Tax 11.35(7)(a)(a) A nonprofit organization is not required to hold a seller's permit if its sales are exempt from sales and use taxation by meeting the provisions of sub. (4) (a) and (b). However, an organization required to hold a seller's permit solely for the purpose of conducting bingo games may still qualify for the occasional sales exemption on nonbingo sales if it otherwise qualifies under the provisions of sub. (4) (a) and (b).
Tax 11.35(7)(b) (b) If a nonprofit organization holds a seller's permit in the current year, but intends or believes in good faith that its activities in the following year would qualify as exempt occasional sales except for its holding of a seller's permit, it may request inactivation of its seller's permit and its sales in the following year will qualify as exempt occasional sales provided it meets the standards in sub. (4) (a) and (b) in that following year.
Tax 11.35 Note Example: A nonprofit organization has held seven 3-day events for a total of 21 days each year for the past 5 years. Receipts were always over $25,000, and there were no admissions to entertainment events. One event has lost money for the past 2 years. The organization intends to discontinue that event for the following year; thus, it may anticipate coming under the 20-day standard and request inactivation of its seller's permit in good faith.
Tax 11.35(7)(c) (c) If a nonprofit organization did not hold or was not required to hold a seller's permit or requested inactivation of its seller's permit in good faith but later, due to unforeseen circumstances, exceeds the standards, only the sales occurring after the standards are exceeded do not qualify as exempt occasional sales and are subject to tax.
Tax 11.35 Note Examples: 1) A church held 18 days of events or sales in the current year. Receipts for the events equaled $30,000 and no entertainment was involved. The church expects to hold the same 18 days of events in the following year. It requests inactivation of its seller's permit. However, in the middle of the following year, the church garage is destroyed by fire. An additional 4-day event is held to raise funds to help replace the garage. Only the receipts from days 21 and 22, the days exceeding the standard, are subject to sales tax.
Tax 11.35 Note 2) A garden club is organized in the current year. The garden club is not required to hold a seller's permit and does not apply for one. In the following year, the garden club holds 22 days of events with taxable receipts from the events of $30,000. Only receipts from days 21 and 22, the days exceeding the standard, are subject to sales tax.
Tax 11.35(7)(d) (d) If a nonprofit organization has sales in the current year and then requests inactivation of its seller's permit, sales made in the current year before requesting inactivation of the seller's permit do not qualify as exempt occasional sales, even if the standards for exempt occasional sales in sub. (4) (a) and (b) are met.
Tax 11.35 Note Example: A nonprofit organization holds 15 days of sales in the current year. The organization holds a seller's permit, files sales and use tax returns and pays sales tax on all its receipts in the current year. At the end of the current year, the organization realizes that its sales would have qualified as exempt occasional sales except for its holding of a seller's permit. The organization may not claim a refund of taxes paid while it held a seller's permit.
Tax 11.35(8) (8)When sales do not qualify for occasional sales exemption. If a nonprofit organization has sales of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, and the sales do not qualify as exempt occasional sales, it is required to obtain a seller's permit and collect and remit sales tax on its taxable sales.
Tax 11.35 Note Note: To obtain a seller's permit, a nonprofit organization shall file Wisconsin form BTR-101, Application for Business Tax Registration, with the department. Form BTR-101 may be obtained from any department of revenue office, or by writing or calling Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902, telephone (608) 266-2776.
Tax 11.35 Note Note: The interpretations contained in s. Tax 11.35 became effective January 1, 1989, pursuant to 1987 Wis. Act 399; except that (a) the $25,000 receipts standard and the $500 entertainment standard became effective January 1, 2006 pursuant to 2005 Wis. Act 25 and (b) 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 11.35 Note Note: Section Tax 11.35 interprets ss. 77.51 (9) and 77.54 (7m), Stats.
