Wisconsin Administrative Code
Department of Revenue
Chapter Tax 1 - General Administration
Section Tax 1.12 - Electronic funds transfer

Universal Citation: WI Admin Code ยง Tax 1.12

Current through August 26, 2024

(1) SCOPE. This section applies to any person who is required to or elects to pay or deposit taxes, fees, or other amounts by electronic funds transfer, or "EFT."

(2) PURPOSE. The purpose of this section is to specify which taxes, fees, and other amounts are required to be paid or deposited using the EFT payment method, to provide that certain persons not required to use the EFT payment method may elect to do so and to explain the procedures for using EFT.

(3) DEFINITIONS. In this section:

(a) "ACH" means automated clearing house, a central clearing facility operated by a federal reserve bank or a private sector organization on behalf of depository financial institutions in which depository financial institutions transmit or receive ACH entries.

(b) "ACH credit" means the EFT payment option in which the payer initiates the transfer of funds by authorizing the payer's financial institution to transfer the payment amount to the department's depository bank.

(c) "ACH debit" means the EFT payment option in which the payer initiates the transfer of funds by authorizing the department's depository bank to transfer the payment amount from the payer's account.

(cg) "Combined group" has the meaning given in s. 71.255(1) (a), Stats.

(cr) "Confirmation number" means a character code uniquely identifying the successful completion of an EFT transaction.

(d) "Electronic funds transfer" or "EFT" means any transfer of funds initiated through a terminal, telephone, or computer authorizing a financial institution to debit or credit an account on the requested settlement date.

Note: The EFT payment method allows funds to be transferred electronically from the payer's financial institution to the department's depository bank eliminating the need to prepare and process a paper check.

(e) "Entry" means an electronic item representing the transfer of funds in the ACH system.

(f) "Financial institution" means any bank, savings and loan, credit union, industrial bank or other institution organized under either national or state banking laws capable of both accepting deposits and making loans.

(fm) "Pass-through entity" has the meaning given in s. 71.738(3d), Stats.

(g) "Payer" means any person who is required to or elects to pay or deposit taxes, fees, or other amounts by electronic funds transfer.

(h) "Settle" or "settlement" means to transfer funds, or a transfer of funds, between two parties in cash or negotiable items or on the books of a mutual depository to complete one or more prior transactions and made subject to a final accounting.

(i) "Settlement date" means the date on which an exchange of funds with respect to an entry or entries is reflected on the books of the department's depository bank.

(j) "Trace number" means a character code uniquely identifying each ACH entry.

(4) REQUIREMENT OR ELECTION TO USE EFT.

(a) Except as provided in sub. (9), the department requires the taxes, fees, and other amounts described in subds. 1. to 18. be paid or deposited using the EFT payment method. The following taxes, fees, and other amounts are included in the EFT payment requirement:
1. Corporate income and franchise tax estimated tax payments and tax due with the tax return when the net tax less refundable credits on the prior year's tax return was $1,000 or more. For a combined group or combined group member, "prior year's tax return" means the prior year's tax return of the designated agent.

2. Income tax withholding payments when the required deposits were $300 or more in the prior calendar year.

3. General, county, and stadium sales and use tax when the aggregate amount due in the prior calendar year was $300 or more.

4. Fermented malt beverages tax when the tax due after the adjustment for any overpayment or additional amount due for a previous period was $1,000 or more in the prior calendar year.

5. Liquor or "distilled spirits and wine" tax and administrative fee when the aggregate net amount of tax and fee due in the prior calendar year was $1,000 or more.

6. Cigarette tax when the net tax due before printing and shipping costs was $1,000 or more in the prior calendar year.

7. Tobacco products tax when the tax due in the prior calendar year was $1,000 or more.

8. Alternate fuels tax when the total tax due in the prior calendar year was $1,000 or more.

9. General aviation fuel tax when the tax due in the prior calendar year was $1,000 or more.

10. Motor vehicle fuel tax and petroleum inspection fee when the aggregate amount due in the prior calendar year was $1,000 or more.

11. Individual and fiduciary income tax estimated tax payments when the estimated tax payments as required under s. 71.09, Stats., were $2,000 or more in the prior taxable year.

12. Installment agreement payments on overdue tax accounts, if at least one of the following requirements is met:
a. The initial overdue balance is at least $2,000.

b. The installment agreement is for more than 2 years in length.

c. The installment agreement was requested by an entity with an active business permit.

d. The installment agreement is for a person with an out-of-state account.

e. The payment history of the account dictates that it would be in the department's best interest to require EFT.

13. Income and franchise tax withholding payments of pass-through entities under s. 71.775, Stats., and composite individual income tax payments made by pass-through entities on behalf of their nonresident partners or shareholders.

14. Withholding by an employer of the delinquent tax of an employee under s. 71.91(7), Stats.

15. Local exposition tax when the general, county, and stadium sales and use tax is required to be paid using EFT, as provided in subd. 3.

