6:00 p.m.   MADISON, WI
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Copies of Rule and Contact Information
A copy of the proposed rule and the fiscal estimate may be obtained by writing to:
Lori Slauson
Administrative Rules and Federal Grants Coordinator
Department of Public Instruction
125 South Webster Street
P.O. Box 7841
Madison, WI 53707
Written Comments
Written comments on the proposed rules received by Ms. Slauson at the above address no later than September 17, 1999, will be given the same consideration as testimony presented at the hearing.
Analysis by the Department of Public Instruction
Chapter 115, Subchapter V, Stats., requires school districts to provide the related service of occupational therapy to children with disabilities who need this service to benefit from special education. The requirement for a medical referral from a licensed physician in s. PI 11.24 (9) (c), Wis. Adm. Code, is based directly on ch. Med 19, Wis. Adm. Code, which regulates all practice of occupational therapy. Section Med 19.08 (2) (a) reads:
(2) REFERRAL. (a) Evaluation and rehabilitative treatment shall be based on a referral from a licensed physician, dentist, psychologist, chiropractor or podiatrist.
On October 26, 1998, the Council to the state Medical Examining Board responded to a request from the Occupational Therapy Examining Council to interpret s. Med 19.08. Based on the legislative history of the provision, the board concluded that the provision is directed exclusively at rehabilitation services, which include evaluation for the purpose of rehabilitative treatment. Since school occupational therapy is not a rehabilitative treatment system, but a system designed to assist a child to benefit from special education, the board concluded that s. Med 19.08 does not require school occupational therapists to obtain a physician's referral.
The proposed rule brings the Department's administrative code (s. PI 11.24 (9) (c)) into conformity with the state Medical Examining Board's administrative code (s. Med 19.08), relating to occupational therapy.
Fiscal Estimate
The proposed rules bring the Department's administrative code into conformity with the state Medical Examining Board's administrative code.
The proposed rules will, in most cases, decrease school administrative costs by no longer requiring that a medical referral be obtained from a child's doctor. For example, school districts currently are required to pay for a physician's evaluation for children having a physician located out-of-state or for children whose parents are unable to pay for a physician's visit. This evaluation is necessary for the sole purpose of obtaining an occupational therapy referral. Under the proposed rules, the referral will no longer be required. Any decrease in costs as a result of this rule is indeterminable.
There is no state fiscal effect as a result of this rule.
Initial Regulatory Flexibility Analysis
The proposed rules are not anticipated to have a fiscal effect on small businesses as defined under s. 227.114 (1) (a), Stats.
Notice of Proposed Rule
Revenue
Notice is hereby given that pursuant to s. 227.11 (2) (a), Stats., and interpreting ss. 77.51 (17m) and (21m), 77.52 (2) (a) 5. and 5m., (2m) and (3m) and 77.525, 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 September 1, 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 Information
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(17m) and (21m), 77.52(2) (a) 5. and 5m., (2m) and (3m) and 77.525
SECTION 1. Tax 11.66(title) is revised, to remove cable television system services and to clarify that the section applies to telecommunications services and telecommunications message services.
SECTIONS 2 TO 5. Tax 11.66(2)(intro.), (a) and (b)(intro.) and 1. to 5. are renumbered Tax 11.66(2)(a)(intro.), 1. and 2.(intro.) and a. to e. and new sub. (2)(intro.), (a)(title) and (b) are created, to clarify the content of sub. (2) and list the types of services discussed in Tax 11.66.
Tax 11.66(2)(a)1. as renumbered is revised and examples are added, to reflect the tax treatment of certain telecommunications services which originate or terminate in Wisconsin, as a result of the amendment to s. 77.52(2)(a)5., Stats., by 1997 Wis. Act 27.
