in mak- 
 ing their individual return by employes. 
 
 Losses 
 
 (c) Losses actually sustained within the year and not com- 
 pensated for by insurance or otherwise, provided that no loss 
 resulting from the operation of business or the ownership of 
 property may be allowed as a deduction, unless the income which 
 might be derived from such business or property would be sub- 
 ject to taxation under this act. (1919 c. 275.) 
 
14 WISCONSIN INCOME TAX LAW 
 
 The fact that a person purchased bonds at a premium does 
 not entitle him to deduct annually from the interest received 
 pro rata share of such premium in order that the capital may 
 he kept unimpaired and that it may not be taxed as income. 
 Van Dyke vs. City of Milwaukee, 159 "Wis. 460. 
 
 Accounts and bills receivable charged off the books as worth- 
 less during the year may be allowed as deductions if previously 
 reported as income. 
 
 The exact amount of the loss and the manner in which it oc- 
 curred must be fully set forth in the return in order to secure 
 the deduction. 
 
 Taxes 
 
 (d) Sums paid by such person within the year for taxes im- 
 posed upon the source from which the income taxed by this act 
 is derived by any state of this union or subdivision thereof, or 
 any territory or possession of the United States, or the United 
 States government as income, excess profits or war profits taxes. 
 (1919 c. 435.) 
 
 This section refers to general taxes paid upon property from 
 which the income is derived. Taxes paid upon unimproved real 
 estate and upon idle property held for investment or speculation 
 cannot be deducted. Income taxes, excess profits and war taxes 
 paid in cash may be deducted. Taxes paid by corporations can- 
 not be allowed as deductions from the income of the stockholder. 
 Special assessments cannot be considered as taxes because they 
 are based on the theory that the property is benefited to the 
 amount of the special assessment imposed. 
 
 Dividends 
 
 (e) Dividends or income received within the year from stocks 
 or interest in any copartnership, corporation, joint stock com- 
 pany or association, the income of which shall have been assessed 
 under the provisions of this act ; provided that when only part 
 of the income of the copartnership, corporation, joint stock com- 
 pany or association from which such dividend or income was 
 received shall have been assessed under this act only a cor- 
 responding part of such dividend or income shall be deducted; 
 provided, further, that such copartnership, corporation, joint 
 stock company or association report the name and address of 
 each person owning stocks or having such interest and the 
 amount of dividends or income paid such person during the as- 
 sessment year. (1913 c. 720.) 
 
WISCONSIN INCOME TAX LAW 15 
 
 The object of this paragraph is to prevent double taxation. 
 It means simply that any corporation owning stock or interest in 
 any copartnership, corporation, joint stock company or associa- 
 tion may deduct from its return of income that proportion of 
 the dividends or income upon which income taxes have already 
 been paid. If the copartnership or corporation does not report 
 the name and address of the persons owning stocks or interest 
 and the amount of dividends or income paid, the deductions 
 cannot be allowed. The reports of copartnerships will be made 
 to the income tax assessors. Corporations will report to the tax 
 commission. 
 
 To constitute an assessment within the meaning of the statute 
 there must be an assessment or levy of a tax because of the 
 existence of the fund as income. Passing upon the taxability of 
 the surplus in the hands of a company by the tax commission 
 did not constitute an assessment of such surplus within the mean- 
 ing of Ses. 1087m — 3 (e). State ex rel. Sallie F. Moon Company 
 vs. Wisconsin Tax Commission, 166 Wis. 287. Van Dyke vs. 
 City of Milwaukee, 159 Wis. 460. State ex rel. Columbia Con- 
 struction Co. vs. Wisconsin Tax Commission, 166 Wis. 369. 
 
 Bank Dividends 
 
 (g) Dividends received from state banks, national banks, 
 mutual savings banks and trust companies subject to taxation 
 by this state. (1913 c. 615.) 
 
 See notes to sections 1087m — i (k) and 1087m — 5 — 2. 
 
 Fronts of Cooperative Associations 
 
 (h) Amounts distributed to patrons in any year, in propor- 
 tion to their patronage of the same year, by any corporation, 
 joint stock company or association doing business on a coopera- 
 tive basis (hereinafter called "company"), whether organized 
 under chapter 86 or otherwise, shall be returned as income or 
 receipts by said patrons but may be deducted by such company 
 as cost, purchase price or refunds; provided that.no such de- 
 duction shall be made for amounts distributed to the stock- 
 holders or owners of such company in proportion to their stock 
 or ownership, nor for amounts retained by such company and 
 subject to distribution in proportion to stock or ownership as 
 distinguished from patronage. (1915 c. 252.) 
 
16 WISCONSIN -INCOME TAX LAW 
 
 This provision recognizes the familiar principle that only so 
 much of the earnings of a corporation as are distributed to 
 stockholders in proportion to their holdings can be considered 
 as dividends. Profits distributed in proportion to patronage 
 represent additional payment for material and are deductible as 
 such by the company paying the same but should be reported as 
 additional price of product sold by the patrons receiving the 
 same. 
 
 (i) Contributions or gifts actually made within the year to 
 corporations or associations organized and operated exclusively 
 for religious, charitable, scientific, or educational purposes, or 
 to societies for the prevention of cruelty to children or animals, 
 no part of the net income of which inures to the benefit of any 
 private stockholder or individual, to an amount not in excess of 
 fifteen per centum of the taxpayer's taxable net income as com- 
 puted without the benefit of this paragraph. (1919 c. 147.) 
 
 "While the above subsection allows as. deductions, gifts and 
 contributions, such deductions by no means include all gifts and 
 contributions, but are limited: 
 
 1. To contributions and gifts made to corporations or asso- 
 ciations. This limitation excludes gifts to individuals. 
 
 2. To gifts and contributions to corporations or associations 
 organized exclusively for religious, charitable, scientific or edu- 
 cational purposes. This limitation excludes gifts made to busi- 
 ness organizations, such as clubs, trade associations, baseball 
 or other pleasure associations, etc. The purpose of the corpora- 
 tions or associations receiving the gifts should be inquired into in 
 all eases to ascertain whether or not they are organized exclu- 
 sively for the purposes set forth in the act. 
 
 3. To such gifts or contributions as are made to corporations 
 or organizations, none of whose profits inure to the benefit of 
 any private stockholder or individual. This means that all the 
 income of the recipient of the gifts must be devoted to religious, 
 charitable, scientific or educational purposes. 
 
 4. The aggregate amount of the gifts allowed to any one per- 
 son as deductions must not exceed 15% of the net income of the 
 taxpayer claiming such deduction. 
 
WISCONSIN INCOME TAX LAW 17 
 
 DEDUCTIONS ALLOWED TO INDIVIDUALS 
 
 Section 1087m — 4.. Persons other than corporations, joint 
 stock companies or associations, in reporting incomes for pur- 
 poses of taxation shall be allowed the following deductions : 
 
 Wages and Salaries 
 
 (a) Payments made within the year for wages of employees 
 and a reasonable allowance for services of copartners or mem- 
 bers of a firm actually rendered in producing such income. But 
 no deductions shall be made for any amount paid for personal 
 services unless there be reported the name and address and 
 amount paid each such employe or copartner to whom a sum of 
 seven hundred dollars or more shall have been paid during the 
 assessment year. 
 
 See note to section 1087m— 3 (a). 
 
 The deductions authorized by this section are limited to wages 
 and salaries paid for services rendered in producing the income 
 reported. Compensation paid to domestic servants, chauffeurs, 
 family physicians, and for like purposes, cannot be allowed as 
 deductions. Such expenses are of a personal character and are 
 presumed to be covered by the exemptions allowed. Members 
 of a partnership are entitled to a reasonable allowance for their 
 services to the firm but the amount should be definitely fixed in 
 advance. 
 
 Ordinary and necessary expenses 
 
 (aa) The ordinary and necessary expenses actually paid 
 within the year in carrying on the profession, occupation or busi- 
 ness from which the income is derived, including a reasonable 
 allowance for depreciation by use, wear and tear of the property 
 from which the income is derived, and in the case of mines and 
 quarries an allowance for depletion of ores and other natural 
 deposits on the basis of their actual original cost in cash or the 
 equivalent of cash. (1913 c. 720.) 
 
 See note to section 1087m — 3 (b). 
 
 Losses 
 
 (b) Losses during the year and not compensated for by in- 
 surance or otherwise, provided that no loss resulting from the 
 operation of business or the ownership of property may be al- 
 
18 WISCONSIN INCOME TAX LAW • 
 
 lowed as a deduction unless the income which might he derived 
 from such business or property would be subject to taxation un- 
 der this act. (1919 c. 275.) 
 
 See note to section 1087m — 3 (e). 
 
 As elsewhere in the income tax law the deductions authorized 
 by the two preceding subdivisions are confined to expenses in- 
 curred or losses sustained in connection with the business or 
 property producing the income. Claims for depreciation or loss 
 of property having no relation to the business carried on or the 
 property employed therein are not allowable. This rule applies 
 to all articles of luxury and ornament and other property used 
 by the taxpayer for personal or family comfort or convenience. 
 
 As the estimated rental value of residence property is no 
 longer taxable as income, the carrying charges thereon such as 
 taxes, insurance, depreciation and repairs can not be allowed as 
 deductions. Alimony paid to a divorced wife is in the nature 
 of a division of property, and not being an expense incurred in 
 producing the income reported is not an allowable deduction to 
 the husband, nor income taxable to the wife. Gould vs. Gould, 
 245 U. S. 151. 
 
 No deduction can be allowed for depreciation or loss of mer- 
 cantile stocks. The merchant is authorized to deduct the full 
 cost of goods when purchased and if the stock depreciates in 
 value thereafter the loss will be reflected in the reduced inven- 
 tory at the end of the year or in the reduced price received 
 therefor when sold. The same principle governs and the same 
 rule applies in case of farm animals. The only expense incurred 
 in connection with live stock raised by the owner is for their feed 
 and care and these items are deductible as they accrue. 
 
 The cost of stock purchased for resale is a proper deduction 
 but when once allowed no additional deduction for depreciation 
 or loss is permissible. Stock purchased for breeding purposes 
 or as a permanent addition to the herd may be regarded as cap- 
 ital investment and if the cost is not deducted at the time of 
 purchase the owner may claim deduction in case of subsequent 
 injury to or loss of such stock. See Federal Income Tax Serv- 
 ice, Rules 215 to 222. 
 
 A person cultivating or operating a farm for recreation or 
 pleasure on a basis other than the recognized principles of com- 
 mercial farming, resulting in a loss from year to year, is not re- 
 
WISCONSIN INCOME TAX LAW 19 
 
 garded as a farmer. In such cases if the expenses incurred in 
 connection with the farm exceed the receipts therefrom, the pro- 
 ceeds from the sale of products should be ignored in making the 
 assessment and the expenses incurred therein disallowed as per- 
 sonal expenses not subject to deduction from income derived 
 from other sources. Income Tax Service, Rule 223, T. D. 2153. 
 
 Dividends 
 
 (c) Dividends or incomes received by any person from stocks 
 or interest in any copartnership, corporation, joint stock com- 
 pany or association, the income of which shall have been assessed 
 under the provisions of this act; provided that when only part 
 of the income of any copartnership, corporation, joint stock com- 
 pany or association shall have been assessed under this act only a 
 corresponding part of the dividends or income received there- 
 from shall be deducted, and provided, further, that said copart- 
 nership, corporation, joint stock company or association report 
 the name and address of each person owning stock or having such 
 interest and the amount of dividends or income paid to such 
 person during the assessment year. (1913 c. 720.) 
 
 When only part of the income of a corporation is taxed in this 
 state a stockholder should be allowed a proportionate and not a 
 total deduction of dividends in computing the amount of his 
 taxable income. Van Dyke vs. City of Milwaukee, 159 Wis. 460. 
 State ex rel. Columbia Construction Co. vs. Wisconsin Tax Com- 
 mission, 166 Wis. 369. 
 
 See note to section 1087m — 3 (c). 
 
 No deduction is allowable from profits derived from the sale 
 of corporate stock resulting from the existence of a surplus 
 which has been taxed to the corporation, for the reason that the 
 purchaser of the stock will be entitled to such deduction when 
 the surplus is distributed in the form of dividends. 
 
 Interest on indebtedness 
 
 (d) Interest paid within the year on existing indebtedness; 
 provided, the debtor reports the amount so paid, the form of the 
 indebtedness, together with the name and address of the creditor. 
 
 Interest paid cannot be allowed as a deduction unless this 
 section is strictly complied with. 
 
20 WISCONSIN INCOME TAX LAW 
 
 Pensions 
 
 (g) Pensions received from the United States. 
 
 Taxes 
 
 (h) Taxes upon the property or business from which the in- 
 come hereby is derived paid by such persons during the year 
 other than inheritance taxes, including therein taxes imposed 
 by the United States government as income, excess profits and 
 war profits taxes. (1919 c. 435.) 
 
 Taxes paid on unproductive property are not allowable de- 
 ductions. State ex rel. Hickox vs. Widule, 166 Wis. 113. 
 
 See note to section 1087m — 3d. 
 
 Inheritances 
 
 (i) All inheritances, devises, bequests and gifts received dur- 
 ing the year. (1915 c. 253.) 
 
 The effect of the 1915 amendment to this section is to exempt 
 inheritances, devises, bequests and gifts from the income tax. 
 The fact that they are enumerated under the head of deduc- 
 tions implies that they should be included in the return of in- 
 come. The legislature could not have intended to allow the 
 deduction of these additions to capital from income derived from 
 other sources. 
 
 It should be borne in mind that it is only the corpus of the 
 legacies or gifts, according to their value at the death of the 
 testator or donor, which is subject to the inheritance tax and 
 exempt from the income tax, and not the profits or income de- 
 rived therefrom. All income from trust and life estates accru- 
 ing subsequent to the death of the testator or intestate is tax- 
 able as such, and an assessment thereof to the fiduciary was sus- 
 tained in State ex rel. Hickox v. Widule, 166 Wis. 113. 
 
 Ch. 318, Laws of 1917, expressly provides that such income 
 shall not be exempt from income tax. 
 
 Whenever a transfer of property is made upon which there 
 is, or in any contingency there may be, a tax imposed, such 
 property shall be appraised at its clear market value imme- 
 diately upon the transfer or as soon thereafter as practicable. 
 The value of every future or limited estate, income* interest, or 
 annuity dependent upon any life or lives in being, shall be de- 
 termined by the rule, method, and standard of mortality and 
 
WISCONSIN INCOME TAX LAW 21 
 
 value employed by the commissioner of insurance in ascertain- 
 ing the value of policies of life insurance and annuities for the 
 determination of liabilities of life insurance companies, except 
 that the rate of interest for making such computation shall be 
 five per cent per annum. The tax so determined shall be con- 
 strued to be upon the transfer of a proportion of the principal 
 or corpus of the estate equal to the present value of such future 
 or limited estate, income, interest, or annuity, and not upon any 
 earnings or income of said property produced after death, and 
 such earnings or income shall not be exempt from the income tax. 
 Such tax shall be due and payable forthwith. (1917 c. 318.) 
 
 Life Insurance 
 
 (j) All insurance received by any person or persons in pay- 
 ment of a death claim by any insurance company, fraternal bene- 
 fit society or other insurer. But endowment or other insurance 
 paid to the insured in his lifetime shall be taxable upon the 
 excess received over the amount paid for the insurance. 
 (1915 c. 253.) 
 
 By chapter 253, laws of 1915, all insurance received on the 
 payment of a death claim was withdrawn from the operation 
 of the income tax law and made subject to inheritance taxes. 
 But the proceeds of endowment policies paid to the insured dur- 
 ing his lifetime are taxable as income to the extent that the in- 
 surance received exceeds the premiums paid. In other words 
 the income tax applies to the profit element of the transaction. 
 
 Bank Dividends 
 
 (k) Dividends received from state banks, national banks, mu- 
 tual savings banks and trust companies subject to taxation by 
 this state. (1913 c. 615.) 
 
 The right of deduction conferred by this section is limited to 
 dividends from banks "subject to taxation by this state." 
 Dividends received by residents of Wisconsin from banks with- 
 out the state should be returned as income and are not subject 
 to deduction. 
 
 See note to section 1087m — 5. 2. 
 
 (1) Contributions or gifts actually made within the year to 
 corporations or associations organized and operated exclusively 
 for religious, charitable, scientific, or educational purposes, or to 
 societies for the prevention of cruelty to children or animals, no 
 
22 WISCONSIN INCOME TAX LAW 
 
 part of the net income of which inures to the benefit of any- 
 private stockholder or individual, to an amount not in excess of 
 fifteen per centum of the taxpayer's taxable net income as com- 
 puted without the benefit of this paragraph. (1919 c. 147.) 
 
 Note to section 1087m — 3i. 
 
 EXEMPTIONS 
 
 Exemptions to individuals 
 
 Section 1087m — 5. 1. There shall be exempt from taxation 
 under this act income as follows, to wit: 
 
 (a) To an individual income up to and including eight hun- 
 dred dollars; 
 
 (b) To husband and wife twelve hundred dollars; 
 
 (c) For each child under the age of eighteen years, two hun- 
 dred dollars; 
 
 (d) For each additional person, who is actually supported by 
 and entirely dependent upon the taxpayer for his support, two 
 hundred dollars. (1913 c. 720.) 
 
 The burden of proof rests on the person claiming exemption 
 under (d) above to show that the person on account of whom he 
 is claiming $200 additional exemption is not only ' ' actually sup- 
 ported by" him but is also "entirely dependent upon" him. 
 
 Nonresidents, firms, corporations, etc. Income of wife and 
 children 
 
 (e) The aforesaid exemption shall not apply to incomes de- 
 rived from sources within the state by nonresidents thereof, nor 
 to copartnerships, corporations, joint stock companies nor asso- 
 ciations. In computing said exemptions and the amounts of 
 taxes payable by persons residing together as members of a 
 family, the income of the wife and the income of each child 
 under eighteen years of age shall be added to that of the hus- 
 band or father, or if he be not living, to that of the head of the 
 family and assessed to him. The taxes levied thereon shall be 
 payable by such husband or head of the family, but if not paid 
 by him may be enforced against any person whose income is in- 
 cluded in the assessment. (1913 c. 720.) 
 
 The above exemptions are based on the family unit, graduated 
 according to the number of members and the estimated cost of 
 maintaining a family ' ' on the lowest scale of decent subsistence. ' ' 
 
WISCONSIN INCOME TAX LAW 23 
 
 As such they are self-explanatory except as to the date when 
 the exemption shall attach in case of the marriage, birth or 
 death of a member of the family during the year. 
 
 In furtherance of the policy of the law and in the absence 
 of a statutory guide in this respect the tax commission has ruled : 
 
 (1) That in case of the birth or death of a member of the 
 family during the income year full exemption shall be allowed 
 for the newborn or deceased member. 
 
 (2) That no exemption shall be allowed for minor children 
 who attain the age of 18 during the income year, nor for chil- 
 dren over 18 although supported by the parents unless in- 
 capable of supporting themselves from physical or mental in- 
 firmity. 
 
 (3) That all income received by minor children over 18 years 
 of age shall be separately assessed to them and the full $800 
 exemption allowed. 
 
 (4) That in case of marriage or divorce during the year the 
 full exemption for husband and wife shall be allowed to the 
 husband when the wife has no separate income, but 
 
 (5) If both husband and wife have separate incomes the in- 
 come of the wife prior to the date of marriage shall be separ- 
 ately assessed to her, subject to such part of the $800 exemp- 
 tion prescribed for individuals as the part of the year prior 
 to marriage bears to the entire year. 
 
 (6) That the income of the husband for the entire year plus 
 the income received by the wife subsequent to marriage shall be 
 assessed to him subject to such part of the $800 exemption pre- 
 scribed for individuals as that part of the year prior to date 
 of marriage bears to the total year, plus such a part of the 
 exemption prescribed for husband and wife as that part of 
 the year subsequent to marriage bears to the entire year. 
 
 Banking', religious, educational, scientific, and benevolent as- 
 sociations 
 
 Section 1087m — 5. 2. Income of state banks, national banks, 
 mutual savings banks, trust companies and building and loan 
 associations and of all religious, scientific, educational, benevo- 
 lent or other corporations or associations of individuals not or- 
 ganized or conducted for pecuniary profit. (1913 c. 615.) 
 
 In the case of National Bank v. Owensboro, 173 U. S. 664, it 
 was held that national banks can only be taxed in the manner 
 
24 WISCONSIN INCOME TAX LAW 
 
 authorized by Congress; that is, by assessment of the stock as 
 property to the individual shareholders. As state banks are in 
 direct competition with national banks and own property of the 
 same character, consistency requires that they be taxed in the 
 same manner. Moreover if the income of banks were assessed, 
 the tax thereon would be subject to offset by the stock tax under 
 section 1087m — 26 of the statutes. For these reasons the legis- 
 lature concluded to exclude banks from the operation of the in- 
 come tax law altogether. 
 
 Where an educational corporation organized to conduct a 
 private enterprise on the plan of a profit sharing corporation 
 with capital stock owned by shareholders receives from its busi- 
 ness an annual income in excess of its expenses and applies the 
 excess to improving its properties, thus enhancing the value of 
 the holdings to the stockholders, its income is not exempt from 
 taxation under subsection 2, sec. 1087m — 5 of the statutes. St. 
 Johns Military Academy vs. Larson, 168 Wis. 357. 
 
 Incomes from public service corporations 
 
 Section 1087m — 5. 3. Incomes derived from property and 
 privileges by persons now required by law to pay taxes or license 
 fees directly into the treasury of the state in lieu of taxes, and 
 such persons shall continue to pay taxes and license fees as here- 
 tofore. 
 
 This section seems to exempt from the payment of income tax : 
 
 Railroad companies 
 
 Palace and sleeping car companies 
 
 Freight line and equipment companies 
 
 Express companies 
 
 Street railway companies including connected electric light, 
 
 heat and power companies 
 Telegraph companies 
 Fire insurance companies 
 Life insurance companies 
 Accident, surety, etc. companies 
 Telephone companies 
 Title guaranty companies 
 Conservation and regulation companies. 
 
 Telephone and insurance companies are taxed upon their gross 
 earnings under the license system. In the assessment of state 
 wide public service companies the franchise element is required 
 to be included, and the earnings or income are taken into ac- 
 count in determining their value. For that reason they have 
 
WISCONSIN INCOME TAX LAW 2.5 
 
 been exempted from the income tax. This exemption does not 
 extend to local utilities, such as water, light, heat and power 
 companies except when owned and operated in connection with 
 street railways. 
 
 Public funds 
 
 Section 1087m — 5. 4. Income received by the United States, 
 the state and all counties, cities, villages, school districts or other 
 political units of this state. 
 
 RATES 
 Rates for individuals 
 
 Section 1087m — 6. 1. The tax to be assessed, levied and col- 
 lected xipon the incomes of all persons, except as otherwise pro- 
 vided by law, after making such deductions and exemptions as 
 are hereinbefore allowed, shall be computed at the following 
 rates, to wit : 
 
 (a) On the first one thousand dollars of taxable income or any 
 part thereof, at the rate of one per cent ; 
 
 (b) On the second one thousand dollars or any part thereof, 
 one and one-fourth per cent ; 
 
 (c) On the third one thousand dollars or any part thereof, 
 one and one-half per cent ; 
 
 (d) On the fourth one thousand dollars or any part thereof, 
 one and three,-f ourths per cent ; 
 
 (e) On the fifth one thousand dollars or any part thereof, 
 two per cent; 
 
 (f ) On the sixth one thousand dollars or any part thereof, 
 two and one-half per cent; 
 
 (g) On the seventh one thousand dollars or any part thereof, 
 three per cent ; 
 
 (h) On the eighth one thousand dollars or any part thereof, 
 three and one-half per cent ; 
 
 (i) On the ninth one thousand dollars or any part thereof, 
 four per cent ; 
 
 (j) On the tenth one thousand dollars or any part thereof, 
 four and one-half per cent; 
 
 (k) On the eleventh one thousand dollars or any part thereof, 
 five per cent ; 
 
 (1) On the twelfth one thousand dollars or any part thereof, 
 five and one-half per cent ; 
 
 (m) On any sum of taxable income in excess of twelve thou- 
 sand dollars, six per cent. 
 
 Rates for corporations 
 
 Section 1087m — 6. 2. The taxes to be assessed, levied and 
 collected upon the incomes of corporations, joint stock com- 
 panies or associations, after making such deductions and exemp- 
 
26 
 
 WISCONSIN INCOME TAX LAW 
 
 tions as hereinbefore allowed, shall be computed at the follow- 
 ing rates, to wit : 
 
 On the first $1,000 of taxable income or any part thereof. .2% 
 On the second $1,000 of taxable income or any part thereof. .2y 2 
 On the third $1,000 of taxable income or any part thereof. .3 
 On the fourth $1,000 of taxable income or any part thereof. .3% 
 On the fifth $1,000 of taxable income or any part thereof. .4 
 On the sixth $1,000 of taxable income or any part thereof . . 5 
 On the seventh $1,000 of taxable income or any part thereof . 6 
 On all taxable income in excess of $7,000 6 
 
 ( 1913 c. 720.) 
 
 The following tables which apply only to even thousands, may 
 be helpful in computing rates : 
 
 CORPORATIONS 
 
 Taxable income 
 
 1st $1,000, 
 
 2nd $1,000. 
 
 3rd $1,000, 
 
 4th $1,000, 
 
 5th $1,000, 
 
 6th $1,000 
 
 7th $1,000 
 
 8th $1,000, 
 
 9th $1,000, 
 
 10th $1,000, 
 
 15th $1,000, 
 
 20th $1,000, 
 
 Bate per 
 cent 
 
 2 
 
 2% 
 
 3 
 
 3'/ 2 
 
 4 
 
 5 
 
 6 
 
 6 
 
 Tax 
 
 $20.00 
 25.00 
 30.00 
 35.00 
 40.00 
 50.00 
 60.00 
 60.00 
 60.00 
 60.00 
 60.00 
 60.00 
 
 Total 
 income 
 taxed 
 
 $1,000 
 2,000 
 3,000 
 4, '000 
 5,000 
 6,000 
 7,000 
 8,000 
 9,000 
 10,000 
 15,000 
 20,000 
 
 Total tax 
 
 $20.00 
 
 45.00 
 
 75.00 
 
 110.00 
 
 150.00 
 
 200.00 
 
 260.00 
 
 320.00 
 
 380.00 
 
 440.00 
 
 740.00 
 
 1,040.00 
 
 True rate on 
 
 whole 
 
 amount in 
 
 even 
 thousands 
 
 2% 
 
 2.25 
 
 2.5 
 
 2.75 
 
 3. 
 
 3.3333 
 
 3.7143 
 
 4. 
 
 4.2222 
 
 4.4 
 
 4.9333 
 
 5.2 
 
 INDIVIDUALS 
 
 
 Taxable 
 income 
 
 Rate 
 
 per 
 
 cent 
 
 Tax 
 
 Total 
 Income 
 taxed 
 
 Total 
 tax 
 
 True rate 
 on whole 
 amount 
 
 1st.. 
 
 $1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 1,000 
 
 1,000 
 1,000 
 
 1 
 1*4 
 
 1% 
 
 2 
 
 2*£ 
 
 3 
 
 3*4 
 
 4 
 
 4% 
 
 5 
 
 6 
 
 6 
 6 
 
 $10.00 
 12.50 
 15.00 
 17.50 
 20.00 
 25.00 
 30.00 
 35.00 
 40.00 
 45.00 
 50.00 
 55.00 
 60.00 
 
 60.00 
 60.00 
 
 $1,000 
 2,000 
 3,000 
 4,000 
 5,000 
 6,000 
 7,000 
 8,000 
 9,000 
 10,000 
 11,000 
 12,000 
 13,000 
 
 15,000 
 20,000 
 
 $10.00 
 
 22.50 
 
 37.50 
 
 55.00 
 
 75.00 
 
 100.00 
 
 130.00 
 
 165.00 
 
 205.00 
 
 250.00 
 
 300.00 
 
 355.00 
 
 415.00 
 
 535.00 
 835.00 
 
 1% 
 
 2nd 
 
 1.125 
 
 3rd 
 
 1.25 
 
 4th 
 
 5th 
 
 1.375 
 1.5 
 
 6th 
 
 1.6667 
 
 7th 
 
 8th 
 
 1.8571 
 2.0626 
 
 9th 
 
 10th 
 
 11th 
 
 12th 
 
 2.2778 
 2.5 
 2.7273 
 2.9582 
 
 13th 
 
 3.1923 
 
 15th 
 
 3.5667 
 
 20th 
 
 4.175 
 
WISCONSIN INCOME TAX LAW 
 
 27 
 
 PART II 
 
 ADMINISTRATION 
 
 Division of state into assessment districts 
 
 Section 1087m — 8. 1. The state shall be divided into assess- 
 ment districts by the state tax commission, but in no instance 
 shall a county be divided. 
 
 In accordance with this authority the tax commission has 
 made the following division of the state into forty districts: 
 
 No. of 
 district 
 
 1. Kenosha 
 
 2. Racine 
 
 3. Walworth 
 
 4. Rock 
 
 5. Green, Lafayette 
 
 6. Grant,. Iowa 
 
 7. Dane 
 
 8. Jefferson 
 
 9. Waukesha 
 
 10. Milwaukee 
 
 11. Ozaukee, Washington 
 
 12. Dodge 
 
 13. Columbia, Marquette 
 
 14. Sauk 
 
 15. Crawford, Richland 
 
 16. La Crosse 
 
 17. Adams, Juneau 
 
 19. Winnebago, Waushara 
 
 20. Fond du Lac, Green Lake 
 
 21. Sheboygan 
 
 No. of 
 
 district 
 
 22. Calumet, Manitowoc 
 
 23. Door, Kewaunee 
 
 24. Brown, Oconto 
 
 25. Outagamie, Waupaca 
 
 26. Portage, Wood 
 
 27. Clark, Jackson 
 
 28. Buffalo, Pepin, Trempealeau 
 
 29. Pierce, St. Croix 
 
 30. Chippewa, Barron 
 
 31. Marathon 
 
 32. Shawano, Langlade 
 
 33. Florence, Forest, Marinette 
 
 34. Oneida, Vilas, Lincoln 
 
 35. Price, Taylor 
 
 36. Rusk, Sawyer 
 
 37. Burnett, Polk 
 
 38. Douglas, Washburn 
 
 39. Ashland, Bayfield, Iron 
 
 40. Dunn, Eau Claire 
 
 41. Monroe, Vernon 
 
 Assessors of incomes ; how appointed 
 
 Section 1087m — 8. 2. Not less than thirty days prior to the 
 first of March, 1912, there shall be selected and appointed by the 
 state tax commission an assessor of incomes for each assessment 
 
28 WISCONSIN INCOME TAX LAW 
 
 district in the state, who shall hold office for a term of three 
 years unless sooner removed as hereinafter provided. Such as- 
 sessor shall be a citizen and an elector of this state, but need not 
 be a resident of the district in which he is appointed to serve; 
 provided, however, that so far as practicable, preference shall be 
 given in making such appointments to residents of the districts. 
 
 The office of assessor of incomes is not a county, city, town or 
 village office, and appointments thereto may be made by state 
 authority without conflict with the home rule clause of the con- 
 stitution. Income Tax Cases, 148 Wis. 456. Subject to civil 
 service requirements, all citizens and electors of the state are 
 eligible to the office of assessor of incomes, but preference is re- 
 quired to be given to residents of the district to be served. All 
 assessors of incomes heretofore appointed have been residents of 
 their respective districts. 
 
 Assessors of incomes; how transferred or removed 
 
 Section 1087m — 8. 3. The tax commission may in its dis- 
 cretion transfer any assessor of incomes from one district to an- 
 other and may remove any assessor of incomes or his deputy 
 from office. 
 
 Oath to be taken and filed 
 
 Section 1087m — 8. 4. Before entering upon his duties such 
 assessor of incomes shall subscribe to the constitutional oath and 
 file the same in the office of the secretary of state. He shall be 
 under the direction and control of the state tax commission, and 
 shall make such reports to the commission, to the county board 
 of review and the county board of supervisors, and perform such 
 other duties, as the commission shall direct. (1913 c. 443.) 
 
 Deputies and assistants 
 
 Section 1087m — 8. 5. The state tax commission may auth- 
 orize any assessor of incomes to appoint such deputies and other 
 assistants as may be required for the proper performance of his 
 duties. Such deputies shall qualify in like manner and possess 
 the same powers as the assessor. 
 
 Salaries and expenses 
 
 Section 1087m — 9. 1. The salaries of the assessors of in- 
 comes and their deputies and assistants shall be fixed by the state 
 tax commission, but such salaries, together with the expenses of 
 such assessors and their deputies and assistants, shall not in any 
 
WISCONSIN INCOME TAX LAW 29 
 
 year exceed in amount five cents for every thousand dollars of 
 the valuation of all property as fixed by the tax commission in 
 the state assessment of the preceding year. The assessor shall be 
 furnished all necessary printing, stationery, postage and office 
 equipment, and he and his deputies shall be entitled to receive 
 their actual necessary expenses incurred in the performance of 
 their duties. The salaries of the assessor and his assistants, and 
 all such expenditures shall be audited and paid out of the state 
 treasury in the same manner as other similar salaries and state 
 expenses are audited and paid. 
 
 2. The county board of each county in which the assessor of 
 incomes has an office shall provide at the expense of the county 
 a suitable room or rooms in the courthouse or other convenient 
 building at the county seat for the use of such assessor. -If any 
 county shall fail or refuse to furnish suitable quarters for the 
 use of the assessor of incomes as herein provided the tax com- 
 mission may procure such quarters at the expense of the county 
 primarily responsible therefor. (1913 c. 487.) 
 
 Under the foregoing: provision, assessors of incomes are provided with 
 offices at the expense of the county. The terms "suitable rooms" or "quar- 
 ters" mean rooms appropriate and adequate to the business of the office 
 and include light and heat. Without light and heat such rooms would be 
 wholly unsuitable. Whether the words include office equipment is not so 
 certain, but as many counties have provided assessors of incomes with 
 appropriate equipment, and as such equipment can be supplied by counties 
 at a. saving of expense, it is believed that the term "office rooms" or "quar- 
 ters" ought to be given a liberal construction, and that the offices of all 
 the assessors of incomes ought to be equipped at the counties' expense with 
 whatever is required in the way of office furniture, filing cases, etc. 
 
 When and by whom assessments made 
 
 Section 1087m — 10. 1. The state tax commission and the as- 
 sessors of incomes shall annually on the first day of January, or 
 as soon thereafter as practicable, proceed to assess as herein- 
 after provided every income received during the preceding cal- 
 endar year liable to taxation under the provisions of this act. 
 Liability to taxation for income which follows the residence of 
 the recipient in the case of persons moving into or out of the 
 state shall be determined by the residence of such person on the 
 thirty-first day of December of the income year, and liability to 
 taxation on like income in the case of corporations which have 
 been created "or dissolved before assessment shall be determined 
 by the status of such corporation on the same date. The assess- 
 ment of corporations, joint stock companies and associations 
 shall be made by the state tax commission, and the assessment of 
 persons other than corporations, joint stock companies and asso- 
 ciations shall be by the county assessor of incomes. (1913 c. 720.) 
 
30 WISCONSIN INCOME TAX LAW 
 
 Powers of tax commission and assessors of incomes 
 
 Section 1087m — 10. 2. In the performance of sneh duty the 
 state tax commission and the county assessors of incomes shall 
 respectively possess all powers now or hereafter granted by law 
 to the state tax commission or assessors in the assessment of per- 
 sonal property and also the power to estimate incomes. 
 
 Among the powers conferred by this section are those set forth 
 in section 1056 of the Revised Statutes authorizing the assessor 
 • to examine persons under oath and to require them to make 
 sworn statements. The "power to estimate incomes" is the so- 
 called "doomage power." 
 
 A doomage assessment does not exempt the taxpayer doomed 
 from the penalties provided by law for failure to make a return. 
 
 Returns by corporations 
 
 Section 1087m — 10. 3. Every corporation, joint stock com- 
 pany or association, whether taxable under this act or not, shall 
 furnish to the tax commission a true and accurate statement at 
 such time, in such manner and form and setting forth such facts 
 as said commission shall deem necessary to enforce the provisions 
 of this act. Such statement shall be made upon the oath or af- 
 firmation of the president, vice president or other principal 
 officer and the treasurer of said corporation, joint stock company 
 or association. 
 
 Returns by individuals 
 
 Section 1087m — 10. 4. Whenever in the judgment of the as- 
 sessor of incomes any person in his district other than a cor- 
 poration, joint stock company or association shall be subject to 
 an income tax under the provisions of this act, he shall require 
 such person to make report at such time and in such manner and 
 form as the tax commission may prescribe, specifying par- 
 ticularly among other items the amount of income received from 
 services, unsecured notes, mortgages, bonds, stocks and real 
 estate, the amount of income received by his wife and each child 
 under eighteen years of age residing together with him as mem- 
 bers of the family and such other information as the commission 
 shall deem necessary to enforce the provisions of this act. 
 (1913 c. 720.) 
 
 All unmarried persons who have a gross annual income of 
 over $800 and all married persons who have a gross annual in- 
 come of over $1,200 should make a return whether notified by the 
 assessor of incomes to do so or not. 
 
WISCONSIN INCOME TAX LAW 31 
 
 All persons who are notified to make return of income by the 
 assessor of incomes should comply with the notice regardless of 
 the amount of their incomes. 
 
 Returns by guardians, trustees, etc. 
 
 Section 1087m — 10. 5. Every guardian, trustee, executor, 
 administrator, agent or receiver, and every other person or cor- 
 poration acting in a fiduciary capacity shall make and render 
 to the assessor of incomes of the district in which such represen- 
 tative resides, a verified list or return of the amount of income 
 received by him for such person, ward or beneficiary, together 
 with all income received by the ward, beneficiary, deceased or 
 incompetent person whom he represents or succeeds during the 
 year covered by the return and 'shall be liable to assessment and 
 taxation therefor, subject to the deductions and exemptions pro- 
 vided in this chapter ; provided, that such deductions or exemp- 
 tions have not been claimed by or for such person, ward or bene- 
 ficiary in another capacity. The return so made shall be signed 
 by the person rendering it, and by the president or secretary 
 thereof, if a corporation. Every person subject to an income 
 tax in his representative capacity under this subdivision shall 
 have all of the remedies and rights of reimbursement for any 
 tax assessed against or paid by him in such capacity prescribed 
 by section 1044a of the statutes. (1913 c. 720.) 
 
 Dividends derived from stocks and interest derived from notes, 
 mortgages, etc., received by a resident trustee (individual or cor- 
 porate) as a gain or profit from securities constituting the trust 
 fund are taxable as income in this state even though the person 
 entitled to the enjoyment thereof and to whom they must be paid 
 over is a nonresident and also a cotrustee, and even though two 
 of the trustees reside without the state. The resident trustee, in 
 such a case, in whose custody the securities are, and to whom the 
 dividends and interest are paid, must be deemed the recipient of 
 such income within the meaning of subdivision 3, Sec. 1087m — 2. 
 State ex rel. Hickox vs. Widulc, 166 Wis. 113. State ex rel. Wis- 
 consin Trust Co. vs. Widule, 156 Wis. 121. 
 
 Expenses incurred in the probate of an estate, such as ad- 
 ministrators', executors' and attorneys' fees and inheritance 
 taxes are not proper deductions in computing annual income. 
 Inheritance taxes are excluded by the express letter of the stat- 
 ute and the other expenses have no relation to the income of 
 the current year. The services of execirtors, administrators, at- 
 
32 WISCONSIN INCOME TAX LAW 
 
 torneys and appraisers mainly relate to the adjustment of 
 claims, devolution of title and conservation of the property of 
 the estate and are therefore proper charges against the corpus. 
 Such expenses are denied by the Internal Revenue Department 
 in administering the federal income tax law and the tax cam- 
 mission has repeatedly ruled that they are not allowable under 
 the Wisconsin law. On the other hand if the executor or ad- 
 ministrator continues the business of the deceased, all ordinary 
 expenses incident to carrying on the business during the year 
 are deductible to the same extent as if the business had been 
 conducted by the former owner. 
 
 Where paid by guardians, etc. 
 
 5a. The income tax to be paid by guardians, trustees, agents 
 or other persons or corporations acting in a fiduciary capacity 
 shall, as to such income as follows the residence of the recipient, 
 be paid in the district where the said guardian, trustee, agent 
 or other fiduciary resides, if the ward, beneficiary or principal 
 is a nonresident of the state of Wisconsin. If the ward, bene- 
 ficiary or principal resides in the state of Wisconsin the tax 
 upon all such income shall be paid in the district where the said 
 ward, beneficiary or principal resides. (1915 c. 408.) 
 
 Returns by executors, etc. required before estate can be settled 
 
 5b. An executor, administrator, guardian or trustee ap- 
 plying to a court having jurisdiction for a discharge from his 
 trust and a final settlement of his accounts, before his appli- 
 cation shall be granted, shall file with the assessor of incomes 
 of his county a return of all income received in his representa- 
 tive capacity during the time between the last preceding Jan- 
 uary first and the date of his application for discharge and 
 also similar returns of income received during each of the 
 three next preceding calendar years as have not theretofore 
 been filed. Upon receipt of such returns the income tax assessor 
 shall immediately determine the amount of income tax due or to 
 become due from such executor, administrator, guardian, or trus- 
 tee and certify the amount or amounts to the court in which 
 the application for discharge is pending and the court shall 
 thereupon enter an order directing the executor, administra- 
 tor, trustee or guardian, as the case may be, to pay to the 
 treasurer of the county in which such proceeding is pending 
 the amount of tax, if any, found due by the assessor of incomes, 
 and take his receipt therefor. The certificate of the assessor 
 of incomes shall contain the names of the counties, towns, cit- 
 ies or villages entitled to the tax and the amount to which 
 
WISCONSIN INCOME TAX LAW 33 
 
 each is entitled and a copy thereof shall be filed with the treas- 
 urer of the county in which said court is located. Such re- 
 ceipt shall be evidence of the payment of the tax and shall 
 be filed with the court before a final distribution of the estate 
 is ordered, and the executor, administrator, or trustee is dis- 
 charged. The county treasurer shall pay to the several treas- 
 urers of the state, county, town, city and village the por- 
 tion of the tax each is entitled to at the time and in the man- 
 ner delinquent income taxes are paid to him. The assessor of 
 incomes shall enter all such assessments upon the assessment 
 roll for the year in which the assessment is made, if practicable 
 to do so, otherwise upon the assessment roll of the following 
 year and shall enter thereon opposite each such assessment 
 the words "Paid to the county treasurer by order of court." 
 (1919 c. 386.) 
 
 In answer to numerous inquiries the tax commission has issued 
 the following instructions to assessors of incomes relating to the 
 assessment of executors, etc. 
 
 "(1) Executors, administrators, guardians and trustees are 
 required to make return of all income received by them in their 
 representative capacity for each calendar year during the exist- 
 ence of the trust. The return for the year of their appointment 
 should also include the income received by the deceased or in- 
 competent person whom they represent or succeed from the first 
 of January preceding to the date of appointment. Under the 
 foregoing amendment the return for the year in which the trust 
 is terminated should cover the income from the first of January 
 preceding to the date of final settlement. All such returns 
 should be made on the regular blanks prescribed for executors, 
 administrators, trustees and others acting in a fiduciary 
 capacity. In case any such representative or the person whom 
 he represents or succeeds shall have failed or omitted to make a 
 return of the income received by him for either of the next three 
 preceding years, he should make separate return of such income. 
 
 (2) The exemptions prescribed for individuals are based upon 
 the family unit. In the ordinary course of probate of an estate 
 the executor or administrator stands in the place of the former 
 owner and the unity of the family is generally preserved. Dur- 
 ing this period, therefore, exemption should be measured by the 
 family status. It follows that executors and administrators 
 should be allowed the same exemptions for the year in which the 
 deceased died which he might have claimed if he had survived. 
 In subsequent years no exemption should be allowed for the de- 
 ceased, but full exemption should be allowed for the succeeding 
 head of the family and minors and dependent members thereof. 
 
34 • WISCONSIN INCOME TAX LAW 
 
 (3) As a general rule the tenure of guardians and trustees is 
 more permanent and the family relation among the beneficiaries 
 less frequent. In such cases when the return covers a full calen- 
 dar year the statute seems to contemplate that exemptions should 
 be allowed according to the status of the beneficiary as if he re- 
 ported in his individual capacity. As the return for the year in 
 which the trust is terminated covers only the income received 
 from the first of January preceding to the date of final settle- 
 ment, and the beneficiary must make return for the balance of 
 the year, care should be exercised to avoid double exemption. In. 
 that event at the option of the beneficiary the fiduciary may 
 claim exemption for him or the beneficiary may waive the exemp- 
 tion in the return made by the fiduciary and avail himself of it 
 in his individual return. When the fiduciary claims exemption 
 for the beneficiary and such exemption exceeds his share of the 
 income reported, the unused portion of the exemption may be 
 claimed by the beneficiary in making his individual return. 
 
 (4) Every assessor of incomes should require returns of all 
 fiduciaries appointed by or acting under the jurisdiction of any 
 court in his district, who may be liable for an income tax, pre- 
 liminary to final settlement of their estates. He should assess 
 the income as soon as the returns are received and certify the 
 amount of the tax due thereon to the court having jurisdiction of 
 the trust and mail a duplicate copy of such certificate to the 
 county treasurer and enter the same on the income tax assess- 
 ment roll in the manner prescribed by sec. 1087m — 10. 5b. 
 
 Court may waive return, when 
 
 (5c) Returns of income required to be made by virtue of the 
 next preceding subsection may be dispensed with by order of the 
 court having jurisdiction in cases where it is clearly evident to 
 the court that no income is due or to become due from the trust 
 estate. (1919 c. 419,) 
 
 Should the court make an order dispensing with the return 
 under the authority of subsection 5c and after the final settle- 
 ment and distribution of the estate it shall be ascertained that 
 taxable income had been received, the fiduciary is personally re- 
 sponsible for the tax. The court is not made a substitute for, 
 but an aid to, the assessor of incomes. Any order dispensing 
 with the return will be made at the risk of the fiduciary, and 
 hence in all cases it is greatly to his interest to see to it that 
 no such order is inadvertently made. 
 
 The certificate required by section 1087m — 10.5b may be sub- 
 stantially in the following form : 
 
WISCONSIN INCOME TAX LAW 35 
 
 CERTIFICATE 
 
 County Court — County, Wisconsin 
 
 In the Matter of the of 
 
 , Deceased. 
 
 ! 
 
 I, the undersigned, assessor of incomes in and for 
 
 County, Wisconsin, hereby certify that 
 
 as 
 
 of the estate of , de- 
 ceased, has made due return of all income received by him in his 
 representative capacity as required by Section 1087m — 10.5& of 
 the Statutes (ch. 265, Laws of 1917 and ch 386, Laws of 1919) ; 
 that I have carefully examined said return and find the amount 
 
 of income taxes due from him as of 
 
 said estate to be as follows : 
 
 $ on income received by him for current year, 
 
 $ on income received by him in 19 
 
 $ on income received by him in 19 
 
 $ on income received by him in 19 
 
 That said Estate is being administered in the County Court 
 
 of County, and the tax thereon 
 
 is payable to the treasurer of said county, to be distributed by 
 him in the following manner: 
 
 70% or $ to be paid to the Treasurer of 
 
 20% or $ to be retained by him for the County of- 
 
 10% or $. .' to be paid to Treasurer of State of Wiscon- 
 sin. (Or) 
 
 That I have carefully examined the accounts of 
 
 as of the said estate 
 
 and that there is no income tax due from him in his repre- 
 sentative capacity. 
 
 Dated this day of , 19 ... . 
 
 Assessor of Incomes, 
 County, Wisconsin. 
 
 Penalty on assessor for questions unanswered 
 
 Section 1087m — 10. 6. For each question unanswered the 
 assessor or deputy assessor, failing to present satisfactory cause 
 for such omission to the state tax commission, shall be subject to 
 a penalty of five dollars, and said penalty shall be deducted 
 
36 WISCONSIN INCOME TAX LAW 
 
 from the compensation of said assessor or deputy assessor at the 
 time such compensation is paid. 
 
 Additions and corrections to returns 
 
 Section 1087m — 11. 1. "Whenever evidence shall be produced 
 before the state tax commission, which in the opinion of the 
 commission, justifies the belief that in any one or more of the 
 three next previous years the returns made by any corporation, 
 joint stock company or association are incorrect, or are made 
 with false or fraudulent intent, or when any corporation, joint 
 stock company or association has failed or refused to make a 
 return as required by law the state tax commission may require 
 from every such corporation, joint stock company or association 
 such further information with reference to its capital, income, 
 losses, expenditures and business transactions as is. deemed ex- 
 pedient. Upon the information so required the state tax com- 
 mission may make such additions or corrections to the assess- 
 ment as are deemed true and just, such correction to be made in 
 the next tax levy. Whenever the state tax commission shall so 
 increase or make subject to tax any income, it shall give notice 
 in writing to the person liable for the payment of the tax on said 
 income of the amount of the assessment. Such notice may be 
 served by registered mail. 
 
 Penalty on corporations for false or fraudulent return or fail- 
 ure to make return 
 
 Section 1087m — 11. 2. In case any return made by any cor- 
 poration, joint stock company or association is made with false 
 or fraudulent intent or in case of a refusal or neglect to make a 
 return as required by law, and an additional amount is discov- 
 ered, the amount so discovered shall be subject to twice the orig- 
 inal rate. The amount so added to the tax shall be collected at 
 such time and in such manner as may be designated by the state 
 tax commission. 
 
 In addition to the power to reassess corporations for taxes 
 • omitted in any of the three previous years, the tax commission is 
 authorized, if not required, to tax the income at double the orig- 
 inal rate. In the case of failure to make a return the tax com- 
 mission may "estimate" the income and impose the double tax 
 rate upon the income thus fixed. 
 
 This section gives the tax commission power to correct errors 
 and reassess incomes of corporations which escaped taxation in 
 former years but limits the time within which such corrections 
 can be made to the three years immediately preceding. Income 
 
WISCONSIN INCOME TAX LAW 37 
 
 of this character which escaped taxation more than three years 
 prior to the year of assessment cannot be reached under this 
 statute but it does not follow that the taxes due thereon cannot 
 be enforced at all. On the contrary it is well settled by decisions 
 of the United States supreme court and of several states that 
 such taxes can be collected by direct action against the taxpayer 
 after the right to reassess has expired. 
 
 Dollar Savings Bank vs. United States, 86 U. S. 227 ; 
 
 Meredith vs. United States, 13 Peters 486 ; 
 
 United States vs. Chamberlain, 219 U. S. 250. 
 
 The same rule has been applied in several of the states, no- 
 tably in California, Massachusetts, New York, and Connecticut, 
 and is probably the general law. 
 
 When time for making returns may be extended 
 
 Section 1087m— 11. 3. In case of neglect occasioned by the 
 sickness or absence of an officer of any corporation, joint stock 
 company or association required to make said return, or for other, 
 sufficient reason, the state tax commission may allow such further 
 time for making and delivering such return as it may deem 
 necessary, not to exceed thirty days. 
 
 Penalty on corporation for making false return, etc. 
 
 Section 1087m — 11. 4. If any of the corporations, joint 
 stock companies or associations aforesaid shall fail or refuse to 
 make a return at the time or times hereinbefore specified in each 
 year, or shall render a false or fraudulent return, such corpora- 
 tion, joint stock company or association shall be liable to a pen- 
 alty of not less than one hundred dollars and not to exceed five 
 thousand dollars at the discretion of the court. 
 
 Penalties on officers of corporations 
 
 Section 1087m — 11. 5. Any officer of a corporation, joint, 
 stock company or association required by law to make, render, 
 sign or verify any return who makes any false or fraudulent re- 
 turn or statement, with intent to defeat or evade the assessment 
 required by this act to be made, shall upon conviction be fined 
 not to exceed five hundred dollars or be imprisoned not to ex- 
 ceed one year, or both, at the discretion of the court, with the cost 
 of prosecution. 
 
 Additions, corrections and reassessments of incomes of indi- 
 viduals 
 
 •Section 1087m — 12. 1. Whenever the assessor of incomes or 
 the county board of review herein provided for shall have rea- 
 
38 WISCONSIN INCOME TAX LAW 
 
 son to believe that in any one or more of the three next previous 
 years the returns made by any person other than a corporation, 
 joint stock company, or association are incorrect or are made 
 with false or fraudulent intent, or when any such person has 
 failed or refused to make a return as required by law, the asses- 
 sor or county board of review shall make such additions or cor- 
 rections to the next assessment as he or they shall deem true and 
 just. Whenever the assessor or the county board of review shall 
 so increase or make subject to tax any income he or they shall 
 give notice in writing to the person liable for the payment of the 
 tax on said income of the amount of the assessment. Such no- 
 tice may be served by registered mail. 
 
 This section provides the same method, for reassessing income 
 taxes which have been omitted within three years by individuals 
 as is set forth in the case of corporations in section 1087m — 11, 
 sub. 1, except that in the former case the reassessment is made 
 by the tax commission while for individuals it is made by the 
 assessor of incomes or the board of review. 
 
 See note 1087m — 11. .2. 
 
 Penalty for false return by individual 
 
 Section 1087m — 12. 2. In case any return made by any per- 
 son other than a corporation, joint stock company or association 
 is made with false or fraudulent intent, or in case of a refusal 
 or neglect to make a return as required by law, and an addi- 
 tional amount is discovered, the amount so discovered shall be 
 subject to twice the original rate. 
 
 Penalty on individual for making false return, etc. 
 
 Section 1087m — 12. 3. Any person, other than a corpora- 
 tion, joint stock company or association who fails or refuses to 
 make a return at the time hereinbefore specified in each .year or 
 shall render a false or fraudulent return shall upon conviction 
 be fined not to exceed five hundred dollars, or be imprisoned not 
 to exceed one year, or both, at the discretion of the court, to- 
 gether with the cost of prosecution. 
 