16. Premier resort area tax when the general, county, and stadium sales and use tax is required to be paid using EFT, as provided in subd. 3.

17. Rental vehicle fee when the general, county, and stadium sales and use tax is required to be paid using EFT, as provided in subd. 3.

18. Dry cleaning facility fee when the general, county, and stadium sales and use tax is required to be paid using EFT, as provided in subd. 3.

(b) Any person not required to use the EFT payment method under par. (a) may elect to use the EFT payment method to pay or deposit the taxes, fees, or other amounts specified in par. (a).

(c) The department shall provide notification when EFT payments or deposits are required.

(5) EFT PAYMENT PROCEDURES. EFT payments or deposits shall be credited by the department directly to the payer's tax account or, for amounts described in sub. (4) (a) 14., to the employee's delinquent tax account. The payer may use the ACH debit or ACH credit transfer option, or both, as follows:

(a) ACH debit transfers.
1. ACH debit transfers shall be made using department approved methods or as otherwise prescribed by the department. Required payment information includes the tax type code for the tax being paid, the tax period date to which the payment should be applied, the amount of the payment, and the effective date of the payment.

2. The payer shall initiate ACH debit transfers before 4:00 p.m. central standard time or central daylight savings time, as applicable, on or before the last business day prior to the prescribed due date of the payment in order for the payment to have a settlement date on or before the prescribed due date.

(b) ACH credit transfers.
1. A payer shall initiate ACH credit transfers through the payer's financial institution following directions specific to that financial institution.

2. In order for the payment to have a settlement date on or before the prescribed due date, ACH credit transfers shall be initiated in time for the payer's financial institution to settle the funds transfer on or before the due date of the payment.

(6) COSTS TO INITIATE EFT.

(a) ACH debit transfers shall occur at no cost to the payer.

(b) Payers using ACH credit transfers are liable for any fees charged by the payer's financial institution.

(7) EVIDENCE OF EFT PAYMENT. A payer receives a trace number or confirmation number for each EFT transaction. The trace number or confirmation number given to the payer during the EFT transaction and included as part of the ACH entry is the payer's confirmation of payment or deposit and shall provide proof of the date and amount of the payment or deposit.

(8) DUE DATE OF EFT PAYMENT.

(a) In order for EFT payments and deposits to be considered received on or before the prescribed due date, EFT payments or deposits shall have a settlement date on or before the prescribed due date, or the revised due date as provided in par. (c), of the payment or deposit.

(b) Payments or deposits made by EFT with a settlement date later than the prescribed due date or revised due date of the payment or deposit shall be considered late and shall be subject to all applicable late fees, penalties and interest.

Note: See s. Tax 2.67 (4) for rules applicable to a combined group with respect to late fees, penalties, and interest.

(c) When the prescribed due date falls on a weekend, legal holiday, or day the Federal Reserve Bank is closed, the payment due date is revised to be the first business day immediately following the weekend, holiday, or day the Federal Reserve Bank was closed.

Example: The prescribed due date falls on a Monday that is also Memorial Day. An ACH debit transfer must be initiated before 4:00 p.m. of the preceding Friday, so that the transfer may have a settlement date on Tuesday, the revised due date. A payer using an ACH credit transfer must work with the financial institution to initiate the transfer in time to settle on or before the revised payment due date.

(9) EXCEPTION TO EFT REQUIREMENT.

(a) The secretary of revenue may waive the requirement to use the EFT payment method when the secretary determines that the requirement causes an undue hardship, if the person otherwise required to use EFT does all of the following:
1. Requests the waiver in writing using Form EFT-102, Electronic Filing or Electronic Payment Waiver Request.

Note: Form EFT-102 should be e-mailed to DORWaiverRequest@wisconsin.gov, faxed to (608) 267-1030, or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at https://www.revenue.wi.gov/Pages/html/formpub.aspx, under "Tax Return Information."

2. Clearly indicates why the requirement causes an undue hardship.

3. Is current in all return and report filings and tax payments.

(b) In determining whether the EFT requirement causes an undue hardship, the secretary of revenue may consider the following factors:
1. Unusual circumstances which may prevent the payer from using the EFT method.

Examples: Examples of unusual circumstances include:

1) The person does not have access to a telephone or computer.

2) The person is physically unable to use a telephone or computer.

3) The telephone system available to the person is incompatible with the department's telephone system used for EFT payments, deposits, or both.

2. Any other factor which the secretary determines is pertinent.

Section Tax 1.12 interprets ss. 71.01(8r), 71.255(7) (b), 71.42(3m), 71.63(1m) and (5m), 71.65(3) (a), 73.029, 77.58(1m), 77.61(14), 77.96(5m), 78.12(5), 78.55(5m), 139.01(5m), 139.30(8m) and 139.75(5m), Stats.

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