LRB-0728LRB-0728/7
JK:lmk/wj/kf:jf
2007 - 2008 LEGISLATURE
DOA:......Easton, BB0171 - Streamlined sales and use tax agreement provisions
For 2007-09 Budget -- Not Ready For Introduction
2007 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Other taxation
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 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 tangible personal property 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).
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:
SECTION 1. 20.435 (3) (bm) of the statutes is repealed.
SECTION 2. 20.566 (1) (ho) of the statutes is created to read:
20.566 (1) (ho) Collections under multistate streamlined sales tax project. From moneys collected under the multistate streamlined sales tax project as provided under s. 73.03 (28e), a sum sufficient to pay the dues necessary to participate in the governing board of the multistate streamlined sales tax project.
SECTION 3. 46.513 of the statutes is repealed.
SECTION 4. 66.0615 (1m) (f) 2. of the statutes is amended to read:
66.0615 (1m) (f) 2. Sections 77.51 (12m), (14) (c), (f) and (j) and, (14g), (15a), and (15b), 77.52 (3), (4), (6) and (13), (14), (18), and (19), 77.522, 77.58 (1) to (5), (6m), and (7), 77.585, 77.59, 77.60, 77.61 (2), (3m), (5), (8), (9), and (12) to (14) (15), and 77.62, as they apply to the taxes under subch. III of ch. 77, apply to the tax described under subd. 1.
SECTION 5. 70.111 (23) of the statutes is amended to read:
70.111 (23) VENDING MACHINES. All machines that automatically dispense soda water beverages, as defined in s. 97.29 (1) (i), and items included as a food or beverage under s. 77.54 (20) (a) and (b) food and food ingredient, as defined in s. 77.51 (3t), upon the deposit in the machines of specified coins or currency, or insertion of a credit card, in payment for the soda water beverages, food or beverages food and food ingredient, as defined in s. 77.51 (3t).
SECTION 6. 71.07 (5e) (b) of the statutes is amended to read:
71.07 (5e) (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first taxable year following the taxable year in which the claimant claims an exemption a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption a deduction under s. 77.54 (48) 77.585 (9).
SECTION 7. 71.07 (5e) (c) 1. of the statutes is amended to read:
71.07 (5e) (c) 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SECTION 8. 71.07 (5e) (c) 3. of the statutes is amended to read:
71.07 (5e) (c) 3. The total amount of the credits and exemptions deductions that may be claimed by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48) 77.585 (9) is $7,500,000, as determined by the department of commerce.
SECTION 9. 71.28 (5e) (b) of the statutes is amended to read:
71.28 (5e) (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first taxable year following the taxable year in which the claimant claims an exemption a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against the taxes imposed under s. 71.23, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption a deduction under s. 77.54 (48) 77.585 (9).
SECTION 10. 71.28 (5e) (c) 1. of the statutes is amended to read:
71.28 (5e) (c) 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SECTION 11. 71.28 (5e) (c) 3. of the statutes is amended to read:
71.28 (5e) (c) 3. The total amount of the credits and exemptions deductions that may be claimed by all claimants under this subsection and ss. 71.07 (5e), 71.47 (5e), and 77.54 (48) 77.585 (9) is $7,500,000, as determined by the department of commerce.
SECTION 12. 71.47 (5e) (b) of the statutes is amended to read:
71.47 (5e) (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first taxable year following the taxable year in which the claimant claims an exemption a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption a deduction under s. 77.54 (48) 77.585 (9).
SECTION 13. 71.47 (5e) (c) 1. of the statutes is amended to read:
71.47 (5e) (c) 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SECTION 14. 71.47 (5e) (c) 3. of the statutes is amended to read:
71.47 (5e) (c) 3. The total amount of the credits and exemptions deductions that may be claimed by all claimants under this subsection and ss. 71.07 (5e), 71.28 (5e), and 77.54 (48) 77.585 (9) is $7,500,000, as determined by the department of commerce.
SECTION 15. 73.03 (28e) of the statutes is created to read:
73.03 (28e) To participate as a member state of the streamlined sales tax governing board which administers the agreement, as defined in s. 77.65 (2) (a), and includes having the governing board enter into contracts that are necessary to implement the agreement on behalf of the member states, and to allocate a portion of the amount collected under ch. 77 through the agreement to the appropriation under s. 20.566 (1) (ho) to pay the dues necessary to participate in the governing board. The department shall allocate the remainder of such collections to the general fund.
SECTION 16. 73.03 (50) (d) of the statutes is amended to read:
73.03 (50) (d) In the case of a sole proprietor, signs the form or, in the case of other persons, has an individual who is authorized to act on behalf of the person sign the form, or, in the case of a single-owner entity that is disregarded as a separate entity under section 7701 of the Internal Revenue Code, the person is the owner. 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. In this paragraph, "sign" has the meaning given in s. 77.51 (17r).
SECTION 17. 73.03 (50b) of the statutes is created to read:
73.03 (50b) To waive the fee established under sub. (50) for applying for and renewing the business tax registration certificate, if the person who is applying for or renewing the certificate is not required for purposes of ch. 77 to hold such a certificate.
SECTION 18. 73.03 (61) of the statutes is created to read:
73.03 (61) To do all of the following related to the Uniform Sales and Use Tax Administration Act:
(a) Certify compliance with the agreement, as defined in s. 77.65 (2) (a).
(b) Pursuant to the agreement, as defined in s. 77.65 (2) (a), certify certified service providers, as defined in s. 77.51 (1g), and certified automated systems, as defined in s. 77.524 (1) (am).
(c) Consistent with the agreement, as defined in s. 77.65 (2) (a), establish performance standards and eligibility criteria for a seller that sells tangible personal property or taxable services in at least 5 states that are signatories to the agreement, as defined in s. 77.65 (2) (a); that has total annual sales revenue of at least $500,000,000; that has a proprietary system that calculates the amount of tax owed to each taxing jurisdiction in which the seller sells tangible personal property or taxable services; and that has entered into a performance agreement with the states that are signatories to the agreement, as defined in s. 77.65 (2) (a). For purposes of this paragraph, "seller" includes an affiliated group of sellers using the same proprietary system to calculate the amount of tax owed in each taxing jurisdiction in which the sellers sell tangible personal property or taxable services.
(d) Issue a tax identification number to a person who claims an exemption under subch. III or V of ch. 77 and who is not required to register with the department for the purposes of subch. III or V of ch. 77 and establish procedures for the registration of such a person.
(e) Maintain a database that is accessible to sellers and certified service providers, as defined in s. 77.51 (1g), that indicates whether items defined in accordance with the Uniform Sales and Use Tax Administration Act are taxable or nontaxable.
(f) Maintain a database that is accessible to sellers and certified service providers, as defined in s. 77.51 (1g), and available in a downloadable format, that indicates tax rates, taxing jurisdiction boundaries, and zip code or address assignments related to the administration of taxes imposed under subchs. III and V of ch. 77.
(g) Set forth the information that the seller shall provide to the department for tax exemptions claimed by purchasers and establish the manner in which a seller shall provide such information to the department.
(h) Provide monetary allowances, in addition to the retailer's discount provided under s. 77.61 (4) (c), to certified service providers, as defined in s. 77.51 (1g), and sellers that use certified automated systems, as defined in s. 77.524 (1) (am), or proprietary systems, pursuant to the agreement as defined in s. 77.65 (2) (a).
SECTION 19. 76.07 (4g) (b) 8. of the statutes is amended to read:
76.07 (4g) (b) 8. Determine transport-related revenue by adding public service revenue allocated to this state on the basis of routes for which the company is authorized to receive subsidy payments, mutual aid allocated to this state on the basis of the ratio of transport revenues allocated to this state to transport revenues everywhere in the previous year, in-flight sales allocated to this state as they are allocated under s. 77.51 (14r) 77.522 and all other transport-related revenues from sales made in this state.
SECTION 20. 77.51 (1) of the statutes is renumbered 77.51 (1fd) and amended to read:
77.51 (1fd) "Business" includes any activity engaged in by any person or caused to be engaged in by any person with the object of gain, benefit or advantage, either direct or indirect, and includes also the furnishing and distributing of tangible personal property, specified digital goods, additional digital goods, or taxable services for a consideration by social clubs and fraternal organizations to their members or others.
****NOTE: This is reconciled s.77.51 (1) . This SECTION has been affected by drafts with the following LRB numbers: 0725 and 0728.
SECTION 21. 77.51 (1a) of the statutes is created to read:
77.51 (1a) "Additional digital goods" means video greeting cards sent by electronic mail, finished artwork, periodicals, and video or electronic games. For purposes of this subchapter, the sale of or the storage, use, or other consumption of a digital code is treated the same as the sale of or the storage, use, or other consumption of any additional digital goods for which the digital code relates.
SECTION 22. 77.51 (1b) of the statutes is created to read:
77.51 (1b) "Alcoholic beverage" means a beverage that is suitable for human consumption and that contains 0.5 percent or more of alcohol by volume.
SECTION 23. 77.51 (1ba) of the statutes is created to read:
77.51 (1ba) "Ancillary services" means services that are associated with or incidental to providing telecommunications services, including detailed telecommunications billing, directory assistance, vertical service, and voice mail services, but not including specified digital goods.
SECTION 24. 77.51 (1f) of the statutes is created to read:
77.51 (1f) "Bundled transaction" means the retail sale of 2 or more products, not including real property and services to real property, if the products are distinct and identifiable products and sold for one nonitemized price. "Bundled transaction" does not include any of the following:
(a) The sale of any products for which the sales price varies or is negotiable based on the purchaser's selection of the products included in the transaction.
(b) 1. The retail sale of tangible personal property and a service, if the tangible personal property is essential to the use of the service, and provided exclusively in connection with the service, and if the true object of the transaction is the service.
2. The retail sale of a service and specified digital goods or additional digital goods, if such goods are essential to the use of the service, and provided exclusively in connection with the service, and if the true object of the transaction is the service.
(c) The retail sale of services, if one of the services is essential to the use or receipt of another service, and provided exclusively in connection with the other service, and if the true object of the transaction is the other service.
(d) A transaction that includes taxable and nontaxable products, if the seller's purchase price or the sales price of the taxable products is no greater than 10 percent of the seller's total purchase price or sales price of all the bundled products, as determined by the seller using either the seller's purchase price or sales price, but not a combination of both, or, in the case of a service contract, the full term of the service contract.
(e) The retail sale of taxable tangible personal property and tangible personal property that is exempt from the taxes imposed under this subchapter, if the transaction includes food and food ingredients, drugs, durable medical equipment, mobility-enhancing equipment, prosthetic devices, or medical supplies and if the seller's purchase price or the sales price of the taxable tangible personal property is no greater than 50 percent of the seller's total purchase price or sales price of all the tangible personal property included in what would otherwise be a bundled transaction, as determined by the seller using either the seller's purchase price or the sales price, but not a combination of both.
SECTION 25. 77.51 (1fm) of the statutes is created to read:
77.51 (1fm) "Candy" means a preparation of sugar, honey, or other natural or artificial sweetener combined with chocolate, fruit, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. "Candy" does not include a preparation that contains flour or that requires refrigeration.
SECTION 26. 77.51 (1n) of the statutes is created to read:
77.51 (1n) "Computer" means an electronic device that accepts information in digital or similar form and that manipulates such information to achieve a result based on a sequence of instructions.
SECTION 27. 77.51 (1p) of the statutes is created to read:
77.51 (1p) "Computer software" means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task. "Computer software" does not include specified digital goods.
SECTION 28. 77.51 (1r) of the statutes is created to read:
77.51 (1r) "Conference bridging service" means an ancillary service that links 2 or more participants of an audio or video conference call and may include providing a telephone number, but does not include the telecommunications services used to reach the conference bridge.
SECTION 29. 77.51 (2k) of the statutes is created to read:
77.51 (2k) "Delivered electronically" means delivered to a purchaser by means other than by tangible storage media.
SECTION 30. 77.51 (2m) of the statutes is created to read:
77.51 (2m) "Delivery charges" means charges by a seller to prepare and deliver tangible personal property or services to a location designated by the purchaser of the tangible personal property or services, including charges for transportation, shipping, postage, handling, crating, and packing.
SECTION 31. 77.51 (3c) of the statutes is created to read:
77.51 (3c) "Detailed telecommunications billing service" means an ancillary service that separately indicates information pertaining to individual calls on a customer's billing statement.
SECTION 32. 77.51 (3n) of the statutes is created to read:
77.51 (3n) "Dietary supplement" means a product, other than tobacco, that is intended to supplement a person's diet, if all of the following apply:
(a) The product contains any of the following ingredients or any combination of any of the following ingredients:
