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The Wisconsin Court of Appeals on February 25 upheld a lower court decision concluding that Wisconsin’s dividend received deduction (DRD) - which requires that a distribution be received with respect to ‘common stock’ - applies to a distribution made from a foreign LLP that elected to be taxed as a corporation for federal income tax purposes.

The appellate court did not rule on the substantive statutory issue. It ruled that the Department of Revenue was precluded from asserting the DRD was inapplicable to the 2013 to 2015 tax years because such position would be contrary to Department guidance in effect during that time. The Department has since withdrawn such guidance.