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Tax 11.30 Note Note: The interpretations in s. Tax 11.30 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) the 4% tax rate was increased to 5% on May 1, 1982; (b) The deduction for bad debts was revised effective October 1, 2009 pursuant to 2009 Wis. Act 2; and (c) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.
Tax 11.30 History History: Cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (2) (a) and cr. (3), Register, September, 1984, No. 345, eff. 10-1-84; am. (2) (c) 1. and (d) 1., Register, June, 1991, No. 426, eff. 7-1-91; EmR0924: emerg. am. (1), r. and recr. (2), eff. 10-1-09; CR 09-090: am. (1), r. and recr. (2) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (a), (d) 1. Register November 2010 No. 659, eff. 12-1-10.
Tax 11.32 Tax 11.32 "Sales price" and "purchase price".
Tax 11.32(1)(1)General. The amount to which the sales and use tax rate is applied is the "sales price" for sales tax and the "purchase price" for use tax. Both "sales price" and "purchase price" mean the total amount of the consideration for the sale, license, lease or rental from retail sales of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, valued in money, whether received in money or otherwise.
Tax 11.32(2) (2)Delivery, handling and service charges. A retailer's charges for customer alterations, handling services, small orders, returned merchandise, restocking, split shipments, shipping, postage, crating, packing, fuel surcharges, and similar charges for services related to retail sales, are included in the sales price derived from the sale of taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services. Cancelled order charges are not taxable if there is no transfer of merchandise to a customer. For orders that include property and items that are subject to tax and property and items that are not subject to tax, the amount of the delivery charge that the seller allocates to the property and items subject to tax shall be based either upon the total sales price of property and items that are subject to tax as compared to the total sales price of all of the property and items included in the shipment or on the weight of the property and items subject to tax compared to the total weight of all of the property and items included in the shipment.
Tax 11.32(3) (3)Cash discounts or price rebates.
Tax 11.32(3)(a)(a) Cash discounts, term discounts and coupons that are not reimbursed by a third party and which are allowed by a retailer directly to customers reduce the sales price subject to the tax. The customer must receive the discount for the retailer to exclude it from the sales price.
Tax 11.32 Note Example: A payment made to a nonprofit organization based on a percentage of the purchases made by the group's members is not a cash discount for sales and use tax purposes.
Tax 11.32(3)(b) (b) A retail cooperative's rebates to members, which are made after the net profit is determined at the end of a year, are patronage dividends rather than cash discounts, and are not deductible from the cooperative's sales price.
Tax 11.32(3)(c) (c) A manufacturer's cash rebate to a person who purchases tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services from a retailer is not a reduction in the retailer's sales price or purchase price for the item, regardless of whether the rebate is paid in cash or is used to reduce the selling price.
Tax 11.32 Note Example: An automobile is sold for a sticker price of $18,000. The manufacturer offers a $1,500 rebate with the purchase. Regardless of whether the customer pays the retailer $18,000 and later receives $1,500 from the manufacturer or the customer pays the retailer $16,500 ($18,000 sticker price less $1,500 rebate), the retailer shall report a taxable sales price of $18,000 from the sale.
Tax 11.32(3)(d) (d) "Sales price" and "purchase price" include consideration paid by third parties if all of the following apply:
Tax 11.32(3)(d)1. 1. The seller actually receives consideration from a third party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale.
Tax 11.32(3)(d)2. 2. The seller is obligated to pass the price reduction or discount to the purchaser.
Tax 11.32(3)(d)3. 3. The amount of the consideration that is attributable to the sale is a fixed amount and the seller is able to determine that amount at the time of the sale to the purchaser.
Tax 11.32(3)(d)4. 4. One of the following applies:
Tax 11.32(3)(d)4.a. a. The purchaser presents a coupon, certificate or other documentation to the seller to claim the price reduction or discount, if the coupon, certificate or other documentation is authorized, distributed or granted by a third party with the understanding that the third party will reimburse the seller for the amount of the price reduction or discount.
Tax 11.32(3)(d)4.b. b. The purchaser identifies himself or herself to the seller as a member of a group or organization that may claim the price reduction or discount.
Tax 11.32(3)(d)4.c. c. The seller provides an invoice to the purchaser, or the purchaser presents a coupon, certificate or other documentation to the seller that identifies the price reduction or discount as a third party price reduction or discount.
Tax 11.32(3m) (3m)Lease, license, and rental receipts.
Tax 11.32(3m)(a)(a) The following charges related to the lease, license, or rental of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are also included in the "sales price" or "purchase price":
Tax 11.32(3m)(a)1. 1. Personal property taxes, including any personal property tax administration fee, imposed on the lessor or licensor that are passed on to the lessee or licensee.
Tax 11.32 Note Example: Company A leases a piece of equipment to Company B. Taxing Authority C imposes property tax of $125 on Company A on the piece of equipment that Company A is leasing to Company B. The lease agreement provides that Company B is required to pay Company A the amount of property taxes imposed on Company A on that piece of equipment. Therefore, the $125 payment that Company B is required to make to Company A for the property taxes imposed on the piece of equipment is part of the sales price subject to tax.
Tax 11.32(3m)(a)2. 2. Contract documentation or administration fees.
Tax 11.32(3m)(a)3. 3. Disposal and return fees.
Tax 11.32 Note Examples: 1) Lessor X leases a motor vehicle to Company Y. As part of the lease agreement, Company Y agrees to pay Lessor X, at the end of the lease term, a fee to prepare the vehicle for sale. This disposition fee is to cover costs incurred by Lessor X for cleaning the motor vehicle, tuning up the vehicle and performing final maintenance on the vehicle before it is sold. The disposition fee is part of the "sales price" of the lease of the motor vehicle.
Tax 11.32 Note 2) Lessor A leases laptop computers to Company B. As part of the lease agreement, Company B agrees to pay Lessor A a fee to remove all data from the hard drive of the laptop computer at the end of the lease term after Company B returns the computer to Lessor A. The fee charged by Lessor A to Company B for removing all of the data from the hard drive is part of the "sales price" of the lease of the laptop computer.
Tax 11.32(3m)(a)4. 4. Service contract charges, warranty charges, and maintenance agreement charges.
Tax 11.32(3m)(b) (b) The following charges related to the lease, license, or rental of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are not included in the "sales price" or "purchase price" if they are separately stated on the invoice, bill of sale, or similar document provided to the lessee or licensee:
Tax 11.32(3m)(b)1. 1. Personal property taxes imposed directly on the lessee or licensee.
Tax 11.32 Note Example: Company A leases a piece of equipment to Company B. Taxing Authority C imposes property tax of $100 on Company B on that piece of equipment. The lease agreement provides that Company B is responsible for any property taxes imposed on that piece of equipment. Since the $100 of property taxes are imposed directly on Company B, as opposed to being imposed on Company A, the property taxes imposed on the piece of equipment are not part of the sales price and are not subject to tax.
Tax 11.32(3m)(b)2. 2. Title and registration fees.
Tax 11.32(3m)(b)3. 3. Late payment fees that do not extend the term of the lease, license, or rental.
Tax 11.32(3m)(b)4. 4. Returned check fees.
Tax 11.32(3m)(b)5. 5. Insurance charges, including credit life and accident, casualty, theft, and loss, and gap insurance, as provided in s. 77.54 (8), Stats.
Tax 11.32(4) (4)Sales tax collected from customers.
Tax 11.32(4)(a)(a) Section 77.585 (7), Stats., provides in part that if a retailer establishes to the department's satisfaction that the sales tax has been added to the total amount of the sales price and has not been absorbed by the retailer, the total amount of the sales price shall be the amount received exclusive of the sales tax imposed. Therefore, when the tax is collected from customers who are notified of that fact, the amount of the tax collected is not included in the base to which the tax applies. The notification may be by any one of the following methods:
Tax 11.32(4)(a)1. 1. Providing the customer a receipt which separately itemizes the tax or states "Prices Include Sales Tax."
Tax 11.32(4)(a)2. 2. Conspicuously posting the bracket system card, form S-213 or S-218, issued by the department.
Tax 11.32(4)(a)3. 3. Conspicuously posting a sign which states "Prices Include Sales Tax."
Tax 11.32 Note Example: A tavern, located in a county which has a combined 5.5% Wisconsin state and county sales and use tax rate in effect, conspicuously posts a sign stating "Prices Include Sales Tax." The tavern's sales price from sales of food and beverages are $10,000 for the month. When filing its sales and use tax return, form ST-12, the tavern may deduct $521.33 of sales tax to arrive at taxable receipts of $9,478.67 ($10,000 ÷ 1.055 = $9,478.67). The tax payable by the tavern is determined by multiplying its taxable receipts times the tax rate ($9,478.67 x .055 = $521.33 tax payable).
Tax 11.32(4)(b) (b) If a retailer cannot collect any tax because all sales are below the minimum price on which tax is collectible using the straight mathematical computation described in sub. (5) (a) or under the bracket systems set forth in sub. (5) (b), no part of the retailer's sales price may be treated as tax collected from customers.
Tax 11.32 Note Example: A vending machine retailer whose only receipts are from sales of 5¢ items is unable to collect any sales tax from customers, and the tax applies to the total sales price.
Tax 11.32(4)(c) (c) If a vending machine retailer sells taxable property at a price such that a sales tax is collectible using either the straight mathematical computation described in sub. (5) (a) or the bracket systems set forth in sub. (5) (b), part of the sales price from these sales shall include sales tax if customers are advised that the vending machine prices include sales tax.
Tax 11.32(5) (5)Straight mathematical computation.
Tax 11.32(5)(a)(a) A retailer shall determine the amount of tax due on a transaction by combining the applicable tax rates under subchs. III and V, Stats., and multiplying the combined rate times the sales price or purchase price of each item or the total invoice amount. The tax collectible from the customer shall be rounded to the nearest $.0l by using the following rounding procedures:
Tax 11.32(5)(a)1. 1. For amounts less than $.005, the amount shall be rounded down to the next lowest penny.
Tax 11.32 Note Examples: 1) Tax computed at $.0849999 would be rounded down to $.08.
Tax 11.32 Note 2) Tax computed at $3.2549 would be rounded down to $3.25.
Tax 11.32(5)(a)2. 2. For amounts equal to or greater than $.005, the amount shall be rounded up to the next highest penny.
Tax 11.32 Note Examples: 1) Tax computed at $.085000 would be rounded up to $.09.
Tax 11.32 Note 2) Tax computed at $6.455001 would be rounded up to $6.46.
Tax 11.32 Note 3) Retailer A sells Customer B three different taxable items in one transaction: Item 1's selling price is $14.70, item 2's selling price is $8.30, and item 3's selling price is $7.10. The aggregate selling price of the taxable items is $30.10. The tax on the invoice provided to the customer may either be calculated by multiplying the 5% tax rate by the selling price of each item individually (($14.70 x 5% = $0.74) + ($8.30 x 5% = $0.42) + ($7.10 x 5% = $0.36) = $1.52) or by multiplying the 5% tax rate by the aggregate selling price ($30.10 x 5% = $1.51).
Tax 11.32(5)(b) (b) The following bracket systems represent straight mathematical computations that comply with s. 77.61 (3m), Stats., and may be used by a retailer to determine the amount of tax due on a transaction. When using the bracket system, a retailer shall determine the amount of tax due on a transaction using either the sales price of each item or the total invoice amount.
Tax 11.32(5)(b)1. 1. In locations with no county or stadium district taxes the following bracket system may be used. - See PDF for table PDF
On sales exceeding $1.00, the state tax equals 5¢ for each full dollar of sales, plus the tax shown above for the applicable fractional part of a dollar.
Tax 11.32(5)(b)2. 2. In counties having a county tax, but no stadium tax, the following bracket system may be used. - See PDF for table PDF
The state and county tax equals 11¢ for each $2.00 of sales, plus the tax shown above for the fractional part of $2.00.
Tax 11.32 Note Example: For a sale of $11.50, the 5.5% tax is 63¢, consisting of 55¢ for $10.00 of sales plus 8¢ for $1.50 of sales.
Tax 11.32(5)(b)3. 3. In counties having a stadium tax, but no county tax, the following bracket system may be used. - See PDF for table PDF
The state and stadium tax equals 51¢ for each $10.00 of sales, plus the tax shown above for the fractional part of $10.00.
Tax 11.32(5)(b)4. 4. In counties having a county tax and a stadium tax, the following bracket system may be used. - See PDF for table PDF
The state, county and stadium tax equals 56¢ for each $10.00 of sales, plus the tax shown above for the fractional part of $10.00.
Tax 11.32(5)(c) (c) The gross sales and use tax payable by a retailer on retail sales is the total of the applicable tax rates under ss. 77.52 (1) and (2), 77.53 (3) and (9m) and 77.71, Stats., times the retailer's taxable sales price, regardless of the amount of tax collected from customers.
Tax 11.32(6) (6)Exchanging tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. The taxable sales price includes the exchange of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., for taxable or nontaxable services, realty, or intangibles if the person providing the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., receives the sales price or purchase price valued in money, whether received in money or otherwise.
Tax 11.32 Note Example: A restaurant operator exchanges meals having a retail price of $100 for radio or television advertising which has an established price of $100 for this type of advertising service. The restaurant operator and the radio or television station each have to report the sales price of $100 as a result of the transaction since the total sales reported on the sales and use tax return includes both taxable and nontaxable transactions.
Tax 11.32 Note The radio station may, however, deduct the $100 from its total sales reported on its sales and use tax return, if the advertising service that it is selling is not subject to Wisconsin sales or use tax. The restaurant operator's sales of these meals are taxable. Therefore, no deduction may be taken on the restaurant operator's sales and use tax return relating to these meals.
Tax 11.32(7) (7)Manufactured homes.
Tax 11.32(7)(a)(a) The sales price and purchase price do not include 35% of the amount from the sale of a new manufactured home as defined in s. 101.91 (11), Stats., not including leases and rentals.
Tax 11.32(7)(b) (b) If the exclusion under par. (a) applies to the sale of a manufactured home, no reduction in the sales price or purchase price is allowed for trade-ins.
Tax 11.32(7)(c) (c) Sales of manufactured homes as defined in s. 101.91 (2), Stats., to a contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.
Tax 11.32(8) (8)Modular homes.
Tax 11.32(8)(a)(a) The sales price and purchase price from the sale of a "modular home," as defined in s. 101.71 (6), Stats., that is tangible personal property when sold, may be reduced by one of the following:
Tax 11.32(8)(a)1. 1. 35% of the sales price.
Tax 11.32(8)(a)2. 2. An amount equal to the sales price minus the cost of the materials that become an ingredient or component part of the modular home.
Tax 11.32(8)(b) (b) No credit is allowed for trade-ins if the sales price or purchase price is reduced under par. (a).
Tax 11.32(8)(c) (c) Once a retailer reduces the sales price or purchase price by the amount in par. (a) 1. or 2., the retailer shall continue to use that method of reduction for all sales of modular homes, that are tangible personal property when sold, until such time as the department approves in writing the use of the other method.
Tax 11.32 Note Example: Building Manufacturer sells a modular home, as defined in s. 101.71 (6), Stats., in Wisconsin to Dealer. Dealer will affix the modular home to real property in Wisconsin for Customer under a contract between Dealer and Customer. This is the first modular home, as defined in s. 101.71 (6), Stats., sold by Building Manufacturer pursuant to a contract entered into on or after December 1, 1997. Additional facts are as follows:
Tax 11.32 Note • $40,000 is the cost of materials purchased by Building Manufacturer that become an ingredient or component part of the modular home.
Tax 11.32 Note • $65,000 is the sales price of the modular home by Building Manufacturer to Dealer.
Tax 11.32 Note The amount subject to sales tax on the sale of the modular home to Dealer is one of the following:
Tax 11.32 Note (1) $42,250, which is the $65,000 sales price reduced by $22,750 (35% of the sales price).
Tax 11.32 Note (2) $40,000, which is the $65,000 sales price reduced by $25,000 (the sales price minus the cost of materials).
Tax 11.32 Note If Building Manufacturer chooses the method under (1) for computing the sales price from the sale of this modular home, it must use the method under (1) for computing the sales price from all future sales of modular homes, until the department approves in writing the use of the method under (2).
Tax 11.32(8)(d) (d) Sales of modular homes as defined in s. 101.71 (6), Stats., to a contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.
Tax 11.32 Note Note: Section Tax 11.32 interprets ss. 77.51 (12m) (a) (intro.) and 2., 3. and 4., (b) 1., 5., 7. and 8. and (c), (15a), (15b) (a) (intro.), 2., 3., and 4., (b) 1., 5., 7. and 8. and (c), 77.54 (8), 77.585 (7), and 77.61 (3m), Stats.
Tax 11.32 Note Note: The interpretations in s. Tax 11.32 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The 5% sales and use tax rate became effective May 1, 1982 (previously the rate was 4%); (b) The 35% reduction of gross receipts from the sale of a new mobile home that is a primary housing unit became effective January 1, 1987, pursuant to 1985 Wis. Act 29; (c) The 35% reduction of gross receipts from the sale of a new mobile home transported in 2 sections became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (d) The reduction of gross receipts and sales price for sales of manufactured buildings, as defined in s. 101.71 (6), Stats., became effective for sales of property pursuant to contracts entered into on or after December 1, 1997, pursuant to 1997 Wis. Act 27; (e) The term "manufactured building" was changed to "modular home" and the term "mobile home" was changed to "manufactured home" effective January 1, 2008 pursuant to 2007 Wis. Act 11; (f) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (g) The exemption for modular homes and manufactured homes used in real property construction activities outside Wisconsin became effective September 1, 2011 pursuant to 2011 Wis. Act 32.
Tax 11.32 History History: Cr. Register, December, 1977, No. 264, eff. 1-1-78; am. (4) (a) and (b), (5) (b) and (c), r. and recr. (5) (a), Register, January, 1983, No. 325, eff. 2-1-83; am. (3) (c), Register, December, 1983, No. 336, eff. 1-1-84; emerg. am. (5) (a), eff. 3-24-86; am. (5) (a) and (am), Register, October, 1986, No. 370, eff. 11-1-86; cr. (6), Register, April, 1990, No. 412, eff. 5-1-90; cr. (7), am. (2), (3) (a) and (c) and (5) (d), Register, June, 1991, No. 426, eff. 7-1-91; am. (2), (4) (a) and (c), (5) (a), (am) and (b) and (7), Register, December, 1992, No. 444, eff. 1-1-93; cr. (4) (a) 1., 2., 3. and (6), am. (4) (b) and (c), r. and recr. (5), renum. (4) (a), (6) and (7) to be (4) (a) (intro.), (7) and (8) and am. (4) (a) (intro.), Register, October, 1997, No. 502, eff. 11-1-97; cr. (9), Register, August, 1999, No. 524, eff. 9-1-99; EmR0924: emerg. am. (title), (1) to (3), (4) (a) (intro.), (b) and (c), cr. (3) (d) and (7), r. and recr. (5), r. (6) and (8), renum. (7) and (9) to be (6) and (8) and am., eff. 10-1-09; CR 09-090: am. (title), (1) to (3), (4) (a) (intro.), (b) and (c), cr. (3) (d), (3m) and (7), r. and recr. (5), r. (6) and (8), renum. (7) and (9) to be (6) and (8) and am. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (6) (Example), renum. (7) to be (7) (a), cr. (7) (b), (c), (8) (d) Register August 2012 No. 680, eff. 9-1-12.
subch. V of ch. Tax 11 Subchapter V — Occasional Sales
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