WISCONSIN INCOME TAX LAW 39 
 
 APPEAL AND REVIEW 
 
 Appeal by corporation 
 
 Section 1087m — 13. Any corporation, joint stock company 
 or association subject to assessment by the state tax commission, 
 feeling aggrieved by the decision of said commission regarding 
 the assessment of its income, shall be granted the same rights of 
 hearing and appeal as are now granted corporations assessed by 
 said commission. 
 
 The "hearing and appeal" referred to in this section is in the 
 nature of a review or rehearing before the tax commission as to 
 the amount of income on which the corporation should be taxed. 
 The section does hot refer to proceedings in court nor does it 
 authorize an action against the state to recover taxes unlawfully 
 levied, as in the case of steam railroads. Eelief from the levy or 
 collection of an unlawful income tax must be sought under sub- 
 division 4 of section 1087m — 22 and sections 1164 and 1210g of 
 the statutes. See Montreal Mining Co. vs. State, 155 Wis. 245. 
 
 Board of review — appointment and compensation 
 
 Section 1087m — 14. The state tax commission shall appoint 
 three resident taxpayers of each county to serve as a county 
 board of review. (1913 c. 772.) 
 
 Duties of county clerk as clerk of board of review 
 
 Section 1087m — 15. The county clerk shall be clerk of such 
 board, and shall keep an accurate record of all proceedings 
 thereof, including a correct record of all changes in the assess- 
 ment rolls made by the board. The county clerk shall take full 
 minutes of all evidence given before the board; provided, how- 
 ever, that the board, with the approval of the assessor of in- 
 comes, may in cases where they deem it advisable, employ a steno- 
 graphic reporter to take such evidence in shorthand, and ex- 
 tend the same in typewritten form. The county clerk shall pre- 
 serve in his office a record of all such proceedings, minutes and 
 evidence taken, and all documentary evidence offered. The 
 stenographer shall be paid by the slate, such payment to be 
 charged to the proper appropriation for the tax commission, but 
 the board may, in its discretion, charge the expenses to the com- 
 plaining party or parties appearing before the board. (1913 c. 
 772.) 
 
40 WISCONSIN INCOME TAX LAW 
 
 Board of Review shall meet last Monday of July 
 
 Section 1087m — 16. 1. The county board of review of each 
 county, constituting an assessment district, shall meet annually 
 on the last Monday of July at ten o'clock a. m. at the courthouse 
 in said county to hear complaints and to review the assessments 
 of income made by the assessor. A majority shall constitute a 
 quorum. I 
 
 Date of meeting in districts comprising more than one county 
 
 2. In assessment districts composed of more than one county 
 the board of review of the county designated by the assessor of 
 incomes shall meet as provided above and the board of review 
 of each remaining county of the district shall meet as soon there- 
 after as is possible for the assessor of incomes to be present. 
 The date of such meeting shall be fixed by the assessor of in- 
 comes. 
 
 Notice of meeting to be published 
 
 3. Notice of the annual meeting of each county board of re- 
 view shall be published in a newspaper of the county at least 
 one week previous to such meeting. 
 
 This section does not specify by whom the notice of the meet- 
 ing of the board of review shall be signed. In the absence of 
 such direction the tax commission has ruled that it shall be 
 signed by the assessor of incomes. The following form of notice 
 is recommended for the purpose : 
 
 Notice is hereby given that the income tax board of review in 
 and for County will meet at the court- 
 house in the city of , on the day of 
 
 July 19 . . . . , at 10 o 'clock in the forenoon, for the purpose of ex- 
 amining the income tax assessment roll and of considering com- 
 plaints of aggrieved taxpayers and performing such other duties 
 as are imposed upon it by law. 
 
 Dated at this day of July, 19 ... . 
 
 Assessor of Incomes in and 
 
 for County. 
 
 Adjournments 
 
 4. The board may adjourn from day to day, and from time 
 to time, until its business is completed, but no adjournment 
 other than from day to day shall be had except upon written re- 
 quest and for satisfactory cause shown. 
 
WISCONSIN INCOME TAX LAW 41 
 
 Attendance of witnesses and production of books and papers 
 
 5. Attendance of witnesses and the production of books and 
 papers before said board may be compelled by subpoena, issued 
 by the clerk thereof, a justice of the peace or a court commis- 
 sioner. 
 
 Duties of board of review 
 
 Section 1087m — 17. 1. The board shall hear and examine, 
 and permit the assessor to examine, any aggrieved or other per- 
 son upon oath who shall appear before it in relation to any as- 
 sessment or omission of income, and may increase or lessen the 
 amount of any income assessed, if satisfied from the evidence sub- 
 mitted and the statements of the assessor, that such change 
 should be made. 
 
 The powers and duties of income tax boards of review are sub- 
 stantially the same as those prescribed by section 1061 of the 
 statutes relating to the property tax. Their principal duty is 
 to pass upon disputed facts and not to modify or suspend any 
 provision of the income tax law or the regulations prescribed 
 for the administration thereof. While the reason for such laws 
 and regulations may not be apparent in all cases, they were 
 framed with reference to their effect on the administration of 
 the law as a whole and are generally observed in making assess- 
 ments. The failure of individual boards of review to be gov- 
 erned by them will inevitably destroy the uniformity between 
 taxpayers which it is the policy of the law to maintain. 
 
 Board must give notice of changes in assessment 
 
 2. The board shall not increase any assessments, nor assess 
 any income not on the roll without notice in writing to the per- 
 son liable for payment of the tax thereon, or his agent, if either 
 be resident of the county, of such intention in time to appear 
 and be heard before the board in relation thereto. 
 
 Objections to assessment must be made before board of review 
 
 Section 1087m — 18. No person subject to assessment by the 
 county assessor shall be allowed in any action or proceeding to 
 question any assessment of income, unless objections thereto 
 shall first have been presented to the county board of review in 
 good faith and full disclosure made under oath of any and all 
 income of such party liable to assessment. 
 
42 WISCONSIN INCOME TAX LAW 
 
 Appeal may be taken to state tax commission 
 
 Section 1087m — 19. 1. Any person dissatisfied with, any de- 
 termination of the county board of review may appeal within 
 twenty days to the state tax commission, to whom a copy of the 
 record of the board shall be certified, together with all evidence 
 or a copy thereof, relating to such assessment. 
 
 An income tax assessor if dissatisfied with the decision of the 
 board of review of income tax assessments, has the right to ap- 
 peal therefrom to the state tax commission. State ex rel. Wick- 
 ham vs. Nygaard, 159 Wis. 396. 
 
 The remedy of appeal to the state tax commission by a per- 
 son dissatisfied with any determination of the county board of 
 review in respect to the assessment of his income is not exclusive. 
 Nor is such an appeal a condition precedent to the right to main- 
 tain an action for the recovery of illegal income taxes paid under 
 protest. Such action may be maintained under subdivision (4), 
 Sec. 1087m— 22 and Sec. 1164. Horlick vs. Town of Mt. Pleas- 
 ant, 161 Wis. 366. Field vs. Milwaukee, 161 Wis. 393. 
 
 Tax commission may review assessments on appeal 
 
 2. The tax commission shall review such assessment from the 
 record thus submitted and shall make necessary corrections and 
 certify its conclusion to the county clerk, who shall duly notify 
 the person liable for the tax and enter upon the assessment roll 
 any change made by the commission. 
 
 APPORTIONMENT AND COLLECTION 
 
 Tax commission to compute and certify tax on corporations 
 
 Section 1087m — 20. 1. The state tax commission shall com- 
 plete the assessment of income for each corporation, joint stock 
 company, and association on or before the fifteenth day of Octo- 
 ber in each year, and compute the tax thereon, and shall there- 
 upon forthwith certify to each county clerk a statement of the 
 assessment of each corporation, joint stock company and asso- 
 ciation in his county and the amount of tax levied against each. 
 
 Tax commission to make report 
 
 2. The state tax commission shall submit in their biennial re- 
 port the amount of income tax collected for each county in the 
 
WISCONSIN INCOME TAX LAW 
 
 43 
 
 state, and shall designate the several general classes of property 
 from which the incomes were received, the cost to the state and 
 each county for the administration of the law, and all such facts 
 as shall be required to give a definite understanding of the finan- 
 cial operations of the law. 
 
 In compliance with this statute the tax commission has sub- 
 mitted the results of the administration of the law in its bien- 
 nial report to the legislature. The following summary shows the 
 results of the income tax for each assessment from 1912 to 1918, 
 inclusive. 
 
 TABLE SHOWING INCOME TAX LEVY, CASH COLLECTIONS, OFFSETS AND 
 DELINQUENTS FOB THE TEARS 1912 TO 1918 INCLUSIVE 
 
 Year 
 
 Income of 1911, assessed in 1912, 
 
 paid in 1913 •.. 
 
 Income of 1912, assessed in 1913, 
 
 paid in 1914 
 
 Income of 1913, assessed in 1914, 
 
 paid in 1915 .- 
 
 Income of 1914, assessed in 1915. 
 
 paid in 1916 
 
 Income of 1915, assessed in 1916. 
 
 paid in 1917 
 
 Income of 1916, assessed in 1917 . 
 
 paid in 1918 
 
 Income of 1917, assessed in 1918. 
 
 paid in 1919 
 
 Total levy 
 
 $3,482,883.25 
 4,085,147.56 
 4,145,676.48 
 3,837,370.04 
 5,328,442.96 
 9,482,620.13 
 
 11,784,151.34 
 
 Offsets 
 
 $1,609,711.02 
 1,897,974.05 
 1,987,904.52 
 1,825,641.62 
 2,211,606.89 
 3,307,435.67 
 4,707,187. 
 
 Cash 
 collections 
 
 $1,631,413.38 
 1,935,846.54 
 2,002,212.53 
 1,906,441.69 
 2,988,766.66 
 6,037,719.19 
 6,951,482.70 
 
 delinquent 
 
 $241,758.85 
 251,326.97 
 155,559.43 
 105,286.73 
 128,069.41 
 137,465.27 
 125,480.68 
 
 By whom income tax of individuals to be computed 
 
 Section 1087m — 21. 1. The tax upon the income of persons 
 other than corporations, joint stock companies and associations 
 shall be computed by the county clerk, assisted by the assessor 
 of incomes and said clerk shall on or before November first, 
 certify, excepting in cities of the first class, to each town, city 
 and village clerk the names of all persons whose incomes are 
 assessed in his own town, city or village, and the amount of 
 tax levied against each such person, and such amount shall be 
 entered by the town, city and village clerks in a separate column 
 designated "income tax" upon the tax roll of the year, and shall 
 be collected and paid as personal property taxes are now col- 
 lected and paid. 
 
44 WISCONSIN INCOME TAX LAW 
 
 2. The county clerk shall certify in a similar manner to the 
 tax commissioner of each city of the first class located within 
 the limits of the county and the tax commissioner shall proceed 
 in the manner previously prescribed for the city clerk to make 
 out the tax roll. ( 1915 c. 335.) 
 
 Where tax shall be assessed, levied and collected 
 
 Section 1087m — 22. The place at which the income tax 
 herein provided for shall be assessed, levied and collected shall 
 be determined as follows : 
 
 1. In their return for purposes of assessment persons deriv- 
 ing incomes from within and without the state, or from more 
 than one political subdivision of the state, shall make a separate 
 accounting of the income derived from without the state and 
 from each political subdivision of the state in such form and 
 manner as the tax commission may prescribe. 
 
 Much confusion has arisen from the failure of taxpayers to 
 furnish the necessary data for apportioning income taxes under 
 this section. Where a taxpayer receives income from different 
 assessment districts within the state, the method of apportion- 
 ment is substantially the same as where income is derived from 
 within and without the state. See note to section 1087m — 2. 3. 
 Persons doing business in different assessment districts within 
 the state should carefully report (1) the total amount of tangible 
 property employed in carrying on the business and the amount 
 located in each assessment district; (2) the total amount of busi- 
 ness transacted dxiring the year in all districts and the amount 
 in each particular district, preferably expressed in gross re- 
 ceipts; (3) the factory cost of (a) goods sold, and (b) goods 
 manufactured in all districts and in each separate district. It 
 should be borne in mind that it is the town, city or village in 
 which the property is located or business transacted which is 
 entitled to the tax, and the name of such municipality should be 
 carefully given in addition to the post-office address. 
 
 Assessment of income derived from different localities 
 
 Section 1087m — 22. 2. The entire taxable income of every 
 person deriving income from within and without the state or 
 from within different political subdivisions of the state, when 
 such person resides within the state, shall be combined and ag- 
 gregated for the purpose of determining the proper exemptions 
 and proper rate of taxation. The taxable income so computed 
 
WISCONSIN INCOME TAX LAW 45 
 
 shall be assessed, and taxes at such rate shall be paid, in the sev- 
 eral towns, cities and villages in proportion to the respective 
 amounts of income derived from each, counting that part of the 
 income derived from without the state when taxable as having 
 been derived from the town, city or village in which said person 
 resides. 
 
 Where income tax of nonresidents to be paid 
 
 Section 1087m — 22. 3. The income tax of every nonresident 
 of this .state shall be paid in the taxing district from which the 
 income is derived. When such income is derived from more 
 than one taxing district of the state, the tax shall be computed 
 on the aggregate income received from all districts and shall 
 be certified for collection to the several taxing districts in pro- 
 portion to the amount of income received from each under such 
 rules and regulations as the tax commission may prescribe. 
 (1917 c. 246.) 
 
 General laws as to personal property taxes applicable 
 
 Section 1087m — 22. 4. All laws not in conflict with the pro- 
 visions of this act, relating to the assessment, collection and pay- 
 ment of taxes on personal property, the correction of errors in 
 assessment and tax rolls, the compromise or cancellation of il- 
 legal taxes and the refund of moneys paid thereon, shall be ap- 
 plicable to the income tax herein provided for; but no town 
 or village board or common council, nor the county officers speci- 
 fied in section 1210g, shall compromise or cancel any income 
 tax or any part thereof or refund any moneys paid thereon with- 
 out the written approval of the assessor of incomes who made 
 the assessment or of the tax commission in the case of assess- 
 ments made by it, specifying the defect in the assessment or tax 
 proceeding and the amount of taxable income which should have 
 been assessed and the amount of the taxes justly chargeable 
 thereto. (1913 c. 27.) 
 
 The foregoing section makes the statutory provisions relating 
 to the manner of assessing, collecting and paying personal prop- 
 erty taxes applicable to the income tax where no express pro- 
 vision to the contrary is made. It also permits the correction 
 of errors in assessment and tax rolls by town, city and village 
 clerks and treasurers in the manner and to the extent prescribed 
 by sections 1065, 1085 and 1085a of the statutes. 
 
 Approval of a claim for illegal taxes by the assessor of incomes 
 or the tax commission is not a condition precedent to an action 
 in court to recover such taxes. Field vs. Milwaukee, 161 Wis. 
 
46 WISCONSIN INCOME TAX LAW 
 
 393. But it is a condition precedent to voluntary payment or 
 refund by town, village and county boards and common councils. 
 
 Delinquent income taxes 
 
 Section 1087m — 22. 5. In the return of delinquent income 
 taxes as required by law the entire amount of each such delin- 
 quent income tax shall be returned to the county treasurer with- 
 out division or apportionment. All laws, including the provi- 
 sions of any city charter in conflict with this subsection are 
 hereby repealed. (1913 c. 720.) 
 
 How income taxes collected by wrong district recovered by 
 proper district 
 
 (6) Whenever any city, town or village shall have collected 
 an income tax that under the income tax law ought not to 
 have been collected by such city, town or village, but by the 
 provisions of the income tax law should have been collected 
 by another town, city or village, such tax shall be paid to the 
 town, city or village entitled thereto; provided, however, that 
 no such payment shall be made except on the written approval 
 of the assessor of incomes who made the assessment, or of the 
 tax commission in the case of assessments made by it, specify- 
 ing the defect in the assessment or tax proceeding; and pro- 
 vided further that a claim for such tax shall have been made 
 within one year after the collection of the tax. If any portion 
 of such taxes so refunded shall be properly chargeable to the 
 county and state, they shall be so charged, and such town, city or 
 village shall be credited by the county treasurer on the settle- 
 ment with the proper treasurer for the taxes of the ensuing year, 
 with the whole amount of such state and county taxes so paid 
 into the county treasury; and the county treasurer shall also 
 be allowed by the state treasurer the amount of said taxes so 
 illegally collected and paid in his settlement with the state 
 treasurer, next after the payment of such claim. (1919 c. 306.) 
 
 Apportionment of income tax 
 
 Section 1087m — 23. All income taxes collected in cash over 
 and above the personal property offset authorized by section 
 1087m — 26 of the statutes shall be divided as follows, to wit: 
 Ten per cent to the state, twenty per cent to the county, and 
 the balance to the town, city or village in which the tax was 
 assessed, levied and collected, except that when such balance 
 exceeds two per cent of the equalized value of such town, city 
 or village under section 1073, such excess shall be paid to the 
 county to be distributed and paid to the several towns, cities and 
 villages of the county, according to the school population therein. 
 
WISCONSIN INCOME TAX LAW 47 
 
 The same shall be remitted and accounted for in the same man- 
 ner as the state and county taxes collected from property arc 
 remitted and paid, except that income taxes returned delinquent 
 shall not be charged to the county nor credited to the town, city 
 or village returning the same. Out of the first moneys received 
 and retained "from cash collected from such income taxes in any 
 city of the first class, however organized, there shall be trans- 
 ferred and paid to the firemen's pension fund provided for by 
 chapter 165 of the laws of 1903 and laws amendatory thereof, a 
 sum each year sufficient to make the said firemen V, pensions fund 
 on the first day of March in each year not less than one hundred 
 and seventy-five thousand dollars, to be used for the purpose of 
 paying pensions to disabled and superannuated members of the 
 fire department and their beneficiaries mentioned in said laws. 
 The county treasurer shall account for and pay all delinquent 
 taxes thereafter collected by him, upon the basis hereinbefore 
 provided, to the state treasurer, and to the several town, city 
 and village treasurers entitled thereto quarterly thereafter. 
 (1917 c. 485.) 
 
 This section is supplemented by section 19 of chapter 628, 
 Laws of 1917, requiring county treasurers to pay to the state 
 treasurer on or before the first day of May in each year the 
 state's quota of all income taxes collected in cash as shown by 
 the reports of local treasurers in their settlement with the county 
 treasurers on the 22nd day of March preceding. 
 
 Section 1087m — 24. 1. No commissioner, assessor of incomes, 
 deputy, member of a county board of review, or any other of- 
 ficer, agent,- clerk or employe shall divulge or make known to 
 any person in any manner any information whatsoever 
 obtained directly or indirectly by him in the discharge of 
 his duties or permit any income return or copy thereof or any 
 paper or book so obtained to be seen or examined by any person 
 except as provided by law ; provided, that any and all informa- 
 tion contained in income tax returns and in the statements and 
 correspondence pertaining thereto relating to the ownership or 
 value of property shall be furnished or made accessible to all 
 public officials charged with the duty of assessing the same for 
 taxation or of supervising the assessment thereof, under such 
 rules and regulations as the tax commission shall prescribe, but 
 no information so received shall be divulged by any such official 
 except as may be necessary in the proper performance of his 
 duties ; and provided further that in any action or proceeding 
 brought for the collection, remission, cancellation or refund of 
 the whole or any part of a tax assessed under sections 1087m — 1 
 
48 WISCONSIN INCOME TAX LAW 
 
 to 1087m — 30, or for enforcing the penalties prescribed for mak- 
 ing false or fraudulent returns, any and all information con- 
 tained in such returns may be furnished or made accessible to 
 the officers or representatives of the state or municipal district 
 charged with the duty of prosecuting or defending the same, 
 under such rules and regulations as the tax commission shall 
 prescribe; and all such returns and the statements and corre- 
 spondence relating thereto may be produced in evidence in any 
 action or proceeding, civil or criminal, directly pertaining to 
 such returns or the assessment made thereon. (1919 c. 638.) 
 
 The following rules and regulations have been prescribed by 
 the tax commission to be observed in administering the foregoing 
 section. 
 
 (1) The information contained in income tax returns which 
 may be divulged is limited to such as relates to the "ownership 
 and value of property, ' ' and may be furnished only to ' ' public 
 officials" charged with the duties of assessing the same for taxa- 
 tion. 
 
 The term "public officials" includes local assessors of prop- 
 erty, income assessors, public administrators and boards of re- 
 view. 
 
 (2) Any such public official is prohibited from divulging any 
 information received by him except so far as "may be necessary 
 for the performance of his duties. ' ' 
 
 (3) As income tax returns contain much information not re- 
 lating to the ownership and value of property which cannot 
 lawfully be disclosed, they should not be submitted to the inspec- 
 tion of assessing officials, and the disclosure authorized by the 
 foregoing section must be confined strictly to information of the 
 character specified therein. 
 
 (4) All the information contained in income tax returns re- 
 lating to the ownership and value of property may be made avail- 
 able to ' ' public officials charged with the duties of assessing the 
 same for taxation" when called for during the assessing period 
 and until the final adjournment of the board of review, and may 
 be given orally or certified in writing as may be found most 
 convenient or as may best serve the purpose of the public of- 
 ficials entitled thereto. 
 
 (5) Disclosure should not be made at any time except when 
 assessing officers are engaged in the performance of their duties 
 
WISCONSIN INCOME TAX LAW 49 
 
 and for no other purpose than to enable them to properly per- 
 form such duties. 
 
 (6) There should be furnished to the representatives of the 
 state or municipality charged with the duty of prosecuting or 
 defending any action or proceeding denned in the act a certified 
 copy of the income tax return upon which the tax affected by 
 such action or proceeding was based, and upon the hearing or 
 trial thereof said return and all statements and correspondence 
 relating thereto should be produced in evidence, if called for by 
 the court or body before whom such action or proceeding is pend- 
 ing, or by the representatives of the state or municipality prose- 
 cuting or defending the same. 
 
 (7) Should an assessor of incomes be in doubt as to his duty 
 to furnish the information called for in any case he should apply 
 to the tax commission for further instructions. 
 
 Penalties on officials for violating' secrecy of returns 
 
 2. Any officer, agent, clerk or employe violating any of the 
 provisions of this section shall upon conviction thereof be pun- 
 ished by a fine of not less than one hundred dollars nor more 
 than five hundred dollars, or by imprisonment in the county jail 
 for not less than one month nor more than six months, or by im- 
 prisonment in the state prison for not more than two years, at the 
 discretion of the court. 
 
 3. Such officer, agent, clerk or employe upon such conviction 
 shall also forfeit his office or employment and shall be incapable 
 of holding any public office in this state for a period of three 
 years thereafter. 
 
 Tax commission authorized to make certain records public 
 
 4. Nothing herein shall be construed as preventing the assess- 
 ment roll, the tax roll and all proceedings had before the county 
 board of review and all evidence taken at such hearing from be- 
 ing open to public inspection at such times and under such con- 
 ditions as the state tax commission may direct. 
 
 Under the authority of the above subdivision the commission 
 entered the following order on the first day of October, 1913, 
 and, except as modified by chapter 638, laws of 1919, the order 
 is still in force. 
 
 To County Clerks: 
 
 Whereas, the proper officers of the several villages and cities 
 of the state are required by law during the month of October of 
 
50 WISCONSIN INCOME TAX LAW 
 
 each year to estimate the amount of money necessary to defray 
 the expenses of their respective municipalities for the ensuing 
 year, and to levy a tax on the general property of such district 
 for that purpose and in so doing are required to take into con- 
 sideration the revenues available from all sources, including the 
 amount to be derived under the income tax law, and, 
 
 Whereas, the income tax law provides that the assessment and 
 tax rolls and all proceedings and evidence taken before the 
 county board of review shall be open to public inspection, under 
 such conditions as the tax commission may direct ; 
 
 Now, Therefore, It is hereby ordered and directed that all as- 
 sessment rolls, completed by the assessor and board of review 
 and filed in your office, and all tax rolls as soon as convenient, 
 be treated as public records, open to the inspection of persons 
 having occasion to consult the same, to the same extent and in 
 the same manner and under the same restrictions, as other pub- 
 lic records in your custody. You are further directed not to 
 make public or permit the examination of any return, exhibit, 
 writing or proceeding in your possession or custody, relating to 
 the assessment of income taxes, except the assessment and tax 
 roll, hereinbefore referred to. 
 
 This rule is to be considered permanent until revoked or 
 amended by the tax commission. 
 
 Personal property tax receipts may be offset against income 
 tax — when 
 
 Section 1087m — 26. Any person who shall have paid a tax 
 assessed upon his personal property during any year shall be 
 permitted to present the receipt therefor to the tax collector, to- 
 gether with any similar receipts for personal property taxes paid 
 by members of his family whose incomes have been assessed to 
 him, and have the same accepted by the tax collector to their 
 full amount in the payment of income taxes assessed against such 
 person during said year ; provided, that no receipt for taxes paid 
 on the shares of stock in any state, national or mutual savings 
 bank or trust company shall be allowed as an offset against any 
 income tax within the meaning of this section. If in any year 
 a person failed or neglected, or shall in the future fail or neg- 
 lect, to present his personal property tax receipt in payment of 
 income tax as provided by this section, and the council of the 
 city or board of the town or village to which such taxes shall 
 have been paid is satisfied that such person was entitled to such 
 offset, and that by reason thereof, such person has paid to the 
 
WISCONSIN INCOME TAX LAW 51 
 
 town, city or village an amount in excess of that which he was 
 legally obliged to pay, it may within two years after such pay- 
 ment remit such excess to such person without interest and 
 charge the state and county for their respective proportions of 
 such excess, as provided in section 1164. (1919. c. 143.) 
 
 Upon payment of a tax assessed in 1913 for personal property 
 omitted from the tax rolls in 1910 and 1911 through no fault of 
 the taxpayer he is entitled under sec. 1087m — 26 to have the 
 amount so paid credited on his income tax assessed during 1913. 
 City of Milwaukee vs. Patton, 158 Wis. 617. 
 
 Chapter 244, Laws of 1919, requires buildings on leased lands 
 to be assessed as real estate. Taxes paid thereon can not be 
 used as offset against income taxes. 
 
 OFFSET OF INCOME TAX BY PERSONAL PROPERTY 
 
 TAX 
 
 Directions to Wisconsin taxpayers 
 
 When the income tax and the personal property tax are both 
 assessed in the same district and the taxpayer is not assessed for 
 income tax in any other district, the taxpayer will simply pay 
 the larger tax and obtain two receipts, one for personal property 
 and one for income tax. 
 
 If the taxpayer wishes to use a personal tax receipt issued in 
 one district to offset income tax assessed in another district, the 
 following procedure should be observed: 
 
 1. Secure a separate personal property tax receipt and have 
 the treasurer endorse on it the amount used to offset income tax 
 in that district. 
 
 2. Present or mail this personal tax receipt to the Assessor of 
 Incomes of the county in which it was issued and apply for 
 Special Offset Receipts covering the balance of personal property 
 tax. In Milwaukee city apply first to Income Tax Teller, City 
 Treasurer's Office. 
 
 3. This application should state the amount desired for offset 
 in each other district in which the taxpayer has income tax to 
 pay, giving the correct name of such district and the county in 
 which situated. 
 
52 WISCONSIN INCOME TAX LAW 
 
 4. Offset receipts for balance of personal property tax will 
 be issued with coupons, which coupons will be accepted only for 
 the amount entered upon them and in the district for which they 
 are issued. 
 
 5. The taxpayer should pay his personal property taxes in 
 time to secure special coupon receipts from the Assessor of In- 
 comes and forward them to the local treasurer against whom 
 they are issued. Penalties are imposed if the taxes are not paid 
 on or before January 31. 
 
 6. Ordinary personal property tax receipts will not be re- 
 ceived in offset in districts other than that in which issued. 
 
 7. The exact name is important. For instance, a firm cannot 
 use its personal property tax receipt to offset the income tax of 
 its members. • 
 
 8. It is a common practice to write a personal property tax re- 
 ceipt at the bottom of the real estate receipt. Taxpayers should 
 therefore request a separate personal tax receipt whenever they 
 wish to use the latter to secure the special offset receipts men- 
 tioned above. 
 
 Assessment and collection of taxes for 1911 not affected by 
 income tax law 
 
 Section 1087m — 27. Nothing contained in this act shall be 
 construed to affect the assessment or collection of taxes assessed 
 in the year 1911 or prior thereto, under present laws, nor to 
 limit the power of assessors and boards of review relative to 
 correcting assessment rolls, placing omitted property thereon, 
 and reassessing property whenever such correction, insertion of 
 omitted property, or reassessment might be made under the laws 
 as they now exist. 
 
 Tax commission may make rules and regulations 
 
 Section 1087m — 28. The state tax commission is hereby em- 
 powered to make such rules and regulations as it shall deem 
 necessary in order to carry out foregoing provisions. 
 
 Tax commission may employ clerks and specialists 
 
 Section 1087m — 29. The state tax commission is hereby au- 
 thorized to employ such clerks and specialists as are necessary 
 to carry into effective operation this act. Salaries and com- 
 pensations of such clerks and specialists shall be charged to the 
 proper appropriation for the tax commission. (1913 c. 772.) 
 
WISCONSIN INCOME TAX LAW 53 
 
 Local treasurer to be reimbursed for costs 
 
 Section 1087m — 30. "Whenever in any action for the re- 
 covery of an unlawful income tax, judgment is rendered against 
 the city, town or village treasurer for such tax, the city, town 
 or village shall reimburse such treasurer for such sums of money 
 as may be recovered against him in any court, with the costs 
 and expenses of suit, for any such income tax collected by him, 
 and such city shall be reimbursed for the county's and state's 
 share of such tax in the manner provided in section 1164 of the 
 statutes. (1915 c. ill.) 
 
 By the voluntary payment of a tax all right to bring action 
 to recover it back or question its legality is waived. State ex rel. 
 Marshall and Ilsley Bank, 155 Wis. 499. Proceedings to recover 
 an illegal tax must be commenced within one year after payment- 
 See sec. 1164 R. S. 
 
 RECEIPTS TAXABLE AS INCOME AND EXPENDI- 
 TURES NOT ALLOWABLE AS DEDUCTIONS 
 
 The forms of returns prescribed for taxpayers and the law 
 defining income are so detailed and definite as to leave little 
 room for misunderstanding and no excuse for omitting items 
 of taxable income. In brief, all gains or profits received during 
 the year should be reported as income, and all ordinary expenses 
 incurred in producing such income are allowable as deductions. 
 
 Nevertheless in the administration of the law numerous ques- 
 tions have arisen as to whether a given receipt should be treated 
 as income or a particular expenditure allowed as a deduction. 
 Without attempting to cover the entire ground we enumerate 
 below the most common of these items, specifying in two separate 
 groups certain receipts which should be treated as income and 
 certain expenditures which are not allowable as deductions. It 
 should be borne in mind that these lists do not purport to be 
 exhaustive nor to include all items of income or deduction, but 
 are confined to those which have occasioned most controversy. 
 
 Receipts Taxable as Income 
 
 1. All compensation for personal or professional services, 
 whether in the form of wages, salaries, fees or commissions. 
 
54 WISCONSIN INCOME TAX LAW 
 
 2: Salaries and wages of all state and local officers, including 
 judges. 
 
 3. All salaries, stipends and gifts received by clergymen in 
 their own right in the performance of their pastoral "duties. 
 
 4. The reasonable value of accommodations furnished to of- 
 ficers and employes as part of their salary, such as board and 
 lodging to hotel managers, and use of residences furnished to 
 pastors, teachers and public employes. 
 
 5. All rent of Wisconsin real estate, including royalties re- 
 ceived for extracting ore. 
 
 6. All interest on bonds and mortgages whether executed by 
 parties or secured by property within or without the state. 
 
 7. All dividends declared out of profits accumulated since the 
 1st of January, 1911, which have not been taxed to the corpora- 
 tion distributing the same. 
 
 8. Stock dividends to the same extent and under the same 
 circumstances as cash dividends. 
 
 9. All profits derived from property located or business trans- 
 acted within the state. 
 
 10. All profits from the sale of Wisconsin real estate or other 
 capital assets accrued since the first day of January, 1911. 
 
 11. The reasonable value of farm products consumed by the 
 owner and of all supplies from a merchant's stock used by his 
 family. 
 
 12. Income from inheritances, bequests and trust estates. 
 
 13. Dividends from state and national banks not taxed under 
 Wisconsin laws. 
 
 14. Dividends declared by corporations, from depreciation re- 
 serve. 
 
 15. Endowment or other life insurance paid to the insured in 
 his lifetime in excess of the premiums paid therefor. 
 
 16. Dividends declared from reserve fund to cover deprecia- 
 tion or bad accounts. 
 
 Expenditures Not Allowable as Deductions 
 
 1. Alimony to divorced wife. 
 
 2. Depreciation of land or. of property not producing taxable 
 income. 
 
 3. Depreciation of good will or from obsolescence. 
 
WISCONSIN INCOME TAX LAW 55 
 
 4. Depletion of mines claimed by lessee. 
 
 5. Election expenses. 
 
 6. Administrators', executors' and attorneys' fees in probat- 
 ing estates. 
 
 7. Interest paid by a corporation in the operation of a busi- 
 ness or the maintenance of property not producing taxable in- 
 come. 
 
 8. Losses sustained in the transaction of business the income 
 of which, if any, would not be taxable. 
 
 9. Uncollectable rent and interest not previously reported as 
 income. 
 
 10. Premiums paid by corporations and partnerships for in- 
 surance on the lives of corporate officers or members. 
 
 11. Expenses incurred in the organization of a corporation. 
 
 12. Special assessments for street, sewer and sidewalk im- 
 provements. 
 
 13. Taxes on property from which no taxable income is de- 
 rived. 
 
 14. Wages of household servants, chauffeurs or nurses. 
 
 15. Shrinkage or depreciation in the market value of stocks, 
 bonds or other securities until sold or otherwise finally dis- 
 posed of. 
 
 DEPRECIATION PERCENTAGES 
 
 After a careful examination of the question of the amount of 
 depreciation sustained by property of various kinds the tax 
 commission has arrived at the following percentages as repre- 
 senting the average annual rate of "depreciation by use, wear 
 and tear of property from which the income is derived, ' ' assum- 
 ing that it is kept in a fair state of repair. These rates only 
 will be allowed as a maximum unless unusual and extraordinary 
 circumstances can be conclusively proved to warrant a greater 
 allowance. They should be applied to the original cost value 
 of the property in computing the amount of the depreciation 
 claim. No claim for depreciation on account of obsolescence 
 can be allowed under the Wisconsin law. 
 
56 
 
 WISCONSIN INCOME TAX LAW 
 
 ANNUAL DEPRECIATION IN PERCENTAGES 
 
 Buildings 
 
 Sbeds 
 
 Stables, etc 
 
 Farm dwellings 
 
 Other farm dwellings 
 
 City dwellings 
 
 Apartment houses 
 
 Stores 
 
 Stores with flats above. 
 
 Warehouses 
 
 Elevators 
 
 Factories 
 
 Office buildings 
 
 Hotels 
 
 Paper and pulp mills 
 
 Frame and 
 veneered, 
 percent 
 
 7 
 4 
 
 1.5 
 2.5 
 2.5 
 .3 
 2.5 
 2.5 
 2.5 
 2.5 
 5 
 
 2.5 
 2.5 
 
 Brick and 
 masonry, 
 percent 
 
 1.5 
 
 1.5 
 
 1.5 
 
 2.5 
 
 2 
 
 2 
 
 2 
 
 1.75 
 
 S 
 
 1.5 
 
 1.75 
 
 2.5 
 
 Fireproof, 
 per cent 
 
 1 
 1.25 
 
 1.25 
 
 1.25 
 
 1.25 
 
 1 
 
 1.5 
 
 2 
 
 MACHINERY, DIES, PATTERNS, SMALL TOOLS AND DRAWINGS 
 
 Machinery 3 to 10 per cent 
 
 Dies 20 per cent 
 
 Patterns 25 per cent 
 
 Small Tools 25 per cent 
 
 Drawings 30 per cent 
 
 MISCELLANEOUS PROPERTY 
 
 Horses 16 per cent 
 
 Harness 20 per cent 
 
 Wagons 16 per cent 
 
 Sleighs 10 per cent 
 
 Automobiles 20 to 25 per cent 
 
 OTHER PROPERTY 
 Depreciation of other property not listed above should be computed upon the cost 
 value and for the actual exhaustion during the year sustained from use, wear and tear. 
 
 CHAPTER 667, LAWS OF 1919 
 SOLDIERS BONUS ACT 
 
 Section 1. The service recognition board is hereby created 
 to consist of the governor, the adjutant general and a returned 
 soldier to be appointed by the governor. 
 
 Section 2. For the purpose of raising a sum sufficient to as- 
 sure to each soldier, sailor, marine and nurse, including Red 
 Cross nurses, who served in the armed forces of the United 
 
WISCONSIN INCOME TAX LAW 57 
 
 States during the war against Germany and Austria, and who at 
 the time of his or her induction into the service was a resident 
 of Wisconsin, a sum not exceeding ten dollars for each month 
 of service, with a minimum of fifty dollars, as a token of appre- 
 ciation of the character and spirit of their patriotic service, and 
 to perpetuate such appreciation as a part of the history of Wis- 
 consin, a tax of not . exceeding three mills on each dollar of the 
 assessed valuation in addition to the income surtax hereinafter 
 mentioned is hereby levied and authorized to be included in the 
 next tax levy; provided that in case any county shall elect by 
 resolution of the county board of such county, adopted prior to 
 the levy of such tax, to raise said amount by a bond issue, au- 
 thority is hereby conferred upon said county to issue such bond 
 and thereupon the proper authorities shall remit said levy in 
 such county. If any such person entitled to the benefits under 
 this act be deceased before receiving such payment, then the pay- 
 ment accruing to said deceased shall be paid to the surviving 
 widow, child or children, mother or dependent father, in the 
 order herein stated, and in such case July 1, 1919, shall be 
 deemed the date of termination of such service. The benefit of 
 this act shall not accrue to any person for time spent while tak- 
 ing training in any student army training camp, nor to any 
 person who, though inducted into service, did civilian work at 
 civilian pay. 
 
 Section 3. All sums levied and collected by taxation or 
 raised by the issue of bonds by any county shall be paid into 
 the state treasury and held there as a special fund to be known 
 as the service recognition fund and disbursed upon certificates of 
 the service recognition board, as to the persons entitled thereto 
 and the amount to which each person is entitled. 
 
 Section 4. The service recognition board shall have complete 
 charge and control of the general scheme of such payments. It 
 shall adopt general rules, uniform throughout the state, for the 
 distribution of said fund, the ascertainment and selection of 
 proper beneficiaries and the amounts to which beneficiaries are 
 entitled, and for procedure, and may select or create such agents 
 as it may deem necessary. 
 
 Section 5. Subsection (5) of section 658 of the Statutes is re- 
 numbered to be subsection (6) thereof. 
 
 Section 6. There is added to section 658 of the Statutes a 
 new subsection to read : (Section 658) (5) For the purpose of 
 carrying out the provisions of chapter 452 of the laws of 1919 ; 
 but bonds issued in any county for such purpose shall not ex- 
 ceed in amount three mills on each dollar of the total assessed 
 valuation of such county. 
 
 Section 7. (1) In addition to the normal tax imposed by sec- 
 tion 1087m — 6 of the statutes, there shall be levied, collected and 
 
58 WISCONSIN INCOME TAX LAW 
 
 paid upon the incomes of all persons, except as otherwise pro- 
 vided by law, a surtax on taxable income computed at the fol- 
 lowing rates, to wit : 
 
 (a) On the fourth one thousand dollars or any part thereof, 
 one and three-fourths per cent; 
 
 (b) On the fifth one thousand dollars or any part thereof, 
 two per cent ; 
 
 (e) On the sixth one thousand dollars or any part thereof, 
 two and one-half per cent; 
 
 (d) On the seventh one thousand dollars or any part thereof, 
 three per cent; 
 
 (e) On the eighth one thousand dollars or any part thereof, 
 three and one-half per cent ; 
 
 (f) On the ninth one thousand dollars or any part thereof, 
 four per cent ; 
 
 (g) On the tenth one thousand dollars or any part thereof, 
 four and one-half per cent; 
 
 (h) On the eleventh one thousand dollars or any part thereof, 
 five per cent; 
 
 (i) On the twelfth one thousand dollars or any part thereof, 
 five and one-half per cent ; 
 
 (j) On any sum taxable as income in excess of twelve thou- 
 sand dollars, six per cent. 
 
 (2) In addition to the normal tax imposed by section 1087m — 6 
 of the statutes, there shall be levied, collected and paid upon the 
 incomes of corporations, joint stock companies or associations, 
 except as otherwise provided by law, a surtax on taxable in- 
 come computed at the following rates, to wit: 
 
 On the first one thousand dollars or any part thereof, two 
 per cent; 
 
 On the second one thousand dollars or any part thereof, two 
 and one-half per cent; 
 
 On the third one thousand dollars or any part thereof, three 
 per cent ; 
 
 On the fourth one thousand dollars or any part thereof, three 
 and one-half per cent ; 
 
 On the fifth one thousand dollars or any part thereof, four 
 per cent; 
 
 On the sixth one thousand dollars or any part thereof, five 
 per cent ; 
 
 On the seventh one thousand dollars or any part thereof, six 
 per cent; 
 
 On all taxable income in excess of seven thousand dollars, six 
 per cent. 
 
 (3) In computing the tax upon income of corporations, joint 
 stock companies or associations, there shall be deducted Before 
 such tax is computed from the net income an amount equal to 
 six per cent of its capital stock, surplus and undivided profits. 
 
WISCONSIN INCOME TAX LAW 59 
 
 (4) The surtax provided for herein shall be upon the income 
 received during the year ending December 31, 1918, and shall 
 be returned, assessed and collected in the same manner and at 
 the same time as is provided for the return, assessment and pay- 
 ment of the normal income tax provided for under sections 
 1087m — 1 to 1087m — 30, both inclusive, except as otherwise 
 herein provided. 
 
 (5) Deductions and exemptions as are provided by law in the 
 assessment of the normal income tax under section 1087m — 6 
 shall be the same with respect to the assessment of this surtax, 
 but said deductions and exemptions shall not be additional 
 thereto and shall only be made once. 
 
 (6) In the collection of said surtax the tax collector shall give 
 his separate receipt therefor and there shall be no offset upon 
 the personal property tax, and section 1087m — 26 shall not 
 apply to said surtax. 
 
 (7) The whole amount collected as surtax shall, through the 
 same channels as other income taxes are paid, be paid into the 
 state treasury, and section 1087m — 23 of the statutes shall not 
 apply to said surtax. The amount so paid into the state treas- 
 ury shall be set apart for the service recognition fund. 
 
 (8) The service recognition board shall estimate or cause to 
 be estimated the amount which may be collected under this sec- 
 tion and determine as nearly as practicable the balance needed 
 for said fund, which balance shall be raised by taxation or bond 
 issues as provided by section 2 of this act. 
 
 Section 8. There is appropriated from the service recogni- 
 tion fund in the state treasury to the service recognition board : 
 
 (1) Such sums as may be necessary to pay each soldier, sailor, 
 marine and nurse, including Red Cross nurses, who served in 
 the armed forces of the United States during the war against 
 Germany and Austria, and who at the time of his or her induc- 
 tion into the service was a resident of Wisconsin, a sum not ex- 
 ceeding ten dollars for each month of service, with a minimum 
 of fifty dollars. 
 
 (2) Such sums as may be necessary to cover the cost of admin- 
 istering this act. 
 
 Section 9. A special election shall be held on Tuesday, Sep- 
 tember 2, 1919, at which the following question shall be sub- 
 mitted: "Shall there be levied in the year 1919, a mill tax of 
 not to exceed three mills on the dollar and an income tax suf- 
 ficient to raise an aggregate sum of approximately fifteen million 
 dollars to be paid by the state to Wisconsin, soldiers, sailors, 
 marines and nurses as stated in chapter 667 of the laws of 
 1919?" 
 
 Section 10. Such special election shall be conducted, held 
 and noticed and the ballots to be used thereat shall be prepared, 
 
60 WISCONSIN INCOME TAX LAW 
 
 printed and distributed and the ballots cast thereat shall be 
 counted, canvassed and returned in the same manner as is by 
 law provided in the case of the submission of a proposed con- 
 stitutional amendment to a vote of the people. The state board 
 of canvassers shall not meet to canvass •such election returns. 
 The secretary of state shall within ten days after the receipt of 
 the returns from the different county clerks canvass, certify, 
 record and publish as in the ease of a constitutional amendment 
 the number of ballots cast in favor of such proposed recognition 
 and the number of ballots cast against such proposed recognition. 
 Section 11. If a majority of the votes cast at such special 
 election are in favor of the recognition of Wisconsin soldiers, 
 sailors, marines and nurses as provided upon such ballots, then 
 the necessary taxes shall be levied in the year 1919. 
 
 The foregoing act was ratified by the people at a special elec- 
 tion held on September 2, 1919. The surtax imposed by it will 
 appear on the tax-rolls of 1919 and will be payable to the local 
 treasurers at the same time other taxes are payable. The sur- 
 tax must be paid wholly in cash. 
 
 Educational bonus act 
 
 At the special session of the legislature in September, 1919, 
 an act was passed, imposing a second or additional surtax on in- 
 comes received in 1918 and on incomes received annually there- 
 after for a term of four years. That part of the act providing 
 for the additional surtax reads as follows : 
 
 Section 5. (1) In addition to the normal tax imposed by sec- 
 tion 1087m — 6 of the statutes, and the surtax imposed by chapter 
 667 of the laws of 1919, there shall be levied, collected and paid 
 upon the incomes of all persons, annually for five years, except 
 as otherwise provided by law, a surtax on taxable income com- 
 puted at the following rates to wit: 
 
 (a) On the fourth one thousand dollars or any part thereof, 
 seven twentieths of one per cent ; 
 
 (b) On the fifth one thousand dollars or any part thereof, 
 four-tenths of one per cent ; 
 
 (c) On the sixth one thousand dollars or any part thereof, 
 five-tenths of one per cent; 
 
 (d) On the seventh one thousand dollars or any part thereof, 
 six-tenths of one per cent; 
 
 (e) On the eighth one thousand dollars or any part thereof, 
 seven-tenths of one per cent; 
 
 (f) On the ninth one thousand dollars or any part thereof, 
 eight-tenths of one per cent; 
 
WISCONSIN INCOME TAX LAW 61 
 
 . (g) On the tenth one thousand dollars or any part thereof, 
 nine-tenths of one per cent ; 
 
 (h) On the eleventh one thousand dollars or any part thereof, 
 one per cent ; 
 
 (i) On the twelfth one thousand dollars or any part thereof, 
 one and one-tenth per cent ; 
 
 (j) On any sum taxable income in excess of twelve thousand 
 dollars, one and two-tenths per cent. 
 
 (2) In addition to the normal tax imposed by section 1087m — 
 6 of the statutes, and the surtax imposed by chapter 667, laws 
 of 1919, there shall be levied, collected and paid upon the in- 
 comes of corporations, joint stock companies or associations, 
 except as otherwise provided by law, annually for five years, a 
 surtax on taxable income computed at the following rates, to wit : 
 
 On the first one thousand. dollars or any part thereof, four- 
 tenths of one per cent; 
 
 On the second one thousand dollars or any part thereof, five- 
 tenths of one per cent ; 
 
 On the third one thousand dollars or any part thereof, six- 
 tenths of one per cent; 
 
 On the fourth one thousand dollars or any part thereof, seven- 
 tenths of one per cent; 
 
 On the fifth one thousand dollars or any part thereof, eight- 
 tenths of one per cent; 
 
 On the sixth one thousand dollars or any part thereof, one 
 per cent; 
 
 On the seventh one thousand dollars or any part thereof, one 
 and two tenths per cent; 
 
 On all taxable income in excess of seven thousand dollars, one 
 and two-tenths per cent. 
 
 (3) In computing the tax upon income of corporations, joint 
 stock companies or associations, there shall be deducted before 
 such tax is computed from the net income an amount equal to 
 six per cent of its capital stock, surplus and undivided profits at 
 the beginning of the taxable year. 
 
 (4) The first surtax provided for herein shall be upon the 
 income received during the year ending December 31, 1918, or 
 corresponding fiscal year for which the taxpayer reported his 
 income under the general income tax law and annually there- 
 after for four years, and shall be returned, assessed and collected 
 in the same manner and at the same time as is provided for the 
 return, assessment and payment of the normal income tax pro- 
 vided for under sections 1087m — 1 to 1087m — 30, both inclusive, 
 except as otherwise herein provided. 
 
 (5) Deductions and exemptions as are provided by law in 
 the assessment of the normal income tax under section 1087m — 6 
 shall be the same with respect to the assessment of this surtax, 
 
62 WISCONSIN INCOME TAX LAW 
 
 but said deductions and exemptions shall not be additional 
 thereto and shall only be made once. 
 
 (6) In the collection of said surtax the tax collector shall give 
 his receipt therefor and there shall be no offset upon the per- 
 sonal property tax, and section 1087m — 26 shall not apply to 
 said surtax. 
 
 (7) The whole amount collected as surtax shall, through the 
 same channels as other income taxes are paid, be paid into the 
 state treasury, and section 1087m — 23 of the statutes shall, not 
 apply to said surtax. The amount so paid into the state treas- 
 ury shall be available for the purposes of this act. 
 
 The first or "soldiers' bonus" surtax, in case of individuals, 
 is found by deducting from the normal income tax $37.50, repre- 
 senting the amount of the normal tax on the first $3,000 of in- 
 come which is not subject to the tax. The surtax on an income 
 in excess of $3,000 is computed at the same rates as the nor- 
 mal tax. 
 
 The second or additional surtax is one-fifth of the soldiers* 
 bonus surtax. 
 
 Surtaxes cannot be paid with personal property tax receipts 
 but must be paid in cash. 
 
WISCONSIN INCOME TAX LAW 63 
 
 PART m 
 
 DUTIES OP ASSESSORS OF INCOMES IN CONNECTION 
 WITH GENERAL PROPERTY TAXATION 
 
 Section 1087b. (1) The assessor of incomes shall have full 
 and complete supervision and direction of the work of the town, 
 city and village assessors of the county or counties within his 
 assessment district and shall annually, on or before the last 
 Tuesday of April, call a meeting for each such county of all 
 such local assessors for conference and instruction relative to 
 their duties in the valuation and assessment of all property sub- 
 ject to taxation. Each such local assessor, upon notice by mail 
 from said assessor of incomes shall attend such meeting, and 
 shall receive therefor the sum of three dollars, and also six cents 
 per mile for travel from his residence to the county seat and re- 
 turning. Such compensation shall be paid out of the treasury of 
 the county in which such local assessor resides upon the certifi- 
 cate of the assessor of incomes showing such attendance and 
 travel, in like manner as certificates of witnesses and jurors are 
 paid. 
 
 (2) The assessor of incomes shall have access to all public 
 records, books, papers and offices throughout his district and 
 shall make a full and complete examination of them and investi- 
 gate all other matters and subjects relative to the assessment and 
 taxation of property in the several towns, villages and cities con- 
 tained therein; and for that purpose he shall visit each such 
 town, village and city as often as may be necessary during each 
 year. 
 
 (3) The assessor of incomes shall examine and test the work 
 of assessors during the progress of their assessments and ascer- 
 tain whether any of them is assessing property at other than full 
 value or is omitting property subject to taxation from the roll. 
 He shall have the rights and powers of a local assessor for the 
 examination of persons and property and for the discovery of 
 property subject to taxation, and shall have the power to per- 
 sonally value and reassess any property previously assessed by 
 the local assessor. If he shall ascertain that any property has 
 been omitted or not assessed according to law, he shall bring the 
 same to the attention of the local assessor of the proper district 
 and if such local assessor shall neglect or refuse to correct the 
 assessment he shall report the fact in writing to the clerk of the 
 proper board of review at or before the meeting of such board 
 
64 WISCONSIN INCOME TAX LAW 
 
 and such clerk shall lay the same before said board of review for 
 its action. 
 
 (4) Whenever the assessor of incomes ascertains, or has good 
 reason to believe, that any assessor is guilty of a violation of law, 
 he is authorized to make complaint to the presiding judge of the 
 circuit court for the removal of such assessor. The district at- 
 torney shall attend and prosecute such proceedings for removal. 
 ■ (5) The -assessor of incomes shall make a report to the county 
 board of each county within his assessment district showing in 
 detail the work of local assessors in their several districts, the 
 failure, if any, of such assessors or property owners to comply 
 with the law, the relative assessed and true value of property in 
 each local assessment district, and all such information and sta- 
 tistics as he may obtain which will be of assistance to the county 
 board in determining the relative value of all taxable property 
 in each town, city and village in the county. Such report shall 
 be filed with the county clerk at least fifteen days before the an- 
 nual meeting of the county board. The county clerk shall Gause 
 to be printed not less than two hundred copies of such report, 
 one of which shall be mailed immediately by the county clerk 
 to each member of the county board. Not less than six copies of 
 such printed report, together with all statistics accompanying 
 the same, shall be filed with the state tax commission. 
 
 (6) The county board, upon its own motion, may direct the 
 assessor of incomes to make a reassessment of all the taxable 
 property in any local assessment district for any year, and to 
 report the same in the form of an assessment roll to the county 
 board at its next annual session. In making such reassessment, 
 the value of the property shall be fixed, as nearly as may be, as 
 of the time the original assessment was made, and he shall have 
 the powers and be governed by the rules provided by law for 
 local assessors in the assessment of property for taxation. In 
 case the aggregate valuation of taxable property as determined 
 by such reassessment, shall be ten per cent or more in excess of 
 the aggregate valuation thereof as fixed by the original assess- 
 ment, the expense of making such reassessment, not exceeding 
 five dollars per day for each day necessarily and actually spent 
 in making the same, shall be charged to such local assessment 
 district in the next apportionment thereto of county taxes. 
 
 (7) The state tax commission shall call a meeting of the as- 
 sessors of incomes at the capitol at a specified time in the month 
 of January in each year, for a conference on the subjects of tax- 
 ation and the administration of the laws, and for the instruction 
 of such officers in their duties. The actual and necessary ex- 
 penses of each such officer in such attendance shall be audited 
 and paid out of the state treasury in the same manner as other 
 expenses of said assessors are audited and paid. (1913 c. 443.) 
 
WISCONSIN INCOME TAX LAW 65 
 
 This section gives assessors of incomes "complete supervision 
 and direction ' ' of the work of local assessors within their respec- 
 tive districts and authorizes them to "value and reassess prop- 
 erty. ' ' For this purpose every assessor of incomes is authorized 
 to inspect all statements, records, and memoranda in any public 
 office in his district relating to the assessment and value of 
 property therein, and to examine persons and property to the 
 same extent and with the same authority as local assessors. 
 
 It should be borne in mind, however, that the powers con- 
 ferred upon assessors of incomes are advisory only. Their 
 authority to appraise property and examine taxpayers is only 
 for the purpose of testing the work of the regular assessors 
 and presenting the result of such investigation to the proper 
 board of review or county board. They are not authorized to 
 change the local assessor's valuations nor to insert their own 
 valuations on the assessment roll. Even the reassessments re- 
 quired to be made by direction of the county board under sub- 
 division 6 of this section are not reassessments in the proper 
 sense and can only be used as an aid to the county board in 
 making the county equalization. There is no authority in this 
 statute for inserting such reassessment values in the assessment 
 roll nor substituting them for the valuation of the local assessor. 
 
INDEX 
 
 Accident, surety, etc., companies Pages 
 
 exempt from income tax 24 
 
 Accounting 
 
 when allocation and separate accounting is permissible 8 
 
 Accounts and bills receivable 
 
 charged off as worthless, deductible 14 
 
 Additional person 
 
 exemptions 22 
 
 Additions and corrections 
 
 of corporations 36—38 
 
 of individuals 37, 38 
 
 tax commission may make 36 
 
 Additions and improvements 
 
 not ordinary and necessary expenses 11 
 
 Agents 
 
 may not divulge contents of returns 49 
 
 penalties for violating secrecy of returns 49 
 
 Alimony 
 
 not allowable deduction. Gould v. Gould, 245 U. S. 151 18, 54 
 
 Allocation 
 
 wlien permissible 8 
 
 Amendments, see Income tax law 
 
 Annuities 
 
 subject to income tax 20, 21 
 
 Appeal and review 
 
 for hearing corporations 39 
 
 for hearing individuals 42 
 
 remedy of, not exclusive 42 
 
 Appeals 
 
 for review of assessments 42 
 
 Apportionment 
 
 of income tax 46, 47 
 
 within and without the state 8 
 
 Apportionment and collection of income tax 
 
 corporations 42 
 
 Arpin v. Bberhardt, see State ex rel. Arpin v. Eberhardt 
 
 Assessment districts 
 
 list of 27 
 
 Assessment rolls 
 
 correction of errors 45 
 
 open to inspection 50 
 
 Assessments 
 
 board to give notice of change in 41 
 
 changes in by boards of review 41 
 
 objections to be made before board of review 41 
 
 of income derived from different localities 44, 45 
 
 when and by whom made 29 
 
68 INDEX 
 
 Assessors Pages 
 
 annual meeting of 63 
 
 compensation for attending annual meeting 63 
 
 removal of 6* 
 
 violation of law_*_: 64 
 
 work supervised by whom 65 
 
 Assessors of incomes 
 
 additions and corrections, individuals 37, 38 
 
 advised to omit interest on U. S. bonds from income tax 7 
 
 annual meeting 64 
 
 appeal from decision of board of review 42 
 
 appointed from districts 27, 28 
 
 approve refund of tax 45 
 
 approval of claim for illegal taxes not condition prece- 
 dent to recover. Field v. Milwaukee 16"1 Wis. 393- 45, 46 
 
 assess copartnerships and individuals 15 
 
 assist county clerk in computing income tax 43 
 
 call meeting of assessors 63 
 
 deputies and assistants 28 
 
 designate meeting of board of review in districts com- 
 prising more than one county 40 
 
 duties of, in general property taxation 63, 64 
 
 expenses paid by state 64 
 
 fix date of meeting of board of review 40 
 
 have access to all public records 63 
 
 have doomage power__- 30 
 
 have powers of local assessors 30, 63 
 
 how appointed 27 
 
 how removed 28 
 
 instructions as to returns for executors, etc 33, 34 
 
 make assessments of individuals annually 29 
 
 make complaint for removal of assessors 64 
 
 make reassessments 64 
 
 make report to county board 64 
 
 not to divulge income tax information 47 
 
 oath of office 28 
 
 office and equipment furnished by county 29 
 
 penalties for unanswered questions 35, 36 
 
 powers advisory only 65 
 
 powers of 30 
 
 qualifications 27, 28 
 
 reassess income of individuals 38 
 
 removal or transfer 28 
 
 salaries and expenses 28, 29 
 
 sign notice of meeting of boards of review 40 
 
 subject to civil service 28 
 
 supervise local assessors' work 65 
 
 term of office 27, 28 
 
 test work of assessors 63 
 
 when in doubt as to furnishing information 49 
 
 Automobiles 
 
 depreciation 56 
 
 Banks 
 
 deductions 15, 21 
 
 dividends of, taxable 4, 15 
 
 exemptions 23 
 
 national, exempted. National Bank v. Owensboro 173 
 
 U. S. 664 23,24 
 
INDEX 69 
 
 Pages 
 
 not subject to personal property offset 50 
 
 state, excluded from income tax law 23, 24 
 
 Benevolent associations 
 
 exemption of 23 
 
 Boards of review 
 
 adjournments 40 
 
 appeal from, to tax commission 42 
 
 appointment and compensation 39 
 
 attendance of witnesses 41 
 
 blank notice 40 
 
 duties of 41 
 
 give notice of assessment changes 41 
 
 may appoint stenographer 39 
 
 may charge expense to complaining parties 39 
 
 may make additions and corrections of income 37, 38 
 
 meet last Monday in July 40 
 
 meeting in districts comprising more than one county 40 
 
 not to divulge income tax information 47 
 
 powers and auties same as for property tax 41 
 
 publication of notice of meeting 40 
 
 reassess income of individuals 38 
 
 Bonds 
 
 income from, where taxed 8 
 
 interest on, not deducted annually. Van Dyke v. City of 
 
 Milwaukee, 159 Wis. 460 14 
 
 of non-residents where taxable 8 
 
 of residents taxable 8 
 
 of U. S., interest not taxable 7 
 
 Bonds and mortgages 
 
 interest on 54 
 
 bonus tax for levy of 56, 57 
 
 Bonuses 
 
 paid employes deducted. See also Soldiers bonus act 13 
 
 how reported 13 
 
 Building and loan associations 
 
 exempt from tax '_ 23 
 
 Buildings 
 
 depreciation 56 
 
 Buildings — On leased lands 
 
 assessed as real estate 51 
 
 taxes on, not subject to offset. State ex rel. Bundy v. 
 
 Nygaard 163 Wis. 307 ■ 51 
 
 Bundy v. Nygaard, see State ex. rel. Bundy v. Nygaard 
 
 Business year 
 
 may be approved by tax commission 5 
 
 Calendar year 
 
 returns for 5 
 
 Capital 
 
 includes what, State ex rel. Bundy v. Nygaard 163 Wis. 
 
 307 54 
 
 Capital assets 
 
 accrued since Jan. 1911, taxable 64 
 
 market value of 6 
 
 Car companies 
 
 exemption of 24 
 
 Certificate, form of, for estates 35 
 
 Charitable associations. 
 
 gifts to, deducted 16,21,22 
 
70 INDEX 
 
 Children Pages 
 
 exemptions , 22, 23 
 
 Circuit judges 
 
 salaries of, taxable. State ex rel. Wickham v. Nygaard 
 
 159 Wis. 396 7 
 
 Cities 
 
 income from exempt 25 
 
 Clergymen 
 
 gifts to, taxable 54 
 
 Collection of taxes 
 
 in 1911 not affected by income tax law 52 
 
 Columbia Construction Co. v. Wis. tax commission, see State 
 ex. rel. Columbia Construction Co. v. Wis. Tax Com- 
 mission 
 
 Contributions 
 
 made within year deductible 16 
 
 Cooperative associations 
 
 what profits deductible 15 
 
 Copartnerships 
 
 deduction for salaries and wages 17 
 
 make returns to assessors of incomes 15 
 
 when not taxable. State ex rel. Arpin v. Eberhardt 158 
 
 Wis. — 201 10, 22 
 
 Corporations 
 
 additions and corrections 36 
 
 appeal and review 39 
 
 assessed and taxed by tax commission 42 
 
 deductions allowed 11-13 
 
 deduction of losses 13 
 
 deduction of worthless accounts 14 
 
 exemptions 22, 23 
 
 expenses of organization 55 
 
 furnish lists of employes 11 
 
 insurance paid by 55 
 
 interest on unproductive property 55 
 
 make annual reports 3 
 
 make returns to tax commission 15 
 
 may base returns on fiscal year, when 5 
 
 may deduct income taxes when 15 
 
 may have hearing on appeal 39 
 
 other ordinary and necessary expenses deducted 11 
 
 penalties on officers for verifying false returns 37 
 
 rates for 25, 26 
 
 reassessed by tax commission 38 
 
 reassessed for taxes omitted for 3 years 36 
 
 returns by 30 
 
 tax commission to certify tax on 42 
 
 taxes deducted 14 
 
 taxes paid by, cannot be deducted by stockholder 14 
 
 within and without state, apportionment for 9 
 
 Conservation and regulation companies 
 
 exempt from income tax 24 
 
 Counties 
 
 income received, exempt 25 
 
 County boards 
 
 "direct assessors of incomes to reassess property 64 
 
 provide office for assessors of incomes 29 
 
 receive report of assessors of incomes 64 
 
INDEX 71 
 
 County clerks Pages 
 
 certify tax to cities of first class 44 
 
 compute income tax 43 
 
 instructed to make tax rolls public 50 
 
 print reports of assessors of incomes 64 
 
 serve on income tax board of review 39 
 
 County treasurers 
 
 account for and pay delinquent taxes 47 
 
 pay to state treasurer state's quota of income taxes 47 
 
 reimburse assessors 63 
 
 Deductions 
 
 allowed corporations : 11, 13 
 
 bank dividends 15 
 
 cash bonuses to employes 13 
 
 dividends 14 
 
 gifts 16 
 
 interest 12 
 
 losses 13 
 
 profits of cooperative associations 15 
 
 repairs 11 
 
 royalties 13 
 
 taxes 14 
 
 wages and salaries 11 
 
 worthless accounts 14 
 
 allowed individuals 
 
 bank dividends 21 
 
 dividends 19 
 
 election expenses, not allowable 55 
 
 gifts made within year 21, 22 
 
 inheritances 20 
 
 interest on indebtedness 19 
 
 life insurance 21 
 
 losses 17 
 
 ordinary and necessary expenses 17 
 
 taxes 20 
 
 U. S. pensions 20 
 
 wages and salaries 17 
 
 wages and salaries, limited 17 
 
 from gross income, when allowed 3 
 
 receipts taxable and expenditures not allowable as 53 
 
 Delinquent taxes 
 
 to be returned to county treasurer 46 
 
 Depletion 
 
 no deduction for. Klar Piquett Mining Co. v. Platteville 
 
 163 Wis. 214, 215 13 
 
 Depreciation 
 
 automobiles 56 
 
 buildings 56 
 
 does not cover fluctuations in market value 12 
 
 harness 56 
 
 horses 56 
 
 in stocks 55 
 
 land or property not allowable as deduction 54 
 
 limited to wear and tear 12, 17 
 
 machinery 56 
 
 not allowable when 18 
 
 ornaments or articles of luxury not allowed 18 
 
 percentages 55 
 
72 INDEX 
 
 Pages 
 Depreciation — continued 
 
 reserves for, taxable 7 
 
 sleighs 56 
 
 tables of 55 
 
 tools 56 
 
 wagons 56 
 
 Dividends 
 
 accumulated since Jan. 1911, taxable 54 
 
 declared and paid out of reserves taxable T. D. 2540 In- 
 come tax service p. 433 7 
 
 declared by corporations from depreciation reserve 54 
 
 deduction of, Van Dyke v. City of Milwaukee, 159 Wis. 
 
 460 19 
 
 deductions allowed, corporations 14 
 
 deductions to individuals 19 
 
 derived from stocks, etc 6, 31 
 
 distributed as losses cannot be deducted, Van Dyke v. 
 
 City of Milwaukee 159 Wis. 460 10 
 
 from state and national banks taxable 54 
 
 limited to earnings since 1911 6 
 
 on banks without state, taxable 21 
 
 taxation of, Sallie F. Moon Co. v. Wisconsin tax com- 
 mission 166 Wis. 287; Van Dyke v. City of Milwau- 
 kee 159 Wis. 460 15 
 
 Dobbins v. Erie Co., 16 Peters 435 
 
 salaries of federal officers 7 
 
 Dollar savings bank v. U. S. 86 U. S. 227 
 
 omitted taxes 37 
 
 Doomage power 
 
 given to assessor of incomes and tax commission 30 
 
 Educational bonus act 
 
 levy of taxes 60, 61 
 
 rates for 60-62 
 
 terms of 60-62 
 
 Educational institutions 
 
 exemption of 23 
 
 gifts to, deducted 16,21,22 
 
 when income is not exempt, St. John's Military Academy 
 
 v. Larson 168 Wis. 357 24 
 
 Estates 
 
 corpus of legacies taxable 20 
 
 court may waive return, when 34 
 
 certificate 35 
 
 expense of, not deducted 31 
 
 fees taxable 55 
 
 returns for 33, 34 
 
 when not exempt from income tax 20, 21 
 
 Estimated rental 
 
 of residence not taxable (1917 amendment) 6,18 
 
 Excess profits taxes 
 
 deducted 14,20 
 
 Executors 
 
 returns by 32, 33 
 
 Exemptions 
 
 accident, surety, etc. companies 24 
 
 car companies 24 
 
 conservation and regulation companies 24 
 
 dependents 22 
 
INDEX 73 
 
 Pages 
 
 express companies i 24 
 
 life insurance companies 24 
 
 public funds 25 
 
 railroads 24 
 
 sleeping car companies 24 
 
 street railways 24 
 
 telegraph, companies 24 
 
 telephone companies 24 
 
 title guaranty companies 24 
 
 to corporations 24 
 
 to individuals ,. 22 
 
 additional person 22 
 
 child under 18 years 22, 23 
 
 husband and wife 22, 23 
 
 Expenditures 
 
 not allowable as deductions 53 
 
 Express companies 
 
 exempt from income tax 24 
 
 Farm animals 
 
 no deduction for depreciation 18 
 
 Farm products 
 
 taxable income 54 
 
 Farms 
 
 operated for recreation or pleasure not subject to de- 
 duction, T. D. 2153, Income tax service 223 18,19 
 
 profits from, when taxed 8 
 
 Federal income tax service 215,222 
 
 livestock deduction 18 
 
 Federal officers 
 
 salaries of, not taxable. Dobbins v. Erie Co. — 16 Peters 
 
 435, and Purnell v. Page 133 N. C. 125 7 
 
 Fees 
 
 included as income 6 
 
 Field v. Milwaukee 161 Wis. 393 
 
 illegal taxes _. 42 
 
 Fire insurance companies 
 
 exempt from income tax 24 
 
 Firms 
 
 exemptions 22, 23 
 
 Fiscal year 
 
 may be fixed when 5 
 
 Franchises 
 
 use, included in income 6 
 
 Freight line and equipment companies 
 
 exempt from tax 24 
 
 Gains, See Profits 
 
 General property 
 
 taxation of 63-65 
 
 Gifts 
 
 aggregate amount not to exceed 15$ of income 16 
 
 deduction of 15 
 
 made within year, deducted 20-22 
 
 received by clergymen taxable 54 
 
 to clubs, etc., not included in deductions 16 
 
 Good will 
 
 depreciation of, cannot be allowed as deduction 13 
 
74 INDEX 
 
 Gould v. Gould 245 U. S. 151 Pages 
 
 alimony not allowable as deduction 18 
 
 Guardians, trustees, etc. 
 
 returns by '. 31 
 
 where income tax is paid 32 
 
 Harness 
 
 depreciation 56 
 
 Hickox v. Widule, see State ex rel. Hickox v. Widule 
 Horlick v. town of Mt. Pleasant 161 Wis. 16 6 
 
 illegal taxes 42 
 
 Horses 
 
 depreciation 56 
 
 Husband and wife 
 
 exemptions 22, 23 
 
 Illegal taxes 
 
 recovery of, Field v. Milwaukee 161 Wis. 393,394 42 
 
 remedy for, Montreal Mining Co. v. State 155 Wis. 245 39 
 
 Horlick, v. town of Mt. Pleasant, 161 Wis. 166; Field v. 
 
 Milwaukee 161 Wis. 393 42 
 
 voluntary payment of right to recover, legality waived, 
 
 state ex re'l. Marshall & Ilsley bank, 155 Wis. 499 53 
 
 Income 
 
 denned 6 
 
 includes what 6, 7 
 
 shall not be exempt from income tax, ch. 318, 1917 20 
 
 Income tax 
 
 apportionment of 46 
 
 collected by wrong district 46 
 
 computed by county clerk , : 43 
 
 deduction of 14, 20 
 
 depreciation percentages 56 
 
 for what period levied 5 
 
 levy of 5 
 
 of individuals, computed by whom 43 
 
 on personal property omitted by officers, City of Milwau- 
 kee v. Patton 158 Wis. 617 51 
 
 personal property offset 50, 51 
 
 refunds 46 
 
 report on, submitted by tax commission 42, 43 
 
 results of, 1912-1918 43 
 
 returns to be made for calendar year 5 
 
 state's quota to be paid by county treasurers 47 
 
 tax roll, when made 43 
 
 tax year 5 
 
 where assessed, levied and collected 44 
 
 Income tax cases 148 Wis. 456 
 
 money is income 7 
 
 Income tax — Federal 
 
 alimony 18 
 
 dividends paid out of reserves 7 
 
 Income tax law 
 
 contains 1911 law as amended 3 
 
 Income tax service, p. 433 (T. D. 25 40) 
 
 dividends paid out of reserves for depreciation 7 
 
 223, T. D. 2153 
 
 farms not subject to deduction 18, 19 
 
INDEX 75 
 
 Indebtedness Pages 
 
 interest on, deduction of 19 
 
 Individuals 
 
 additions and corrections of incomes by whom made__ 37, 38 
 
 deductions for dividends 19 
 
 for operation of business 17, 18 
 
 infsutt-ance 21 
 
 wages and salaries 17 
 
 excluded from deductions lor gifts 16 
 
 exemptions to 22 
 
 income tax of, by whom computed 43 
 
 may appeal to tax commission 42 
 
 penalty for false return 38 
 
 rates for 25 
 
 reassessment of incomes 37, 38 
 
 returns by 30 
 
 taxable on dividends from without state 21 
 
 term used when 5 
 
 to make annual reports 3 
 
 wages and salaries 17 
 
 within and without state, apportionment for 9 
 
 Inheritance tax 
 
 gifts subject to 20 
 
 Inheritances 
 
 deduction of 20 
 
 income from, taxable 54 
 
 Insurance 
 
 endowment when taxable 21 
 
 exempt from income tax 21 
 
 on residence not deductible ' 18 
 
 premiums paid by corporations 5 5 
 
 Interest 
 
 deduction of, to corporations 12 
 
 not previously reported, taxable 55 
 
 on indebtedness, deduction of 19 
 
 on mortgages and bonds taxable 6 
 
 on notes taxable 6 
 
 on U. S. bonds not taxable 7 
 
 paid by corporations on unproductive property 55 
 
 Inventories 
 
 take care of depreciation 12 
 
 Joint stock companies, see Corporations 
 
 Klar Piquett Mining Co. v. Platteville, 163 Wis. 214, 215 
 
 ore depletion 13 
 
 Land contracts 
 
 income from when taxed 8 
 
 not apportionable when 10 
 
 of non-residents not taxable 8 
 
 of residents taxable 8 
 
 Life insurance 
 
 deductions 21 
 
 taxable 54 
 
 Life insurance companies 
 
 exempt from income tax 24 
 
76 INDEX 
 
 Live stock Pages 
 
 cost of, purchased for resale, deductible 18 
 
 expense of feeding, deductible 18 
 
 for breeding purposes, deduction 18 
 
 loss allowed when 18 
 
 Local treasurers 
 
 to be reimbursed for costs of action to recover tax 53 
 
 Losses 
 
 accounts and bills receivable 14 
 
 allowed to corporations actually sustained within year 13 
 
 for depreciation of stock not allowed 13 
 
 for live stock when, Fed. income tax service, 215, 222-- 18 
 
 from business when 17, 18 
 
 from sale of real or personal property when taxed 6 
 
 when not taxable 55 
 
 Machinery 
 
 depreciation 56 
 
 replacement of covered by depreciation 12 
 
 Manufacturing corporations 
 
 apportionment method 9 
 
 of Wis. when taxable 10 
 
 when income is not taxable, U. S. Glue Co. v. Oak Creek 
 
 116 Wis. 211; 247 U. S. 321 10 
 
 Market value 
 
 of capital assets, profits and loss basis 6 
 
 Marines 
 
 bonus for _ 57 
 
 Marshall &. Ilsley bank, see State ex rel. Marshall & Ilsley bank 
 
 Meeting 
 
 boards of review in July 40 
 
 notice of, boards of review, published 40 
 
 Merchants' stocks 
 
 cared for in inventories 12 
 
 no deduction for depreciation of 18 
 
 used by family, taxable 54 
 
 Meredith v. U. S. 13 Peters 486 
 
 omitted taxes 37 
 
 Milwaukee city of v. Patton 15 8 Wis. 617 
 
 personal property omitted 51 
 
 Mines 
 
 depletion of, claimed by lessee not allowable as deduction 55 
 
 lessee of, not allowed deduction for ore depletion Klar 
 
 Piquett Mining Co. v. Platteville 163 Wis. 214, 215 13 
 
 royalties from, follow situs of property 8 
 
 Mines and quarries 
 
 deductions allowed 17 
 
 Money 
 
 is income. Income tax cases, 148 Wis. 456 
 
 Montreal Mining Co. v. State 155 Wis. 245 
 
 illegal taxes 39 
 
 Moon, Sallie F. company, see State ex rel. Sallie F Moon 
 company v. Wisconsin tax commission 
 
 Mortgages 
 
 income from when not apportionable 10 
 
 income from, where taxed = '. 8 
 
 of non-residents not taxable 8 
 
 of residents taxable 8 
 
INDEX 77 
 
 Mutual savings banks Pages 
 
 exemptions of _, 23 
 
 National bank v. Owensboro 173 U. S. 6 64 excluded banks 
 
 from income tax law 23, 24 
 
 Net income 
 
 includes what 3 
 
 Notices 
 
 form used for boards of review 40 
 
 of increased assessment by registered mail 37, 38 
 
 of meeting to be published . 40 
 
 Nonresidents 
 
 exemptions 22, 23 
 
 taxable on what income 8 
 
 where income tax is to be paid 45 
 
 Obsolescent 
 
 depreciation for, not allowed 55 
 
 not a factor in determining depreciation 13 
 
 Omitted property 
 
 how assessed 63 
 
 Omitted taxes 
 
 assessed for three years 36 
 
 collection of, Meredith v. XJ. S. 13 Peters i486 37 
 
 corporations, by whom made 38 
 
 individuals, reassessed by whom made 38 
 
 Ordinary and necessary expenses 
 
 allowed corporations 11 
 
 allowed individuals 17 
 
 for profession, occupation or business allowed 17 
 
 Ores 
 
 depletion of, not allowed; Klar Piquett Mining Co. 
 
 v. Platteville 163 Wis. 214, 215 13 
 
 Parsonages 
 
 taxable 54 
 
 Partnerships 
 
 allowance for services 17 
 
 Penalties 
 
 assessors of incomes 35, 36 
 
 corporations, making false return 36, 37 
 
 for false return 3 8 
 
 for refusal or failure to make returns 36 
 
 for violating secrecy of returns 49 
 
 on officers of corporations 37 
 
 to corporations for failure to furnish list of employes 11 
 
 Pensions 
 
 deduction of 20 
 
 person 
 
 definition of - 5 
 
 Personal, property 
 
 general laws as to, applicable 45 
 
 profits from, when taxable 6 
 
 losses from, taxable when 6 
 
 Persona! property offset 
 
 against income tax 50 
 
 cannot be used on buildings on leased land 51 
 
 how obtained 50, 51 
 
 instructions to taxpayers : 51 
 
78 INDEX 
 
 Personal property taxes Pages 
 
 when paid to secure offset 52 
 
 Personal services 
 
 deduction allowed 17 
 
 of nonresidents not taxable 8 
 
 of residents taxable . 8 
 
 where taxed _ '. 8 
 
 within and without state not apportionable 10 
 
 Physicians 
 
 no deduction for services of 17 
 
 Profits 
 
 from business, shall be included as income 6 
 
 from farms, etc., where taxed 8 
 
 from farms, mines and quarries not apportionable 10 
 
 from real estate sales included in income 6 
 
 from sale of stock allowed when 19 
 
 how determined 1'. 6 
 
 included as income, State ex rel. Wis Trust Co. v. 
 
 Widule 164 Wis. 56 7 
 
 of cooperative associations 15 
 
 on real estate 54 
 
 to be included, except when exempted 6 
 
 Public funds 
 
 exempt from income tax 25 
 
 Public officials 
 
 not to divulge information relating to income tax 48 
 
 when compensation of, is not income 6 
 
 Public service corporations 
 
 exempt from tax 24 
 
 Purnell v. Page 133 N. C. 125 
 
 salaries of federal officers 7 
 
 Railroads 
 
 exempt from income tax 24 
 
 Rates 
 
 for corporations 25, 26 
 
 tables used in computing 26 
 
 for individuals 25 
 
 tables used in computing 26 
 
 Real estate 
 
 losses from sale, when income 6 
 
 profits on, taxable 54 
 
 rent of, included in income 6 
 
 Reassessments 
 
 of corporations 38 
 
 of individuals 37,38 
 
 to be made by assessors of incomes 64 
 
 to be made by county board 65 
 
 Quarries 
 
 gains or profits from, where taxed 8 
 
 Receipts 
 
 taxable as income 53 
 
 Receipts taxable 
 
 not allowable as deductions . 53 
 
 Red Cross nurses 
 
 bonus for 57 
 
 Religious associations 
 
 exemption of 23 
 
 gifts deducted 16, 21, 22 
 
INDEX 79 
 
 Rent Pages 
 
 uncollectable, taxable 55 
 
 Rentals 
 
 Income from 8 
 
 income from, not apportionable 10 
 
 Repairs 
 
 not allowable deduction , 18 
 
 when deductible 11 
 
 Reserves 
 
 for depreciation taxable 7, 54 
 
 Residents 
 
 taxable on all income 8 
 
 Returns 
 
 additions and corrections 36 
 
 false or fraudulent or failure to make 36 
 
 for business year 5 
 
 for calendar year 5 
 
 of individuals 37, 38 
 
 may be made for fiscal year when 5 
 
 penalties for false returns 37 
 
 penalties for violating secrecy of 49 
 
 secrecy of _■ 47 
 
 time may be extended 37 
 
 to be made by whom 30 
 
 Royalties 
 
 for extracting ore taxable 54 
 
 from mines follow situs of property 8 
 
 from mines not apportionable 10 
 
 included in income 6 
 
 paid fee owner by lessee, deductible 13 
 
 St. John's Military Academy v. Larson, 168 Wis. 357 
 
 educational institutions 24 
 
 Sailors 
 
 bonus for 57 
 
 Salaries 
 
 of circuit judges taxable, State ex rel. Wickham v. Ny- 
 
 gaard 159, Wis. 396 7 
 
 of federal officers not taxable Dobbins v. Erie Co. 16 
 
 Peters, 435 & Purnell v. Page 133 N. C. 125 7 
 
 included in income 6 
 
 reduced when excessive 11 
 
 Salaries and expenses 
 
 of assessors of incomes 28, 29 
 
 Salaries and wages 
 
 deducted 11, 17 
 
 of state and local officers taxable 54 
 
 Savings banks 
 
 dividends, taxable 15 
 
 School districts 
 
 income received, exempt 25 
 
 Scientific associations 
 
 gifts to, deducted 16, 21, 22 
 
 Secrecy of returns 
 
 penalties for violating 49 
 
 Securities 
 
 of nonresidents not taxable 8 
 
 of residents, taxable 8 
 
80 INDEX 
 
 Servants Pages 
 
 wages of, taxable 55 
 
 Service recognition board 
 
 appointment of 56 
 
 powers of 57 
 
 Sleeping car companies " 
 
 exempt from income tax 24 
 
 Sleighs 
 
 depreciation , 56 
 
 Soldiers 
 
 bonus for 57 
 
 Soldiers bonus 
 
 how determined 58, 62 
 
 Soldiers bonus act 
 
 terms of 56-60 
 
 Special assessments 
 
 cannot be considered as taxes 14 
 
 taxable 55 
 
 State banks 
 
 dividends from, deductions 21 
 
 State ex rel. Arpin v. Eberhardt 158 Wis. 20, 22 
 
 copartnerships, profits not taxable 10 
 
 State ex rel. Bundy v. Nygaard 163 Wis. 307 
 
 capital included as income 51 
 
 State ex rel. Columbia construction Co. v. Wis. tax commis- 
 sion 166 Wis. 369 
 
 deduction of dividends 19 
 
 taxation of dividends 15 
 
 State ex rel. Hickox v. Widule 166 Wis. 113 
 
 deduction for taxes 20 
 
 dividends of trustees 20, 31 
 
 State ex rel. Marshall and Ilsley bank 155 Wis. 499 
 
 recovery of taxes 53 
 
 State ex rel. Sallie F. Moon Co. v. Wisconsin tax commission 
 166 Wis. 287 
 
 taxation of dividends 15 
 
 State ex rel. Wickham v. Nygaard, 159 Wis. 396 
 
 salaries of state and local officers 7 
 
 State ex rel. Wisconsin Trust Co. v. Widule 156 Wis. 121 
 
 dividends of trustees 31 
 
 profit or gain 7 
 
 Stock dividends 
 
 taxable 54 
 
 Stocks 
 
 losses for depreciation cannot be deducted, Van Dyke v. 
 
 City of Milwaukee 159 Wis. 460 13 
 
 profits from sale of, when allowed 19 
 
 shrinkage or depreciation in value 55 
 
 Stocks and bonds 
 
 income from, where taxed 8 
 
 of non-residents, not taxable 8 
 
 of residents, taxable 8 
 
 Street railways 
 
 exempt from income tax 24 
 
 Surtaxes 
 
 levy of „__ 56; 57, 60, 61 
 
 to appear on 1919 rolls , ._ 60 
 
 under soldiers bonus act . '. 58 
 
INDEX 81. 
 
 Tax commission Pages 
 
 appeal to, by individuals 42 
 
 assess corporations 15 
 
 authorized to make certain records public 49 
 
 instructs county clerks to make tax rolls public 50 
 
 may assess at double rate when 36" 
 
 may consent to returns for fiscal year 5 
 
 may correct errors and reassess corporations 36 
 
 may employ clerks and specialists 52 
 
 may fix tax year 5 
 
 may grant corporations hearing on appeal 3 9 
 
 may make additions and corrections 3 6 
 
 may prescribe apportionment method 44 
 
 may reduce excessive salaries, when 11 
 
 may review assessments on appeal 42 
 
 powers of 30 
 
 shall give notice of increased assessment 3 6 
 
 to call meeting of assessors of incomes 64 
 
 to compute and certify tax on corporations 42 
 
 to furnish instructions as to income tax information 49 
 
 to make assessment of corporations annually *. 29 
 
 to make report of income tax 42, 43 
 
 to make rules and regulations as to collection of taxes 52 
 
 to pay expenses of boards of review ! 3 9 
 
 to reassess corporations 38 
 
 to receive reports of assessors of incomes 64 
 
 Tax levy 
 
 bonuses and surtaxes 5 
 
 income taxes . 56, 57, 60, 61" 
 
 Tax rolls 
 
 correction of errors 45 
 
 to be made public 50 
 
 when made 43 
 
 Tax year 
 
 date of 5, 29 
 
 Taxes 
 
 collection of ' 52 
 
 deduction of 14, 20 
 
 how raised for soldiers bonus 57 
 
 omitted, may be reassessed, collected by action after 
 right has expired, Dollar Savings Bank v. U. S. 8 6 
 U. S. 227; Meredith v. U. S. 13 Peters 486; U. S.- 
 
 v. Chamberlain 219 U. S. 250 37 
 
 on residence not allowed as deductions , 18 
 
 on unimproved real estate cannot be deducted 14 
 
 on unproductive property not allowable deduction State 
 
 ex rel. Hickox v. Widule 166 Wis. 113 31, 55 
 
 recovery of, waived by voluntary payment, State ex rel. 
 
 Marshall and llsley Bank 155 Wis. 499 53 
 
 Telegraph companies 
 
 exempt from income tax 24 
 
 Telephone companies 
 
 exempt from income tax . 24 
 
 Title guaranty companies 
 
 exempt from income tax 24 
 
 Tools 
 
 depreciation 56 
 
 Trust companies 
 
 bank dividends 21 
 
 dividends, taxable 15 
 
 fi 
 
82 INDEX 
 
 Trust companies — continued Pages 
 
 " exemptions 23 
 
 not subject to personal property offset- 50 
 
 Trust estates 
 
 income from, taxable 54 
 
 Trustees 
 
 dividends of, State ex rel. Hickox v. Widule 166 Wis. 
 113 ; State ex rel. Wis. Trust Company v. Widule 156 
 
 Wis. 121 31 
 
 returns by 32, 33 
 
 where income tax is paid 32 
 
 Unlawful taxes, see Illegal taxes 
 
 U. S. Glue Co. v. Oak Creek 161 Wis., 211, TJ. S. 321 
 
 within and without the state 10 
 
 U. S. officers, see Federal officers 
 U. S. pensions 
 
 deducted 20 
 
 U. S. taxes 
 
 deducted 14 
 
 U. S. v. Chamberlain 219 U. S. 250 
 
 omitted taxes 37 
 
 Van Dyke v. City of Milwaukee 159 Wis. 460 
 
 deduction of dividends and interest 19 
 
 depreciation for losses in stock 13 
 
 taxation of dividends 15 
 
 Villages 
 
 income from, exempt 25 
 
 Wages 
 
 included in income 6 
 
 of household servants, chauffers or nurses, taxable 17, 5 5 
 
 Wages and salaries 
 
 deducted 11 
 
 deduction -allowed individuals . '. 17 
 
 Wagons 
 
 depreciation 13, 56 
 
 War profits taxes 
 
 deduction of 14, 20 
 
 Water, light, heat and power companies 
 
 not exempt from income tax 25 
 
 Wife 
 
 exemptions 23 
 
 Wickham v. Nygaard, see State ex rel. Wickham v. Nygaard 
 
 Wisconsin Trust Co. v. Widule, see State ex rel. Wis. trust 
 Co. v. Widule 
 
 Within and without the state 
 
 apportionment method 8 
 
 deduction of dividends, Van Dyke v. City of Milwaukee 
 159 Wis. 460; State ex rel. Col. cons. co. v. Wis. 
 
 tax commission 166 Wis. 369 15 
 
 how income is assessed 8 
 
 non-apportionable income to be disregarded 10 
 
 rule of apportionment applies to individuals and corpo- 
 rations 9 
 
 when income is not taxable. U. S. Glue co. v. Oak Creek 
 
 116 Wis. 211; 247 U. S. 321 ' 10 
 
 Witnesses 
 
 before board of review 41 
 
JkaM*^ 
 
 *-#