William Jakel v. Wisconsin Department of Revenue
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COURT OF APPEALS DECISION DATED AND FILED April 22, 2004 Cornelia G. Clark Clerk of Court of Appeals Appeal No. 03-0992 STATE OF WISCONSIN NOTICE This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See WIS. STAT. § 808.10 and RULE 809.62. Cir. Ct. No. 02CV002086 IN COURT OF APPEALS DISTRICT IV WILLIAM JAKEL AND KATHLEEN JAKEL, PETITIONERS-APPELLANTS, V. WISCONSIN DEPARTMENT OF REVENUE, RESPONDENT-RESPONDENT. APPEAL from an order of the circuit court for Dane County: MARYANN SUMI, Judge. Affirmed. Before Deininger, P.J., Vergeront and Lundsten, JJ. ¶1 PER CURIAM. William and Kathleen Jakel appeal the circuit court s order affirming a decision of the Wisconsin Tax Appeals Commission.1 1 We review the decision of the agency, not the circuit court. See Wisconsin Cent. Ltd. v. PSC, 170 Wis. 2d 558, 567, 490 N.W.2d 27 (Ct. App. 1992). No. 03-0992 The issue is whether termination payments William Jakel received from State Farm Insurance after he retired are taxable as capital gains or as ordinary income. We affirm. ¶2 After briefing for this appeal was complete, the Seventh Circuit Court of Appeals decided a case that directly addresses the issue before us, Baker v. Commissioner of Internal Revenue, 338 F.3d 789 (7th Cir. 2003). Like this case, Baker involved a retired State Farm insurance agent who treated termination payments as capital gains, rather than as ordinary income, and discussed the same legal issue: whether the termination payments were capital gains because they were consideration for the sale of a capital asset the goodwill of the agent s business. Id. at 792. The Baker court concluded that the payments were ordinary income because the goodwill of a business can only be transferred with other assets of the business with which it is connected, and here the agent had no other assets to sell.2 Id. at 793-94. ¶3 It has long been established that Wisconsin courts consider federal court rulings on issues of taxation persuasive where, as here, the Wisconsin and federal statutes are similar in language and operation. See Department of Taxation v. Siegman, 24 Wis. 2d 92, 97, 128 N.W.2d 658 (1964). Here, the commission s analysis, which we give at least due weight,3 paralleled the analysis 2 The Jakels concede that the issue in Baker v. Commissioner of Internal Revenue, 338 F.3d 789 (7th Cir. 2003), which was pending before the Seventh Circuit during briefing, is identical to this case. 3 We give due weight to the commission s decision when it has previously decided an issue at least once. See Zignego Co., Inc. v. DOR, 211 Wis. 2d 819, 825, 565 N.W.2d 590 (Ct. App. 1997). The commission has also decided that termination payments received by a State Farm agent were taxable as ordinary income, not as capital gains, for the sale of goodwill in Gudal v. DOR, Wis. Tax Rptr. (CCH) ¶400-541 (Apr. 19, 2001). 2 No. 03-0992 in Baker. We believe the analysis employed by both the commission and by the Baker court is a reasonable reading of the case law and statutes. We also conclude that the Jakels have not proffered a more reasonable interpretation than that espoused by the commission. See Zignego Co., Inc. v. DOR, 211 Wis. 2d 819, 825-26, 565 N.W.2d 590 (Ct. App. 1997) (declining to overturn an agency decision accorded due weight deference if the decision is reasonable, and no more reasonable interpretation is available). Therefore, we affirm. By the Court. Order affirmed. This opinion will not be published. 809.23(1)(b)5. 3 See WIS. STAT. RULE
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