AB64: Bill Text

AB64,567,4 71.75 (7m) The department shall not issue a refund to an employed individual before March 1 unless both the individual and the individual's employer have filed all required returns and forms with the department for the taxable year for which the individual claims a refund.

AB64,1140 Section 1140. 71.77 (2n) of the statutes is created to read:

AB64,567,10 71.77 (2n) Notwithstanding sub. (2), the department may make an assessment to recover all or a part of any tax credit allocated by the Wisconsin Economic Development Corporation if the corporation has revoked the allocation and provided notice of the revocation to the department within one year of providing notice of the revocation to the taxpayer.

AB64,1141 Section 1141. 71.775 (4) (a) (intro.) of the statutes is renumbered 71.775 (4) (a) and amended to read:

AB64,567,18 71.775 (4) (a) Each pass-through entity that is subject to the withholding under sub. (2) shall file an annual return that indicates the withholding amount paid to the state during the pass-through entity's taxable year. The pass-through entity shall file the return with the department no later than: on or before the date on which the pass-through entity is required to file for federal income tax purposes, not including any extension, under the Internal Revenue Code.

AB64,1142 Section 1142. 71.775 (4) (a) 1. of the statutes is repealed.

AB64,1143 Section 1143. 71.775 (4) (a) 2. of the statutes is repealed.

AB64,1144 Section 1144. 71.775 (4) (fm) 3. of the statutes is created to read:

AB64,567,23 71.775 (4) (fm) 3. The secretary of revenue determines that because of casualty, disaster, or other unusual circumstances it is not equitable to impose interest.

AB64,1145 Section 1145. 71.78 (2) of the statutes is amended to read:

AB64,568,24 71.78 (2) Disclosure of net tax. The department shall make available upon suitable forms prepared by the department information setting forth the net Wisconsin income tax or Wisconsin franchise tax reported as paid or payable in the returns filed by any individual or corporation, and any amount of delinquent taxes owed by any such individual or corporation, for any individual year upon request. When making available information setting forth the delinquent taxes owed by an individual or corporation, the information shall include interest, penalties, fees, and costs, which are unpaid for more than 90 days after all appeal rights have expired, except that such information may not be provided for any person who has reached an agreement or compromise with the department, or the department of justice, under s. 71.92 and is in compliance with that agreement, regarding the payment of delinquent taxes, or the name of any person who is protected by a stay that is in effect under the Federal Bankruptcy Code. Before the request is granted, the person desiring to obtain the information shall prove his or her identity and shall be required to sign a statement setting forth the person's address and reason for making the request and indicating that the person understands the provisions of this section with respect to the divulgement, publication, or dissemination of information obtained from returns as provided in sub. (1). The use of a fictitious name is a violation of this section. Within 24 hours after any information from any such tax return has been so obtained, the department shall mail send to the person from whose return the information has been obtained a notification which shall give the name and address of the person obtaining the information and the reason assigned for requesting the information. The department shall collect from the person requesting the information a fee of $4 for each return.

AB64,1146 Section 1146. 71.80 (2) of the statutes is amended to read:

AB64,569,3 71.80 (2) Notice to taxpayer by department. The department shall notify each taxpayer by mail of the amount of income or franchise taxes assessed against the taxpayer and of the date when the taxes become delinquent.

AB64,1147 Section 1147. 71.80 (12) (a) 2. of the statutes is amended to read:

AB64,569,8 71.80 (12) (a) 2. A signification of the nonresident's agreement that any notice, order, pleading, or process described in subd. 1. that is so served shall be of the same legal force and validity as if served on the nonresident personally, or on the nonresident's personal representative.

AB64,1148 Section 1148 . 71.80 (12) (b) 2. of the statutes is amended to read:

AB64,569,13 71.80 (12) (b) 2. A signification of that person's agreement that any notice, order, pleading, or process described in subd. 1. that is so served shall be of the same legal force and validity as if served on that person personally, or upon that person's personal representative.

AB64,1149 Section 1149. 71.80 (12) (c) 2. a. of the statutes is amended to read:

AB64,569,18 71.80 (12) (c) 2. a. Within 10 days of completion of service, notice of the service and a copy of the served notice, order, pleading, or process are sent by mail by the state department, officer, or agency making the service to the person, or that person's personal representative, at that person's last-known address.

