Tax 11.86(4) (4)Equipment charges.
Tax 11.86(4)(a)(a) The taxable receipts from a contract to construct or repair an overhead utility facility which is tangible personal property may not be reduced by the amount of hourly charges for the use of equipment.
Tax 11.86(4)(b) (b) The charges for the rental of equipment used in the construction or repair of a utility line to a utility are taxable.
Tax 11.86 Note Note: See s. Tax 11.29 (5) for more information.
Tax 11.86(5) (5)Nontaxable services.
Tax 11.86(5)(a)(a) The sales price received from tree and shrub trimming services for a utility for the purpose of keeping the overhead transmission and distribution lines free from interference from nearby trees and shrubs or inaccessible to children is not taxable under s. 77.52 (2) (a) 20., Stats.
Tax 11.86(5)(b) (b) The sales price received under a separate contract for tree trimming and line clearing in connection with the construction of a new utility line is not taxable.
Tax 11.86(5)(c) (c) The sales price received from a separate charge for removing an existing utility line is not taxable.
Tax 11.86(6) (6)Landscaping services. The sales price received from landscaping and lawn maintenance services is taxable. Except as provided in sub. (5) (a) and (b), landscaping and lawn maintenance services include:
Tax 11.86(6)(a) (a) Landscape planning and counseling.
Tax 11.86(6)(b) (b) Lawn and garden services, such as planting, mowing, spraying, and fertilizing.
Tax 11.86(6)(c) (c) Shrub and tree services.
Tax 11.86(6)(d) (d) Spreading topsoil and installing sod or planting seed where trenches have been dug or sump pump, transmission, and distribution lines have been buried in residential, business, commercial, and industrial locations, cemeteries, golf courses, athletic fields, stadiums, parking lots, and other areas, and along highways, streets, and walkways.
Tax 11.86 Note Note: Section Tax 11.86 interprets ss. 77.51 (20), 77.52 (2) (a) 10., 11. and 20., 86.16 and 182.017, Stats.
Tax 11.86 Note Note: The interpretations in s. Tax 11.86 are effective on and after September 1, 1969, except: (a) Underground utility facilities were determined not to be tangible personal property, effective September 1, 1970; (b) Landscaping services described in sub. (6) became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981; (c) The Wisconsin Tax Appeals Commission decision in Capital City Tree Experts, Inc., dated June 19, 1987, later modified by stipulation and order of the Circuit Court of Dane County dated September 21, 1987, held that the service of trimming trees on a utility right-of-way to prevent interference and to make inaccessible to children is not a taxable landscaping service; and (d) 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 11.86 History History: Cr. Register, November, 1978, No. 275, eff. 12-1-78; am. (4) (a) and cr. (5), Register, September, 1984, No. 345, eff. 10-1-84; r. and recr., Register, June, 1991, No. 426, eff. 7-1-91; emerg. r. and recr. (6), eff. 5-18-97; r. and recr. (6), Register, October, 1997, No. 502, eff. 11-1-97; correction in (6) made under s. 13.93 (2m) (b) 1., Stats., Register, May, 1999, No. 521; EmR0924: emerg. am. (1) (a), (b), (2) (a), (3), (4), (5), (6) (intro.), (b) and (d), eff. 10-1-09; CR 09-090: am. (1) (a), (b), (2) (a), (3), (4), (5), (6) (intro.), (b) and (d) Register May 2010 No. 653, eff. 6-1-10.
Tax 11.87 Tax 11.87 Prepared food, food and food ingredients, and soft drinks.
Tax 11.87(1)(1) Definitions. In this section:
Tax 11.87(1)(a) (a) "Community-based residential facility" has the meaning in s. 50.01 (1g), Stats.
Tax 11.87(1)(b) (b) "Exempt food" means food and food ingredients that are exempt from the sales and use tax as provided in s. 77.54 (20n), Stats.
Tax 11.87(1)(c) (c) "Hospital" has the meaning in s. 50.33 (2), Stats.
Tax 11.87(1)(d) (d) "Nursing home" has the meaning in s. 50.01 (3), Stats.
