Tax 11.40(3)(d) (d) The exemption does not apply to machines or processing equipment used in whole or in part by a manufacturer before the manufacturing process has begun or after it has been completed.
Tax 11.40 Note Example: Machines or equipment used for storage, delivery to or from a plant, repair or maintenance of facilities or equipment, research, or crating or packaging of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., for shipment are not exempt.
Tax 11.40(3)(e) (e) The exemption does not apply to tangible personal property or an item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., which is not machinery or equipment, but is used in a manufacturing plant.
Tax 11.40 Note Example: Sweeping compounds are factory supplies rather than processing equipment.
Tax 11.40(4) (4)Repair of exempt machinery and processing equipment. The sales price from the sale of and the storage, use or other consumption of repair or replacement parts and from repair service for exempt machines and processing equipment is exempt.
Tax 11.40 Note Example: Conveyor belts, grinding wheels, grinding balls, machine drills, auger bits, milling cutters, emery wheels, jigs, saw blades, machine tool holders, reamers, dies, molds and patterns used as replacement parts for exempt machines and processing equipment are exempt.
Tax 11.40 Note Note: Section Tax 11.40 interprets ss. 77.51 (7h) and 77.54 (5) (c) and (d), (6) (am) 1. and (cm), and (26m), Stats.
Tax 11.40 Note Note: The interpretations in s. Tax 11.40 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Mobile mixing units are exempt effective September 1, 1983, pursuant to 1983 Wis. Act 27; (b) Vehicles and machines used in waste reduction and recycling are exempt effective July 1, 1984, pursuant to 1983 Wis. Act 426; (c) Motor vehicles or trailers upon which mobile mixing units are mounted are exempt effective July 20, 1985, pursuant to 1985 Wis. Act. 29; (d) Safety attachments became exempt effective June 1, 1986, pursuant to 1985 Wis. Act 149; (e) The exemption in s. 77.54 (6) (am), Stats., shall be strictly construed effective October 1, 1989, pursuant to 1989 Wis. Act 31; (f) The definition of "manufacturing" and what is included in the scope of manufacturing is effective October 1, 2009, pursuant to 2009 Wis. Act 28; 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 11.40 History History: Cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (4) (e), Register, October, 1979, No. 286, eff. 11-1-79; am. (1) (a), (2) (b), (3) (a) to (c), Register, November, 1981, No. 311, eff. 12-1-81; am. (1) (a), Register, June, 1990, No. 414, eff. 7-1-90; am. (1) (a) and (c), (2), (3) (a), (b), (d), and (4), cr. (1) (d) and (e), Register, March, 1991, No. 423, eff. 4-1-91; reprinted to restore dropped copy in (1) (a), Register, April, 1994, No. 460; EmR0924: emerg. am. (1) (a) to (c), (2) (a), (3) (b), (c), (e) and (4), eff. 10-1-09; CR 09-090: am. (1) (a) to (c), (2) (a), (3) (b), (c), (e) and (4) Register May 2010 No. 653, eff. 6-1-10; correction in (1) (c) made under s. 13.92 (4) (b) 7., Stats., Register May 2010 No. 653; CR 10-094: am. (4) Register November 2010 No. 659, eff. 12-1-10; corrections in (1) (a), (c) made under s. 13.92 (4) (b) 7., Stats., Register August 2014 No. 704.
Tax 11.41 Tax 11.41 Exemption of property and items consumed or destroyed in manufacturing.
Tax 11.41(1) (1) General.
Tax 11.41(1)(a)(a) Tangible personal property and 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., that is destined for sale and that becomes an ingredient or component part of the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale or is consumed or destroyed or loses its identity in manufacturing the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale is exempt from Wisconsin sales or use tax under s. 77.54 (2), Stats., except as provided in s. 77.54 (30) (a) 6., Stats.
Tax 11.41(1)(b) (b) Manufacturing is defined in s. 77.51 (7h), Stats., to mean 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, and that begins with conveying raw materials and supplies from plant inventory to the place where work is performed in the same plant and ends with conveying finished units of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., to the point of first storage in the same plant.
Tax 11.41(2) (2)Property and items exempt.
Tax 11.41(2)(a)(a) The following property and items are within the exemption provided by s. 77.54 (2), Stats., if the property or item is used exclusively and directly by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., destined for sale and is consumed, destroyed, or loses its identity in manufacturing the property or item that is destined for sale:
Tax 11.41(2)(a)2. 2. Bleaching agents.
Tax 11.41(2)(a)3. 3. Chemicals.
Tax 11.41(2)(a)4. 4. Cleaning compounds and solvents for maintaining exempt manufacturing machinery whether used while the machinery is operating or while the machinery is idle.
Tax 11.41(2)(a)5. 5. Cutting and lubricating oils.
Tax 11.41(2)(a)6. 6. Filtering clay.
Tax 11.41(2)(a)7. 7. Fluxing material.
Tax 11.41(2)(a)8. 8. Foundry sand.
Tax 11.41(2)(a)9. 9. Greases.
Tax 11.41(2)(a)10. 10. Lapping and grinding compounds.
Tax 11.41(2)(a)11. 11. Purification agents.
Tax 11.41(2)(a)12. 12. Sandpaper.
Tax 11.41(2)(a)13. 13. Shielding gases.
Tax 11.41(2)(a)14. 14. Wood used to smoke products.
Tax 11.41(2)(a)15. 15. Gloves and other wearing apparel, including hair nets, beard nets and facemasks used by employees working on the production line to prevent contamination of the product while it is being manufactured.
Tax 11.41 Note Examples: 1) Employees of Manufacturer A wear gloves and aprons while grading, weighing, and slicing meat products within the scope of manufacturing as defined in s. Tax 11.39 (2). The gloves and aprons are used only in this manner and prevent the meat products being manufactured from being contaminated. The gloves and aprons worn by the employees to protect the meat products from contamination are used directly in manufacturing and qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats.
Tax 11.41 Note 2) Employees of Manufacturer B wear gloves and aprons while they are working on the production line. The gloves and aprons are used only in this manner. The gloves and aprons are worn to protect the employees' clothing rather than to prevent contamination of the product while it is being manufactured. Although the gloves and aprons are used exclusively in manufacturing, the gloves and aprons are not used directly in manufacturing and do not qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats.
Tax 11.41(2)(b) (b) Tangible personal property and items under s. 77.52 (1) (b), Stats., used exclusively and directly by a manufacturer and which become an ingredient or component part of tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., is exempt from Wisconsin sales or use tax.
Tax 11.41 Note Examples: 1) Property and items sold to an automobile repair shop or other repair business to repair a customer's product does not qualify for exemption under s. 77.54 (2), Stats., because the property or items are not used exclusively and directly by a manufacturer in manufacturing.
Tax 11.41 Note 2) A manufacturer-contractor is not entitled to the exemption when purchasing tangible personal property or items under s. 77.52 (1) (b), Stats., consumed, destroyed or losing its identity in manufacturing building components which it, as a contractor, will affix to real property in a real property construction activity, because the item or property is not sold by the manufacturer-contractor as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats.
Tax 11.41(3) (3)Property and items not exempt.
Tax 11.41(3)(a)(a) An exemption under sub. (1) (a) is not allowed for property or items consumed or destroyed or losing their identity in manufacturing if any of the following apply:
Tax 11.41(3)(a)1. 1. The activity is not manufacturing or is not within the scope of manufacturing.
Tax 11.41(3)(a)2. 2. The property or item manufactured is not destined for sale as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats.
Tax 11.41(3)(a)3. 3. The property or item is not used exclusively and directly by a manufacturer in manufacturing.
Tax 11.41(3)(b) (b) The following property and items are not within the exemption provided by s. 77.54 (2), Stats., although the property or item may be exempt under s. 77.54 (6) (am) 1., Stats., if the property or item is a machine or specific processing equipment, or a part for that machine or equipment, used exclusively and directly in manufacturing, as described in s. Tax 11.40:
Tax 11.41(3)(b)1. 1. Machine drills and auger bits.
Tax 11.41(3)(b)2. 2. Milling cutters.
Tax 11.41(3)(b)3. 3. Grinding wheels.
Tax 11.41(3)(b)4. 4. Chucks, jigs, and dies.
Tax 11.41(3)(b)5. 5. Saw blades.
Tax 11.41(3)(b)6. 6. Machine tool holders.
Tax 11.41(3)(b)7. 7. Hand tools, including files, wrenches, hammers, saws, screwdrivers, planes, punches, chisels, and spray guns.
Tax 11.41(3)(b)8. 8. Wearing apparel for the comfort or welfare of the employee or for the protection of the employee's clothing, such as helmets, hard hats, work gloves, aprons, coveralls, pants, coats, and fur-lined boots and jackets.
Tax 11.41 Note Example: Employees of Manufacturer C wear hard hats, as required by federal regulations, while working within the scope of manufacturing as defined in s. Tax 11.39 (2). The hard hats are worn to protect the employees. The hard hats are not used directly in manufacturing and do not qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats.
Tax 11.41(3)(b)9. 9. Chemicals and cleaning agents used to clean the room where manufacturing takes place, including walls, ceilings, floors, drains, windows, and doors, even if the cleaning is required in order to meet sanitation standards required by state and federal regulatory agencies.
Tax 11.41(4) (4)Fuel and electricity.
Tax 11.41(4)(a)(a) Fuel and electricity are specifically excluded from the exemption provided by s. 77.54 (2), Stats. However, an exemption is provided in s. 77.54 (30) (a) 6., Stats., for fuel and electricity consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., in this state.
Tax 11.41(4)(b) (b) Fuel includes:
Tax 11.41(4)(b)1. 1. Oxygen used to enrich the fuel mixture in an industrial furnace, or oxygen and acetylene used in a welding process.
Tax 11.41(4)(b)2. 2. Coal or coke used by a foundry, except the portion of the coke which actually becomes an ingredient or component part of any grey-iron produced.
Tax 11.41(4)(b)3. 3. Gasoline, fuel oil, kerosene, natural gas, liquid propane gas, also called LPG, or other natural or synthetic liquids used as fuel.
Tax 11.41 Note Note: Since "fuel" is not defined in the sales and use tax statutes, it shall be given its ordinary meaning as provided in a dictionary. Dictionaries generally define fuel as a material used to produce heat or power by burning, or something that feeds a fire.
Tax 11.41 Note Note: Section Tax 11.41 interprets ss. 77.51 (7h) and 77.54 (2), (6) (am) 1. and (cm), and (30) (a) 6., Stats.
Tax 11.41 Note Note: The interpretations in s. Tax 11.41 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) The exemption for wood residue was effective on September 1, 1987, pursuant to 1987 Wis. Act 27; (b) The exemption for fuel and electricity consumed in manufacturing was effective January 1, 2006 pursuant to 2003 Wis. Act 99; (c) The requirement that property and items which qualify for exemption under s. 77.54 (2), Stats., be consumed exclusively and directly by a manufacturer in manufacturing property and items destined for sale became effective August 1, 2009, pursuant to 2009 Wis. Act 28; 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., and certain leased property affixed to real property under s. 77.52 (1) (c), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.
Tax 11.41 History History: Cr. Register, November, 1977, No. 263, eff. 12-1-77; cr. (3) (a) 15. and am. (4) (h), Register, October, 1979, No. 286, eff. 11-1-79; am. (3) (a) 4., Register, July, 1987, No. 379, eff. 8-1-87; am. (5) (intro.), Register, April, 1990, No. 412, eff. 5-1-90; am. (2) (intro.), (3) (b) and (4) (intro.), cr. (5) (c), Register, March, 1991, No. 423, eff. 4-1-91; r. and recr. (1), r. (2), (3) (b), cr. (2) (a) 4. b., (b), (4) (b) (intro.), renum. (3) (a) (intro.), 1. to 15., (4), (5) (intro.), (a), (b) and (c) to be (2) (a) (intro.), 1. to 4. a., 5 to 15., (3), (4) (a), (b) 1. to 3. and am. (2) (a) 4. a., (3) (intro.), (4) (a), Register, October, 1997, No. 502, eff. 11-1-97; am. (1) (b) 2. b., (3) (b) and (h), Register, August, 1999, No. 524, eff. 9-1-99; EmR0924: emerg. am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3), eff. 10-1-09; CR 09-090: am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (a) (intro.), 15., (3) (a) (intro.), r. and recr. (2) (a) 4., cr. (3) (a) 3., (b) 9. Register November 2010 No. 659, eff. 12-1-10; correction in (3) (b) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register August 2014 No. 704.
subch. VII of ch. Tax 11 Subchapter VII — Types of Retailers
Tax 11.45 Tax 11.45 Sales by pharmacies and drug stores.
Tax 11.45(1)(1) Taxable sales. All sales of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c) and (d), Stats., by a pharmacy or drug store are taxable under the general sales tax law unless exempted by a specific statute. The most common exemptions are described and enumerated in this section.
Tax 11.45(2) (2)Drugs and prescription drugs.
Tax 11.45(2)(a)(a) "Drug" is defined in s. 77.51 (3pj), Stats., to mean a compound, substance, or preparation, or any component of them, other than food and food ingredients, dietary supplements, or alcoholic beverages, to which any of the following applies:
Tax 11.45(2)(a)1. 1. It is listed in the United States Pharmacopoeia, Homeopathic Pharmacopoeia of the United States, or National Formulary, or any supplement to any of them.
Tax 11.45(2)(a)2. 2. It is intended for use in diagnosing, curing, mitigating, treating, or preventing a disease.
Tax 11.45(2)(a)3. 3. It is intended to affect a function or structure of the body.
Tax 11.45(2)(b) (b) Drugs are exempt from the tax if prescribed by a licensed physician, surgeon, podiatrist or dentist to a patient, who is a human being, for treatment and dispensed on prescription filled by a registered pharmacist in accordance with law.
Tax 11.45(2)(c) (c) Drugs described in par. (b) which are exempt from the tax include:
Tax 11.45(2)(c)1. 1. Pills and capsules.
Tax 11.45(2)(c)2. 2. Powders.
Tax 11.45(2)(c)3. 3. Liquids, including sterile water and irrigation solutions.
Tax 11.45(2)(c)4. 4. Salves and ointments.
Tax 11.45(2)(c)5. 5. Insulin.
Tax 11.45(2)(c)6. 6. Other preparations consumed orally, injected or applied, including dermal fillers.
Tax 11.45(2)(c)7. 7. Parenteral nutrition formulas.
Tax 11.45(2)(c)8. 8. Enteral nutrition formulas that contain a drug facts box.
Tax 11.45(2)(c)9. 9. Suppositories.
Tax 11.45(2)(c)10. 10. Radioactive isotopes such as implanted seeds.
Tax 11.45(2)(c)11. 11. Dyes and other contrast media.
Tax 11.45(2)(c)12. 12. Other items which remain or dissolve in the body, such as birth control implants including intra-uterine devices (IUD).
Tax 11.45(2)(c)13. 13. Gases - medical grade, such as oxygen and nitrous oxide.
Tax 11.45(2)(c)14. 14. Vitamins.
Tax 11.45(2)(c)15. 15. Vaccines.
Tax 11.45(2)(c)16. 16. Oral contraceptives.
Tax 11.45(2)(c)17. 17. Medicated dressings.
Tax 11.45(2)(d) (d) This exemption does not include:
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