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Tax 11.12 Note Note: The interpretations in s. Tax 11.12 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Semen became exempt effective July 22, 1971, pursuant to Chapter 64, Laws of 1971; (b) Baling wire and twine became exempt effective December 24, 1975, pursuant to Chapter 146, Laws of 1975; (c) The exemption for electricity for residential use and use in farming and for fuel oil, propane, coal, steam or wood for residential use became effective July 1, 1979, pursuant to Chapter 1, Laws of 1979; (d) The definition of "feed lot" became effective December 1, 1981; (e) Farm livestock medicine, milk house supplies and animal bedding became exempt effective July 1, 1986, pursuant to 1985 Wis. Act 29; (f) The definition of "exclusively used" became effective October 1, 1989, pursuant to 1989 Wis. Act 31; (g) The farm machinery exemption was revised effective October 1, 1989, pursuant to 1989 Wis. Act 31; (h) The exemption for farm fuel for items other than machines became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (i) The exemption for electricity sold for use in farming was expanded to include sales of electricity during the entire year, effective for sales on or after May 1, 2000, pursuant to 1999 Wis. Act 9; (j) The expansion of the exemption for tangible personal property consumed in farming and the addition of "silviculture" to the definition of farming became effective July 1, 2007, pursuant to 2005 Wis. Act 366; and (k) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.
Tax 11.12 History History: Cr. Register, March, 1978, No. 267, eff. 4-1-78; am. (2) (intro.), (4) (a) 1., (4) (b) (intro.) and (5) (c), renum. (2) (a) to be (2) (a) 1. and am., cr. (2) (a) 2., Register, November, 1981, No. 311, eff. 12-1-81; am. (2) (a) 1., (4) (b) 5., 6. c. and 9., Register, June, 1983, No. 330, eff. 7-1-83; am. (4) (a) 1., 3. and 5., and (5) (c), cr. (5) (d), Register, September, 1984, No. 345, eff. 10-1-84; am. (4) (a) (intro.) and 7., (4) (b) 6. b., Register, July, 1987, No. 379, eff. 8-1-87; am. (2) (a) 1. and (4) (b) 7., cr. (7), Register, November, 1988, No. 395, eff. 12-1-88; renum. (2) (a) to (d) and (4) (b) 7. and 8. to be (2) (c), (g), (f), (b), (h) and (e), cr. (2) (a), and (d) and (i), am. (4) (b) (intro.) and 3. b., Register, June, 1990, No. 414, eff. 7-1-90; cr. (2) (b), (4) (a) 2., 4. c. and d. and 5. a., am. (1), (4) (a) (intro.), (4) (b) 3. a., 4. b. and 6. b. and d., renum. (2) (b) to be (2) (c), renum. (2) (c) 1. and 2. to be (2) (d) and (g) and am. (g), renum. (2) (d) to (g) to be (2) (e), (f), (h) and (i) and am. (f), renum. (2) (h) and (i) to be (2) (j) and (k), renum. (4) (a) 2. to be 3., and am., renum. (4) (a) 3. and 4. a. and b. to be (4) (a) 4. and 5. b. and c., and am. 4. a. and b. and 5. b. and c., renum. (4) (a) 5., 6., and 7. to be (4) (a) 6., 7. and 8. and am. 7. b. and 8., Register, June, 1991, No. 426, eff. 7-1-91; am. (2) (d), (e), (i) and (3), (4) (a) (intro.), 3., 5. c., 6., 7. c., (b) (intro.), 4. a., 5. and 6. c., renum. (4) (b) 9. to be (4) (b) 7., r. (5) (d), Register, April, 1993, No. 448, eff. 5-1-93; am. (1), (3), (4) (a) (intro.), 7. c. and (b) (intro.), 1. and 6., a., b., c., and e., (5), (6) (b) 1. and (7) (b), r. (4) (a) 5. c., renum. (2) (d), (e) and (f) to be (2) (f), (d) and (e) and am. (e) and (f), Register, May, 1999, No. 521, eff. 6-1-99; EmR0924: emerg. am. (title), (1), (2) (intro.), (d), (f), (4) (a) (intro.), 1., 3., 4. b. to d., 5. b., 7. a., 8., (b) (intro.), 2., 6. c., 7., (5) (a), (6) (a) 1., (b) 1., and (7) (intro.), r. and recr. (2) (k), (4) (a) 6., (6) (b) (title) and (intro.), cr. (4) (a) 2g., 2r., (c) and (d), r. (4) (a) 7. c., (b) 6. e., and (7) (a), renum. (7) (b) to (e) to be (7) (a) to (d), eff. 10-1-09; CR 09-090: am. (title), (1), (2) (intro.), (d), (f), (4) (a) (intro.), 1., 3., 4. b. to d., 5. b., 7. a., 8., (b) (intro.), 2., 6. c., 7., (5) (a), (6) (a) 1., (b) 1., and (7) (intro.), r. and recr. (2) (k), (4) (a) 6., (6) (b) (title) and (intro.), cr. (4) (a) 2g., 2r., (c) and (d), r. (4) (a) 7. c., (b) 6. e., and (7) (a), renum. (7) (b) to (e) to be (7) (a) to (d) and am. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (a), (c), (d), (f), (h), (i), (k) 1., 2. e., (4) (a) (intro.), 3., 4. b., d., 5. a., 6., 7. b., (b) 2., 5., (5), (6) (a) 2., (b) (intro.) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (3) Register August 2012 No. 680, eff. 9-1-12.
Tax 11.13 Tax 11.13 Direct pay.
Tax 11.13(1)(1)Definitions. In this section:
Tax 11.13(1)(a) (a) "Continuous" use of a direct pay permit means that the purchase without tax applies to the purchase being made from the retailer and subsequent purchases from that retailer and is considered a part of each order given to the retailer.
Tax 11.13(1)(b) (b) "Single purchase" use of a direct pay permit means that the purchase without tax applies only to the purchase being made from a retailer for which the direct pay permit is given.
Tax 11.13(2) (2)General.
Tax 11.13(2)(a)(a) The holder of a direct pay permit may purchase tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services, except those in sub. (6) (a) and (b), from a retailer without paying Wisconsin sales or use tax to the retailer.
Tax 11.13(2)(b) (b) The direct pay permit holder shall report Wisconsin use tax on the purchase price of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services purchased from a retailer without tax using a direct pay permit if the property, item, good, or service is subject to Wisconsin sales or use tax. The tax shall be reported on the direct pay permit holder's Wisconsin sales tax return for the period in which the taxable storage, use, or consumption first occurs in Wisconsin.
Tax 11.13 Note Note: Purchase price, for purposes of this paragraph, has the meaning specified in s. 77.51 (12m), Stats.
Tax 11.13(3) (3)Issuance.
Tax 11.13(3)(a)(a) The department shall issue a direct pay permit to those applicants who meet the qualifications set forth in s. 77.52 (17m) (b), Stats.
Tax 11.13(3)(b) (b) Persons who wish to obtain a direct pay permit shall apply to the department using form S-101, "Application for Direct Pay Permit."
Tax 11.13 Note Note: Form S-101 is available by writing to Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8902, Madison WI 53708-8902; calling (608) 266-2776; or downloading it from the department's web site, www.revenue.wi.gov.
Tax 11.13(3)(c) (c) A direct pay permit shall be effective for purchases made beginning on the first day of the applicant's taxable year, for Wisconsin franchise or income tax purposes, after the permit is issued.
Tax 11.13 Note Example: A person's taxable year begins July 1 for Wisconsin franchise or income tax purposes. The person files an application for a direct pay permit with the department on January 1, 2009. The person is issued a direct pay permit which is effective for purchases made on or after July 1, 2009.
Tax 11.13(4) (4)Revocation or cancellation.
Tax 11.13(4)(a)(a) A direct pay permit issued by the department may be used indefinitely until it is revoked by the department or cancelled by the holder.
Tax 11.13(4)(b) (b) A permit may be cancelled by the holder by mailing the permit to the department for cancellation. A letter shall be enclosed with the permit, indicating the holder's intention to cancel the permit.
Tax 11.13 Note Note: The permit to be cancelled and letter should be mailed to Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8902, Madison WI 53708-8902.
Tax 11.13(4)(c) (c) The cancellation of a direct pay permit shall become effective immediately following the last day of the holder's taxable year in which the permit is received by the department.
Tax 11.13(5) (5)Using direct pay.
Tax 11.13(5)(a)(a) Documentation. A direct pay permit holder shall provide one of the following to a retailer when purchasing without paying tax to the retailer using a direct pay permit:
Tax 11.13(5)(a)1. 1. A copy of its direct pay permit. The direct pay permit holder shall also provide to the retailer a written statement as to whether the direct pay permit is for a single purchase or is continuous.
Tax 11.13(5)(a)2. 2. A form S-211, "Wisconsin Sales and Use Tax Exemption Certificate," or other written document, either of which contains all of the following:
Tax 11.13(5)(a)2.a. a. The name and address of the direct pay permit holder.
Tax 11.13(5)(a)2.b. b. A statement that the direct pay permit holder is purchasing without Wisconsin sales or use tax using a direct pay permit.
Tax 11.13(5)(a)2.c. c. The direct pay permit holder's direct pay permit number.
Tax 11.13(5)(a)2.d. d. The effective date of the direct pay permit.
Tax 11.13(5)(a)2.e. e. A statement as to whether the use of the direct pay permit is for a single purchase or is continuous.
Tax 11.13(5)(a)2.f. f. The signature of the direct pay permit holder.
Tax 11.13(5)(b) (b) Continuous use.
Tax 11.13(5)(b)1.1. If a direct pay permit holder indicates in writing to a retailer that the use of the direct pay permit is continuous, that purchase and all subsequent purchases from the retailer, except those in sub. (6) (a) and (b), shall be made without paying Wisconsin sales or use tax to the retailer using the direct pay permit, unless the continuous use is voided by the direct pay permit holder. The direct pay permit holder may void the continuous use of its direct pay permit by furnishing the retailer a letter indicating that continuous use no longer applies.
Tax 11.13(5)(b)2. 2. If the use of a direct pay permit is continuous, it is necessary for the direct pay permit holder to provide the documentation in par. (a) to a retailer only at the time the direct pay permit holder begins making purchases without paying tax to that retailer using the direct pay permit, rather than at the time of each purchase.
Tax 11.13(5)(b)3. 3. While the use of a direct pay permit is continuous, all purchases from a retailer, except those in sub. (6) (a) and (b), shall be made using the direct pay permit even though an exemption certificate requiring different documentation may apply.
Tax 11.13 Note Example: On October 1, 2009, Company A begins using its direct pay permit when purchasing tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., from Company B. Company A provides a written statement to Company B that the use of its direct pay permit will be continuous. All purchases of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, except those described in sub. (6) (a) and (b), by Company A from Company B on or after October 1, 2009, while continuous use is in effect, must be made without paying sales or use tax to the retailer using the direct pay permit. While continuous use of a direct pay permit is in effect, no other exemption certificate may be used.
Tax 11.13(5)(c) (c) Single purchase. If a direct pay permit holder uses its direct pay permit for a single purchase, any subsequent purchase by the direct pay permit holder from that retailer is subject to Wisconsin sales or use tax unless the direct pay permit holder provides the information in par. (a) for that purchase or that purchase is otherwise exempt from tax.
Tax 11.13(5)(d) (d) Retailer records. The retailer shall keep the information provided by the direct pay permit holder under par. (a) on file as authorization for the direct pay permit holder to make purchases without paying tax to the retailer.
Tax 11.13(6) (6)Services and property not eligible for direct pay.
Tax 11.13(6)(a)(a) Services. A direct pay permit holder shall pay Wisconsin sales or use tax to a retailer on the retailer's sales of services to the direct pay permit holder under the following Wisconsin statutes:
Tax 11.13(6)(a)1. 1. Section 77.52 (2) (a) 1., Stats., relating to furnishing rooms or lodging.
Tax 11.13(6)(a)2. 2. Section 77.52 (2) (a) 2., Stats., relating to admissions to amusement, athletic, entertainment, or recreational events, devices, or facilities.
Tax 11.13(6)(a)3. 3. Section 77.52 (2) (a) 5. and 5m., Stats., relating to internet access services; prepaid calling services and intrastate, interstate, and international telecommunications services, except interstate 800 services; ancillary services, and telecommunications message services.
Tax 11.13(6)(a)4. 4. Section 77.52 (2) (a) 9., Stats., relating to parking.
Tax 11.13(6)(a)5. 5. Section 77.52 (2) (a) 12., Stats., relating to cable television system services.
Tax 11.13(6)(a)6. 6. Section 77.52 (2) (a) 20., Stats., relating to landscaping services.
Tax 11.13(6)(b) (b) Property. A direct pay permit holder shall pay Wisconsin sales or use tax to a retailer on the retailer's sale, lease, license, or rental to the direct pay permit holder of the following tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.:
Tax 11.13(6)(b)1. 1. Tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred to a purchaser in connection with the sale of landscaping services subject to tax under s. 77.52 (2) (a) 20., Stats.
Tax 11.13(6)(b)2. 2. Motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), Stats., trailers, semitrailers, all-terrain vehicles, or aircraft.
Tax 11.13(6)(b)3. 3. Candy as defined in s. 77.51 (1fm), Stats., soft drinks as defined in s. 77.51 (17w), Stats., dietary supplements as defined in s. 77.51 (3n), Stats., prepared foods as defined in s. 77.51 (10m), Stats., and alcoholic beverages as defined in s. 77.51 (1b), Stats.
Tax 11.13(6)(c) (c) Exemptions. Although not eligible to be purchased without paying Wisconsin sales or use tax to a retailer using a direct pay permit, the taxable services and tangible personal property, and items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., described in pars. (a) and (b) may be purchased without Wisconsin sales or use tax if a resale, farming, manufacturing, or other exemption applies. Documentation is required to purchase without tax, as provided in s. Tax 11.14.
Tax 11.13(6)(d) (d) Penalty for prohibited or incorrect use. A person who uses a direct pay permit in a manner that is prohibited by or inconsistent with the Wisconsin sales and use tax laws or who provides incorrect information to a seller or certified service provider related to their direct pay permit shall be subject to a penalty of $250 for each invoice or bill of sale related to the prohibited or inconsistent use of their direct pay permit as provided in s. 77.60 (13), Stats.
Tax 11.13(7) (7)Retailer's liability — permit revoked or cancelled. A retailer is not liable for sales or use tax on the sales price from the sale of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, except those described in sub. (6) (a) and (b), to a person who has provided the retailer with the appropriate information under sub. (5) (a), until the earlier of the following:
Tax 11.13(7)(a) (a) The date the retailer is notified by the direct pay permit holder or the department that the holder's direct pay permit has been revoked by the department. A direct pay permit is considered revoked on the date the holder receives the department's notice of revocation.
Tax 11.13(7)(b) (b) The last day of the direct pay permit holder's taxable year in which the retailer is notified by the holder or the department that the holder's direct pay permit is being cancelled by the holder as provided in sub. (4) (b).
Tax 11.13 Note Note: Section Tax 11.13 interprets ss. 77.52 (17m) and 77.60 (13), Stats.
Tax 11.13 Note Note: The change of the term "gross receipts" to "sales price," the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., and the penalty for prohibited or inconsistent use of a direct pay permit became effective October 1, 2009, pursuant to 2009 Wis. Act 2.
Tax 11.13 History History: Cr. Register, June, 1995, No. 474, eff. 7-1-95; CR 02-128: am. (1) (a), (3) (b), (5) (a) 2. (intro.) and (b) 3., Register July 2003 No. 571, eff. 8-1-03; EmR0924: emerg. am. (2) (a), (b), (6) (b) (intro.), 1., 2., (c), and (7) (intro.), cr. (6) (a) 3m., r. and recr. (6) (b) 3., r. (6) (b) 4., eff. 10-1-09; CR 09-090: am. (2) (a), (b), (6) (b) (intro.), 1., 2., (c), and (7) (intro.), cr. (6) (a) 3m. and (d), r. and recr. (6) (b) 3., r. (6) (b) 4. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (6) (a) 2., 3., (b) (intro.), 2., 3., (c), r. (6) (a) 3m. Register November 2010 No. 659, eff. 12-1-10.
Tax 11.14 Tax 11.14 Exemption certificates.
Tax 11.14(1) (1)Statutes. The sales tax status of exemption certificates is contained in s. 77.52 (13) to (17), Stats., and the use tax status of exemption certificates is contained in s. 77.53 (10) to (13), Stats.
Tax 11.14(2) (2)General.
Tax 11.14(2)(a)(a) Exemption certificates are given to sellers or lessors by purchasers or lessees to verify that a transaction is exempt from Wisconsin sales and use taxes. Sellers and lessors shall exclude from the taxable sales price those transactions for which they have accepted a valid exemption certificate from the purchaser. The following sales and use tax exemption certificates may be used in Wisconsin:
Tax 11.14(2)(a)1. 1. Wisconsin sales and use tax exemption certificate, form S-211. This is a multipurpose form which may be used for any Wisconsin sales and use tax exemption provided by law, except as provided in sub. (14). For direct pay, form S-211 may be used as the document described in s. Tax 11.13 (5) (a) 2. if all of the required information is included on the form S-211.
Tax 11.14(2)(a)2. 2. Construction contract entered into before the effective date of county/stadium tax, form S-207CT-1. This is a certificate which may be used by a contractor to purchase building materials without a county or stadium tax under the circumstances described in sub. (13).
Tax 11.14(2)(a)3. 3. Streamlined Sales and Use Tax Exemption Certificate, SSTGB Form F0003 or Streamlined Sales and Use Tax Exemption Certificate - Wisconsin, Form S-211-SST. These are multistate forms which may be used to claim any sales or use tax exemption provided under Wisconsin law. Since these are multistate exemption certificates, purchasers should use caution when issuing these certificates, since they contain various exemptions that are not applicable in Wisconsin and only apply in other states. Purchasers are responsible for knowing if they qualify for the exemption they are claiming in the state in which the exemption is being claimed. The purchaser will be held liable for any tax, interest, and penalties that result from the purchaser claiming an exemption for which they were not eligible.
Tax 11.14(2)(b) (b) Use of an exemption certificate designed by the department is not required by law. A person may use a substitute exemption certificate if it contains all the essential information relating to the transaction and if it is in a form approved by the department. Paper exemption certificates must be signed by and bear the name and address of the purchaser, the name and address of the seller, a general description of the purchaser's business and the reason for the claimed exemption. An electronic exemption certificate shall contain the same information as a paper exemption certificate, except that a signature is not required.
Tax 11.14(2)(c) (c) If a purchaser provides an exemption certificate indicating that the property, item, good, or service purchased will be used for activities or under circumstances which make the purchase of the property, item, good, or service exempt from the sales tax or for resale, and the property, item, good, or service is subsequently used by the purchaser in a manner that makes the property, item, good, or service ineligible for exemption from tax, the purchaser is liable for payment of the applicable sales or use tax.
Tax 11.14(3) (3)Effect of obtaining certificate.
Tax 11.14(3)(a)(a) Except as provided in par. (b), a seller is relieved of liability for the tax if the seller obtains from the purchaser, prior to the date of the sale or within 90 days after the date of the sale, a fully completed exemption certificate which indicates that the purchaser will use the property or service in a manner that is exempt from Wisconsin sales and use tax.
Tax 11.14(3)(b) (b) A seller is not relieved of its liability to collect and remit the applicable Wisconsin sales or use tax on a sale to a purchaser if any of the following apply:
Tax 11.14(3)(b)1. 1. The seller fraudulently fails to collect the sales or use tax.
Tax 11.14(3)(b)2. 2. The seller solicits the purchaser to claim an unlawful exemption.
Tax 11.14(3)(b)3. 3. The seller accepts an exemption certificate from a purchaser claiming to be an entity that is not subject to sales and use taxes, if both of the following apply:
Tax 11.14(3)(b)3.a. a. The subject of the transaction covered by the exemption certificate is received by the purchaser at the seller's Wisconsin location.
Tax 11.14(3)(b)3.b. b. The exemption certificate clearly and affirmatively indicates that the claimed exemption is not available in Wisconsin.
Tax 11.14 Note Note: All retailers should be familiar with the instructions contained in an exemption certificate.
Tax 11.14(4) (4)Failure to obtain certificate.
Tax 11.14(4)(a)(a) A seller who does not obtain an exemption certificate as provided in sub. (3) (a), shall be relieved from liability for the tax if, no later than 90 days after the sale, the seller captures and maintains all of the following data elements in its accounting system, with respect to the transaction upon which an exemption is being claimed:
Tax 11.14(4)(a)1. 1. Name and business address of the purchaser.
Tax 11.14(4)(a)2. 2. Purchaser's state tax identification number and state of issue. If the purchaser does not have a state tax identification number then the purchaser's federal employer identification number is needed. If the purchaser does not have a federal employer identification number then the purchaser's personal driver's license number and state of issue is needed.
Tax 11.14(4)(a)3. 3. Purchaser's type of business.
Tax 11.14(4)(a)4. 4. The reason for the claimed exemption.
Tax 11.14(4)(b) (b) If a seller does not obtain an exemption certificate as provided in sub. (3) (a) or the relevant data elements provided in par. (a), the seller may, within 120 days after it is requested by the department to substantiate a claimed exemption, either obtain, in good faith, a fully completed exemption certificate from the purchaser; or by some other means provide proof that the transaction was not subject to Wisconsin sales or use tax. If a seller cannot prove that a transaction was exempt by one of these methods, the seller is not relieved from liability for the tax, interest, or penalties.
Tax 11.14(4)(c)1.1. A seller accepts an exemption certificate as provided in sub. (4) (b) in good faith if all of the following apply:
Tax 11.14(4)(c)1.a. a. The exemption claimed was authorized by law on the date of the transaction in the jurisdiction to which the transaction is sourced.
Tax 11.14(4)(c)1.b. b. The exemption could be applicable to the property, item, good, or service being purchased.
Tax 11.14(4)(c)1.c. c. The exemption being claimed is reasonable for the purchaser's type of business.
Tax 11.14(4)(c)2. 2. If a seller obtains the information in subd. 1., the seller is relieved of its liability for the tax unless it is discovered through the audit process that the seller had knowledge or reason to know at the time the information relating to the exemption was provided that the information was materially false or the seller otherwise knowingly participated in an activity intended to purposefully evade the tax that is properly due on the transaction.
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