Tax 11.87(1)(e) (e) "Personal care" means assistance with the activities of daily living, including eating, dressing, bathing, and ambulation.
Tax 11.87(1)(em) (em) "Prepared food" has the meaning provided in s. Tax 11.51 (4).
Tax 11.87(1)(f) (f) "Retirement home" means a nonprofit residential facility, which as its primary function provides personal care above the level of room and board to retired persons, where 3 or more unrelated adults or their spouses have their principal residence and where support services, including meals from a common kitchen, are available to residents.
Tax 11.87(1)(g) (g) "Sanatorium" means an institution for the recuperation and treatment of the victims of physical or mental disorders.
Tax 11.87(1)(h) (h) "Taxable food" means food and food ingredients, including candy, dietary supplements, prepared food, soft drinks, and alcoholic beverages subject to the sales and use tax.
Tax 11.87 Note Note: See s. Tax 11.51 to determine which items are exempt food and which items are taxable food.
Tax 11.87(2) (2)Taxable sales.
Tax 11.87(2)(a)(a) General. Generally, the sales price from sales of food or beverages shall be taxable when sold by restaurants, cafeterias, lunch counters, coffee shops, snack bars, eating houses, hotels, motels, lodging houses, sororities, fraternities, drug stores, diners, taverns, drive-ins, mobile sales units, clubs, young men's christian associations, young women's christian associations, and similar businesses, organizations, or establishments.
Tax 11.87(2)(b) (b) Sales by generally exempt seller. Certain foods that have been prepared by a seller by cooking, baking, or other methods shall be taxable as "prepared food" even though the seller is principally engaged in the sale of exempt food. Heated food or beverages mean those products, items, or components which have been prepared for sale in a heated condition and which are sold at any temperature which is higher than the air temperature of the room or place where they are sold.
Tax 11.87 Note Example: When a supermarket roasts chickens on a rotisserie and sells them in a heated condition, the roasted chickens are taxable because they are prepared food.
Tax 11.87(2)(c) (c) Prepared food. Sales of prepared food, as provided in s. Tax 11.51 (4), are taxable.
Tax 11.87 Note Examples: 1) Retailer A sells heated food and heated beverages. Heated foods and heated beverages are prepared food and Retailer A's sales of the heated foods and heated beverages are subject to tax.
Tax 11.87 Note 2) Restaurant B sells prepared foods and also other foods and food ingredients, including cartons of milk, cookies, and candy. Restaurant B's sales of prepared foods, based on Restaurant B's prior tax year, are more than 75% of its total sales of food and food ingredients. Restaurant B makes napkins and straws available to the purchaser. Restaurant B's sales of the food and beverages, including the cartons of milk are subject to tax since (a) Restaurant B's sales of prepared foods are more than 75% of Restaurant B's total sales of food and food ingredients, based on Restaurant B's prior tax year; and (b) napkins and straws are available to the purchaser.
Tax 11.87 Note 3) Same as Example 2, except that the seller is a convenience store instead of a restaurant. The answer is the same as in Example 2.
Tax 11.87 Note 4) Convenience Store C sells prepared foods and other foods and food ingredients, including cartons of milk, cookies, soft drinks, and candy. Convenience Store C's sales of prepared foods, based on its prior tax year, are less than 75% of its total sales of food and food ingredients. Convenience Store C makes napkins and straws available to the purchaser, but does not physically hand or give the straws or napkins to the purchaser. Convenience Store C's sales of heated food, heated beverages, soft drinks, and candy are subject to tax, but Convenience Store C's sales of milk and cookies are not subject to tax since (a) Convenience Store C's sales of prepared foods are less than 75% of Convenience Store C's total sales of food and food ingredients, based on its prior tax year; and (b) Convenience Store C makes the napkins and straws available to the purchaser, rather than physically giving or handing the napkins or straws to the purchaser.
