Wisconsin Legislature: LRB-0303/5

5. If the location of a sale of a product cannot be determined under subds. 1. to 4., the location of the sale is determined as follows:

a. If the item sold is tangible personal property, the sale occurs at the location from which the tangible personal property is shipped.

b. If the item sold is a digital good, or computer software delivered electronically, the sale occurs at the location from which the digital good or computer software was first available for transmission by the seller.

c. If a service is sold, the sale occurs at the location from which the service was provided.

(c) The sale of direct mail occurs at the location from which the direct mail is shipped, if the purchaser does not provide to the seller a direct pay permit, a direct mail form, or other information that indicates the appropriate taxing jurisdiction to which the direct mail is delivered to the ultimate recipients. If the purchaser provides a direct mail form or direct payment to the seller, the purchaser shall pay or remit, as appropriate, to the department the tax imposed under s. 77.53 (1) on all purchases for which the tax is due and the seller is relieved from liability for collecting such tax. A direct mail form provided to a seller under this paragraph shall remain effective for all sales by the seller who received the form to the purchaser who provided the form, unless the purchaser revokes the form in writing and provides such revocation to the seller.

(d) 1. A business purchaser who purchases a service, digital good, or computer software that is delivered electronically, who does not hold a direct pay permit under s. 77.52 (17m), and who knows at the time of purchase that the service, good, or software will be concurrently available for use in more than one taxing jurisdiction shall provide a multiple-points-of-use exemption form to the seller, in conjunction with the purchase, and shall pay or remit, as appropriate, to the department the tax imposed under s. 77.53 (1) on all purchases for which the tax is due.

2. To apportion the amount of the tax due multiple taxing jurisdictions, a purchaser who provides an exemption form under subd. 1. shall use any reasonable, consistent, and uniform apportionment method supported by the purchaser's business records that exist at the time of the sale.

3. An exemption form provided under subd. 1. shall remain effective for all sales by the seller who received the form to the purchaser who provided the form, unless the purchaser revokes the form in writing and provides such a revocation to the seller.

4. A business purchaser who purchases a service, digital good, or computer software that is delivered electronically, who holds a direct pay permit under s. 77.52 (17m), and who knows at the time of purchase that the service, good, or software will be concurrently available for use in more than one taxing jurisdiction is not required to provide a multiple-points-of-use exemption form to the seller, but shall collect, pay, or remit, as appropriate, to the department the tax imposed under s. 77.53 (1) and shall use the apportionment method described under subd. 2. to apportion the tax due multiple taxing jurisdictions.

5. A seller who receives a multiple-points-of-use exemption form under this paragraph is relieved from liability for collecting the tax imposed under s. 77.53 (1) on purchases related to the multiple-points-of-use exemption form.

(2) LEASE OR RENTAL. (a) Except as provided in pars. (b) and (c), with regards to the first or only payment on the lease or rental, the lease or rental of tangible personal property occurs at the location determined under sub. (1) (b). If the property is moved from the place where the property was initially delivered, the subsequent periodic payments on the lease or rental occur at the property's primary location as indicated by an address for the property that is provided by the lessee and that is available to the lessor in records that the lessor maintains in the ordinary course of the lessor's business, if the use of such an address does not constitute bad faith. The location of a lease or rental as determined under this paragraph shall not be altered by any intermittent use of the property at different locations.

(b) The lease or rental of motor vehicles, trailers, semitrailers, and aircraft, that are not transportation equipment, occurs at the primary location of such motor vehicles, trailers, semitrailers, or aircraft as indicated by an address for the property that is provided by the lessee and that is available to the lessor in records that the lessor maintains in the ordinary course of the lessor's business, if the use of such an address does not constitute bad faith, except that a lease or rental under this paragraph that requires only one payment occurs at the location determined under sub. (1) (b). The location of a lease or rental as determined under this paragraph shall not be altered by any intermittent use of the property at different locations.

(d) A license of tangible personal property shall be treated as a lease or rental of tangible personal property under this subsection.

(3) TELECOMMUNICATIONS. (a) In this subsection:

1. "Air-to-ground radiotelephone service" means a radio service in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft.

2. "Call-by-call basis" means any method of charging for telecommunications services by which the price of such services is measured by individual calls.

3. "Communications channel" means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.

4. "Customer" means a person who enters into a contract with a seller of telecommunications services or, in any transaction for which the end user is not the person who entered into a contract with the seller of telecommunications services, the end user of the telecommunications services. "Customer" does not include a person who resells telecommunications services or, for mobile telecommunications services, a serving carrier under an agreement to serve a customer outside the home service provider's licensed service area.

5. "Customer channel termination point" means the location where a customer inputs or receives communications.

6. "End user" means an individual who uses a telecommunications service.

7. "Home service provider" means a home service provider under section 124 (5) of P.L. 106-252.

8. "Mobile telecommunications service" means a mobile telecommunications service under 4 USC 116 to 126, as amended by P.L. 106-252.

9. "Place of primary use" means place of primary use, as determined under 4 USC 116 to 126, as amended by P.L. 106-252.

10. "Postpaid calling service" means a telecommunications service that is obtained by paying for it on a call-by-call basis using a bankcard, travel card, credit card, debit card, or similar method, or by charging it to a telephone number that is not associated with the location where the telecommunications service originates or terminates. "Postpaid calling service" includes a service that would otherwise be a prepaid calling service except that the service provided to the customer is not exclusively a telecommunications service.

11. "Prepaid calling service" means the right to access services that are exclusively telecommunications services, if that right is paid for in advance of providing such services, requires using an access number or authorization code to originate calls, and is sold in predetermined units or dollars that decrease with use in a known amount.

12. "Private communication service" means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of communications channels, regardless of the manner in which the communications channel or group of communications channels is connected, and includes switching capacity, extension lines, stations, and other associated services that are provided in connection with the use of such channel or channels.

13. "Radio service" means a communication service provided by the use of radio, including radiotelephone, radiotelegraph, paging, and facsimile service.

14. "Radiotelegraph service" means transmitting messages from one place to another by means of radio.

15. "Radiotelephone service" means transmitting sound from one place to another by means of radio.

(b) Except as provided in pars. (d) to (g), the sale of a telecommunications service that is sold on a call-by-call basis occurs in the taxing jurisdiction for sales and use tax purposes where the call originates and terminates, in the case of a call that originates and terminates in the same such jurisdiction, or the taxing jurisdiction for sales and use tax purposes where the call originates or terminates and where the service address is located.

(c) Except as provided in pars. (d) to (g), the sale of a telecommunications service that is sold on a basis other than a call-by-call basis occurs at the customer's place of primary use.

(d) The sale of a mobile telecommunications service, except an air-to-ground radiotelephone service and a prepaid calling service, occurs at the customer's place of primary use.

(e) The sale of a postpaid calling service occurs at the location where the signal of the telecommunications service originates, as first identified by the seller's telecommunications system or, if the signal is not transmitted by the seller's telecommunications system, by information that the seller received from the seller's service provider.

(f) The sale of a prepaid calling service occurs at the location determined under sub. (1) (b), except that, if the service is a mobile telecommunications service and the location cannot be determined under sub. (1) (b) 1. to 4., the prepaid calling service occurs at the location determined under sub. (1) (b) 5. c. or at the location associated with the mobile telephone number, as determined by the seller.

(g) 1. The sale of a private communication service for a separate charge related to a customer channel termination point occurs at the location of the customer channel termination point.

2. The sale of a private communication service in which all customer channel termination points are located entirely in one taxing jurisdiction for sales and use tax purposes occurs in the taxing jurisdiction in which the customer channel termination points are located.

3. If the segments are charged separately, the sale of a private communication service that represents segments of a communications channel between 2 customer channel termination points that are located in different taxing jurisdictions for sales and use tax purposes occurs in an equal percentage in both such jurisdictions.

4. If the segments are not charged separately, the sale of a private communication service for segments of a communications channel that is located in more than one taxing jurisdiction for sales and use tax purposes occurs in each such jurisdiction in a percentage determined by dividing the number of customer channel termination points in that jurisdiction by the number of customer channel termination points in all jurisdictions where segments of the communications channel are located.

(4) FLORISTS. (a) For purposes of this subsection, "retail florist" means a person engaged in the business of selling cut flowers, floral arrangements, and potted plants and who prepares such flowers, floral arrangements, and potted plants. "Retail florist" does not include a person who sells cut flowers, floral arrangements, and potted plants primarily by mail or via the Internet.

(b) The sale of tangible personal property by a retail florist who takes an order from a purchaser occurs at the location where the retail florist takes the order, if the retail florist forwards the order to another retail florist who is at a location other than the location of the florist who takes the order and who transfers the tangible personal property to a person identified by the purchaser.

SECTION 70. 77.523 (title) of the statutes is repealed.

SECTION 71. 77.523 of the statutes is renumbered 77.59 (9p) (a) and amended to read:

77.59 (9p) (a) If a customer purchases a service that is subject to 4 USC 116 to 126, as amended by P.L. 106-252, and if the customer believes that the amount of the tax assessed for the service under this subchapter or the place of primary use or taxing jurisdiction assigned to the service is erroneous, the customer may request that the service provider correct the alleged error by sending a written notice to the service provider. The notice shall include a description of the alleged error, the street address for the customer's place of primary use of the service, the account name and number of the service for which the customer seeks a correction, and any other information that the service provider reasonably requires to process the request. Within 60 days from the date that a service provider receives a request under this section paragraph, the service provider shall review its records to determine the customer's taxing jurisdiction. If the review indicates that there is no error as alleged, the service provider shall explain the findings of the review in writing to the customer. If the review indicates that there is an error as alleged, the service provider shall correct the error and shall refund or credit the amount of any tax collected erroneously, along with the related interest, as a result of the error from the customer in the previous 48 months, consistent with s. 77.59 (4). A customer may take no other action, or commence any action, to correct an alleged error in the amount of the tax assessed under this subchapter on a service that is subject to 4 USC 116 to 126, as amended by P.L. 106-252, or to correct an alleged error in the assigned place of primary use or taxing jurisdiction, unless the customer has exhausted his or her remedies under this section paragraph.

SECTION 72. 77.524 (1) (a) of the statutes is renumbered 77.524 (1) (am).

SECTION 73. 77.524 (1) (ag) of the statutes is created to read:

77.524 (1) (ag) "Agent" means a person appointed by a seller to represent the seller before the states that are signatories to the agreement, as defined in 77.65 (2) (a).

SECTION 74. 77.524 (1) (b) of the statutes is renumbered 77.51 (1g).

SECTION 75. 77.53 (1) of the statutes, as affected by 2005 Wisconsin Act .... (this act), is repealed and recreated to read:

77.53 (1) Except as provided in sub. (1m), an excise tax is levied and imposed on the use or consumption in this state of coins, stamps, leased property, and taxable services under s. 77.52 purchased from any retailer, at the rate of 5% of the purchase price of such coins, stamps, leased property, and services; on the storage, use or other consumption in this state of tangible personal property purchased from any retailer, at the rate of 5% of the purchase price of that property; on the storage, use, or other consumption of audiovisual works, finished artwork, literary works, and audio works purchased from any retailer and delivered electronically to the purchaser, at the rate of 5% of the purchase price of such items; and on the storage, use or other consumption of tangible personal property manufactured, processed or otherwise altered, in or outside this state, by the person who stores, uses or consumes it, from material purchased from any retailer, at the rate of 5% of the purchase price of that material.

****NOTE: This is reconciled s. 77.53 (1). This SECTION has been affected by LRB-1796/1.

SECTION 76. 77.53 (3) of the statutes is amended to read:

77.53 (3) Every retailer engaged in business in this state and making sales of tangible personal property or taxable services for delivery into this state or with knowledge directly or indirectly that the property or service is intended for storage, use or other consumption in that are sourced to this state under s. 77.522, shall, at the time of making the sales or, if the storage, use or other consumption of the tangible personal property or taxable service is not then taxable under this section, at the time the storage, use or other consumption becomes taxable, collect the tax from the purchaser and give to the purchaser a receipt in the manner and form prescribed by the department.

SECTION 77. 77.53 (4) of the statutes is repealed.

SECTION 78. 77.53 (9) of the statutes is amended to read:

77.53 (9) Every retailer selling tangible personal property or taxable services for storage, use or other consumption in this state shall register with the department and obtain a certificate under s. 73.03 (50) and give the name and address of all agents operating in this state, the location of all distribution or sales houses or offices or other places of business in this state, the standard industrial code classification of each place of business in this state and the other information that the department requires. Any person who may register under this subsection may designate an agent, as defined in s. 77.524 (1) (ag), to register with the department under this subsection, in the manner prescribed by the department.

SECTION 79. 77.53 (9m) of the statutes is renumbered 77.53 (9m) (a).

SECTION 80. 77.53 (9m) (b) of the statutes is created to read:

77.53 (9m) (b) Any person who may register under par. (a) may designate an agent, as defined in s. 77.524 (1) (ag), to register with the department under par. (a), in the manner prescribed by the department.

SECTION 81. 77.53 (9m) (c) of the statutes is created to read:

77.53 (9m) (c) The registration under par. (a) by a person who is not otherwise required to collect any tax imposed by this subchapter shall not be used as a factor in determining whether the seller has nexus with this state for any tax at any time.

SECTION 82. 77.53 (10) of the statutes is amended to read:

77.53 (10) For the purpose of the proper administration of this section and to prevent evasion of the use tax and the duty to collect the use tax, it is presumed that tangible personal property or taxable services sold by any person for delivery in this state is sold for storage, use, or other consumption in this state until the contrary is established. The burden of proving the contrary is upon the person who makes the sale unless that person takes from the purchaser a an electronic or paper certificate, in a manner prescribed by department, to the effect that the property or taxable service is purchased for resale, or otherwise exempt from the tax;, except that no certificate is required for sales of cattle, sheep, goats, and pigs that are sold at an animal market, as defined in s. 95.68 (1) (ag), and no certificate is required for sales of commodities, as defined in 7 USC 2, that are consigned for sale in a warehouse in or from which the commodity is deliverable on a contract for future delivery subject to the rules of a commodity market regulated by the U.S. commodity futures trading commission if upon the sale the commodity is not removed from the warehouse the sale of tangible personal property that is exempt under s. 77.54 (7), (7m), (8), (10), (11), (14), (14b), (15), (17), (20n), (21), (22b), (30), (31), (32), (35), (36), (37), (42), (44), (45), and (46), except as provided in s. 77.54 (30) (e) and (f).

SECTION 83. 77.53 (11) of the statutes is amended to read:

77.53 (11) The certificate referred to in sub. (10) relieves the person selling the property or service from the burden of proof only if taken in good faith from a person who is engaged as a seller of tangible personal property or taxable services and who holds the permit provided for by s. 77.52 (9) and who, at the time of purchasing that the person purchases the tangible personal property or taxable service, intends to sell it in the regular course of operations or is unable to ascertain at the time of purchase whether the property or service will be sold or will be used for some other purpose, or if taken in good faith from a person claiming exemption. The certificate under sub. (10) shall not relieve the seller of the burden of proof if the sale is sourced to this state under s. 77.522 (1) (b) 1. and the claimed exemption is not provided for under this subchapter or if the seller fraudulently fails to collect sales tax or solicit the purchaser to claim an unlawful exemption. The certificate shall be signed by and bear the name and address of provide information that identifies the purchaser and shall indicate the number of the permit issued to the purchaser, the general character of tangible personal property or taxable service sold by the purchaser and the basis for the claimed exemption and a paper certificate shall be signed by the purchaser. The certificate shall be substantially in the form that the department prescribes by rule.

SECTION 84. 77.53 (16) of the statutes is amended to read:

77.53 (16) If the purchase, rental or lease of tangible personal property or service subject to the tax imposed by this section was subject to a sales tax by another state in which the purchase was made, the amount of sales tax paid the other state shall be applied as a credit against and deducted from the tax, to the extent thereof, imposed by this section, except no credit may be applied against and deducted from a sales tax paid on the purchase of direct mail, if the direct mail purchaser did not provide to the seller a direct pay permit, a direct mail form, or other information that indicates the appropriate taxing jurisdiction to which the direct mail is delivered to the ultimate recipients. In this subsection "sales tax" includes a use or excise tax imposed on the use of tangible personal property or taxable service by the state in which the sale occurred and "state" includes the District of Columbia but does not include the commonwealth of Puerto Rico or the several territories organized by congress.

SECTION 85. 77.53 (17) of the statutes is amended to read:

77.53 (17) This section does not apply to tangible personal property purchased outside this state, as determined under s. 77.522, other than motor vehicles, boats, snowmobiles, mobile homes not exceeding 45 feet in length, trailers, semitrailers, all-terrain vehicles and airplanes registered or titled or required to be registered or titled in this state, which is brought into this state by a nondomiciliary for the person's own storage, use or other consumption while temporarily within this state when such property is not stored, used or otherwise consumed in this state in the conduct of a trade, occupation, business or profession or in the performance of personal services for wages or fees.

SECTION 86. 77.53 (17m) of the statutes is amended to read:

77.53 (17m) This section does not apply to a boat purchased in a state contiguous to this state, as determined under s. 77.522, by a person domiciled in that state if the boat is berthed in this state's boundary waters adjacent to the state of the domicile of the purchaser and if the transaction was an exempt occasional sale under the laws of the state in which the purchase was made.

SECTION 87. 77.53 (17r) (a) of the statutes is amended to read:

77.53 (17r) (a) It is purchased in another state, as determined under s. 77.522.

SECTION 88. 77.53 (18) of the statutes is amended to read:

77.53 (18) This section does not apply to the storage, use or other consumption in this state of household goods for personal use or to aircraft, motor vehicles, boats, snowmobiles, mobile homes, trailers, semitrailers and all-terrain vehicles, for personal use, purchased by a nondomiciliary of this state outside this state, as determined under s. 77.522, 90 days or more before bringing the goods or property into this state in connection with a change of domicile to this state.

SECTION 89. 77.54 (1) of the statutes is amended to read:

77.54 (1) The gross receipts sales price from the sale of and the storage, use or other consumption in this state of tangible personal property and services the gross receipts sales price from the sale of which, or the storage, use or other consumption of which, this state is prohibited from taxing under the constitution or laws of the United States or under the constitution of this state.

SECTION 90. 77.54 (2) of the statutes is amended to read:

77.54 (2) The gross receipts sales price from sales of and the storage, use or other consumption of tangible personal property becoming an ingredient or component part of an article of tangible personal property or which is consumed or destroyed or loses its identity in the manufacture of tangible personal property in any form destined for sale, except as provided in sub. (30) (a) 6.

SECTION 91. 77.54 (2m) of the statutes is amended to read:

77.54 (2m) The gross receipts sales price from the sales of and the storage, use or other consumption of tangible personal property or services that become an ingredient or component of shoppers guides, newspapers or periodicals or that are consumed or lose their identity in the manufacture of shoppers guides, newspapers or periodicals, whether or not the shoppers guides, newspapers or periodicals are transferred without charge to the recipient. In this subsection, "shoppers guides", "newspapers" and "periodicals" have the meanings under sub. (15). The exemption under this subdivision does not apply to advertising supplements that are not newspapers.

SECTION 92. 77.54 (3) (a) of the statutes is amended to read:

77.54 (3) (a) The gross receipts sales price from the sales of and the storage, use or other consumption of tractors and machines, including accessories, attachments and parts therefor, used exclusively and directly in the business of farming, including dairy farming, agriculture, horticulture, floriculture and custom farming services, but excluding automobiles, trucks, and other motor vehicles for highway use; excluding personal property that is attached to, fastened to, connected to or built into real property or that becomes an addition to, component of or capital improvement of real property and excluding tangible personal property used or consumed in the erection of buildings or in the alteration, repair or improvement of real property, regardless of any contribution that that the personal property makes to the production process in that building or real property and regardless of the extent to which that personal property functions as a machine.

SECTION 93. 77.54 (3m) (intro.) of the statutes is amended to read:

77.54 (3m) (intro.) The gross receipts sales price from the sale of and the storage, use or other consumption of the following items if they are used exclusively by the purchaser or user in the business of farming; including dairy farming, agriculture, horticulture, floriculture and custom farming services:

SECTION 94. 77.54 (4) of the statutes is amended to read:

77.54 (4) Gross receipts The sales price from the sale of tangible personal property, and the storage, use or other consumption in this state of tangible personal property which is the subject of any such sale, by any elementary school or secondary school, exempted as such from payment of income or franchise tax under ch. 71, whether public or private.

SECTION 95. 77.54 (5) (intro.) of the statutes is amended to read:

77.54 (5) (intro.) The gross receipts sales price from the sale of and the storage, use or other consumption of: