Borge v. Wisconsin Tax Appeals Commission

¶ 1. The issue presented on this appeal is whether distributions received by the shareholders of a mutual fund that invests in state and local bonds are included as taxable income for purposes of the Wisconsin income tax. We conclude that Wis. Stat. § 71.05(6)(a) (1999-2000) 1 unambiguously requires taxpayers to include in their Wisconsin adjusted gross income "any interest.. . which is not included in federal adjusted gross income." And, under 26 U.S.C. §§ 103(a) and 852(b)(5), the distributions at issue here are treated as "an item of interest" that is excluded from federal gross income.…