Tax 11.87 Note 5) Same as Example 4, except that Convenience Store C's customary practice is to physically give or hand the napkins and straws to the purchaser. Convenience Store C's sales of heated food, heated beverages, soft drinks, candy, cookies, and cartons of milk are subject to tax since Convenience Store C's customary practice is to physically give or hand the napkins and straws to the purchaser. The tax applies to these sales even though Convenience Store C's sales of prepared foods are less than 75% of its total sales of food and food ingredients.
Tax 11.87 Note 6) Grocery Store A has a self-service salad bar. Grocery Store A's sales of prepared foods, based on its prior tax year, are less than 75% of its total sales of food and food ingredients. The plates necessary to receive the food items at the salad bar, along with the forks, knives, and napkins are made available to the purchaser. Grocery Store A's sales of the self-service salad bar items are subject to tax since the plates necessary to receive the food items at the salad bar are made available to the purchaser.
Tax 11.87(2)(d) (d) Caterers. Food and food ingredients, sold by caterers are generally taxable as prepared foods. For purposes of this paragraph:
Tax 11.87(2)(d)1. 1. "Caterer" means a person engaged in the business of preparing meals, food, and drinks, and serving these items on premises designated by a purchaser. When an agreement with a caterer provides that the caterer shall prepare and serve "prepared foods" either for a stated price per meal, for a lump sum, or for a price per plate, the consideration paid shall constitute taxable receipts.
Tax 11.87(2)(d)2. 2. Charges made by a caterer for preparing and serving prepared foods to social clubs, service clubs, fraternal organizations, or other nonexempt purchasers shall constitute exempt sales for resale only if the purchasers are regularly engaged as retailers of prepared foods, hold a seller's permit and give a properly completed exemption certificate to the caterer.
Tax 11.87(2)(d)3. 3. The tax shall apply to items purchased by caterers, including dishes, silverware, linen napkins, tablecloths, punch fountains, coffee silver service, and glassware, which are used by caterers to serve food or beverages to their customers, or used in conjunction with providing catering service, unless customers are charged a separate and optional amount for their use. In addition, items such as tents, public address systems, portable dance floors, portable bars, chairs, and tables may be purchased without tax for resale, if used exclusively for rental purposes by a caterer and if customers are charged a separate and optional amount for their use. Disposable items transferred to customers for a valuable consideration, including paper and plastic cups and plates, plastic eating utensils, napkins, straws, placemats, and toothpicks also may be purchased without tax for resale.
Tax 11.87(2)(e) (e) Vending machine sales. A vending machine operator's receipts from candy, dietary supplements, prepared foods, and soft drinks are taxable.
Tax 11.87(2)(f) (f) Cover and minimum charges. Cover charges or minimum charges, whether listed separately on a bill or collected as an admission fee or fixed charge, which entitle the patron to receive entertainment or to dance as well as to receive prepared food, candy, dietary supplements, soft drinks, or other taxable property, items, or goods, shall be taxable. If prepared food, candy, dietary supplements, soft drinks, or other taxable property, items, or goods are furnished, prepared, or served at locations other than the place of business of the seller or in a room other than a regular dining room and an extra charge is made for the service, the entire amount shall be taxable.
Tax 11.87(2)(g) (g) Tips.
Tax 11.87(2)(g)1.1. A tip which is given directly to an employee in cash or which is added by a customer to a bill which amount is then turned over in full to the employee shall be exempt from the sales tax, if the amount of the tip is wholly in the discretion or judgment of the customer and the customer does not make the payment pursuant to an arrangement made with the seller.
Tax 11.87(2)(g)2. 2. A flat amount or flat percentage, whether designated as a tip or as a service charge, that is added to the price of prepared food or other taxable food or food ingredient under a requirement of the seller or an arrangement made with the seller is a part of the sales price of the prepared food or other taxable food or food ingredient and shall be subject to the tax, regardless of whether the amount or flat percentage may be subsequently paid over in whole or in part by the seller to employees.
Tax 11.87(2)(h) (h) Huber law meals. Prepared foods, candy, dietary supplements, and soft drinks sold to "Huber Law" prisoners by a sheriff or a governmental unit shall be subject to the tax.
Tax 11.87(2)(i) (i) Food and food ingredients to employees. Sales of prepared foods, candy, dietary supplements, and soft drinks to employees by an employer for a consideration shall be taxable. For purposes of this paragraph:
Tax 11.87(2)(i)1. 1. A consideration shall be deemed made for prepared foods, candy, dietary supplements, and soft drinks if any one of the following conditions is met:
Tax 11.87(2)(i)1.a. a. The employee pays cash for the prepared foods, candy, dietary supplements, and soft drinks consumed.
Tax 11.87(2)(i)1.b. b. An actual, specific charge for the prepared foods, candy, dietary supplements, and soft drinks is deducted from an employee's wages.
Tax 11.87(2)(i)1.c. c. An employee receives the prepared foods, candy, dietary supplements, and soft drinks in lieu of cash to bring the employee's compensation up to the legal minimum wage.
Tax 11.87(2)(i)1.d. d. An employee has the option to receive cash for the prepared foods, candy, dietary supplements, and soft drinks not consumed.
Tax 11.87(2)(i)2. 2. In the absence of any of the conditions in subd. 1., a consideration is not deemed made when:
Tax 11.87(2)(i)2.a. a. A value is assigned to prepared foods, candy, dietary supplements, and soft drinks only as a means of reporting the fair market value of an employee's prepared foods, candy, dietary supplements, and soft drinks for FICA, social security, or union contract purposes.
Tax 11.87(2)(i)2.b. b. An employee who does not consume available prepared foods, candy, dietary supplements, and soft drinks has no recourse against the employer for additional cash wages.
Tax 11.87(2)(j) (j) Transportation companies. The sale of prepared foods, candy, dietary supplements, soft drinks, and alcoholic beverages by transportation companies, such as airlines or railways, to a customer while operating in Wisconsin for a specific charge shall be taxable. These prepared foods, candy, dietary supplements, soft drinks, and alcoholic beverages may be purchased by the transportation companies without tax for resale. However, if the sales price of the prepared foods, candy, dietary supplements, soft drinks, or alcoholic beverages is not separately stated to the customer, the tax shall apply to purchases of these prepared foods, candy, dietary supplements, soft drinks, and alcoholic beverages by transportation companies.
Tax 11.87(2)(k) (k) Organizations and their members.
Tax 11.87(2)(k)1.1. When members of an exempt or nonexempt organization meet at a hotel, restaurant, or other place of business where food or drinks are sold and the members pay for the items, the place of business shall be considered selling directly to the members and not to the organization except as provided in subds. 2. and 3. The sales shall, therefore, be subject to the tax, even if the organization collects from the members, pays the seller, and retains a portion of the collections for its own purposes. In these situations, the organization shall be deemed acting for its members' convenience and not purchasing and reselling prepared foods.
Tax 11.87(2)(k)2. 2. When an exempt organization as described in s. 77.54 (9a) (f), Stats., pays for food and beverages out of its own funds and provides the items to members or others without charge, the sale of the items by a retailer to the organization is not subject to the tax. If the exempt organization holds a certificate of exempt status issued by the department, it shall give the retailer the certificate number to claim the exemption.
Tax 11.87(2)(k)3. 3. Sales of food and beverages are not subject to tax even though the employee of an exempt organization as described in s. 77.54 (9a) (f), Stats., pays for the sale of the food or beverages provided all of the following are met:
Tax 11.87(2)(k)3.a. a. The retailer issues the billing or invoice for the food and beverages in the name of the exempt organization.
Tax 11.87(2)(k)3.b. b. The certificate of exempt status number of the exempt organization is entered on the retailer's copy of the invoice or billing document.
Tax 11.87(2)(k)3.c. c. The retailer keeps a copy of the documents described in subd. 3. a. and b.