Tax 11.35 History History: Cr. Register, June, 1991, No. 426, eff. 7-1-91; renum. (1) and (2) to be (2) and (1) and am. (2) (b), am. (3), (5) (b) and (6) (a), Register, October, 1997, No. 502, eff. 11-1-97; EmR0924: emerg. am. (2) (b), (3), (4) (c), (5) (a), (b), (6) (b), (7) (d) and (8), r. (2) (c), renum. (2) (d) to be (2) (c) and am., cr. (2) (d), eff. 10-1-09; CR 09-090: am. (2) (b), (3), (4) (c), (5) (a), (b), (6) (b), (7) (d) and (8), r. (2) (c), renum. (2) (d) to be (2) (c) and am., cr. (2) (d), Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (4) (b), (6) (b), (7) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (1) Register August 2012 No. 680, eff. 9-1-12.
subch. VI of ch. Tax 11 Subchapter VI — Manufacturers and Producers
Tax 11.38 Tax 11.38 Fabricating, processing, and printing.
Tax 11.38(1)(1) Sales of fabricating, processing, and printing services. The producing, fabricating, processing, printing, or imprinting of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., for a consideration for consumers who furnish directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting is subject to Wisconsin sales or use tax unless:
Tax 11.38(1)(a) (a) The printing or imprinting is done on tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., that results in printed materials that are exempt under s. 77.54 (25), Stats., or catalogs and their mailing envelopes that are exempt under s. 77.54 (25m), Stats.
Tax 11.38 Note Example: Printer ABC prints an advertising flyer for Company DEF. Company DEF furnishes the paper and the ink. Company DEF will send the flyer to its customers outside Wisconsin. The charge by Printer ABC for printing the advertising flyer is not subject to Wisconsin sales tax provided Company DEF provides Printer ABC with a properly completed exemption certificate.
Tax 11.38(1)(b) (b) An exemption under s. 77.54 or 77.55, Stats., applies.
Tax 11.38 Note Examples: 1) Company GHI is in the business of cleaning used oil. A Wisconsin municipality contracts with Company GHI to have all used oil it collects from residents cleaned by Company GHI. The charge by Company GHI to the municipality for cleaning the oil is not subject to Wisconsin sales or use tax because sales to Wisconsin municipalities are exempt from Wisconsin sales tax under s. 77.54 (9a), Stats.
Tax 11.38 Note 2) The charge by a feed mill to grind a farmer's corn that the farmer will use as feed is not subject to Wisconsin sales or use tax because the sale of feed to a farmer is not subject to Wisconsin sales or use tax under s. 77.54 (3m), Stats. The farmer must provide the feed mill with a properly completed exemption certificate.
Tax 11.38 Note 3) The charge by a cooperative to age a cigar manufacturer's tobacco is not subject to Wisconsin sales or use tax because a sale of tobacco to a cigar manufacturer is not subject to Wisconsin sales or use tax under s. 77.54 (2), Stats. The cigar manufacturer must provide the cooperative with a properly completed exemption certificate.
Tax 11.38(1)(c) (c) The producing, fabricating or processing is for resale.
Tax 11.38 Note Example: Company JKL is in the business of custom making cabinets. A customer orders a cabinet from Company JKL. Due to time constraints, Company JKL is unable to make the cabinet. Therefore, Company JKL contracts with Company MNO to make the cabinet from materials provided by Company JKL. Company MNO is not subject to Wisconsin sales or use tax on the charge to Company JKL for making the cabinet if Company JKL provides Company MNO with a properly completed exemption certificate claiming resale.
Tax 11.38(2) (2)Examples of fabricating and processing services. Fabricating and processing services, where materials are furnished directly or indirectly by the customer, that are subject to Wisconsin sales or use tax include, except as provided in sub. (1) (a) through (c):
Tax 11.38(2)(a) (a) Application of coating to pipe.
Tax 11.38(2)(b) (b) Assembling kits to produce a completed product.
Tax 11.38(2)(c) (c) Bending glass tubing into neon signs.
Tax 11.38(2)(d) (d) Bookbinding.
Tax 11.38(2)(e) (e) Caterer's preparation of food.
Tax 11.38(2)(f) (f) Cleaning used oil.
Tax 11.38(2)(g) (g) Cutting lumber to specifications and producing cabinets, counter tops or other items from lumber for customers, often called "millending."
Tax 11.38(2)(h) (h) Cutting or crushing stones, gravel or other construction materials.
Tax 11.38(2)(i) (i) Drying, planing or ripping lumber.
Tax 11.38(2)(j) (j) Dyeing or fireproofing fabric.
Tax 11.38(2)(k) (k) Fabricating steel which may involve cutting the steel to length and size, bending and drilling holes in the steel to specifications of a particular construction job.
Tax 11.38(2)(L) (L) Firing of ceramics or china.
Tax 11.38(2)(m) (m) Heat treating or plating.
Tax 11.38(2)(n) (n) Laminating identification cards.
Tax 11.38(2)(o) (o) Making a fur coat from pelts, gloves or a jacket from a hide.
Tax 11.38(2)(p) (p) Making curtains, drapes, slip covers or other household furnishings.
Tax 11.38(2)(q) (q) Production of a sound recording or motion picture.
Tax 11.38(2)(r) (r) Retreading tires.
Tax 11.38(2)(s) (s) Tailoring a suit.
Tax 11.38(2)(t) (t) Threading pipe or welding pipe.
Tax 11.38(3) (3)Purchases by fabricators or processors. Persons providing fabricating, processing and printing services, including those services listed in sub. (2), may qualify as manufacturers. If the service provider qualifies as a manufacturer as provided in s. 77.51 (7h) (a), Stats., the following items may be purchased by the service provider without Wisconsin sales or use tax:
Tax 11.38(3)(a) (a) Machinery and equipment used exclusively and directly in manufacturing.
Tax 11.38 Note Example: Company PQR is in the business of heat treating metal for steel manufacturers. Company PQR uses its machinery and equipment only in providing this heat treating to steel manufacturers. Company PQR is performing a manufacturing process in acting as a submanufacturer. Since the machinery and equipment is used exclusively and directly in manufacturing, it may be purchased without Wisconsin sales or use tax provided Company PQR gives its supplier a properly completed exemption certificate.
Tax 11.38(3)(b) (b) Tangible personal property or items under s. 77.52 (1) (b), Stats., that are used exclusively and directly by a manufacturer in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale and which becomes an ingredient or component part of the property or item destined for sale or is consumed or destroyed or loses its identity in the manufacture of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., in any form destined for sale, except for fuel and electricity as provided in s. 77.54 (30) (a) 6., Stats.
Tax 11.38 Note Example: Company VWX is an electroplater. Company STU is a manufacturer of car bumpers. Company STU hires Company VWX to electroplate the bumpers. Company VWX may purchase the caustic soda, boric acid, etc., that is consumed or destroyed in the electroplating without Wisconsin sales or use tax when acting as a submanufacturer. These items are consumed or destroyed in the manufacture of tangible personal property, bumpers, destined for sale.
Tax 11.38 Note Note: Section Tax 11.38 interprets ss. 77.51 (14) (f) and (h), 77.52 (2) (a) 10. and 11., 77.54 and 77.55, Stats.
Tax 11.38 Note Note: For information regarding what is manufacturing and exemptions for machinery and equipment and other items used in manufacturing, refer to ss. Tax 11.39, 11.40 and 11.41.
Tax 11.38 Note Note: The interpretations in s. Tax 11.38 are effective under the general sales and use tax law on and after September 1, 1969 except that (a) The exemption for catalogs and the envelopes in which they are mailed became effective April 1, 2009 pursuant to 2007 Wis. Act 20; and (b) 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 11.38 History History: Cr. Register, October, 1976, No. 250, eff. 11-1-76; r. and recr. Register, June, 1993, No. 450, eff. 7-1-93; EmR0924: emerg. am. (title), (1) (title), (intro.), (a), (2) (e) and (3) (b), eff. 10-1-09; CR 09-090: am. (title), (1) (title), (intro.), (a), (2) (e) and (3) (b) Register May 2010 No. 653, eff. 6-1-10; correction in (3) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register May 2010 No. 653.
Tax 11.39 Tax 11.39 Manufacturing.
Tax 11.39(1)(1) Definitions.
Tax 11.39(1)(a)1.1. Manufacturing means the production by machinery of a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., with a different form, use, and name from existing materials, by a process popularly regarded as manufacturing.
Tax 11.39(1)(a)2. 2. Manufacturing does not include storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., research or development, delivery to or from the plant, or repairing or maintaining plant facilities.
Tax 11.39(1)(b) (b) "Plant" as defined in s. 77.51 (10b), Stats., means a parcel of property or adjoining parcels of property, including parcels that are separated only by a public road, and the buildings, machinery, and equipment that are located on the parcel, that are owned by or leased to the manufacturer. Plant inventory does not include unsevered mineral deposits as provided in s. 77.51 (10c), Stats.
Tax 11.39(2) (2)Scope of manufacturing.
Tax 11.39(2)(a)(a) Manufacturing:
Tax 11.39(2)(a)1. 1. Begins with conveying of raw materials and supplies from plant inventory to the place where the work is performed in the same plant and ends with conveying finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., to the point of first storage in the same plant.
Tax 11.39(2)(a)2. 2. Includes conveying work in progress directly from one manufacturing operation to another in the same plant.
Tax 11.39(2)(a)3. 3. Includes testing or inspecting, throughout the manufacturing process, the new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., that is being manufactured.
Tax 11.39(2)(a)4. 4. Includes storing work in progress in the same plant where the manufacturing occurs.
Tax 11.39(2)(a)5. 5. Includes assembling finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
Tax 11.39(2)(a)6. 6. Includes packaging a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., if the manufacturer or another person on the manufacturer's behalf performs the packaging and if the packaging becomes part of the new article as it is customarily offered for sale by the manufacturer.
Tax 11.39(2)(b) (b) Manufacturing does not include storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., delivery to or from the plant, repairing or maintaining facilities, or research and development.
Tax 11.39(3) (3)Manufacturers. Manufacturers ordinarily include the following:
Tax 11.39(3)(a) (a) Asphalt plants.
Tax 11.39(3)(b) (b) Bakeries.
Tax 11.39(3)(c) (c) Battery makers.
Tax 11.39(3)(d) (d) Breweries and soda water bottling plants.
Tax 11.39(3)(e) (e) Candy factories.
Tax 11.39(3)(f) (f) Cement and concrete plants.
Tax 11.39(3)(fr) (fr) Cheese cutting and repackaging plants.
Tax 11.39(3)(g) (g) Chemical processing plants.
Tax 11.39(3)(h) (h) Concrete block and tile producers.
Tax 11.39(3)(i) (i) Creameries and instant milk producers.
Tax 11.39(3)(j) (j) Dairies and cheese plants.
Tax 11.39(3)(jd) (jd) Dental labs.
Tax 11.39(3)(jr) (jr) Ductwork fabricators.
Tax 11.39(3)(k) (k) Electric generating companies.
Tax 11.39(3)(L) (L) Flour and feed mills, including mobile units.
Tax 11.39(3)(m) (m) Food processing plants, canning and freezing.
Tax 11.39(3)(n) (n) Foundries.
Tax 11.39(3)(o) (o) Glass making plants.
Tax 11.39(3)(oc) (oc) Grain dryers.
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Published under authority of s. 35.93, Stats. Updated on the first day of each month. Entire code is alwaycurrent. The date shown on each chapter is the date the chapter was last published.