Tax 11.67(3)(j) (j) Detonating explosives. Detonating explosives is a non-taxable service. A person who performs that service and furnishes the explosives used in conjunction with the service is the consumer of the explosives.
Tax 11.67(3)(k) (k) Taxidermists. The sales price from services taxidermists perform on tangible personal property is subject to the tax.
Tax 11.67(3)(L) (L) Car washes. The sales price received by persons providing car wash services, including those providing coin-operated self-service car washes consisting of a pressurized spray of soap and water, are taxable. These persons are the consumers of the tangible personal property such as soap, brushes, and towels they purchase, except for the wax, air freshener, and protectants physically transferred to a customer's vehicle. Thus, suppliers may accept an exemption certificate claiming resale for the wax, air freshener, protectants, and other tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., sold to car wash operators, which will be physically transferred to the car wash operator's customers. Car wash operators are liable for sales or use tax on their purchases of supplies that they use in providing their services unless those items are physically transferred to their customers.
Tax 11.67(3)(m) (m) Soliciting advertising for telephone directories. Persons who solicit advertising for telephone books and who, as an incident of the service, provide telephone books to telephone companies or their subscribers, are the consumers of and shall pay tax on all the telephone books they distribute in Wisconsin.
Tax 11.67 Note Example: Company B located in Wisconsin solicits advertising for telephone books yellow pages and compiles, publishes, and delivers the directories to the subscribers of telephone companies. Company B contracts with an out-of-state corporation to print the directories. The printer delivers a portion of the directories to the U.S. Postal Service for delivery directly to telephone subscribers in Wisconsin. The remaining directories are delivered to Company B who in turn distributes them to subscribers in Wisconsin. Company B is subject to use tax on the directories delivered by the U.S. Postal Service as well as on the directories which it distributes to subscribers.
Tax 11.67 Note Note: Section Tax 11.67 interprets ss. 77.51 (1f), (12), (12m), (13), (14) (intro.) and (h), (15a), (15b), (20), and (22) (a) and (b) and 77.52 (1), (2) (a), (2m) (a) and (b), (20), and (21), Stats.
Tax 11.67 Note Note: The interpretations in s. Tax 11.67 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) The fees paid to architects performing landscaping planning became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981; (b) The definition of bundled transactions became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (c) 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; and (d) The clarification that a service provider who transfers tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., incidentally with a taxable service is the consumer of such property, items, or goods became effective July 2, 2013, pursuant to 2013 Wis. Act 20.
Tax 11.67 History History: Cr. Register, January, 1978, No. 265, eff. 2-1-78; am. (3) (n), Register, June, 1983, No. 330, eff. 7-1-83; r. (3) (k) and am. (3) (n), Register, September, 1984, No. 345, eff. 10-1-84; am. (3) (h), Register, April 1990, No. 412, eff. 5-1-90; am. (1), (2) (b) and (c), (3) (a), (d) 1. and 2., (e) 1. and 2., (g), (L), (m) and (n), Register, November, 1993, No. 455, eff. 12-1-93; am. (2) (a), (3) (e) 2., (f), (h) and (j), r. (3) (e) 3., renum. (3) (L) to (n) to be (3) (k) to (m) and am. (3) (L), Register, April, 2000, No. 532, eff. 5-1-00; EmR0924: emerg. am. (1), (2) (a), (b), (3) (a), (b), (d), (e), (f), (h), (i), (k) and (L), renum. (2) (c) to be (2) (c) 1. and am., cr. (2) (c) 2., eff. 10-1-09; CR 09-090: am. (1), (2) (a), (b), (3) (a), (b), (d), (e), (f), (h), (i), (k) and (L), renum. (2) (c) to be (2) (c) 1. and am., cr. (2) (c) 2. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (1), (2) (b), (3) (d) (title), 1., 2., cr. (3) (d) 3. Register November No. 659, eff. 12-1-10; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register November 2010 No. 659.
Tax 11.68 Tax 11.68 Construction contractors.
Tax 11.68(1)(1)Definition. In this section, “real property construction activities" means activities that occur at a site where tangible personal property or items or goods under s. 77.52 (1) (b) or (d), Stats., that are applied or adapted to the use or purpose to which real property is devoted are affixed to that real property, if the intent of the person who affixes that property, item, or good is to make a permanent accession to the real property. “Real property construction activities" do not include affixing property subject to tax under s. 77.52 (1) (c), Stats., to real property or affixing to real property tangible personal property that remains tangible personal property after it is affixed.
Tax 11.68 Note Note: The definition of real property construction activities was revised effective for sales of property pursuant to contracts entered into on or after December 1, 1997, to:
Tax 11.68 Note (a) Reverse the effect of the Wisconsin Supreme Court decision in the case of Wisconsin Department of Revenue vs. Sterling Custom Homes (283 N.W. 2d 573 (1979)) prospectively from the effective date of this revision, and
Tax 11.68 Note (b) Provide by statute those criteria that were used by the Supreme Court in the case of Dept. of Revenue vs. A.O. Smith Harvestore Products, Inc. (72 Wis. 2d 60, (1976)), for purposes of determining whether tangible personal property becomes real property. The meaning of each of the criteria is explained in the Supreme Court's decision.
Tax 11.68(2) (2) General.
Tax 11.68(2)(a)(a) Construction contractors may be retailers with respect to some activities and consumers with respect to others. When a construction contractor acts as a retailer, the contractor shall obtain a seller's permit and pay the tax on its receipts from retail sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services. When the contractor acts as a consumer, the contractor shall pay the tax on its purchases of property, items, and goods consumed.
Tax 11.68 Note Note: Refer to s. Tax 11.002 for a description of permit requirements, how to apply for a permit, and the 15-day time period within which the department is required to act on permit applications.
Tax 11.68(2)(b) (b) Contractors are retailers of:
Tax 11.68(2)(b)1. 1. Property, items, and goods it installs which retain their character as personal property after sale and installation.
Tax 11.68 Note Note: Refer to subs. (5) and (7) for the classification of property.
Tax 11.68(2)(b)2. 2. Labor or services furnished in installing tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., which retain their character as personal property after installation.
Tax 11.68 Note Note: Refer to subs. (5) and (7) for the classification of property.
Tax 11.68(2)(b)3. 3. Labor and material furnished in the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of items of real property which retain their character as tangible personal property for repair purposes.
Tax 11.68 Note Note: Refer to sub. (11) for a description of real property which retains its character as tangible personal property for repair purposes.
Tax 11.68(2)(b)4. 4. Tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., sold.
Tax 11.68(2)(c) (c) Contractors are consumers of tangible personal property and items and goods under s. 77.52 (1) (b) and (d), Stats., they use when engaged in real property construction activities, such as altering, repairing, or improving real property.
Tax 11.68(3) (3) Real property construction contractors.
Tax 11.68(3)(a) (a) Generally, real property construction contractors are persons who perform real property construction activities and include persons engaged in activities such as building, electrical work, plumbing, heating, painting, steel work, ventilating, paper hanging, sheet metal work, bridge or road construction, well drilling, excavating, wrecking, house moving, landscaping, roofing, carpentry, masonry and cement work, plastering, and tile and terrazzo work.
Tax 11.68(3)(b) (b) A retailer may also be a real property contractor, such as a department store which sells and installs tangible personal property and items or goods under s. 77.52 (1) (b) or (d), Stats., which becomes a part of real property after installation.
Tax 11.68 Note Example: A water heater or water softener sold and installed in a purchaser's residence by a retailer becomes real property after installation. The retailer is considered to be a real property contractor.
Tax 11.68(4) (4) Purchases by contractors.
Tax 11.68(4)(a) (a) Under s. 77.51 (2), Stats., contractors who perform real property construction activities are the consumers of building materials which they use in altering, repairing, or improving real property. Therefore, suppliers' sales of building materials to contractors who incorporate the materials into real property in performing construction activities are subject to the tax. This includes raw materials purchased outside Wisconsin that are used by a contractor in manufacturing tangible personal property or items under s. 77.52 (1) (b), Stats., outside Wisconsin, or that are fabricated or altered outside Wisconsin by a contractor so as to become different or distinct items of tangible personal property or items under s. 77.52 (1) (b), Stats., from the constituent raw materials, and are subsequently stored, used, or consumed in Wisconsin by that contractor.
Tax 11.68 Note Note: Prior to August 12, 1993, raw materials purchased outside Wisconsin that were used by a contractor in manufacturing tangible personal property outside Wisconsin or that were fabricated or altered outside Wisconsin by a contractor so as to become different or distinct items of tangible personal property from the constituent raw materials, and were subsequently stored, used, or consumed in Wisconsin by that contractor were not subject to tax pursuant to the Circuit Court of Dane County decision in Morton Buildings, Inc. vs. Wisconsin Department of Revenue (2/10/92).
Tax 11.68(4)(b)1.1. Tangible personal property and property, items, and goods under s. 77.52 (1) (b), (c), and (d), Stats., which a construction contractor will resell as personal property may be purchased without tax for resale. This includes personal property furnished as part of a real property construction activity when the personal property retains its character as personal property after installation. This also includes personal property furnished as part of a real property construction activity when provided as part of a taxable landscaping service.
Tax 11.68 Note Note: Refer to subs. (5) and (7) for the classification of property.
Tax 11.68(4)(b)2. 2. Taxable services which a construction contractor will resell may be purchased without tax for resale.
Tax 11.68(4)(c) (c) Machinery and equipment, including road building equipment, tunnel shields, construction machines, and cement mixers, tools, including power saws and hand tools, and supplies, including machine lubricating and fuel oils, form lumber, and industrial gases, purchased by a construction contractor for the contractor's use are generally either consumed in the process of construction or are removed when the project is completed. The contractor is the consumer of the personal property and shall pay the tax on its purchases of the property. However, an exemption is provided in s. 77.54 (5) (d), Stats., for mobile cement mixers used for mixing and processing and the motor vehicle or trailer on which a mobile mixing unit is mounted, including accessories, attachments, parts, supplies, and materials for the vehicles, trailers, and units.
Tax 11.68(4)(d) (d) Under s. 77.54 (26), Stats., contractors may purchase without sales or use tax tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., which become a component part of an industrial waste treatment facility that would be exempt under s. 70.11 (21), Stats., if the property were taxable under ch. 70, Stats., or a municipal waste treatment facility, even though they are the consumers of the property and items.
Tax 11.68 Note Note: Refer to s. Tax 11.11 regarding industrial and municipal waste treatment facilities.
Tax 11.68(4)(e) (e) Under s. 77.54 (26m), Stats., contractors may purchase without sales or use tax waste reduction and recycling machinery and equipment, including parts, which are exclusively and directly used for waste reduction and recycling activities which reduce the amount of solid waste generated, reuse, recycle, or compost solid waste, or recover energy from solid waste, even though they are the consumers of the property.
Tax 11.68 Note Examples: 1) Equipment used in a foundry to clean sand so that the sand can be reused qualifies for exemption.
Tax 11.68 Note 2) Equipment used to remove impurities from lubricating oil used in manufacturing machines so that the oil can continue to be used by the manufacturer qualifies for exemption.
Tax 11.68 Note 3) Equipment used to produce fuel cubes qualifies for exemption. This equipment shreds waste paper and cardboard, removes foreign objects, blends the materials with a binding agent, adds moisture if necessary and then compresses the materials into fuel cubes which are burned by homeowners or others to replace wood.
Tax 11.68 Note 4) A roto-mill machine that mines old pavement and grinds up the mined materials to be reused in construction activities qualifies for exemption.
Tax 11.68 Note 5) Large steel waste collection containers, including dumpsters, which may be picked up and dumped into waste collection trucks or hauled away on flatbed trucks, or which may mechanically compact the waste in the container do not qualify for exemption.
Tax 11.68(4)(f) (f) Under s. 77.54 (41), Stats., contractors, subcontractors, or builders may purchase without sales or use tax building materials, supplies, and equipment acquired solely for or used solely in the construction, renovation, or development of property that would be exempt under s. 70.11 (36), Stats. Section 70.11 (36), Stats., exempts property consisting of or contained in a sports and entertainment home stadium, including but not limited to parking lots, garages, restaurants, parks, concession facilities, transportation facilities, and functionally related or auxiliary facilities and structures; including those facilities and structures while they are being built; constructed by, leased to, or primarily used by a professional athletic team that is a member of a league that includes teams that have home stadiums in other states, and the land on which that stadium and those structures and facilities are located.
Tax 11.68(4)(g) (g) Under s. 77.54 (5) (am), Stats., contractors and subcontractors may purchase without sales and use tax modular homes, as defined in s. 101.71 (6), Stats., and manufactured homes as defined in s. 101.91 (2), Stats., that are used in real property construction activities outside Wisconsin.
Tax 11.68(4)(h) (h) Under s. 77.54 (6) (bn), Stats., contractors and subcontractors may purchase without sales and use tax the items described in s. 77.54 (6) (am) 4. and 5., Stats., and used by the contractor or subcontractor in real property construction activities which satisfy the conditions described in s. 77.54 (6) (am) 4. and 5. and (bn), Stats., regarding a fertilizer blending, feed milling, or grain drying operation.
Tax 11.68 Note Note: Refer to s. Tax 11.42 for additional information on the application of s. 77.54 (6) (am) 4. and 5. and (bn), Stats.
Tax 11.68(5) (5) Classification of property after installation.
Tax 11.68(5)(a) (a) Contractors shall determine whether a particular contract or transaction results in an improvement to real property or in the sale and installation of personal property. In determining whether personal property becomes a part of real property, the following criteria shall be considered:
Tax 11.68(5)(a)1. 1. Actual physical annexation to the real property.
Tax 11.68(5)(a)2. 2. Application or adaptation to the use or purpose to which the real property is devoted.
Tax 11.68(5)(a)3. 3. An intention on the part of the person making the annexation to make a permanent accession to the real property.
Tax 11.68 Note Note: See Dept. of Revenue vs. A. O. Smith Harvestore Products, Inc.(1976), 72 Wis. 2d 60, regarding determining whether personal property becomes a part of real property.
Tax 11.68(5)(b) (b) Certain types of property that have a variety of functions may be personal property in some instances and additions to real property in others, including boilers, furnaces, stand-by generators, pumps, substations, and transformers. When this property is installed primarily to provide service to a building or structure and is essential to the use of the building or structure, it is a real property improvement. However, when similar property is installed in a manufacturing plant to perform a processing function, it may, as machinery, retain its status as personal property.
Tax 11.68(6) (6) Personal property which becomes a part of realty. A construction contractor is the consumer of tangible personal property and items and goods under s. 77.52 (1) (b) and (d), Stats., such as building materials, which is incorporated into or becomes a part of real property, and sales of this personal property to a contractor are subject to the tax. Personal property which becomes a part of real property includes the following:
Tax 11.68(6)(a) (a) Boilers and furnaces for space heating.
Tax 11.68(6)(b) (b) Built-in household items such as kitchen cabinets, dishwashers, fans, garbage disposals, central vacuum systems, and incinerators.
Tax 11.68(6)(bm) (bm) Casework, tables, counters, cabinets, lockers, sinks, athletic and gymnasium equipment attached to the structure in apartment buildings, convalescent homes, or other residential buildings.
Tax 11.68(6)(c) (c) Cemetery monuments.
Tax 11.68(6)(d) (d) Personal property that is used to construct buildings, and structural and other improvements to buildings, including awnings, canopies, carpeting, foundations for machinery, floors, including computer room floors, partitions and movable walls attached in any way to realty, holding structures used in fertilizer blending, feed milling, or grain drying operations, underground wiring, general wiring and lighting facilities, roofs, stairways, stair lifts, sprinkler systems, storm doors and windows, door controls, air curtains, loading platforms, central air conditioning units, building elevators, sanitation and plumbing systems, and heating, cooling, and ventilation systems.
Tax 11.68(6)(e) (e) Fixed or year-around wharves and docks.
Tax 11.68(6)(f) (f) Personal property that is used to construct improvements to land. “Improvements to land," as used in this section, include retaining walls, roads, walks, bridges, fencing, railway switch tracks, ponds, dams, ditches, wells, underground irrigation systems except systems sold to and for use by farmers, drainage, storm, and sanitary sewers, and water supply lines for drinking water, sanitary purposes, and fire protection.
Tax 11.68(6)(g) (g) Residential water heaters, water softeners, intercoms, incinerators, and garage door opening equipment, except portable equipment.
Tax 11.68(6)(h) (h) Personal property that is used to construct silos and the building portion of grain elevators.
Tax 11.68(6)(i) (i) Swimming pools, wholly or partially underground.
Tax 11.68(6)(j) (j) Storage tanks constructed on the site.
Tax 11.68(6)(k) (k) Street and parking lot lighting.
Tax 11.68(6)(L) (L) Truck platform scale foundations.
Tax 11.68(6)(m) (m) Walk-in cold storage units becoming a component part of a building.
Tax 11.68(7) (7) Property provided under a construction contract which remains personal property.
Tax 11.68(7)(a) (a) Contractors shall obtain a seller's permit and report for taxation the sales price received from the sale and installation of tangible personal property and items and goods under s. 77.52 (1) (b) and (d), Stats., furnished under a construction contract, which retains its character as personal property after installation, such as:
Tax 11.68(7)(a)1. 1. Furniture, radio and television sets and antennas, washers and dryers, portable lamps, home freezers, portable appliances, and window air conditioning units.
Tax 11.68(7)(a)2. 2. Communication equipment, including intercoms, pneumatic tube systems, roof mounted antennas, CATV wiring, and music and sound equipment in business, industrial, or commercial buildings, schools, and hospitals, but not in apartment buildings, convalescent homes, or other residential buildings.
Tax 11.68(7)(a)3. 3. Casework, tables, counters, cabinets, lockers, sinks, athletic and gymnasium equipment, and related easily movable property attached to the structure in schools, laboratories, and hospitals, except if attached to the structure in the bathrooms of such facilities.
Tax 11.68(7)(a)4. 4. Machinery, including safety attachments, equipment, tools, appliances, process piping and wiring, and grain handling equipment and grain elevator legs used exclusively by manufacturers, industrial processors, and others performing a processing function with the items.
Tax 11.68(7)(a)5. 5. Office, bank, and savings and loan association furniture and equipment, including office machines, safe deposit boxes, drive-up and walk-up windows, night depository equipment, remote TV auto teller systems, camera security equipment except when used to monitor for unauthorized entry to a building or room in a building, and vault doors.
Tax 11.68(7)(a)6. 6. Personal property used to carry on a trade or business, including fixtures and equipment installed in stores, taverns, night clubs, restaurants, ice arenas, bowling centers, hotels and motels, barber and beauty shops, figure salons, theaters, and gasoline service stations. Underground storage tanks at gasoline service stations are real property.
Tax 11.68(7)(a)7. 7. Shades, curtains, drapes, venetian blinds, and associated hardware.
Tax 11.68(7)(a)7m. 7m. Satellite dish systems installed on residential and commercial buildings, but not satellite dish systems that are installed by permanently affixing the satellite dish to a concrete foundation in apartment buildings, convalescent homes, or other residential buildings.
Tax 11.68(7)(a)8. 8. Radio, television, and cable television station equipment, but not broadcasting towers installed on their owner's land.
Tax 11.68(7)(a)9. 9. Except as provided in ss. 77.51 (12m) (b) 7. and (15b) (b) 7. and 77.54 (31), Stats., mobile homes, as defined in s. 101.91 (10), Stats., and manufactured homes, as defined in s. 101.91 (11) and (12), Stats., located in a mobile home park on land owned by a person other than the mobile home or manufactured home owner. Exemptions are provided by s. 77.51 (12m) (b) 7. and (15b) (b) 7., Stats., for 35% of the total amount for which a new manufactured home, as defined in s. 101.91 (11), Stats., is sold. No credit may be allowed for trade-ins and the exemption does not apply to a lease or rental. The exemption provided in s. 77.54 (31), Stats., applies to the sale of, but not the lease or rental of, used mobile homes as defined in s. 101.91 (10), Stats., and used manufactured homes as defined in s. 101.91 (12), Stats.
Tax 11.68(7)(a)10. 10. Advertising signs, except their underground concrete foundations. A foundation is underground even though a portion of the foundation extends above the grade.
Tax 11.68(7)(a)11. 11. Buildings and standing timber sold for removal.
Tax 11.68(7)(a)12. 12. Utility transmission and distribution lines installed above ground on land owned by others as provided in s. Tax 11.86 (1), and oil and gas pipeline pumping station equipment.
Tax 11.68(7)(a)13. 13. Commercial and industrial incinerators which do not become an integral part of the building.
Tax 11.68(7)(a)14. 14. Seating in auditoriums and theaters, and theater stage lights and projection equipment.
Tax 11.68(7)(a)15. 15. Stop and go lights, railroad signs and signals, and street identification signs.
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Published under s. 35.93, Stats. Updated on the first day of each month. Entire code is always current. The Register date on each page is the date the chapter was last published.