Tax 11.87(3) (3)Exempt sales. The following food and food ingredients shall be exempt:
Tax 11.87(3)(a) (a) Health care facilities. Food and food ingredients, except soft drinks, fermented malt beverages, and intoxicating liquor, sold by hospitals, sanatoriums, nursing homes, retirement homes, community-based residential facilities as defined in s. 50.01 (1g), Stats., or any facility certified or licensed under ch. 48, Stats. However, if an affiliated organization sells the items, the exemption does not apply.
Tax 11.87 Note Example: If a ladies' auxiliary of a hospital, separate from the hospital, operates a coffee shop on the hospital premises, although the ladies' auxiliary is a nonprofit organization, the prepared food and drinks sold at the coffee shop are taxable.
Tax 11.87(3)(b) (b) "Meals on wheels." Prepared food sold to the elderly or handicapped by persons providing "mobile meals on wheels."
Tax 11.87(3)(c) (c) Institutions of higher education. Food and food ingredients furnished in accordance with any contract or agreement or paid for to such institution through the use of an account of such institution, by a public or private institution of higher education to any of the following:
Tax 11.87(3)(c)1. 1. An undergraduate student, a graduate student, or a student enrolled in a professional school if the student is enrolled for credit at the public or private institution of higher education and if the food and food ingredients are consumed by the student.
Tax 11.87(3)(c)2. 2. A national football league team.
Tax 11.87(3)(d) (d) Groceries. Sales of food and food ingredients, except candy, dietary supplements, prepared foods, and soft drinks are exempt from tax under s. 77.54 (20n), Stats. This includes sales of prepackaged ice cream, ice milk, or sherbet in any size container and also of ice cream, ice milk, sherbet, or yogurt as cones, sundaes, sodas and shakes.
Tax 11.87 Note Note: See s. Tax 11.51 for more information.
Tax 11.87(3)(e) (e) Supervised boarding facilities. The portion of the monthly fee charged by a supervised boarding facility for low income adults who are receiving or are eligible for social security, supplemental security income, veterans administration, or other disability and retirement benefits reflecting the value of prepared foods provided.
Tax 11.87(3)(f) (f) Food and food ingredients to employees. Purchases by restaurants of candy, soft drinks, dietary supplements, prepared foods, and disposable products that are transferred with such items, are exempt from sales and use tax if the restaurant transfers such items to its employees during the employee's work hours for no consideration.
Tax 11.87(3)(g) (g) Vegetable oil and animal fat. Sales of vegetable oil and animal fat to an individual that will be converted to motor vehicle fuel for use in that individual's personal motor vehicle if the individual does not sell any of that fuel during the year. This exemption only applies if the motor vehicle fuel is exempt from the motor vehicle fuel tax under s. 78.01 (1), Stats.
Tax 11.87(4) (4)Specialty situations.
Tax 11.87(4)(a)(a) Specialty items. A seller engaged principally in the sale of taxable food may also be engaged in the sale of exempt food.
Tax 11.87 Note Example: A restaurant which specializes in serving pancakes may also sell containers of its specially prepared syrup to take home. Sales of this syrup are not taxable.
Tax 11.87(4)(b) (b) Fund-raising events. When a charge to a customer bears little or no relationship to the actual value of taxable food and food ingredients and beverages received, the tax shall be based on the reasonable value of the taxable food and food ingredients and other tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services received by the customer. The retailer is responsible for determining the reasonable value and showing that the charge to the patron bears little or no relationship to the actual value received.
Tax 11.87 Note Examples: 1) Company A puts on a fundraising dinner. Individuals wishing to attend the dinner must pay $300 per person to attend. The actual value of the dinner received is $50. Company A may compute the tax that must be remitted on the $50 since that is the actual value of the dinner received. The actual value in this example is based on the amount that an individual would be required to pay for this dinner if it was not a fundraising dinner.
Tax 11.87 Note 2) Company B puts on a fundraising dinner and dance. Individuals wishing to attend the dinner and dance must pay $300 per person to attend. The actual value of the dinner received is $50 and the actual value of admission to the dance is $25. Company B may compute the tax that must be remitted on the $75 since that is the actual value of the dinner and admission to the dance that is received. The actual values in this example are based on the amount that an individual would be required to pay for the dinner and to attend the dance if this was not a fundraising dinner and dance.
Tax 11.87 Note Note: Section Tax 11.87 interprets ss. 77.51 (10m), (12m), (14) (b) and (f), and (15b), and 77.54 (20n) and (20r), Stats.
Tax 11.87 Note Note: The interpretations in s. Tax 11.87 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Sales of meals by retirement homes became exempt April 25, 1978, pursuant to Chapter 250, Laws of 1977; (b) Sales of meals by certain health care facilities off their premises became taxable October 1, 1991, pursuant to 1991 Wis. Act 39; (c) Sales of meals by community-based residential facilities on their premises became exempt June 1, 1994, pursuant to 1993 Wis. Act. 332; (d) The exemption for certain meals, food, food products and beverages furnished by institutions of higher education was revised to apply only if the items are furnished to an undergraduate student, a graduate student or a student enrolled in a professional school if the student is enrolled for credit at that institution and if the items are consumed by that student, or the items are furnished to a national football league team, effective for contracts or agreements entered into on or after October 14, 1997, pursuant to 1997 Wis. Act 27, and further revised to include certain meals, food, food products or beverages paid for to an institution of higher education through the use of an account of the institution, if the items are furnished by the institution, effective December 31, 1997, pursuant to 1997 Wis. Act 41; (e) Sales of certain food combinations became exempt effective August 1, 1997, pursuant to 1997 Wis. Act 237; (f) The exemption for food and food ingredients was revised to exempt all food and food ingredients except candy, dietary supplements, prepared food and soft drinks effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (g) 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 11.87 History History: Cr. Register, March, 1978, No. 267, eff. 4-1-78; renum. (1) (b) to be (1) (g), cr. (1) (b) to (f), am. (3) (a), (b) and (c), Register, January, 1983, No. 325, eff. 2-1-83; am. (2) (d) 3., (g) and (i), Register, June, 1983, No. 330, eff. 7-1-83; am. (3) (d), Register, September, 1984, No. 345, eff. 10-1-84; correction in (1) (b) made under s. 13.93 (2m) (b) 7., Stats; am. (1) (intro.) and (f), (2) (a), (b), (c), (d) 1., (g), (j) and (k), (3) (a) and (4) (a), cr. (2) (k) 3., Register, June, 1991, No. 426, eff. 7-1-91; am. (2) (d) (intro.), 3., (f), (i) (intro.), 1. intro. and 2. intro., (k) 2., (3) (a), (b) and (d), cr. (3) (e), Register, December, 1992, No. 444, eff. 1-1-93; renum. (1) (a) to (g) to be (b) to (h) and am. (1) (b), cr. (1) (a), am. (3) (a), (d) and (e), Register, December, 1996, No. 492, eff. 1-1-97; am. (1) (b), (2) (c) and (3) (a), renum. (1) (e) and (f) to be (1) (f) and (e), r. and recr. (3) (c), Register, October, 1999, No. 526, eff. 11-1-99; EmR0924: emerg. am. (title), (1) (b), (e), (h), (2) (a), (b), (d), (f), (g) 2., (h) to (k) 1., (3) (intro.), (a), (b), (c) 1., 2., (d), (e) and (4) (b), cr. (1) (em) and (3) (f), r. and recr. (2) (c), (e) and (3) (c) (intro.), eff. 10-1-09; CR 09-090: am. (title), (1) (b), (e), (h), (2) (a), (b), (d), (f), (g) 2., (h) to (k) 1., (3) (intro.), (a), (b), (c) 1., 2., (d), (e) and (4) (b), cr. (1) (em) and (3) (f), r. and recr. (2) (c), (e) and (3) (c) (intro.) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (a), (j), (3) (a) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: cr. (3) (g), am. (4) (b), cr. (4) (b) (Examples) Register August 2012 No. 680, eff. 9-1-12.
Tax 11.88 Tax 11.88 Manufactured homes, mobile homes, modular homes, and recreational vehicles.
Tax 11.88(1) (1) Definitions. For purposes of this section:
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