Section 108.068. Treatment of limited liability companies and members.

 

(1)  Subject to subs. (2) to (6) and (8) , the department shall treat a multimember limited liability company as a partnership and shall treat a single-member limited liability company as a sole proprietorship under this chapter unless the company has filed an election with the federal internal revenue service to be treated as a corporation for federal tax purposes and files proof with the department that the internal revenue service has agreed to treat the company as a corporation for such purposes.

(2)  The department shall treat a limited liability company that files proof under sub. (1) as a corporation under this chapter beginning on the same date that the federal internal revenue service treats the company as a corporation for federal tax purposes, except that for benefit purposes the treatment shall apply to benefit years in existence on or beginning on or after the date that the federal internal revenue service treats the company as a corporation for federal tax purposes if the benefit year to which the treatment is to be applied has not ended on the date that the department first has notice of a benefit eligibility issue that relates to treatment of that limited liability company.

(3)  Subject to subs. (1) , (2) , and (6) to (8) , a limited liability company that is treated as a corporation for federal tax purposes shall be treated as a corporation under this chapter, and each member of the limited liability company shall be treated as a corporate officer for contribution and benefit purposes.

(4)  Subject to subs. (2) and (6) to (8) , a multimember limited liability company that is not treated as a corporation for federal tax purposes shall be treated as a partnership under this chapter, and the members of the limited liability company shall be treated for contribution and benefit purposes as partners of that partnership.

(5)  Subject to subs. (2) and (6) to (8) , a single-member limited liability company that is not treated as a corporation for federal tax purposes shall be treated as a sole proprietorship under this chapter, and the member shall be treated as a sole proprietor for contribution and benefit purposes.

(6)  The department may, in the interests of justice or to prevent fraud upon the unemployment insurance program, determine that a member of a limited liability company is an employee of that company.

(7)  Subject to subs. (2) to (6) , if a limited liability company is treated as a corporation under this chapter the department shall treat the company as a partnership under this chapter, if the company has multiple members or shall treat the company as a sole proprietorship under this chapter if the company has a single member if the company files proof with the department that the internal revenue service has agreed to treat the company as a partnership or sole proprietorship for federal tax purposes.

(8)  The department shall treat a limited liability company that files proof under sub. (7) as a partnership or sole proprietorship under this chapter beginning on the same date that the federal internal revenue service treats the company as a partnership or sole proprietorship for federal tax purposes, except that for benefit purposes the treatment shall apply to benefit years in existence on or beginning on or after the date that the federal internal revenue service treats the company as a partnership or sole proprietorship for federal tax purposes if the benefit year to which the treatment is to be applied has not ended on the date that the department first has notice of a benefit eligibility issue that relates to treatment of that limited liability company.

2003 a. 197 ; 2005 a. 86 ; 2007 a. 97 .