AB64,1150 Section 1150. 71.80 (16) (b) of the statutes is amended to read:

AB64,570,13 71.80 (16) (b) A construction contractor required to file a surety bond under par. (a) may, in lieu of such requirement, but subject to approval by the department, deposit with the secretary of administration an amount of cash equal to the face of the bond that would otherwise be required. If an offer to deposit is made, the department shall issue a certificate to the secretary of administration authorizing said secretary to accept payment of such moneys and to give his or her receipt therefor. A copy of such certificate shall be mailed sent to the contractor who shall, within the time fixed by the department, pay such amount to the secretary of administration. A copy of the receipt of the secretary of administration shall be filed with the department. Upon final determination by the department of such contractor's liability for state income or franchise taxes, required unemployment insurance contributions, sales and use taxes, and income taxes withheld from wages of employees, interest and penalties, by reason of such contract or contracts, the department shall certify to the secretary of administration the amount of taxes, penalties, and interest as finally determined, shall instruct the secretary of administration as to the proper distribution of such amount, and shall state the amount, if any, to be refunded to such contractor. The secretary of administration shall make the payments directed by such certificate within 30 days after receipt thereof. Amounts refunded to the contractor shall be without interest.

AB64,1151 Section 1151. 71.80 (20) of the statutes is amended to read:

AB64,570,18 71.80 (20) Electronic filing. If a person is required to file 50 10 or more wage statements or 50 10 or more of any one type of information return with the department, the person shall file the statements or the returns electronically, by means prescribed by the department.

AB64,1152 Section 1152 . 71.80 (25) of the statutes is created to read:

AB64,570,24 71.80 (25) Net operating and business loss carry-forward and carry-back. (a) No offset of Wisconsin income may be made under s. 71.05 (8) (b) 1., 71.26 (4) (a), or 71.45 (4) (a) unless the incurred loss was computed on a return that was filed within 4 years of the unextended due date for filing the original return for the taxable year in which the loss was incurred.

AB64,571,3 (b) No carry-back of a loss may be allowed under s. 71.05 (8) (b) 1. unless claimed within 4 years of the unextended due date for filing the original return for the taxable year to which the loss is carried back.

AB64,1153 Section 1153. 71.83 (1) (cf) of the statutes is created to read:

AB64,571,13 71.83 (1) (cf) Inconsistent estate basis reporting. If any portion of an underpayment of tax required to be shown on a Wisconsin return is the result of an inconsistent estate basis reporting, there shall be added to the tax an amount equal to 20 percent of that portion of the underpayment. For purposes of this paragraph, an inconsistent estate basis reporting occurs if the property basis claimed on a Wisconsin return exceeds the property basis determined under section 1014 (f) of the Internal Revenue Code. The department shall assess, levy, and collect the penalty under this paragraph in the same manner as it assesses, levies, and collects taxes under this chapter.

AB64,1154 Section 1154. 71.84 (2) (a) of the statutes is amended to read:

AB64,572,3 71.84 (2) (a) Except as provided in s. 71.29 (7), in the case of any underpayment of estimated tax by a corporation under s. 71.29 or 71.48, there shall be added to the aggregate tax for the taxable year interest at the rate of 12 percent per year on the amount of the underpayment for the period of the underpayment. For corporations, except as provided in par. (b) In this paragraph, “ period of the underpayment" means the time period from the due date of the installment until either the 15th day of the 3rd month beginning after the end of the taxable year date on which the corporation is required to file for federal income tax purposes, not including any extension, under the Internal Revenue Code or the date of payment, whichever is earlier. If 90 percent of the tax shown on the return is not paid by the 15th day of the 3rd month following the close of the taxable year date on which the corporation is required to file for federal income tax purposes, not including any extension, under the Internal Revenue Code, the difference between that amount and the estimated taxes paid, along with any interest due, shall accrue delinquent interest under s. 71.91 (1) (a).

AB64,1155 Section 1155. 71.84 (2) (c) of the statutes is amended to read:

AB64,572,13 71.84 (2) (c) If a refund under s. 71.29 (3m) results in an income or franchise tax liability that is greater than the amount of estimated taxes paid in when reduced by the amount of the refund, the taxpayer shall add to the aggregate tax for the taxable year interest at an annual rate of 12 percent on the amount of the unpaid tax liability for the period beginning on the date the refund is issued and ending on either the 15th day of the 3rd month beginning after the end of the taxable year, date on which the taxpayer is required to file for federal income tax purposes, not including any extension, under the Internal Revenue Code or the date the tax liability is paid, whichever is earlier.

AB64,1156 Section 1156. 71.91 (6) (f) 1. of the statutes is amended to read:

AB64,572,25 71.91 (6) (f) 1. As soon as practicable after obtaining property, the department shall notify, in the manner prescribed by the department, the owner of any real or personal property, and, at the possessor's request, the possessor of any personal property, obtained by the department under this subsection. That notice may be left at the person's usual place of residence or business. If the owner cannot be located or has no dwelling or place of business in this state, or if the property is obtained as a result of a continuous levy on commissions, wages or salaries, the department may mail send a notice to the owner's last-known address. That notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property obtained and, in the case of real property, a description with reasonable certainty of the property seized.

AB64,1157 Section 1157. 71.91 (7) (b) of the statutes is amended to read:

AB64,574,3 71.91 (7) (b) The department may give notice to any employer deriving income having a taxable situs in this state (regardless of whether any such income is exempt from taxation) to the effect that an employee of such employer is delinquent in a certain amount with respect to state taxes, including penalties, interest and costs. Such notice may be served by mail or by delivery by an employee of the department of revenue. Upon receipt of such notice of delinquency, the employer shall withhold from compensation due, or to become due to the employee, the total amount shown by the notice. The department may direct the employer to withhold part of the amount due the employee each pay period, until the total amount as shown by the notice, plus interest, has been withheld. The employer may not withhold more than 25 percent of the compensation due any employee for any one pay period, except that, if the employee leaves the employ of the employer or gives notice of his or her intention to do so, or is discharged for any reason, the employer shall withhold the entire amount otherwise payable to such employee, or so much thereof as may be necessary to equal the unwithheld balance of the amount shown in the notice of delinquency, plus delinquent interest. In crediting amounts withheld against delinquent taxes of an employee, the department shall apply amounts withheld in the following order: costs, penalties, delinquent interest, delinquent tax. The “compensation due" any employee for purposes of determining the 25 percent maximum withholding for any one pay period shall include all wages, salaries and fees constituting income, including wages, salaries, income advances or other consideration paid for future services, when paid to an employee, less amounts payable pursuant to a garnishment action with respect to which the employer was served prior to being served with the notice of delinquency and any amounts covered by any irrevocable and previously effective assignment of wages, of which amounts and the facts relating to such assignment the employer shall give notice to the department within 10 days after service of the notice of delinquency.

AB64,1158 Section 1158. 71.91 (7) (h) of the statutes is amended to read:

AB64,574,11 71.91 (7) (h) The department may, by written notice served personally or by mail, require any employer, as defined in s. 71.63 (3), to withhold from the compensation due or to become due to any entertainer or entertainment corporation the amount of any delinquent state taxes, including costs, penalties and interest, shown by the notice. The employer shall send the money withheld to the department on or before the last day of the month after the month during which an amount was withheld.

AB64,1159 Section 1159. 71.93 (8) (b) 1. of the statutes is amended to read:

AB64,575,3 71.93 (8) (b) 1. Except as provided in subd. 2., a state agency and the department of revenue shall enter into a written agreement to have the department collect any amount owed to the state agency that is more than 90 days past due, unless negotiations between the agency and debtor are actively ongoing, the debt is the subject of legal action or administrative proceedings, or the agency determines that the debtor is adhering to an acceptable payment arrangement , or the agency receives written notice from the secretary of administration or the secretary of revenue identifying specific debts to be excluded from the agreement. At least 30 days before the department pursues the collection of any debt referred by a state agency, either the department or the agency shall provide the debtor with a written notice that the debt will be referred to the department for collection. The department may collect amounts owed, pursuant to the written agreement, from the debtor in addition to offsetting the amounts as provided under sub. (3). The department shall charge each debtor whose debt is subject to collection under this paragraph a collection fee and that amount shall be credited to the appropriation under s. 20.566 (1) (h).

AB64,1160 Section 1160. 71.93 (8) (b) 3. of the statutes is repealed.

AB64,1161 Section 1161. 73.0300 of the statutes is created to read:

AB64,575,10 73.0300 Disregarded entities. With regard to a single-owner entity that is disregarded as a separate entity under section 7701 of the Internal Revenue Code, any notice that the department of revenue sends to the owner or to the entity is considered a notice sent to both and both are liable for any amounts due as specified in the notice. This section applies to all laws administered by the department.

AB64,1162 Section 1162. 73.03 (69) (b) 1. of the statutes is amended to read:

AB64,575,18 73.03 (69) (b) 1. The business has at least 2 full-time employees and the amount of payroll compensation paid by the business in this state is equal to at least 50 percent of the amount of all payroll compensation paid by the business. An employee of a professional employer organization, as defined in s. 202.21 (5), or a professional employer group, as defined in s. 202.21 (4), who is performing services for a client is considered an employee solely of the client for purposes of this subdivision.

AB64,1163 Section 1163. 73.03 (73) of the statutes is created to read:

AB64,575,21 73.03 (73) (a) To serve notice in any of the following ways, unless otherwise provided by law:

AB64,575,22 1. By serving notice as a circuit court summons is served.

AB64,575,23 2. By certified or registered mail.

AB64,575,25 3. By regular mail, if the intended recipient admits receipt or there is satisfactory evidence of receipt.

AB64,576,3 4. By electronic transmission if, before the person receives the electronic transmission, the intended recipient consents to receiving such notices electronically.

AB64,576,9 (b) Any notice transmitted by the department under par. (a) 4. is considered to be received by the intended recipient on the date that the department electronically transmits the information to the person or electronically notifies the person that the information is available to be accessed by the person. Department records of electronic transmission shall constitute appropriate and sufficient proof of delivery and be admissible in any action or proceeding.

AB64,576,13 (c) For purposes of this subsection, if the intended recipient has appointed another person or entity to act on the intended recipient's behalf as its agent under a power of attorney, then service upon the agent constitutes service upon the intended recipient.

AB64,1164 Section 1164. 73.0301 (2) (b) 1. b. of the statutes is amended to read:

AB64,577,9 73.0301 (2) (b) 1. b. Mail Send a notice of suspension, revocation or denial under subd. 1. a. to the license holder or applicant. The notice shall include a statement of the facts that warrant the suspension, revocation or denial and a statement that the license holder or applicant may, within 30 days after the date on which the notice of denial, suspension or revocation is mailed sent, file a written request with the department of revenue to have the certification of tax delinquency on which the suspension, revocation or denial is based reviewed at a hearing under sub. (5) (a). With respect to a license granted by a credentialing board, the department of safety and professional services shall mail send a notice under this subd. 1. b. With respect to a license to practice law, the department of revenue shall mail send a notice under this subd. 1. b. and the notice shall indicate that the license holder or applicant may request a hearing under sub. (5) (a) and (am) and that the department of revenue shall submit a certificate of delinquency to suspend, revoke, or deny a license to practice law to the supreme court after the license holder or applicant has exhausted his or her remedies under sub. (5) (a) and (am) or has failed to make use of such remedies. A notice sent to a person who holds a license to practice law or who is an applicant for a license to practice law shall also indicate that the department of revenue may not submit a certificate of delinquency to the supreme court if the license holder or applicant pays the delinquent tax in full or enters into an agreement with the department of revenue to satisfy the delinquency.

AB64,1165 Section 1165. 73.0302 (2) of the statutes is amended to read:

AB64,577,18 73.0302 (2) If the department of revenue denies an application or revokes a certificate under sub. (1), the department shall mail send a notice of denial or revocation to the applicant or certificate holder. The notice shall include a statement of the facts that warrant the denial or revocation and a statement that the applicant or certificate holder may, within 30 days after the date on which the notice of denial or revocation is mailed sent, file a written request with the department to have the determination that he or she is liable for delinquent taxes reviewed at a hearing under s. 73.0301 (5) (a).

AB64,1166 Section 1166. 73.13 (2) (c) of the statutes is amended to read:

AB64,578,14 73.13 (2) (c) If within 3 years from either the date of the order under par. (b) or the date of the final payment according to a payment schedule as determined under par. (b), whichever is later, the department ascertains that the taxpayer has an income or owns property sufficient to enable the taxpayer to pay the unpaid portion of the principal amount of the taxes due, including the costs, penalties, and interest recorded under par. (b), the department shall reopen the order under par. (b) and order the taxpayer to pay in full the unpaid portion of the principal amount of the taxes due, including the costs, penalties, and interest recorded under par. (b). Before the entry of the order for payment, the department shall send a written notice to the taxpayer, by certified mail, advising the taxpayer of the department's intention to reopen the order under par. (b) and fixing a time and place for the appearance of the taxpayer, if the taxpayer desires a hearing. If the department determines that the taxpayer is able to pay the unpaid portion of the principal amount of the taxes due, including the costs, penalties, and interest recorded under par. (b), the department shall enter the order for payment in full. The unpaid portion of the principal amount of the taxes due, including the costs, penalties, and interest recorded under par. (b), shall be due and payable immediately upon entry of the order for payment in full and shall thereafter be subject to the interest under s. 71.82 (2), as that subsection applies to delinquent income and franchise taxes under s. 71.82, and to the delinquent account fee under s. 73.03 (33m).

AB64,1167 Section 1167. 73.142 of the statutes is created to read:

AB64,578,17 73.142 Sunsets; credits, subtractions, and exemptions. (1) (a) In this subsection:

AB64,578,18 1. “Credit” means any tax credit enacted under s. 71.07, 71.28, or 71.47.

AB64,578,21 2. “Subtraction” means any subtract modification, deduction, or exemption enacted under s. 71.05 (1), (6) (b), (22), or (23), 71.26 (1), (1m), or (3), or 71.45 (1) or (1t).

AB64,578,25 (b) With regard to any credit or subtraction that takes effect after December 31, 2016, and first applies to a taxable year beginning after December 31, 2016, no new claim for that credit or subtraction may be filed more than 7 taxable years after its initial applicability.

AB64,579,5 (c) In August of each year, the department of revenue shall submit to the speaker and minority leader of the assembly, the president and minority leader of the senate, and the chief clerk of each house of the legislature, for distribution to the appropriate standing committees under s. 13.172 (3), a report that details credits and subtractions for which no new claims may be filed after the next 2 calendar years.

AB64,579,7 (d) Any enactment to which par. (b) applies is not a bill that increases the rate of the income tax or franchise tax in a way that would be subject to s. 13.085 (1).

AB64,579,9 (2) (a) In this subsection, “exemption” means any exemption or credit enacted under subch. III of ch. 77 or under ch. 78 or 139.

AB64,579,13 (b) With regard to an exemption that takes effect after December 31, 2016, no person may claim the exemption after the date that is 7 years after its effective date, unless the department of revenue determines that the exemption is necessary to comply with the agreement, as defined in s. 77.65 (2) (a).

AB64,579,18 (c) In August of each year, the department of revenue shall submit to the speaker and minority leader of the assembly, the president and minority leader of the senate, and the chief clerk of each house of the legislature, for distribution to the appropriate standing committees under s. 13.172 (3), a report that details the exemptions that expire in the next 2 calendar years.

AB64,579,20 (d) Any enactment to which par. (b) applies is not a bill that increases any tax rate in a way that would be subject to s. 13.085 (1).

AB64,1168 Section 1168 . 73.16 (2) (b) of the statutes is amended to read:

AB64,580,6 73.16 (2) (b) The department may retroactively apply any rule change that is related to implementing a legislative act or a final and conclusive decision of the tax appeals commission or the courts to take effect no earlier than the act's effective date or the date on which the decision became final and conclusive, unless otherwise prescribed by the legislature, tax appeals commission, or court, and only if the department submits the rule's scope statement to the governor for approval under s. 227.135 (2) no later than 18 months after the latter of the legislative act's publication date, effective date, or initial applicability date, or the date on which the decision becomes final and conclusive. A retroactive application of a rule change not described under this paragraph shall be subject to approval under s. 227.185 (1).

AB64,1169 Section 1169. 77.14 of the statutes is amended to read:

AB64,580,15 77.14 Forest croplands information, protection, appropriation. The department of natural resources shall publish and distribute information regarding the method of taxation of forest croplands under this subchapter, and may employ a fire warden in charge of fire prevention in forest croplands. All actual and necessary expenses incurred by the department of natural resources or by the department of revenue in the performance of their duties under this subchapter shall be paid from the appropriation made in s. 20.370 (1) (2) (mv) upon certification by the department incurring such expenses.

AB64,1170 Section 1170. 77.22 (2) (c) of the statutes is repealed.

AB64,1171 Section 1171. 77.22 (2) (d) of the statutes is repealed.

AB64,1172 Section 1172 . 77.51 (2) of the statutes is amended to read:

AB64,581,11 77.51 (2) “Contractors" and “subcontractors" are the consumers of tangible personal property or items or goods under s. 77.52 (1) (b) or (d) used by them in real property construction activities, and the sales and use tax applies to the sale of tangible personal property or items or goods under s. 77.52 (1) (b) or (d) to them. A contractor engaged primarily in real property construction activities may use resale certificates only with respect to purchases of tangible personal property or items or goods under s. 77.52 (1) (b) or (d) which that the contractor has sound reason to believe the contractor will sell to customers for whom the contractor will not perform real property construction activities involving the use of such tangible personal property or items or goods under s. 77.52 (1) (b) or (d). In this subsection, “real property construction activities" means activities that occur at a site where tangible personal property or items or goods under s. 77.52 (1) (b) or (d) that are applied or adapted to the use or purpose to which real property is devoted are affixed to that real property, if the intent of the person who affixes that property is to make a permanent accession to the real property. In this subsection, “real property construction activities" does not include affixing property subject to tax under s. 77.52 (1) (c) to real property or affixing to real property tangible personal property that remains tangible personal property after it is affixed.

AB64,1173 Section 1173 . 77.51 (9) (a) of the statutes is renumbered 77.51 (9) (a) 1.

AB64,1174 Section 1174 . 77.51 (9) (a) 2. of the statutes is created to read:

AB64,581,20 77.51 (9) (a) 2. For purposes of subd. 1., it is presumed that a seller is not pursuing a vocation, occupation, or business or a partial vocation or occupation or part-time business as a vendor of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or taxable services if the seller's total taxable sales price from sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), and taxable services is less than $2,000 during a calendar year.

AB64,1175 Section 1175 . 77.51 (11d) of the statutes is amended to read:

AB64,581,25 77.51 (11d) For purposes of subs. (1ag), (1f), (3pf), and (9p) and ss. 77.52 (20) and (21), 77.522, and 77.54 (51), (52), and (60), and 77.59 (5r), “product" includes tangible personal property, and items, property, and goods under s. 77.52 (1) (b), (c), and (d), and services.

AB64,1176 Section 1176. 77.51 (12t) of the statutes is created to read:

AB64,582,9 77.51 (12t) “Real property construction activities" means activities that occur at a site where tangible personal property or items or goods under s. 77.52 (1) (b) or (d) that are applied or adapted to the use or purpose to which real property is devoted are affixed to that real property, if the intent of the person who affixes that property is to make a permanent accession to the real property. “Real property construction activities" does not include affixing property subject to tax under s. 77.52 (1) (c) to real property or affixing to real property tangible personal property that remains tangible personal property after it is affixed.

AB64,1177 Section 1177. 77.51 (13) (am) of the statutes is amended to read:

AB64,582,15 77.51 (13) (am) Any person making any retail sale of a motor vehicle, aircraft, snowmobile, recreational vehicle, as defined in s. 340.01 (48r), trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, as defined in s. 23.335 (1) (q), or boat registered or titled, or required to be registered or titled, under the laws of this state or of the United States.

AB64,1178 Section 1178 . 77.52 (2) (a) 10. of the statutes is amended to read:

AB64,583,15 77.52 (2) (a) 10. Except for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of any aircraft or aircraft parts; except for services provided by veterinarians; and except for installing or applying tangible personal property, or items or goods under sub. (1) (b) or (d), that, subject to par. (ag), when installed or applied, will constitute an addition or capital improvement of real property; the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of all items of tangible personal property or items, property, or goods under sub. (1) (b), (c), or (d), unless, at the time of that repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance, a sale in this state of the type of property, item, or good repaired, serviced, altered, fitted, cleaned, painted, coated, towed, inspected, or maintained would have been exempt to the customer from sales taxation under this subchapter, other than the exempt sale of a motor vehicle or truck body to a nonresident under s. 77.54 (5) (a) and other than nontaxable sales under s. 77.522 or unless the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance is provided under a contract that is subject to tax under subd. 13m. The tax imposed under this subsection applies to the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of items listed in par. (ag), regardless of whether the installation or application of tangible personal property or items, property, or goods under sub. (1) (b), (c), or (d) related to the items is an addition to or a capital improvement of real property, except that the tax imposed under this subsection does not apply to the original installation or the complete replacement of an item listed in par. (ag), if that installation or replacement is a real property construction activity under s. 77.51 (2).