Recycling Surcharge
- What is the recycling surcharge?
- Who is subject to the recycling surcharge?
- What are the recycling surcharge rates?
- I am a partner in a partnership. Under the partnership agreement, I receive guaranteed payments for performing services for the partnership. These payments are not based on the income of the partnership. As a result of receiving the guaranteed payments, am I subject to the recycling surcharge on my individual income tax return?
- What is the recycling surcharge?
The Legislature passed the recycling surcharge for taxable years beginning on or after January 1, 2000. This new recycling surcharge replaces the temporary recycling surcharge that applied to taxable years ending after April 1, 1991, and ending before April 1, 1999. Businesses, including certain individuals with Wisconsin self-employment income, are subject to this surcharge on their Wisconsin tax returns.
The recycling surcharge applies to farm and nonfarm businesses that have $4 million or more of gross receipts. The minimum recycling surcharge is $25 and the maximum is $9,800.
A portion of the recycling surcharge payments collected, including interest and penalties, is deposited in Wisconsin's recycling fund. These revenues are used to fund grants to county and municipal governments for implementing recycling programs and other state solid waste reduction programs.
For more information about the recycling surcharge, see Wisconsin Publication 400. Individuals, estates, and trusts also see Schedule RS.
- Who is subject to the recycling surcharge?
The recycling surcharge applies to corporations and insurance companies, estates and trusts, exempt organizations, individuals, partnerships, and tax-option (S) corporations that meet the following requirements.
Corporations and insurance companies that --
- are required to file a Wisconsin franchise or income tax return, Form 4, 4I, or 5,
- are engaged in business in Wisconsin, and
- have at least $4 million of gross receipts from all activities.
- are required to file a Wisconsin income tax return, Form 2,
- have farming activities and/or non-farm trade or business activities, including income as a statutory employee, in Wisconsin, and
- have at least $4 million of gross receipts from farming activities and/or non-farm trade or business activities for federal income tax purposes.
- are required to file a Wisconsin franchise or income tax return, Form 4T,
- are engaged in unrelated trade or business activities in Wisconsin, and
- are taxable as corporations and have at least $4 million of gross receipts from all unrelated trade or business activities or
- are taxable as trusts and have at least $4 million of gross receipts from all unrelated trade or business activities for federal income tax purposes.
- are required to file a Wisconsin income tax return, Form 1 or Form 1NPR,
- have farming activities and/or non-farm trade or business activities, including income as a statutory employee, in Wisconsin, and
- have at least $4 million of gross receipts from farming activities and/or non-farm trade or business activities for federal income tax purposes.
Note: The recycling surcharge applies to each individual, regardless of marital property law and regardless of whether married individuals file joint or separate Wisconsin income tax returns.
Partnerships, including limited liability companies (LLCs) that are treated as partnerships, must file Form 3S and pay the recycling surcharge if they --
- must file a Wisconsin partnership return, Form 3, and do business in Wisconsin
- derive income from business transacted, property located, or services performed in Wisconsin, and
- have $4 million of gross receipts from farming and/or other trade or business activities for federal income tax purposes.
For more information see the Instructions for Wisconsin Form 3S
Tax-option (S) corporations that --
- are required to file a Wisconsin franchise or income tax return, Form 5S,
- are engaged in business in Wisconsin, and
- have at least $4 million of gross receipts from all activities.
- What are the recycling surcharge rates?
The rates for the recycling surcharge are as follows
- Corporations (except tax-option (S) corporations), insurance companies, and exempt organizations taxable as corporations: The greater of $25 or 3% of Wisconsin gross tax liability, but not more than $9,800.
- Individuals, estates, trusts, and exempt organizations taxable as trusts: The greater of $25 or 0.2% of net business income as allocated or apportioned to Wisconsin, but not more than $9,800. For taxpayers engaged only in farming, the recycling surcharge is $25.
- Partnerships: The greater of $25 or 0.2% of the partnership's net business income as allocated or apportioned to Wisconsin, but not more than $9,800. For partnerships engaged only in farming, the recycling surcharge is $25.
- Tax-option (S) corporations: The greater of $25 or 0.2% of Wisconsin net income as allocated or apportioned to Wisconsin, but not more than $9,800.
- Corporations (except tax-option (S) corporations), insurance companies, and exempt organizations taxable as corporations: The greater of $25 or 3% of Wisconsin gross tax liability, but not more than $9,800.
- I am a partner in a partnership. Under the partnership agreement, I receive guaranteed payments for performing services for the partnership. These payments are not based on the income of the partnership. As a result of receiving the guaranteed payments, am I subject to the recycling surcharge on my individual income tax return?
No, you are not subject to the recycling surcharge on the guaranteed payments you received from the partnership. The guaranteed payments are added to the partnership's income and are subject to the recycling surcharge at the partnership level.
Note: If the recycling surcharge owed by a partnership is delinquent, its partners are jointly and severally liable for the unpaid amount.
FOR MORE INFORMATION PLEASE CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
P.O. Box 8949
Madison, WI 53708-8949
Phone: (608)
266-2486
Fax: (608) 267-1030
E-Mail Additional Questions
Last updated January 23, 2009