SECTIONS 6 TO 11. Tax 11.66(3)(title) and (intro.) are revised, sub. (3)(d) is repealed, sub. (3)(a), (b), (c) and (e) to (m) are renumbered sub. (3)(a)1., 2., 3. and 4. to 12. and sub. (3)(a)(intro.) is created, to clarify the content of sub. (3) and to remove cable television system services from Tax 11.66 because they are taxed separately from telecommunications services.
Tax 11.66(3)(a)1. as renumbered and the example are revised, to reflect the tax treatment of certain telecommunications services which originate or terminate in Wisconsin, as a result of the amendment to s. 77.52(2)(a)5., Stats., by 1997 Wis. Act 27.
SECTION 12. Tax 11.66(3)(b) is created, to list telecommunications message services as taxable services, as a result of the creation of s. 77.52(2)(a)5m., Stats., by 1997 Wis. Act 27.
SECTIONS 13 AND 14. Tax 11.66(4)(intro.) and (c) are revised, to correct grammar and punctuation in conformity with Legislative Council Rules Clearinghouse standards.
Tax 11.66(4)(a) is revised and sub. (4)(d) is repealed and recreated, and the example at the end of sub. (4)(d) is removed, to reflect the tax treatment of certain telecommunications services which originate or terminate in Wisconsin, as a result of the amendment to s. 77.52(2)(a)5., Stats., by 1997 Wis. Act 27.
SECTIONS 15 TO 17. Tax 11.66(4)(e) is repealed and sub. (4)(f) is renumbered sub. (4)(e), to remove nonmechanical telephone answering services from the listing of nontaxable services, as a result of the creation of s. 77.52(2)(a)5m., Stats., by 1997 Wis. Act 27.
Tax 11.66(5) is renumbered Tax 11.66(7) and new sub. (5) is created, to reflect the tax treatment of prepaid telephone calling cards and authorization numbers, as a result of the amendment to s. 77.52(2)(a)5., Stats., and the creation of s. 77.52(3m), Stats., by 1997 Wis. Act 237.
Tax 11.66(6) is created, to reflect the credit for taxes paid to other states, as a result of the creation of s. 77.525, Stats., by 1997 Wis. Act 27.
Text of Rule
SECTION 1. Tax 11.66(title) is amended to read:
Tax 11.66 Telecommunications and CATV telecommunications message services.
SECTION 2. Tax 11.66(2)(intro.) and (a) are renumbered Tax 11.66(2)(a)(intro.) and 1. and Tax 11.66(2)(a)1. as renumbered is amended to read:
  Tax 11.66(2)(a)1. The service originates or terminates in Wisconsin.
  Note to Revisor: Add the following examples at the end of Tax 11.66(2)(a)1. as renumbered:
  Examples: 1) Mary Jones places a telephone call from her home in Wisconsin to Bill Jones in Illinois. The call originated in Wisconsin since it was placed from a telephone in Wisconsin.
  2) Mary Jones receives a collect call at her home in Wisconsin. The call was placed by Bill Jones from a telephone in Illinois. The call terminated in Wisconsin since it was received in Wisconsin.
SECTION 3. Tax 11.66(2)(intro.) and (a)(title) are created to read:
Tax 11.66(2) GENERAL. This subsection describes the conditions under which telecommunications services and telecommunications message services are taxable. The conditions are as follows:
(a) Telecommunications services.
SECTION 4. Tax 11.66(2) (b) (intro.) and 1. to 5. are renumbered Tax 11.66(2)(a)2.(intro.) and a. to e.
SECTION 5. Tax 11.66(2)(b) is created to read:
Tax 11.66(2)(b) Telecommunications message services. Telecommunications message services that consist of recording telecommunications messages and transmitting them to the purchaser of the service or at that purchaser's direction are taxable, except that those services are not taxable if they are merely an incidental element of another service that is sold to the purchaser and is not taxable.
SECTION 6. Tax 11.66(3)(title) and (intro.) are amended to read:
Tax 11.66(3) TAXABLE TELECOMMUNICATIONS SERVICES.
