(g) “Payer" means any person who is required to or elects to pay or deposit taxes or fees by electronic funds transfer.
(h) “Settle" or “settlement" means to transfer funds, or a transfer of funds, between two parties in cash or negotiable items or on the books of a mutual depository to complete one or more prior transactions and made subject to a final accounting.
(i) “Settlement date" means the date on which an exchange of funds with respect to an entry or entries is reflected on the books of the department's depository bank.
(j) “Trace number" means a character code uniquely identifying each ACH entry.
(4) REQUIREMENT OR ELECTION TO USE EFT. (a) Except as provided in sub. (11), the department requires a person who owes taxes and fees as described in subds. 1. to 11. to pay or deposit the taxes and fees using the EFT payment method. The following taxes and fees are included in the EFT payment requirement:
1. Corporate income and franchise tax estimated tax payments and tax due with the tax return when the net tax less refundable credits on the prior year's tax return was $40,000 or more.
2. Income tax withholding payments when the required deposits were $10,000 or more in the prior calendar year.
3. General, county and stadium sales and use tax when the aggregate amount due in the prior calendar year was $10,000 or more.
Note: See s. Tax 11.001(4) for the definition of stadium tax.
4. Fermented malt beverages tax when the tax due after the adjustment for any overpayment or additional amount due for a previous period was $40,000 or more in the prior calendar year.
5. Liquor or “distilled spirits and wine" tax and administrative fee when the aggregate net amount of tax and fee due in the prior calendar year was $40,000 or more.
6. Cigarette tax when the net tax due before printing and shipping costs was $40,000 or more in the prior calendar year.
7. Tobacco products tax when the tax due in the prior calendar year was $40,000 or more.
8. Alternate fuels tax when the total tax due in the prior calendar year was $40,000 or more.
9. General aviation fuel tax when the tax due in the prior calendar year was $40,000 or more.
10. Motor vehicle fuel tax and petroleum inspection fee when the aggregate amount due in the prior calendar year was $40,000 or more.
11. Individual and fiduciary income tax estimated tax payments when the estimated tax payments as required under s. 71.09, Stats., were $40,000 or more in the prior taxable year.
(b) Any person not required to use the EFT payment method under par. (a) may elect to use the EFT payment method to pay or deposit the taxes or fees specified in par. (a).
(5) DATE FIRST EFT PAYMENT REQUIRED. The department shall notify a person when EFT payments or deposits are required. A 90-day EFT registration period shall follow the notification. The first required EFT payment or deposit shall be due on the first payment or deposit due date following the end of the registration period.
Example: An employer required to make semi-monthly deposits of withholding tax is notified of the EFT requirement on November 10, 1999. The first EFT deposit is due February 15, 2000, which is the first deposit due date following the end of the 90-day registration period.
(6) REGISTRATION FOR EFT. (a) Payers shall register with the department to use the EFT payment method before making EFT payments or deposits. Payers required to pay or deposit by EFT shall be notified by the department as provided in sub. (5) and given registration instructions. Persons who elect to pay or deposit by EFT may request an EFT registration packet from the department.
Note: A request for an EFT registration packet may be made by calling the department's forms request line at (608)266-1961, or by writing to Forms Request Office, Wisconsin Department of Revenue, P.O. Box 8903, Madison, WI 53708-8903.
(b) As part of the registration process, the payer shall provide a signed authorization statement to the department authorizing the department to make ACH debit transfers through its depository bank or to receive ACH credit transfers from the payer's financial institution.
(7) EFT PAYMENT PROCEDURES. EFT payments or deposits shall be credited by the department directly to the payer's tax account. The payer may use the ACH debit or ACH credit transfer option, or both, as follows:
(a) ACH debit transfers. 1. ACH debit transfers shall be made using a touch tone telephone, a computer with a modem or another department approved method. A toll free telephone number and voice instructions shall be provided by the department for the payer to use when initiating an ACH debit transfer via telephone. Required payment information includes the tax type code for the tax being paid, the tax period date to which the payment should be applied, the amount of the payment and the effective date of the payment.
Note: written requests for department approval of another ACH debit transfer method should be addressed to Electronic FundsTransfer, Wisconsin Department of Revenue, P.O. Box 8912, Madison WI 53708-8912.
2. The payer shall initiate ACH debit transfers before 4:00 p.m. central standard time or central daylight savings time, as applicable, at least one business day before the prescribed due date of the payment in order for the payment to have a settlement date on or before the prescribed due date.
(b) ACH credit transfers. 1. A payer shall initiate ACH credit transfers through the payer's financial institution following directions specific to that financial institution.
2. In order for the payment to have a settlement date on or before the prescribed due date, ACH credit transfers shall be initiated in time for the payer's financial institution to settle the funds transfer on or before the due date of the payment.
(8) COSTS TO INITIATE EFT. (a) ACH debit transfers shall occur at no cost to the payer.
(b) Payers using ACH credit transfers are liable for any fees charged by the payer's financial institution.
(9) EVIDENCE OF EFT PAYMENT. A payer receives a trace number for each EFT transaction. The trace number given to the payer during the EFT transaction and included as part of the ACH entry is the payer's confirmation of payment or deposit and shall provide proof of the date and amount of the payment or deposit.
(10) DUE DATE OF EFT PAYMENT. (a) In order for EFT payments and deposits to be considered received on or before the prescribed due date, EFT payments or deposits shall have a settlement date on or before the prescribed due date, or the revised due date as provided in par. (c), of the payment or deposit.
(b) Payments or deposits made by EFT with a settlement date later than the prescribed due date or revised due date of the payment or deposit shall be considered late and shall be subject to all applicable late fees, penalties and interest.
(c) When the prescribed due date falls on a weekend or legal holiday, the payment due date is revised to be the first business day immediately following the weekend or holiday.
Example: If the prescribed due date falls on a Monday which is also memorial day, an ACH debit transfer must be initiated on or before the preceding Friday so that it has a settlement date on or before the following Tuesday, when the payment is due. A payer using an ACH credit transfer must work with the financial institution to initiate the transfer in time to settle on or before the revised payment due date.
(11) EXCEPTION TO EFT REQUIREMENT. (a) The secretary of revenue may waive the requirement to use the EFT payment method when the secretary determines that the requirement causes an undue hardship, if the person otherwise required to use EFT does all of the following:
1. Requests the waiver in writing.
Note: Written waiver requests should be addressed to Electronic Funds Transfer, Wisconsin Department of Revenue, P.O. Box 8912, Madison, WI 53708-8912.
2. Clearly indicates why the requirement causes an undue hardship.
3. Is current in all return and report filings and tax payments.
(b) In determining whether the EFT requirement causes an undue hardship, the secretary of revenue may consider the following factors:
1. Unusual circumstances which may prevent the payer from using the EFT method.
Examples: Examples of unusual circumstances include:
1) The person does not have access to a touch tone telephone.
2) The person is physically unable to use a touch tone telephone.
3) The telephone system available to the person is incompatible with the department's telephone system used for EFT registration or payments, or both.
2. Any other factor which the secretary determines is pertinent.
Note: Section Tax 1.12 interprets ss. 71.01(8r), 71.42(3m), 71.63(1m) and (5m), 71.65(3)(a), 73.029, 77.58(1m), 77.61(14), 77.96(5m), 78.12(5), 78.55(5m), 139.01(5m), 139.30(8m) and 139.75(5m), Stats.
The rules contained in this order shall take effect on the first day of the month following publication in the Wisconsin administrative register as provided in s. 227.22(2)(intro.), Stats.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
Tax 1.12 is created to permit the Department of Revenue (DOR) to require electronic funds transfer (EFT) to pay income, sales and excise taxes. In general, EFT could be required for persons or businesses with prior calendar year deposits of $40,000 or more. For income tax withholding and sales tax, EFT could be required for those prior calendar year deposits of $10,000 or more. EFT could be accomplished by debit transfers with costs paid by DOR or credit transfers with costs paid by the taxpayer. The department may waive the EFT requirement in specific cases.
In August 1998, approximately 30% of withholding collections came from voluntary use of EFT. It is not currently possible to use EFT for sales tax deposits. The rule would not have a significant effect on state tax collections. With increased EFT, state FPR investment income could increase by perhaps $1 million annually because funds would be available sooner than without EFT. Some of this increase would be from voluntary use of EFT, and some from required use.
Notice of Proposed Rule
Revenue
Notice is hereby given that pursuant to s. 227.11(2)(a), Stats., and interpreting ss. 77.51(4)(a)3., (14r) and (15)(a)3., 77.52(2)(a) and 77.54(9a), (20)(c) and (20m), Stats., and according to the procedure set forth in s. 227.16(2)(e), Stats., the Department of Revenue will adopt the following rules as proposed in this notice without public hearing unless, within 30 days after publication of this notice on May 15, 1999, it is petitioned for a public hearing by 25 natural persons who will be affected by the rule, a municipality which will be affected by the rule, or an association which is representative of a farm, labor, business or professional group which will be affected by the rule.
Contact Person
Please contact Mark Wipperfurth at (608) 266-8253, if you have any questions regarding this proposed rule order.
Analysis by the Department of Revenue
Statutory authority: s. 227.11(2)(a)
Statutes interpreted: ss. 77.51(4)(a)3., (14r) and (15)(a)3., 77.52(2)(a)
and 77.54(9a), (20)(c) and (20m)
SECTION 1. Tax 11.05(2)(a) and the example following, sub. (2)(d) and sub. (3)(d) are revised, to provide additional information regarding the facilities to which admissions are taxable.
A note is added at the end of Tax 11.05(2)(b), to reference Tax 11.51 for a list of taxable food products.
Tax 11.05(2)(d) is further revised, to update style per Legislative Council Rules Clearinghouse (Clearinghouse) standards.
Tax 11.05(2)(f) is revised, to reflect the renumbering of sub. (3)(p) as explained in section 2.
Tax 11.05(2)(i) is revised, to clarify that the paragraph applies to the rental of lodging facilities that are available to the public.
Tax 11.05(3)(L) is revised, to reflect the change to s. 77.54(20)(c)5., Stats., by 1997 Wis. Acts 27 and 41, regarding sales of food, food products and beverages by institutions of higher education.
SECTIONS 2 AND 3. Tax 11.05(3)(m) to (u) are renumbered Tax 11.05(3)(n) to (v) and new Tax 11.05(3)(m) is created, to reflect the change to s. 77.54(20)(c)5., Stats., by 1997 Wis. Acts 27 and 41, regarding sales of food, food products and beverages by institutions of higher education.
Tax 11.05(3)(w) and (x) are created, to list additional items which are not taxable.
SECTION 4. Tax 11.05(4)(a) is revised, to reflect the exemption for purchases of joint local water authorities, as a result of the creation of s. 77.54(9a)(em), Stats., by 1997 Wis. Act 184.
Tax 11.05(4)(b)2. and the note following are revised, to reflect the creation of a new multipurpose exemption certificate, Form S-211, which replaces various other exemption certificates.
SECTION 5. Tax 11.05(4)(b)3. is created, to reflect that a Wisconsin governmental unit may provide its certificate of exempt status number to a retailer to document that its purchases are exempt.
SECTION 6. Tax 11.87(1)(b) is revised, to include a reference to s. 77.54(20m), Stats., as created by 1997 Wis. Act 237.
SECTION 7. Tax 11.87(1)(e) and (f) are renumbered Tax 11.87(1)(f) and (e), to alphabetize definitions per Clearinghouse standards.
A note is added at the end of Tax 11.87(1)(h), to reference Tax 11.51 for lists of taxable and exempt items.
SECTION 8. Tax 11.87(2)(c) and the example are revised and a note is added, to clarify the taxability of meals.
Tax 11.87(3)(a) is revised, to clarify the exemption for food and beverages sold by health care facilities.
SECTION 9. Tax 11.87(3)(c) is revised, to reflect the change to s. 77.54(20)(c)5., Stats., by 1997 Wis. Acts 27 and 41, regarding sales of food, food products and beverages by institutions of higher education.
SECTIONS 10 AND 11. Tax 11.94(1)(d) and (2)(a) are revised, to update style per Clearinghouse standards.
Tax 11.94(2)(c) is revised, to reflect two Circuit Court decisions, Rhinelander Paper Company, Inc. vs. Wisconsin Department of Revenue (97CV 1051, December 18, 1997) and Trierweiler Construction and Supply Co., Inc. vs. Wisconsin Department of Revenue (97CV 1444, December 12, 1997). The Circuit Court held that sales price does not include transportation costs separately incurred by the buyer from a carrier independent of the retailer.
Consequently, Tax 11.94(2)(d) and the example following are repealed, because the answer may vary, depending on the facts. Taxability must be determined on a case-by-case basis.
Text of Rule
SECTION 1. Tax 11.05(2)(a), (d), (f) and (i) and (3)(d) and (L) are amended to read:
Tax 11.05(2)(a) Admissions to recreational facilities if the activity being conducted at the facility is amusement, athletic, entertainment or recreational in nature.
Note to Revisor: Replace the example at the end of sub. (2)(a) with the following:
