Rule-Making Notices (Hearing Notices)

Plain language analysis

This proposed rule:

•   reflects the following tax law changes:

○   Section 77.52 (21), Stats., as revised by 2011 Wisconsin Act 32 to change the sales and use tax treatment of items provided free of charge by a retailer.

○   Section 77.54 (5) (am), Stats., as created by 2011 Wisconsin Act 32 to create a sales and use tax exemption for modular and manufactured homes used in real property construction activities outside Wisconsin.

○   Section 77.54 (11m), Stats., as created by 2011 Wisconsin Act 32 to create a sales and use tax exemption for vegetable oil or animal fat converted to motor vehicle fuel that is exempt from the taxes imposed under s. 78.01 (1), Stats.

•   The repeal of the regional transit authorities:

○   provides consistency with the interpretive rules and amendments adopted by the Streamlined Sales Tax Governing Board (SSTGB) to the extent those rules and amendments are consistent with Wisconsin's laws and makes changes to clarify rules based on suggestions made during last year's compliance review conducted by the SSTGB.

○   provides specifically that if the due date of a payment falls on a day the Federal Reserve Bank is closed the payment is timely if it is made on the next day the Federal Reserve is open (existing provisions to be updated are in section Tax 1.12)

○   removes potentially obsolete language and adds and amends examples where needed for clarification purposes

○   makes corrections to incorrect statutory cross-references

○   correctly reflects the occasional sale provisions contained in Wisconsin law

○   reflects the department's position relating to the Federal Anti-Head Tax Act (49 U.S.C. 40166) as it applies to Wisconsin sales and use tax

Summary of, and comparison with, existing or proposed federal regulation

There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.

Comparison with rules in adjacent states

The department is not aware of a similar rule in an adjacent state.

Summary of factual data and analytical methodologies

2011 Wisconsin Act 32 and the other legislation referenced in the above plain language analysis made various changes to Wisconsin's sales and use tax laws. The department has created this proposed rule order to reflect these statutory changes. No other data was used in the preparation of this proposed rule order or this analysis.

Analysis and supporting documents used to determine effect on small business

As explained above, this proposed rule is created to administer Wisconsin's sales and use tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.

Anticipated costs incurred by private sector

This proposed rule does not have a significant fiscal effect on the private sector.

Effect on Small Business

This proposed rule does not have a significant effect on small business.

Initial Regulatory Flexibility Analysis

This proposed rule order does not have a significant economic impact on a substantial number of small businesses.

Agency Contact Person

Please contact Dale Kleven at [phone] or [e-mail], if you have any questions regarding this proposed rule.

Text of Rule

SECTION 1. Tax 1.12 (8) (c) is amended to read:

Tax 1.12 (8) (c) When the prescribed due date falls on a weekend, or legal holiday, or day the Federal Reserve Bank is closed, the payment due date is revised to be the first business day immediately following the weekend, or holiday, or day the Federal Reserve Bank was closed.

SECTION 2. Tax 11.001 (1) is amended to read:

Tax 11.001 (1) Chapter Tax 11 is applicable to the state sales and use taxes imposed under subch. III of ch. 77, Stats., and is also applicable to the county, and stadium, and regional transit authority sales and use taxes authorized under subch. V of ch. 77, Stats.

SECTION 3. Tax 11.001 (2) (bw) is repealed.

SECTION 4. Tax 11.001 (2) (e) is amended to read:

Tax 11.001 (2) (e) “Tax" means the Wisconsin sales or use taxes in effect under ss. 77.52 (1) and (2) and 77.53 (1), Stats. “Tax" also includes the county, and stadium, and regional transit authority taxes imposed under s. 77.71, Stats.

SECTION 5. Tax 11.001 (3) (Note) is amended to read:

Tax 11.001 (3) (Note) 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. The regional transit authority taxes were authorized by 2009 Wis. Act 28 and repealed by 2011 Wis. Act 32.

SECTION 6. Tax 11.04 (1) is amended to read:

Tax 11.04 (1) In this rule, “exempt entity" means a person qualifying for an exemption under s. 77.54 (9a) or 77.55 (1), Stats. Section 77.54 (9a), Stats., provides an exemption for sales to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Wisconsin Quality Home Care Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s. 66.0927, Stats.; a sewerage commission organized under s. 281.43 (4), Stats., or a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21 to 200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s. 66.0823, Stats.; any transit authority created under s. 59.58 (7) or 66.1039, Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s. 613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch. II of ch. 229, Stats.; a local cultural arts district under subch. V of ch. 229, Stats.; a cemetery company or corporation described under section 501 (c) 13 of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation. Section 77.55 (1), Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any unincorporated [incorporated] agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States.

SECTION 7. Tax 11.05 (3) (b) is renumbered (3) (b) 1. and amended as renumbered to read:

Tax 11.05 (3) (b) 1. Water delivered through mains. Wood residue used for fuel and sold for use in a business activity. Coal, fuel oil, propane, steam, peat, fuel cubes produced from solid waste, wood, and biomass as defined in s. 196.378 (1) (ar), Stats., used for fuel sold for residential use. Electricity and natural gas sold for residential use during the months of November through April. Fuel and electricity sold for use in farming. Fuel and electricity consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats. “Sold" is defined in s. 77.54 (30) (b), Stats. In this paragraph, “residential use" has the meaning in s. Tax 11.57 (2) (q) 2.

SECTION 8. Tax 11.05 (3) (b) 2. and 3. are created to read:

Tax 11.05 (3) (b) 2. Electricity and natural gas are considered sold at the time of the billing. If the billings are mailed, the time of billing is the day on which the billing is mailed.

3. Fuels other than electricity and natural gas are considered sold at the time possession is transferred from the seller or seller's agent to the purchaser or purchaser's agent, except that a common carrier is the agent of the seller regardless of any f.o.b. point and regardless of the method in which the freight is paid.

SECTION 9. Tax 11.05 (4) (a) and (Note) are amended to read:

Tax 11.05 (4) (a) Section 77.54 (9a), Stats., exempts sales to and the storage, use or other consumption of tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., and services by Wisconsin or by any agency of Wisconsin, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Wisconsin Quality Home Care Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s. 66.0927, Stats.; a sewerage commission organized under s. 281.43 (4), Stats., or a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21 to 200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s. 66.0823, Stats.; any transit authority created under s. 59.58 (7) or 66.1039, Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s. 613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch. II of ch. 229, Stats.; a local cultural arts district under subch. V of ch. 229, Stats.; and a cemetery company or corporation described under section 501 (c) (13) of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation.

(Note) The interpretations in s. Tax 11.05 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Sales by vocational, technical and adult education schools were exempt from July 1, 1972, through October 3, 1973; (b) Mobile meals on wheels became exempt October 4, 1973, pursuant to Chapter 90, Laws of 1973; (c) Admission fees to state parks became exempt on July 1, 1978, pursuant to Chapter 418, Laws of 1977; (d) Sales of coal, fuel oil, propane, steam and wood used for fuel became exempt July 1, 1979, and the electricity and natural gas six-month exemption became effective on November 1, 1979, both pursuant to Chapter 1, Laws of 1979; (e) A governmental unit's charges for parking motor vehicles and aircraft and docking and providing storage space for boats became taxable June 1, 1980, pursuant to Chapter 221, Laws of 1979; (f) Landscaping and lawn maintenance services became taxable on May 1, 1982, pursuant to Chapter 317, Laws of 1981; (g) A governmental unit's charges for copying public records became exempt effective April 27, 1984, pursuant to 1983 Wis. Act 287, later amended effective April 2, 1986, pursuant to 1985 Wis. Act 149 to clarify that the exemption also applies to confidential records, and again amended effective May 1, 1992, pursuant to 1991 Wis. Act 269, to include records under s. 19.35 (1) (a), Stats.; (h) The exemption for peat and fuel cubes produced from solid waste became effective April 2, 1986, pursuant to 1985 Wis. Act 149; (i) The exemption for an agency or instrumentality of a Wisconsin governmental unit became effective June 1, 1986, pursuant to 1985 Wis. Act 149; (j) Wood residue used for fuel by businesses became exempt on September 1, 1987, pursuant to 1987 Wis. Act 27; (k) The exemption for admissions to a museum operated by a nonprofit corporation under lease with the state historical society became exempt July 20, 1985, pursuant to 1985 Wis. Act 29; (L) The exclusion of hospital service insurance corporation from the definition of exempt entity became effective September 1, 1985, pursuant to 1985 Wis. Act 29; (m) Revenues from establishing a “911" emergency telephone system became exempt August 1, 1987, pursuant to 1987 Wis. Act 27; (n) State park camping fees became exempt effective September 1, 1989, pursuant to 1989 Wis. Act 31; (o) The exemption for animal identification tags and standard samples by the Wisconsin department of agriculture, trade and consumer protection became effective October 1, 1993, pursuant to 1993 Wis. Act 16; (p) The exemption for fuel used in farming became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (q) The requirement that meals must be served on the premises of hospitals, nursing homes, etc., for exemption to apply became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (r) The exemption for sales to a local exposition district became effective April 26, 1994, pursuant to 1993 Wis. Act 263; (s) The exemption for sales of meals by community-based residential facilities became effective June 1, 1994, pursuant to 1993 Wis. Act 332; (t) The exemption for sales to the University of Wisconsin Hospitals and Clinics Authority became effective July 29, 1995, pursuant to 1995 Wis. Act 27; (u) The exemption for certain meals, food, food products and beverages furnished by institutions of higher education was revised to apply only if the items are furnished to an undergraduate student, a graduate student or a student enrolled in a professional school if the student is enrolled for credit at that institution and if the items are consumed by that student, or the items are furnished to a national football league team, effective for contracts or agreements entered into on or after October 14, 1997, pursuant to 1997 Wis. Act 27, and further revised to include certain meals, food, food products or beverages paid for to an institution of higher education through the use of an account of the institution, if the items are furnished by the institution, effective December 31, 1997, pursuant to 1997 Wis. Act 41; (v) The exemption for electricity sold for use in farming was expanded to include sales of electricity during the entire year, effective for sales on or after May 1, 2000, pursuant to 1999 Wis. Act 9; (w) The exemption for sales from the collection of public benefit fees became effective October 29, 1999, pursuant to 1999 Wis. Act 9; (x) The exemption for use of recreational facilities in connection with the sale of time-share property became effective December 1, 1999, pursuant to 1999 Wis. Act 9; (y) The exemption for certain items sold from a vending machine became effective July 1, 2001, pursuant to 1999 Wis. Act 9; (z) The exemption for fuel consumed in manufacturing became effective January 1, 2006, pursuant to 2003 Wis. Act 99; (zb) The exemption for regional transit authorities and the Wisconsin Quality Home Health Care Authority became effective July 1, 2009, pursuant to 2009 Wis. Act 28; (ze) The exemption for federally recognized American Indian tribes or bands in Wisconsin became effective August 1, 2009, pursuant to 2009 Act 28; (zh) The requirement that governmental units collect sales tax on their sales of used motor vehicles became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (zL) The exemption for low-income assistance fees became effective July 1, 2005, pursuant to 2005 Wis. Act 141; (zp) The exemption for certain admissions to sports activities by governmental units became effective July 1, 2009, pursuant to 2009 Wis. Act 28; (zr) The exemption for the police and fire protection fee became effective July 1, 2009, pursuant to 2009 Wis. Act 28; (zu) 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 (zy) The exemption for sales of food and food ingredients, except soft drinks, by any facility certified or licensed under ch. 48, Stats., became effective May 6, 2010, pursuant to 2009 Wis. Act 204; and (zz) The exemption for regional transit authorities was repealed effective September 28, 2011, pursuant to 2011 Wis. Act 32 and the exemption for the Wisconsin Quality Home Care Authority was repealed effective June 29, 2011, pursuant to 2011 Wis. Act 10.

SECTION 10. Tax 11.12 (3) is amended to read:

Tax 11.12 (3) A retailer shall have a signed exemption certificate for every exempt sale made to a farmer, except that if the exemption certificate is received electronically, a signature is not required. The certificate shall be used only for categories of items listed on it. Every invoice to which the certificate refers must contain the seller's name, the farmer's name and address, the date of sale and a brief description of the product sold.

SECTION 11. Tax 11.14 (2) (a) 3., (6) (b) 1., (8), (9), (10) (intro.), and (13) (b) are amended to read:

Tax 11.14 (2) (a) 3. Streamlined Sales and Use Tax Exemption Certificate, SSTGB Form F0003 or Streamlined Sales and Use Tax Exemption Certificate - Wisconsin, Form S-211-SST. This is a These are multistate form forms which may be used to claim any sales or use tax exemption provided under Wisconsin law. Since this is a these are multistate exemption certificate certificates, purchasers should use caution when issuing this certificate these certificates, since it contains they contain various exemptions that are not applicable in Wisconsin and only apply in other states. Purchasers are responsible for knowing if they qualify for the exemption they are claiming in the state in which the exemption is being claimed. The purchaser will be held liable for any tax, interest, and penalties that result from the purchaser claiming an exemption for which they were not eligible.

(6) (b) 1. The name, and address , and the signature of the purchaser, except that if the exemption certificate is received electronically, a signature is not required.

(8) A retailer shall have a signed exemption certificate for every exempt sale made to a farmer, except that if the exemption certificate is received electronically, a signature is not required.

(9) A retailer shall have a signed exemption certificate if the sale of fuel oil, propane, coal, steam or wood for residential or farm use is partially exempt from sales or use tax, except that if the exemption certificate is received electronically, a signature is not required. If the sale is 100% exempt, an exemption certificate is not required.

(10) (intro.) A retailer of electricity or natural gas shall have a signed exemption certificate, except that if the exemption certificate is received electronically, a signature is not required, for all sales of electricity or natural gas for residential or farm use which are exempt from sales or use tax unless any, or all, of the following apply:

(13) (b) The certificate shall give the descriptive name of the contract, job site, county or stadium tax effective date, date of prime contract and bid, date contract was signed, seller's name, date of performance of the contract, and contractor's name and address and shall be signed by the contractor, except that if the certificate is received electronically, a signature is not required.

SECTION 12. Tax 11.15 (3) (a) is amended to read:

Tax 11.15 (3) (a) Returnable container deposits received by a retailer at the time of the retail sale of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., such as soft drink bottles, beer bottles and milk containers, and refunds of the deposits may be excluded from the computation of the taxable sales price if they are excluded from the sales price on the retailer's books of account.

SECTION 13. Tax 11.17 (4) (b) 6. is amended to read:

Tax 11.17 (4) (b) 6. An optometrist's sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., including nonprescription sun glasses, contact lens solution, thermal and chemical care units for contact lenses, and other types of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., ordinarily taxable when sold at retail, unless the sales price from those sales are less than $1,000 during the calendar year. Optometrists whose receipts from taxable property, items, and goods equal or exceed $1,000 in a calendar year shall register with the department and obtain a seller's permit. Those whose receipts from taxable property, items, and goods are less than $1,000 shall be exempt as occasional sellers and shall pay tax to their suppliers or a use tax, as appropriate, on purchases of taxable property, items, or goods.

SECTION 14. Tax 11.26 (3) (b) (Example 1) and (Example 3) and (Note) are amended to read:

Tax 11.26 (3) (b) (Example 1) The room taxes imposed under s. 66.75 66.0615, Stats., which municipalities or local exposition districts impose on persons furnishing lodging to transients.

(Example 3) The county, and stadium, and regional transit authority sales and use taxes imposed under s. 77.71, Stats.

(Note) The interpretations in s. Tax 11.26 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exclusion for federal and Wisconsin motor vehicle excise taxes refunded became effective December 1, 1997, pursuant to 1997 Wis. Act 27; (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; and (c) the regional transit authority taxes were authorized by 2009 Wis. Act 28 and repealed by 2011 Wis. Act 32.

SECTION 15. Tax 11.28 (3) (c) 1. (intro.) and a. are amended to read:

Tax 11.28 (3) (c) 1. (intro.) When a retailer distributes coupons which its customer may use to obtain free tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, the following shall apply:

a. When purchasing tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. taxable products, including services, which will be given away to customers who must purchase other property, items, or goods to obtain the free property, item, or good make a required purchase consisting of only nontaxable products, a retailer may not use an exemption certificate to purchase the free property, item, or good products without payment of the sales tax for resale. The retailer is deemed the consumer of the free property products as provided in s. 77.52 (21) (a), Stats. If the free property, item, or good was products were acquired without tax for resale, the retailer shall report the tax on its purchase price of the property, item, or good those products.

SECTION 16. Tax 11.28 (3) (c) 1. a. (Example), ag., and ar. are created to read:

11.28 (3) (c) 1. a. (Example) A retailer purchases key chains that it will give to customers who purchase eight gallons of gasoline. The gasoline is exempt from sales tax. The retailer is required to pay Wisconsin sales or use tax on its purchase of the key chains.

ag. When purchasing taxable products, including services, which will be given away to customers who make a required purchase consisting of only taxable property, items, or goods, a retailer may purchase the free products without tax for resale. The retailer is deemed to be selling both the required property, item, or good and the product being provided free, as provided in s. 77.52 (21) (b), Stats.

Example: A retailer purchases bicycles that it will give to customers who purchase a sofa. The retailer may purchase the bicycles without tax for resale because the customer must purchase the sofa in order to receive the bicycle.

ar. When purchasing taxable products, including services, which will be given away to customers who make a required minimum purchase that may consist of both taxable and nontaxable property, items, and goods, the retailer may owe tax on its purchase of the free products. If the sales price of all of the taxable products sold equals or exceeds the required minimum purchase, the retailer may purchase the free products without tax for resale. If the sales price of all of the taxable products sold does not equal or exceed the required minimum purchase, the retailer owes tax on its purchase price of the free products to the extent that nontaxable products are included in the required minimum purchases. The retailer may make a reasonable allocation to compute the tax due on its purchase price of the free products. If the retailer does not want to make this allocation, the retailer shall pay tax on its purchase price of the products provided free of charge.

Examples: 1) A retailer provides a free soft drink to each customer that purchases at least $20 worth of property. A customer purchases $15 dollars of taxable property and $5 dollars of nontaxable property and receives the free soft drink. The retailer purchased the soft drink from its supplier for $1. Since 75% of the selling price of the minimum required purchase is from taxable property ($15/$20 minimum purchase requirement = 75%), the retailer is only required to pay tax on the remaining 25% of its $1 purchase price of the soft drink it gave away to this customer.

2) Same as Example 1 except that the customer purchases $5 of taxable property and $15 of nontaxable property and receives the free soft drink. Since 25% of the selling price of the minimum required purchases is from taxable property ($5/$20 minimum purchase requirement = 25%), the retailer is only required to pay tax on the remaining 75% of its $1 purchase price of the soft drink it gave away to this customer.

3) Same as Example 1 except that the customer purchased $15 of taxable property and $30 of nontaxable property and receives the free soft drink. Since 75% of the minimum required purchases is from taxable property ($15/$20 minimum purchase requirement = 75%), the retailer is only required to pay tax on the remaining 25% of its $1 purchase price of the soft drink it gave away to this customer.

4) Same as Example 1 except that the customer purchases $25 of taxable property and $30 of nontaxable property and receives the free soft drink. Since at least 100% of the $20 minimum required purchase is from taxable property, the retailer does not owe any sales or use tax on its purchase of the soft drink that it gave away to this customer.

Note: Additional examples can be obtained in Wisconsin Tax Bulletin 174 (January 2012) available on the department's web site at: www.revenue.wi.gov.

SECTION 17. Tax 11.28 (3) (c) 1. b. is amended to read:

Tax 11.28 (3) (c) 1. b. A retailer may not use an exemption certificate when purchasing taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., products which the retailer knows, or should know, is are to be given away to customers without the customers being a required to purchase other property, items, or goods to receive the free property, item, or good. If the property, item, or good product that is given away was acquired without tax for resale, the retailer shall report the tax on its purchase price of the property, item, or good product.

SECTION 18. Tax 11.28 (3) (c) 1. b. (Example 1) is repealed.

SECTION 19. Tax 11.28 (7) (Note) is amended to read:

Tax 11.28 (7) (Note) The interpretations in s. Tax 11.28 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption from use tax of certain donated property became effective August 9, 1989, pursuant to 1989 Wis. Act 31; (b) The exemption for certain medicines furnished without charge became effective October 14, 1997, pursuant to 1997 Wis. Act 27; (c) Section 77.57, Stats., was amended to remove the portion of the statute that allowed a purchaser to use the lesser of the cost or fair market value of an item that was purchased exempt and whose first taxable use occurred more than 6 months after it was purchased, pursuant to 2009 Wis. Act 2; (d) The requirements for a third party reimbursement to be considered part of the sales price or purchase price of a product are effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (e) 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 (f) The tax treatment of products provided for free by retailers became effective September 1, 2011 pursuant to 2011 Wis. Act 32.

SECTION 20. Tax 11.32 (6) (Example) is amended to read:

Tax 11.32 (6) (Example) A restaurant operator exchanges meals having a retail price of $100 for radio or television advertising which has an established price of $100 for this type of advertising service. The restaurant operator and the radio or television station each have to report the sales price of $100 as a result of the transaction since the total sales reported on the sales and use tax return includes both taxable and nontaxable transactions.

The radio station may, however, deduct the $100 from its total sales reported on its sales and use tax return, if the advertising service that it is selling is not subject to Wisconsin sales or use tax. The restaurant operator's sales of these meals are taxable. Therefore, no deduction may be taken on the restaurant operator's sales and use tax return relating to these meals.

SECTION 21. Tax 11.32 (7) is renumbered 11.32 (7) (a).

SECTION 22. Tax 11.32 (7) (b) and (c) and (8) (d) are created to read: