State Bar of Wisconsin Return to Wisconsin Tax Appeals Commission





c/o Attorney Robert A. Kennedy, Jr.

Kennedy Law Office

209 E. Madison Street

Crandon, WI 54520




P.O. Box 8933

Madison, WI 53708


DOCKET NO. 98-T-276



This matter was submitted to the Commission on stipulated facts and briefs of the parties. Petitioner is represented by Attorney Robert A. Kennedy, Jr., of Kennedy Law Office. Respondent ("Department") is represented by Attorney Neal E. Schmidt.

Based on the stipulated facts, related exhibits, and briefs of the parties, the Commission finds, concludes, and orders as follows:


The Commission adopts and summarizes the following facts as stipulated by the parties, making minor changes and omitting references to exhibits:

1. Wolfhead Sportsman's Club, Inc. ("Wolfhead"), is a Wisconsin nonprofit, nonstock corporation incorporated on December 23, 1960 under Wis. Stat. Chapter 181.

2. In 1969, the Crandon Jaycees began an off-road, cross-country vehicle race, commonly known as the "Brush Run 101."

3. In 1970, Wolfhead took over the operation of the race and has conducted the race ever since.

4. The race, currently known as the "World's Championship Off-Road Race" ("World's Championship Race"), is a community event which, since 1984, has been run in the Town of Crandon, near Highway 8, about 2 miles west of Crandon.

5. At all times material to this case, Wolfhead was a Wisconsin nonprofit, nonstock corporation.

6. In 1984, Wolfhead began to acquire the real estate where the World's Championship Race is conducted.

7. Since the initial purchase, the race site has been expanded with subsequent real estate purchases.

8. To preserve the name associated with the race, Crandon International Off-road Raceway Association, Inc. ("CIORA"), a new corporation, was formed on January 29, 1996.

9. CIORA has administered the racing event, all funds, advertising, contracts, insurance coverage, financing, and every aspect of the World's Championship Race, as well as all other snowmobile races and vehicle races conducted at the racetrack.

10. After CIORA assumed control of the racing events, Wolfhead had no activity whatsoever concerning any racing event.

11. While refinancing the then-existing mortgage and credit line on the racetrack (originally in the name of Wolfhead), the lending institution required that the real estate be deeded to CIORA, to be consistent with the correct maker of their financing.

12. The conveyance which is the subject of this dispute transferred real estate from Wolfhead to CIORA in a deed recorded July 22, 1996.

13. After the real estate transfer, Wolfhead was not dissolved but remained in existence, since its name has long-standing traditional value in the Crandon area.

14. All of the financial and business matters of the racing events are now run through CIORA, and Wolfhead is a dormant corporation.

15. The same members control both CIORA and Wolfhead, and have done so at all times.

16. All of the above-described events took place before January 1, 1999 and before the effective date of 1997 Wisconsin Act 79, Sec. 48, which created Wis. Stat. § 181.1104. This new legislation recognizes there can be a relationship between a subsidiary and a parent nonprofit corporation.

17. The Department issued its assessment for $1,195.16 on March 3, 1998.

18. Petitioner's petition for redetermination was dated September 15, 1998.

19. The Department's notice of action, denying the petition for redetermination, was dated September 29, 1998.


20. Petitioner filed a timely petition for review with this commission.

21. On May 30, 2000, the Commission issued an order stating that the case will be decided under Wis. Stat. § 73.01(4)(b); i.e., not as a small claims case.


77.22 Imposition of real estate transfer fee.

(1) There is imposed on the grantor of real estate a real estate transfer fee at the rate of 30 cents for each $100 of value or fraction thereof on every conveyance not exempted or excluded under this subchapter. ...

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77.25 Exemptions from fee. The fees imposed by this sub-chapter do not apply to a conveyance:

* * *

(3) Which, executed for nominal, inadequate or no consider-ation, confirms, corrects or reforms a conveyance previously recorded.

* * *

(7) By a subsidiary corporation to its parent for no considera-tion, nominal consideration or in sole consideration of cancellation, surrender or transfer of capital stock between parent and subsidiary corporation.

* * *

(9) Between agent and principal or from a trustee to a beneficiary without actual consideration.


The July 22, 1996 conveyance of real estate by Wolfhead Sportsman's Club, Inc., to Crandon International Off-Road Raceway Association, Inc., is not exempt from the real estate transfer fee under § 77.25(7) as a conveyance by a subsidiary corporation to its parent corporation.


The case before the Commission involves the July 22, 1996 conveyance of real estate in Forest County, Wisconsin, by Wolfhead Sportsman's Club, Inc. ("Wolfhead"), to Crandon International Off-Road Raceway Association, Inc. ("CIORA"). On a Real Estate Transfer Return filed with the deed, exemption from the transfer fee was claimed on the basis that the conveyance was a "Deed Between Related Corporations". Both entities were nonprofit, nonstock corporations organized under Wis. Stat. Ch. 181.

The real estate has a racetrack on it. The principal activity of each corporation was to administer and conduct a race now known as the "World's Championship Off-Road Race" ("World's Championship Race"), plus other snowmobile races and off-road vehicle races held at the racetrack. After the real estate conveyance, Wolfhead had no other activities but was not dissolved.

Case law has long held that the burden of showing error in an assessment is on the taxpayer. Failure to present any evidence showing error means that the case must be decided against the taxpayer. Woller v. Department of Taxation, 35 Wis. 2d 227, 233 (1976).

Tax exemptions are matters of legislative grace, and an entity claiming an exemption must bring itself within the express terms of the exemption. Ramrod, Inc. v. Department of Revenue, 64 Wis. 2d 499, 504 (1974).

Petitioner claims exemption from the transfer fee under Wis. Stat. § 77.25(7) as a transfer by a subsidiary corporation (Wolfhead) to its parent (CIORA).(1) However, petitioner has offered no evidence that Wolfhead was CIORA's subsidiary on the July 22, 1996 conveyance date. They were two independent, nonstock corporations with identical members, and Wolfhead had no activities after the transfer. None of these factors, or any others, established a parent-subsidiary relationship between the two corporations.

Significantly, on the July 22, 1996 conveyance date, Wisconsin law did not permit a parent-subsidiary relationship between nonstock corporations organized under Ch. 181. This corporate relationship was first authorized by 1997 Wisconsin Act 79, Sec. 48, creating Wis. Stat. § 181.1104, effective on January 1, 1999. The law was not retroactive and was clearly not in effect on the July 22, 1996 real estate transfer date.

Petitioner also asserts that, by virtue of the 1996 real estate conveyance, Wolfhead "became the equivalent of a subsidiary of CIORA." (Petitioner's Initial Brief p. 2.) Petitioner claims that this resulted from Wolfhead having no activities and being a mere corporate shell after the transfer. Petitioner further claims that even if this is not so, a parent-subsidiary relationship was intended, and petitioner requests that the Commission restructure the entities by exercising its equitable powers. Again, petitioner offers no evidence of any intent.

However, Wolfhead's becoming an inactive corporation, with no activities, did not automatically make it a subsidiary of CIORA. Nor can this commission make it so. The Commission has the powers and duties bestowed upon it by the legislature. See, Fiedler Foods v. Rev. Dept., 142 Wis. 2d 722 (1987) (citing State v. ILHR Dept., 77 Wis. 2d 126 (1977)). The Commission does not have equity powers to do as petitioner suggests. "With a few irrelevant exceptions [not involved here], the only relief the commission can grant a taxpayer is tax relief." Hogan, et al. v. WDOR, (CCH) Wis. Tax Rptr., p. 15,477, ¶ 203-336, n. 10 (WTAC 1992) (corrected May 18, 1992 and June 17, 1992).



That respondent's action on petitioner's petition for redetermination is affirmed.

Dated at Madison, Wisconsin, this 22nd day of June, 2000.



Mark E. Musolf, Chairperson


Don M. Millis, Commissioner


Thomas M. Boykoff, Commissioner


July 19, 2000 Appealed to Dane County Circuit Court(00CV1948)

1 The other provisions in this exemption statute are not pertinent to this case.