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 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)3.
3. Late payment fees that do not extend the term of the lease, license, or rental.
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)(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, 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)(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.
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.
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.
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.
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)(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)(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)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 2 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;
CR 22-044: am. (4) (a) 2. Register June 2023 No. 810, eff. 7-1-23. Tax 11.33(1)(1)
Scope. This section describes the general rules for exempt occasional sales.
Tax 11.33(2)
(2)
General. Sales of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., and taxable services are not taxable if they are exempt “occasional sales." However, if the number, scope and character of the sales are such that they exceed the standards in the statutes and this section, a taxable sale occurs.
Tax 11.33(4)
(4)
Sales which are exempt occasional sales. Sales which are exempt occasional sales include:
Tax 11.33(4)(a)
(a) The sale of a motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01 (48r), Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin is an exempt occasional sale only if one of the following applies:
Tax 11.33(4)(a)1.
1. The sale is to a spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law, of the transferor provided the property has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling this type of property.
Tax 11.33(4)(a)2.
2. The item is a motor vehicle and the transferor sells the motor vehicle to a corporation owned solely by the transferor or the transferor's spouse, provided the motor vehicle has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling motor vehicles. Transferor for purposes of this subdivision means a natural person.
Tax 11.33(4)(a)3.
3. The motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01 (48r), Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft is sold by a nonprofit organization meeting the requirements in s.
Tax 11.35 (4).
Tax 11.33(4)(b)
(b) Any sale of a boat that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin or under the laws of the United States, is an exempt occasional sale only if one of the following applies:
Tax 11.33(4)(b)1.
1. The sale is to a spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law, of the transferor provided the property has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling boats.
Tax 11.33(4)(c)
(c) Except as provided in pars.
(a) and
(b), five or fewer auctions that are the sale of personal farm property or household goods and that are held by the same auctioneer at the same location during the year. For indoor locations, “location" means a building, except that in the case of a shopping center or shopping mall, “location" means a store.
Tax 11.33 Note
Note: Refer to s.
Tax 11.50 (4) and
(5) regarding exempt occasional sales at auction of personal farm property and household goods.
Tax 11.33(4)(d)
(d) Except as provided in pars.
(a) and
(b), sales of tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., by an individual who operates a sole proprietorship and who holds or is required to hold a seller's permit, which have not been used in the course of the person's business and the sales are not the type of property, items, or goods sold in the course of the person's business. However, all tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., sold by a corporation or partnership which holds or is required to hold a seller's permit shall be considered to be used or sold in the course of the organization's business activities and are taxable.
Tax 11.33 Note
Example: A taxpayer operates a service station as a sole proprietor and holds a seller's permit for the purpose of selling cigarettes and repairing motor vehicles. The sales price from selling a refrigerator and stove used in the taxpayer's residence are not subject to the sales tax. However, the sales price from the sale of a desk and refrigerator which were used in the service station's business activities are subject to the sales tax.
Tax 11.33(4)(e)
(e) Except as provided in pars.
(a) and
(b), the sale of a business or business assets, not including inventory held for sale, previously used by a seller to conduct its trade or business at a location after that person has ceased actively operating in the regular course of business as a seller of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., or taxable services at that location.
Tax 11.33 Note
Note: Refer to s.
Tax 11.34 regarding the occasional sales exemption for the sale of a business or business assets.
Tax 11.33(4)(f)
(f) Except as provided in pars.
(a) and
(b), sale of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., or taxable services by a person who does not hold and is not required to hold a seller's permit, if the total taxable sales price from sales of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., and taxable services are less than $2,000 during the calendar year. However, purchases of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., or taxable services which when resold are exempt under this paragraph, are taxable purchases by that person. This paragraph does not apply to nonprofit organizations.
Tax 11.33 Note
Examples: 1) If the sales price from a person's garage and rummage sales, lawn maintenance services, bait sales to fishermen, sales of books, charges for parking and other normally taxable receipts are less than $2,000 during the calendar year, that person's receipts are deemed exempt occasional sales under par. (f). However, purchases by the seller of the tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., which are sold are taxable.
Tax 11.33 Note
2) Sales of soft drinks by employee groups are not taxable if the sales price from soft drink sales are less than $2,000 per year. These groups are deemed consumers and the supplier's sales to them are taxable retail sales.