Telecommunications services Gross receipts which are subject to Wisconsin sales or use tax include gross receipts from the sale of the following services:
SECTION 7. Tax 11.66(3)(a) is renumbered Tax 11.66(3)(a)1. and amended to read:
  Tax 11.66(3)(a)1. Local and toll service and Wide-Area Telecommunications Service, or WATS, including intrastate private line service.
  Note to Revisor: Replace the example at the end of sub. (3)(a)1. as renumbered with the following:
  Example: Company JKL, headquartered in Milwaukee, has branch offices in Madison, Green Bay, Chicago and Minneapolis. Company JLK contracts with a telecommunications company for private line telecommunications service between its Milwaukee office and each branch office. The charges by the telecommunications company to Company JKL for private line service are subject to Wisconsin sales or use tax. A credit may be allowed, against the Wisconsin sales or use tax, for tax paid to Illinois or Minnesota. See sub. (6).
SECTION 8. Tax 11.66(3) (a) (intro.) is created to read:
Tax 11.66(3) (a) Telecommunications services, including:
SECTION 9. Tax 11.66(3) (b) and (c) are renumbered Tax 11.66(3) (a) 2. and 3.
SECTION 10. Tax 11.66(3)(d) is repealed.
SECTION 11. Tax 11.66(3)(e) to (m) are renumbered Tax 11.66(3)(a)4. to 12.
  Note to Revisor: Add the following note at the end of Tax 11.66(3)(a)12. as renumbered:
  Note: Refer to sub. (5) regarding the sale of rights to purchase telecommunications services.
SECTION 12. Tax 11.66(3)(b) is created to read:
Tax 11.66(3)(b) Telecommunications message services, including:
  1. Nonmechanical telephone answering services.
  Examples: 1) A real estate business, whose employes spend considerable periods of time away from its office, contracts with Company A to answer incoming telephone calls during periods when employes are not available to answer the telephone. Employes of Company A receive the calls to the real estate office by telephone, take messages from incoming callers and transmit the messages to the real estate company or particular employes in that company. The service provided by Company A is not an incidental element of another service that is sold to the real estate company and is nontaxable. Company A's charge for this service is subject to Wisconsin sales or use tax.
  2) Company B employs an office management service that provides receptionist, typing, filing, scheduling, bookkeeping and similar services. Employes of the office management service also answer and route incoming telephone calls. When calls cannot be routed, the office management service takes and transmits messages to the appropriate person. This answering service is only a small part of the total services provided.
  The telephone answering service provided as a part of the office management service is not subject to Wisconsin sales or use tax because it is incidental to the office management service provided and that office management service is not taxable.
2. Burglar alarm and similar security monitoring services.
3. Electronic mail services.
4. Mechanical or electronic voice messaging and telephone answering services.
  Example: Company A provides its customers access to an office message system computer through which a customer can deposit or retrieve telephone messages using a touch-tone telephone. The service may be used as a message center, a call forwarding service or an answering service. Messages are stored in the computer, and the customer may send or retrieve messages, reply to a message directly, reroute messages to others, broadcast messages to a wider group, save selected messages and cancel messages no longer needed. The service is available 24 hours a day, and the customer accesses the computer either through a toll-free telephone number or a local telephone number. The service provided by Company A is not an incidental element of another service that is sold to the customer and is nontaxable. Company A's charges for this service are subject to Wisconsin sales or use tax.
SECTION 13. Tax 11.66(4)(intro.), (a) and (c) are amended to read:
Tax 11.66(4) Gross receipts from the sale of or charge for the following services are not taxable:
(a) Interstate or international telecommunications service if the service originates from another state or country or if the service originates in Wisconsin but is charged to a service address in another state or country.
(c) Access services, Measured Toll Service, or MTS, and Wide-Area Telecommunications Service, or WATS, services resellers purchase, repackage, and resell to customers.
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