AB547,2,22 1An Act to repeal 20.435 (3) (bm), 46.513, 77.51 (4), 77.51 (14) (d), 77.51 (14) (i),
277.51 (14) (k), 77.51 (14) (L), 77.51 (14r), 77.51 (15), 77.52 (6), 77.52 (14) (a) 2.,
377.523 (title), 77.53 (4), 77.54 (14g), 77.54 (14s), 77.54 (20), 77.54 (20m), 77.54
4(22), 77.54 (40), 77.61 (3), 77.65 (2) (c), 77.72 (title) and 77.72 (2) and (3); to
5renumber
77.51 (1), 77.51 (14) (g), 77.524 (1) (a), 77.524 (1) (b) and 77.53 (9m);
6to renumber and amend 77.52 (1), 77.523, 77.61 (2), 77.72 (1) and 77.77 (1);
7to consolidate, renumber and amend 77.52 (14) (a) (intro.) and 1. and (b);
8to amend 66.0615 (1m) (f) 2., 70.111 (23), 73.03 (50) (d), 76.07 (4g) (b) 8., 77.51
9(5), 77.51 (13) (o), 77.51 (14) (intro.), 77.51 (14) (a), 77.51 (14) (j), 77.51 (17),
1077.51 (20), 77.51 (21), 77.52 (2) (intro.), 77.52 (2) (a) 10., 77.52 (7), 77.52 (13),
1177.52 (15), 77.524 (1) (intro.), 77.53 (1), 77.53 (9), 77.53 (10), 77.53 (11), 77.53
12(16), 77.53 (17), 77.53 (17m), 77.53 (17r) (a), 77.53 (18), 77.54 (1), 77.54 (2), 77.54
13(2m), 77.54 (3) (a), 77.54 (3m) (intro.), 77.54 (4), 77.54 (5) (intro.), 77.54 (6)
14(intro.), 77.54 (8), 77.54 (9), 77.54 (9a) (intro.), 77.54 (10), 77.54 (11), 77.54 (12),

177.54 (13), 77.54 (14) (intro.), 77.54 (14) (a), 77.54 (14) (b), 77.54 (14) (f), 77.54
2(15), 77.54 (16), 77.54 (17), 77.54 (18), 77.54 (21), 77.54 (23m), 77.54 (25), 77.54
3(26), 77.54 (26m), 77.54 (27), 77.54 (28), 77.54 (29), 77.54 (30) (a) (intro.), 77.54
4(30) (c), 77.54 (31), 77.54 (32), 77.54 (33), 77.54 (34), 77.54 (35), 77.54 (36), 77.54
5(37), 77.54 (38), 77.54 (39), 77.54 (41), 77.54 (42), 77.54 (43), 77.54 (44), 77.54
6(45), 77.54 (46), 77.54 (46m), 77.55 (1) (intro.), 77.55 (2), 77.55 (2m), 77.55 (3),
777.56 (1), 77.57, 77.58 (3) (b), 77.58 (6), 77.59 (9), 77.61 (1) (b), 77.61 (1) (c), 77.61
8(4) (c), 77.65 (2) (e), 77.70, 77.705, 77.706, 77.707 (1), 77.707 (2), 77.71 (1), 77.71
9(2), 77.71 (3), 77.71 (4), 77.73 (2), 77.785 (1), 77.785 (2), 77.98, 77.981, 77.982
10(2), 77.99, 77.991 (2), 77.994 (1) (intro.), 77.9941 (4), 77.995 (2), 77.9951 (2),
1186.195 (3) (b) 3. and 218.0171 (2) (cq); to repeal and recreate 77.51 (7), 77.51
12(17m) and 77.63; and to create 73.03 (50b), 73.03 (61), 77.51 (1b), 77.51 (1e),
1377.51 (1n), 77.51 (1p), 77.51 (2k), 77.51 (2m), 77.51 (3p), 77.51 (3pd), 77.51 (3pj),
1477.51 (3pm), 77.51 (3pp), 77.51 (3t), 77.51 (7m), 77.51 (10m), 77.51 (10n), 77.51
15(10r), 77.51 (11m), 77.51 (12m), 77.51 (12p), 77.51 (13s), 77.51 (15a), 77.51
16(15b), 77.51 (17w), 77.51 (21p), 77.51 (22) (bm), 77.52 (1) (b), 77.52 (1) (c), 77.52
17(7b), 77.522, 77.524 (1) (ag), 77.53 (9m) (b), 77.53 (9m) (c), 77.54 (14b), 77.54
18(20n), 77.54 (20r), 77.54 (22b), 77.58 (6m), 77.58 (9a), 77.585, 77.59 (2m), 77.59
19(9n), 77.59 (9p) (b), 77.59 (9r), 77.60 (13), 77.61 (2) (b), 77.61 (3m), 77.61 (5m),
2077.61 (16), 77.67, 77.73 (3) and 77.77 (1) (b) of the statutes; relating to: the
21Uniform Sales and Use Tax Administration Act, granting rule-making
22authority, making an appropriation, and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill adopts the substantive provisions of the streamlined sales and use tax
agreement (agreement) for purposes of administering and collecting state, county,

and stadium district sales and use taxes. The agreement is intended to simplify and
modernize sales and use tax administration for the states that enter into the
agreement and to encourage out-of-state retailers to collect the state, county, and
stadium district sales and use taxes voluntarily. Under current federal law,
generally, an out-of-state retailer who sells goods or services to customers in this
state is not required to collect the sales tax or use tax imposed on such sales, if the
retailer has no physical presence in this state. See Quill v. North Dakota, 504 U.S.
298; 112 S.Ct. 1904 (1992).
States that wish to enter into the agreement must adopt uniform definitions
related to the administration of sales and use taxes and uniform policies related to
sourcing sales of goods and services, bad debt allowances, refunds, and, to some
extent, exemptions. Under the agreement, DOR may act jointly with other states
that are signatories to the agreement to establish standards for certifying service
providers and automated systems to aid out-of-state retailers with the collection of
state sales and use taxes.
Under current law, "gross receipts" refers to the measure of the sales tax, and
"sales price" refers to the measure of the use tax. Under the bill, "sales price" refers
to the measure of the sales tax, and "purchase price" refers to the measure of the use
tax.
The bill creates definitions for "alcohol beverages," "candy," "delivery charges,"
"dietary supplement," "food and food ingredients," "prepared food," and "soft drink."
The agreement provides that a state that is a signatory to the agreement may
choose to tax or not tax all articles that are covered by one definition, but a state may
not exempt from sales tax or use tax a particular item that is included in a definition.
The members of the project working on the agreement approved a definition for
"clothing." Therefore, in order to comply with the agreement, a state may either tax
all clothing or exempt all clothing, but a state may not exempt certain items of
clothing and tax others. This bill, therefore, eliminates the sales tax and use tax
exemptions for cloth diapers and antiembolism hose.
This bill creates definitions for "durable medical equipment,"
"mobility-enhancing equipment," and "prosthetic device." Under the bill, the sale
of such equipment and devices is exempt from the sales tax and the use tax.
Under the bill, generally, for purposes of determining which jurisdiction may
impose a sales tax or use tax on a sale, if a purchaser receives a product at the seller's
business location, the sale of that product occurs at the seller's business location. If
a purchaser does not receive the product at a seller's business location, the sale
occurs at the location where the purchaser receives the product. If the location of the
sale cannot be so determined, the sale occurs at the purchaser's address, as indicated
by the seller's business records. If the address cannot be determined from the
business records, the sale occurs at the purchaser's address, as obtained during the
consummation of the sale, including the address indicated on the purchaser's check.
Finally, if the location of a sale cannot be determined in any other way, the sale of
tangible personal property occurs at the location from which the tangible personal
property is shipped. Under the bill, if the item sold is a digital good or computer
software, and the digital good or computer software is delivered electronically, the

sale occurs at the location from which the digital good or computer software was first
available for transmission by the seller.
Under the bill, generally, the sale of a telecommunications service occurs at a
location that is determined to be consistent with the provisions of the federal Mobile
Telecommunications Sourcing Act.
This bill will be referred to the Joint Survey Committee on Tax Exemptions for
a detailed analysis, which will be printed as an appendix to this bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB547, s. 1 1Section 1. 20.435 (3) (bm) of the statutes is repealed.
AB547, s. 2 2Section 2. 46.513 of the statutes is repealed.
AB547, s. 3 3Section 3. 66.0615 (1m) (f) 2. of the statutes is amended to read:
AB547,4,84 66.0615 (1m) (f) 2. Sections 77.51 (12m), (14) (c), (f) and (j) and, (14g), (15a),
5and (15b),
77.52 (3), (3m), (4), (6) and (13), (14), (18), and (19), 77.522, 77.58 (1) to (5),
6(6m),
and (7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5), (8), (9) and, (12) to (14), and
7(15),
and 77.62, as they apply to the taxes under subch. III of ch. 77, apply to the tax
8described under subd. 1.
AB547, s. 4 9Section 4. 70.111 (23) of the statutes is amended to read:
AB547,4,1510 70.111 (23) Vending machines. All machines that automatically dispense soda
11water beverages, as defined in s. 97.29 (1) (i), and items included as a food or beverage
12under s. 77.54 (20) (a) and (b)
food and food ingredient, as defined in s. 77.51 (3t),
13upon the deposit in the machines of specified coins or currency, or insertion of a credit
14card, in payment for the soda water beverages, food or beverages food and food
15ingredient, as defined in s. 77.51 (3t)
.
AB547, s. 5 16Section 5. 73.03 (50) (d) of the statutes is amended to read:
AB547,5,8
173.03 (50) (d) In the case of a sole proprietor, signs the form or, in the case of
2other persons, has an individual who is authorized to act on behalf of the person sign
3the form, or, in the case of a single-owner entity that is disregarded as a separate
4entity under section 7701 of the Internal Revenue Code, the person is the owner. Any
5person who may register under this subsection may designate an agent, as defined
6in s. 77.524 (1) (ag), to register with the department under this subsection in the
7manner prescribed by the department. In this paragraph, "sign" has the meaning
8given in s. 77.51 (17r).
AB547, s. 6 9Section 6. 73.03 (50b) of the statutes is created to read:
AB547,5,1310 73.03 (50b) To waive the fee established under sub. (50) for applying for and
11renewing the business tax registration certificate, if the person who is applying for
12or renewing the certificate is not required for purposes of ch. 77 to hold such a
13certificate.
AB547, s. 7 14Section 7. 73.03 (61) of the statutes is created to read:
AB547,5,1615 73.03 (61) To do all of the following related to the Uniform Sales and Use Tax
16Administration Act:
AB547,5,1717 (a) Certify compliance with the agreement, as defined in s. 77.65 (2) (a).
AB547,5,2018 (b) Pursuant to the agreement, as defined in s. 77.65 (2) (a), certify certified
19service providers, as defined in s. 77.51 (1g), and certified automated systems, as
20defined in s. 77.524 (1) (am).
AB547,6,621 (c) Consistent with the agreement, as defined in s. 77.65 (2) (a), establish
22performance standards and eligibility criteria for a seller that sells tangible personal
23property or taxable services in at least 5 states that are signatories to the agreement,
24as defined in s. 77.65 (2) (a); that has total annual sales revenue of at least
25$500,000,000; that has a proprietary system that calculates the amount of tax owed

1to each taxing jurisdiction in which the seller sells tangible personal property or
2taxable services; and that has entered into a performance agreement with the states
3that are signatories to the agreement, as defined in s. 77.65 (2) (a). For purposes of
4this paragraph, "seller" includes an affiliated group of sellers using the same
5proprietary system to calculate the amount of tax owed in each taxing jurisdiction
6in which the sellers sell tangible personal property or taxable services.
AB547,6,107 (d) Issue a tax identification number to a person who claims an exemption
8under subch. III or V of ch. 77 and who is not required to register with the department
9for the purposes of subch. III or V of ch. 77 and establish procedures for the
10registration of such a person.
AB547,6,1411 (e) Maintain a database that is accessible to sellers and certified service
12providers, as defined in s. 77.51 (1g), that indicates whether items defined in
13accordance with the Uniform Sales and Use Tax Administration Act are taxable or
14nontaxable.
AB547,6,1815 (f) Maintain a database that is accessible to sellers and certified service
16providers, as defined in s. 77.51 (1g), that indicates tax rates, taxing jurisdiction
17boundaries, and zip code or address assignments related to the administration of
18taxes imposed under subchs. III and V of ch. 77.
AB547,6,2119 (g) Set forth the information that the seller shall provide to the department for
20tax exemptions claimed by purchasers and establish the manner in which a seller
21shall provide such information to the department.
AB547,6,2522 (h) Provide monetary allowances, in addition to the retailer's discount provided
23under s. 77.61 (4) (c), to certified service providers, as defined in s. 77.51 (1g), and
24sellers that use certified automated systems, as defined in s. 77.524 (1) (am), or
25proprietary systems, pursuant to the agreement as defined in s. 77.65 (2) (a).
AB547, s. 8
1Section 8. 76.07 (4g) (b) 8. of the statutes is amended to read:
AB547,7,82 76.07 (4g) (b) 8. Determine transport-related revenue by adding public service
3revenue allocated to this state on the basis of routes for which the company is
4authorized to receive subsidy payments, mutual aid allocated to this state on the
5basis of the ratio of transport revenues allocated to this state to transport revenues
6everywhere in the previous year, in-flight sales allocated to this state as they are
7allocated under s. 77.51 (14r) 77.522 and all other transport-related revenues from
8sales made in this state.
AB547, s. 9 9Section 9. 77.51 (1) of the statutes is renumbered 77.51 (1d).
AB547, s. 10 10Section 10. 77.51 (1b) of the statutes is created to read:
AB547,7,1211 77.51 (1b) "Alcohol beverage" means a beverage that is suitable for human
12consumption and that contains 0.5 percent or more of alcohol by volume.
AB547, s. 11 13Section 11. 77.51 (1e) of the statutes is created to read:
AB547,7,1714 77.51 (1e) "Candy" means a preparation of sugar, honey, or other natural or
15artificial sweetener combined with chocolate, fruit, nuts, or other ingredients or
16flavorings in the form of bars, drops, or pieces. "Candy" does not include a
17preparation that contains flour or that requires refrigeration.
AB547, s. 12 18Section 12. 77.51 (1n) of the statutes is created to read:
AB547,7,2119 77.51 (1n) "Computer" means an electronic device that accepts information in
20digital or similar form and that manipulates such information to achieve a result
21based on a sequence of instructions.
AB547, s. 13 22Section 13. 77.51 (1p) of the statutes is created to read:
AB547,7,2423 77.51 (1p) "Computer software" means a set of coded instructions designed to
24cause a computer or automatic data processing equipment to perform a task.
AB547, s. 14 25Section 14. 77.51 (2k) of the statutes is created to read:
AB547,8,2
177.51 (2k) "Delivered electronically" means delivered to a purchaser by means
2other than by tangible storage media.
AB547, s. 15 3Section 15. 77.51 (2m) of the statutes is created to read:
AB547,8,74 77.51 (2m) "Delivery charges" means charges by a seller to prepare and deliver
5tangible personal property or services to a location designated by the purchaser of
6the tangible personal property or services, including charges for transportation,
7shipping, postage, handling, crating, and packing.
AB547, s. 16 8Section 16. 77.51 (3p) of the statutes is created to read:
AB547,8,109 77.51 (3p) "Dietary supplement" means a product, other than tobacco, that is
10intended to supplement a person's diet, if all of the following apply:
AB547,8,1211 (a) The product contains any of the following ingredients or any combination
12of any of the following ingredients:
AB547,8,1313 1. A vitamin.
AB547,8,1414 2. A mineral.
AB547,8,1515 3. An herb or other botanical.
AB547,8,1616 4. An amino acid.
AB547,8,1817 5. A dietary substance that is intended for human consumption to supplement
18the diet by increasing total dietary intake.
AB547,8,1919 6. A concentrate, metabolite, constituent, or extract.
AB547,8,2320 (b) The product is intended for ingestion in tablet, capsule, powder, soft-gel,
21gel-cap, or liquid form, or, if not intended for ingestion in such forms, is not
22represented as conventional food and is not represented for use as the sole item of
23a meal or diet.
AB547,8,2524 (c) The product is required to be labeled as a dietary supplement as required
25under 21 CFR 101.36.
AB547, s. 17
1Section 17. 77.51 (3pd) of the statutes is created to read:
AB547,9,102 77.51 (3pd) "Direct mail" means printed material that is delivered by the U.S.
3postal service or other delivery service to a mass audience or to addressees on a
4mailing list provided by or at the direction of the purchaser of the printed material,
5if the cost of the printed material or any tangible personal property included with the
6printed material is not billed directly to the recipients of the printed material.
7"Direct mail" includes any tangible personal property provided directly or indirectly
8by the purchaser of the printed material to the seller of the printed material for
9inclusion in any package containing printed material. "Direct mail" does not include
10multiple items of printed material delivered to a single address.
AB547, s. 18 11Section 18. 77.51 (3pj) of the statutes is created to read:
AB547,9,1412 77.51 (3pj) "Drug" means a compound, substance, or preparation, or any
13component of them, other than food and food ingredients, dietary supplements, or
14alcoholic beverages, to which any of the following applies:
AB547,9,1715 (a) It is listed in the United States Pharmacopoeia, Homeopathic
16Pharmacopoeia of the United States, or National Formulary, or any supplement to
17any of them.
AB547,9,1918 (b) It is intended for use in diagnosing, curing, mitigating, treating, or
19preventing a disease.
AB547,9,2020 (c) It is intended to affect a function or structure of the body.
AB547, s. 19 21Section 19. 77.51 (3pm) of the statutes is created to read:
AB547,9,2522 77.51 (3pm) "Durable medical equipment" means equipment, including the
23repair parts and replacement parts for the equipment, that is for use in a person's
24home; that is primarily and customarily used for a medical purpose related to a
25person; that can withstand repeated use; that is not generally useful to a person who

1is not ill or injured; and that is not placed in or worn on the body. "Durable medical
2equipment" does not include mobility-enhancing equipment.
AB547, s. 20 3Section 20. 77.51 (3pp) of the statutes is created to read:
AB547,10,54 77.51 (3pp) "Electronic" means relating to technology having electrical,
5digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
AB547, s. 21 6Section 21. 77.51 (3t) of the statutes is created to read:
AB547,10,107 77.51 (3t) "Food and food ingredient" means a substance in liquid,
8concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion, or
9for chewing, by humans and that is ingested or chewed for its taste or nutritional
10value. "Food and food ingredient" does not include alcohol beverages or tobacco.
AB547, s. 22 11Section 22. 77.51 (4) of the statutes, as affected by 2003 Wisconsin Act 48, is
12repealed.
AB547, s. 23 13Section 23. 77.51 (5) of the statutes is amended to read:
AB547,10,2114 77.51 (5) For purposes of subs. (13) (e) and (f) and (14) (L) (15a) and s. 77.52
15(2m), "incidental" means depending upon or appertaining to something else as
16primary; something necessary, appertaining to, or depending upon another which is
17termed the principal; something incidental to the main purpose of the service.
18Tangible personal property transferred by a service provider is incidental to the
19service if the purchaser's main purpose or objective is to obtain the service rather
20than the property, even though the property may be necessary or essential to
21providing the service.
AB547, s. 24 22Section 24. 77.51 (7) of the statutes is repealed and recreated to read:
AB547,10,2523 77.51 (7) (a) "Lease or rental" means any transfer of possession or control of
24tangible personal property for a fixed or indeterminate term and for consideration
25and includes:
AB547,11,1
11. A transfer that includes future options to purchase or extend.
AB547,11,52 2. Agreements related to the transfer of possession or control of motor vehicles
3or trailers, if the amount of any consideration may be increased or decreased by
4reference to the amount realized on the sale or other disposition of such motor
5vehicles or trailers, consistent with section 7701 (h) (1) of the Internal Revenue Code.
AB547,11,66 (b) "Lease or rental" does not include any of the following:
AB547,11,107 1. A transfer of possession or control of tangible personal property under a
8security agreement or deferred payment plan, if such agreement or plan requires
9transferring title to the tangible personal property after making all required
10payments.
AB547,11,1411 2. A transfer of possession or control of tangible personal property under any
12agreement that requires transferring title to the tangible personal property after
13making all required payments and after paying an option price that does not exceed
14the greater of $100 or 1 percent of the total amount of the required payments.
AB547,11,1815 3. Providing tangible personal property along with an operator, if the operator
16is necessary for the tangible personal property to perform in the manner for which
17it is designed and if the operator does more than maintain, inspect, or set up the
18tangible personal property.
AB547,11,2219 (c) 1. Transfers described under par. (a) are considered a lease or rental,
20regardless of whether such transfer is considered a lease or rental under generally
21accepted accounting principles, or any provision of federal or local law, or any other
22provision of state law.
AB547,12,223 2. Transfers described under par. (b) are not considered a lease or rental,
24regardless of whether such transfer is considered a lease or rental under generally

1accepted accounting principles, or any provision of federal or local law, or any other
2provision of state law.
AB547, s. 25 3Section 25. 77.51 (7m) of the statutes is created to read:
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