The property or item is not used exclusively and directly by a manufacturer in manufacturing.
The following property and items are not within the exemption provided by s. 77.54 (2)
, Stats., although the property or item may be exempt under s. 77.54 (6) (am) 1.
, Stats., if the property or item is a machine or specific processing equipment, or a part for that machine or equipment, used exclusively and directly in manufacturing, as described in s. Tax 11.40
Hand tools, including files, wrenches, hammers, saws, screwdrivers, planes, punches, chisels, and spray guns.
Wearing apparel for the comfort or welfare of the employee or for the protection of the employee's clothing, such as helmets, hard hats, work gloves, aprons, coveralls, pants, coats, and fur-lined boots and jackets.
Tax 11.41 Note
Employees of Manufacturer C wear hard hats, as required by federal regulations, while working within the scope of manufacturing as defined in s. Tax 11.39 (2)
. The hard hats are worn to protect the employees. The hard hats are not used directly in manufacturing and do not qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2)
Chemicals and cleaning agents used to clean the room where manufacturing takes place, including walls, ceilings, floors, drains, windows, and doors, even if the cleaning is required in order to meet sanitation standards required by state and federal regulatory agencies.
Fuel and electricity are specifically excluded from the exemption provided by s. 77.54 (2)
, Stats. However, an exemption is provided in s. 77.54 (30) (a) 6.
, Stats., for fuel and electricity consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b)
, Stats., in this state. Consistent with s. 77.51 (7h)
, Stats., “fuel and electricity consumed in manufacturing" means only fuel and electricity used to operate machines and equipment used directly in the step-by-step manufacturing process and does not include fuel and electricity consumed in providing plant heating, cooling, air conditioning, communications, lighting, safety and fire prevention, storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b)
, Stats., research and product development, delivery to or from the plant, repairing or maintaining plant facilities, or shipping, advertising, distribution, sales, or administrative department activities.
Oxygen used to enrich the fuel mixture in an industrial furnace, or oxygen and acetylene used in a welding process.
Coal or coke used by a foundry, except the portion of the coke which actually becomes an ingredient or component part of any grey-iron produced.
Gasoline, fuel oil, kerosene, natural gas, liquid propane gas, also called LPG, or other natural or synthetic liquids used as fuel.
Tax 11.41 Note
Note: Since “fuel" is not defined in the sales and use tax statutes, it shall be given its ordinary meaning as provided in a dictionary. Dictionaries generally define fuel as a material used to produce heat or power by burning, or something that feeds a fire.
Tax 11.41 Note
The interpretations in s. Tax 11.41
are effective under the general sales and use tax law on and after September 1, 1969, except that (a) The exemption for wood residue was effective on September 1, 1987, pursuant to 1987 Wis. Act 27
; (b) The exemption for fuel and electricity consumed in manufacturing was effective January 1, 2006 pursuant to 2003 Wis. Act 99
; (c) The requirement that property and items which qualify for exemption under s. 77.54 (2)
, Stats., be consumed exclusively and directly by a manufacturer in manufacturing property and items destined for sale became effective August 1, 2009, pursuant to 2009 Wis. Act 28
; and (d) 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., and certain leased property affixed to real property under s. 77.52 (1) (c)
, Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2
Tax 11.41 History
Cr. Register, November, 1977, No. 263
, eff. 12-1-77; cr. (3) (a) 15. and am. (4) (h), Register, October, 1979, No. 286
, eff. 11-1-79; am. (3) (a) 4., Register, July, 1987, No. 379
, eff. 8-1-87; am. (5) (intro.), Register, April, 1990, No. 412
, eff. 5-1-90; am. (2) (intro.), (3) (b) and (4) (intro.), cr. (5) (c), Register, March, 1991, No. 423
, eff. 4-1-91; r. and recr. (1), r. (2), (3) (b), cr. (2) (a) 4. b., (b), (4) (b) (intro.), renum. (3) (a) (intro.), 1. to 15., (4), (5) (intro.), (a), (b) and (c) to be (2) (a) (intro.), 1. to 4. a., 5 to 15., (3), (4) (a), (b) 1. to 3. and am. (2) (a) 4. a., (3) (intro.), (4) (a), Register, October, 1997, No. 502
, eff. 11-1-97; am. (1) (b) 2. b., (3) (b) and (h), Register, August, 1999, No. 524
, eff. 9-1-99; EmR0924
: emerg. am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3), eff. 10-1-09; CR 09-090
: am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3) Register May 2010 No. 653
, eff. 6-1-10; CR 10-094
: am. (2) (a) (intro.), 15., (3) (a) (intro.), r. and recr. (2) (a) 4., cr. (3) (a) 3., (b) 9. Register November 2010 No. 659
, eff. 12-1-10; correction in (3) (b) (intro.) made under s. 13.92 (4) (b) 7.
, Stats., Register August 2014 No. 704
; CR 19-112
: am. (4) (a) Register June 2020 No. 774
, eff. 7-1-20.
Fertilizer blending, feed milling, and grain drying operations.
For purposes of s. 77.54 (6) (bn)
, Stats., primarily engaged in fertilizer blending, feed milling, or grain handling operations does not include the planting, harvesting, and tilling of grain, but may include the custom farming services of grain drying.
Tax 11.42 Note
Individual operates a dairy farm and also grows corn and soybeans. Individual conducts corn and soybean drying operations on the farm with respect to corn and soybeans grown and harvested by Individual. Individual also mills corn, soybeans, and other grains into feed for Individual's dairy cattle. Individual's primary activity is operating a dairy farm and the grain drying and feed milling operations are conducted as an incident to Individual's grain growing and dairy farming activities. Individual is not a person described in s. 77.54 (6) (bn)
Tax 11.42 Note
Business' primary business activity is the operation of a grain dryer. For a fee, Business will dry grain owned by farmers. Business is primarily engaged in “grain handling operations which include grain drying operations" for purposes of this section. Drying grain owned by a farmer for a fee is a “custom farming service" as defined in s. Tax 11.12 (2) (b)
. Business' drying of a farmer's grain for a fee, while a “custom farming service," constitutes being engaged in “grain handling operations which include grain drying operations" for purposes of this section.
Tax 11.42 Note
The interpretations in s. Tax 11.42
are effective under the general sales and use tax law on and after September 1, 1969, except that the exemption for fertilizer blending, feed milling, and grain drying operations became effective on April 19, 2014, pursuant to 2013 Wis. Act 324
Tax 11.42 History
History: CR 16-054
: cr. Register June 2018 No. 750
, eff. 7-1-18.
Sales by pharmacies and drug stores. Tax 11.45(1)(1)
All sales of tangible personal property and items, property and goods under s. 77.52 (1) (b)
, Stats., by a pharmacy or drug store are taxable under the general sales tax law unless exempted by a specific statute. The most common exemptions are described and enumerated in this section.
“Drug" is defined in s. 77.51 (3pj)
, Stats., to mean a compound, substance, or preparation, or any component of them, other than food and food ingredients, dietary supplements, or alcoholic beverages, to which any of the following applies:
It is listed in the United States Pharmacopoeia, Homeopathic Pharmacopoeia of the United States, or National Formulary, or any supplement to any of them.
It is intended for use in diagnosing, curing, mitigating, treating, or preventing a disease.
Drugs are exempt from the tax if prescribed by a licensed physician, surgeon, podiatrist or dentist to a patient, who is a human being, for treatment
and dispensed on prescription filled by a registered pharmacist in accordance with law.
Other preparations consumed orally, injected or applied, including dermal fillers.
Other items which remain or dissolve in the body, such as birth control implants including intra-uterine devices (IUD).
Prosthetic devices, mobility-enhancing equipment, or durable medical equipment.
Non-medicated bandages, pads, compresses, supports, or dressings.
Food and food ingredients, including dietary supplements and soft drinks.
The exemption for prosthetic devices under s. 77.54 (22b)
, Stats., applies to sales of all prosthetic devices, including repair and replacement parts, that are used for a human being. The exemption also includes accessories for exempt prosthetic devices.
“Prosthetic device" is defined in s. 77.51 (11m)
, Stats., to mean a replacement, corrective, or supportive device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.
Tax 11.45 Note
A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.'s Rules and Procedures, available at www.streamlinedsalestax.org
“Prosthetic devices" include the following items, as well as repair and replacement parts and accessories for those items, if they are implanted or worn on the body:
Trusses; post-operative shoes; orthopedic shoes, shoe lifts, inserts, arch supports, and heel protectors; braces including ankle, knee, neck, and back braces; knee immobilizers; traction devices; cervical collars; head halters; abdominal belts, binders, and supports; slings; suspensories; and bone pins, plates, nails, screws, wax, and cement.
Antiembolism elastic hose and stockings, and compression stockings and sleeves.
Pressure garments, including edema gloves, mast pants, and burn garments.
Artificial limbs; skin, shoulder, elbow, tendon, testicular, penile, hip, and knee implants and acetabular cups for hip implants; neuro, spinal, and joint membranes implants; adhesion barriers; artificial eyes; ocular, orbital, ear, nose, and throat implants; cochlear implants; maxillofacial devices; hands and feet implants; orthobiologics implants; surgical mesh implants; vena cava filters; artificial heart valves; artificial larynx; trachea tubes; grafts; sphincters; stump shrinkers; gastric bands and intragastric balloons; nasogastric tubes; stents; pacemakers and leads that are implanted or worn; defibrillator and leads that are implanted; and hearing aids and batteries.
Contact lenses and corrective eyeglasses (prescription and non-prescription).
Ostomy adhesives, barriers, catheters, collection bags and pouches, drain tubes, stoma caps, tubing, belts, hernia belts, and valves, but not barrier prep wipes, barrier powder, or lubricants.
Feeding, drainage, urinary and dialysis catheters, access ports, drains, and shunts.
Collagen implants, implanted tissue expanders, breast implants and prosthesis, and mastectomy surgical bras.
Casts and casting materials, splint and splint materials, staples, sutures, and suture alternatives.
Bone growth stimulators, CPAP machines, infuser pumps, programmable drug infusion devices, insulin pumps, penile pumps, electronic speech aids and tracheostomy speaking valves, tens units, and nerve stimulators implanted with leads.
The exemption for mobility-enhancing equipment under s. 77.54 (22b)
, Stats., applies to all mobility-enhancing equipment, including repair and replacement parts, that is for human use. The exemption also includes accessories for exempt mobility-enhancing equipment.
“Mobility-enhancing equipment" is defined in s. 77.51 (7m)
, Stats., to mean equipment, including the repair parts and replacement parts for the equipment, that is primarily and customarily used to provide or increase the ability of a person to move from one place to another; that may be used in a home or motor vehicle; and that is generally not used by a person who has normal mobility. “Mobility-enhancing equipment" does not include a motor vehicle or any equipment on a motor vehicle that is generally provided by a motor vehicle manufacturer. “Mobility-enhancing equipment" does not include durable medical equipment.
“Mobility-enhancing equipment" includes the following items, as well as repair and replacement parts and accessories for those items:
Canes, crutches, walkers, wheelchairs including motorized wheelchairs and scooters, specialty chairs such as all terrain wheelchairs and pool wheelchairs, and wheelchair ramps.
Swivel seats which enable a disabled person to rotate his or her body, while seated, in order to get into position to rise from a chair.
Handrails and grab bars to assist in rising from the commode, tub, or shower.
Lift chairs, patient lifts, bed pull-ups including trapeze bars, and transfer belts and benches.
Mobility enhancing car seats which are car seats that provide restraint and support (five point harness) for disabled children who have outgrown standard size child car seats but still need the restraint and support provided by car seats.
Durable Medical equipment.
The exemption for durable medical equipment under s. 77.54 (22b)
, Stats., applies to all durable medical equipment, including repair and replacement parts, that is for use in a person's home, if the equipment is used for a human being. The exemption also includes accessories for exempt durable medical equipment.
“Durable medical equipment" is defined in s. 77.51 (3pm)
, Stats., to mean equipment, including the repair parts and replacement parts for the equipment that is primarily and customarily used for a medical purpose related to a person; that can withstand repeated use; that is not generally useful to a person who is not ill or injured; and that is not placed in or worn on the body. “Durable medical equipment" does not include mobility-enhancing equipment.
“Use in a person's home" means that the equipment is sold to an individual for use where they are living, regardless of whether the individual resides in a single family home, apartment building, nursing home, assisted living center, convalescent home or school dormitory.
Durable medical equipment is not for use in a person's home if it is purchased by a hospital, clinic, nursing home, assisted living center, convalescent home, dental office, chiropractor or optician's office. In addition, purchases of durable medical equipment by a nursing home, assisted living center and convalescent home are not for use in a person's home even if the equipment is purchased for use by the residents of the nursing home, assisted living center or convalescent home.