The sales price from sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b)
, and (d)
, Stats., and taxable services, or licenses, rentals, or leases of tangible personal property and items, property, and goods under s. 77.52 (1) (b)
, and (d)
, Stats., including any services that are a part of the sale, license, lease, or rental sourced to Wisconsin under s. 77.522
, Stats., even if the seller, licensor, or lessor regards the receipts as taxable or nontaxable. Taxable receipts shall be reported on the accrual basis, except when the department is satisfied that an undue hardship would exist and authorizes reporting on some other basis.
The basis for all deductions claimed in filing returns, including exemption certificates obtained from customers. Exempt sales to governmental units and public schools need not be supported by exemption certificates, if the supplier retains a copy of the exempt entity's purchase order and the supplier's invoice or billing document. Sales to organizations holding a certificate of exempt status, CES, including religious or charitable organizations, can be shown to be exempt by recording the CES number on the seller's copy of the bill of sale. Except as provided in this paragraph and ss. 77.52 (13)
and 77.53 (10)
, Stats., exempt sales shall be supported by an exemption certificate retained by the seller and paper certificates shall also be signed by the purchaser. Documents necessary to support claimed exemptions from tax liability, such as bills of lading and purchase orders, shall be maintained in a manner in which they readily can be related to the transaction for which exemption is sought.
Total purchase price of all tangible personal property, items, property, and goods under s. 77.52 (1) (b)
, and (d)
, Stats., and taxable services purchased for sale, license, lease, rental, storage, use, or other consumption in Wisconsin.
Every person subject to the county or stadium sales and use tax shall keep a record of sales that the person makes that are sourced under s. 77.522
, Stats., to each:
Every person shall keep a record of the purchase price of property, items, and goods on which the person is subject to county and stadium use or excise tax in each enacting county or stadium district's jurisdiction.
(2) Microfilm records.
Microfilm, including microfiche, reproductions of general books of account, such as cash books, journals, voucher registers and ledgers, and supporting records of detail shall be acceptable if the following conditions are met:
Appropriate facilities are provided for preservation of the films for periods required.
Microfilm rolls are indexed, cross referenced, labeled to show beginning and ending numbers or beginning and ending alphabetical listing of documents included, and are systematically filed.
Transcriptions are provided for any information contained on microfilm which may be required for purposes of verification of tax liability.
Proper facilities are provided for the ready inspection and location of the particular records, including adequate projectors for viewing and copying the records.
(3) Records prepared by automated data processing (adp) systems.
An automatic data processing, ADP, tax accounting system shall have the capability of producing visible and legible records which will provide the following necessary information for verification of the taxpayer's tax liability:
(a) Recorded or reconstructible data.
ADP records shall provide an opportunity to trace any transaction back to the original source or forward to a final total. If detailed printouts are not made of transactions at the time they are processed, then the system must have the ability to readily reconstruct these transactions.
(b) General and subsidiary books of account.
A general ledger, with source references, shall be written out to coincide with financial reports for tax reporting periods. Where subsidiary ledgers are used to support the general ledger accounts, the subsidiary ledgers shall also be written out periodically.
(c) Audit trail and supporting documents.
The audit trail shall be designed so that the details underlying the summary accounting data may be identified and made available to the department upon request. The record keeping system should be so designed that supporting documents, such as sales invoices, purchase invoices, exemption certificates, and credit memoranda, shall be readily available.
(d) Program documentation.
A written description of the ADP portion of the accounting system shall be available. Important changes, together with their effective dates, shall be noted in order to preserve an accurate chronological record. The statements and illustrations as to the scope of operations shall be sufficiently detailed to indicate:
(4) Records retention.
The records shall be preserved and retained for the 4-year period open to audit under s. 77.59 (3)
, Stats. If any agreement is entered into to extend the 4-year audit period, the records shall be preserved for that extended period. If a notice of tax determination has been issued to the taxpayer by the department and if the taxpayer files a petition for redetermination, the records for the period covered by the notice of the tax determination shall be preserved and retained until the tax redetermination has been finally resolved.
(5) Examination of records.
All records described in this section shall be made available for examination by the department at its request.
(6) Failure to maintain records.
In the absence of suitable and adequate records, the department may determine the amount of tax due by using any information available, whether obtained from the taxpayer's records or from any other source. Failure to maintain and keep complete and accurate records may result in penalties or other appropriate action provided by law, including the disallowance of deductions, credits, and exemptions and the inclusion of additional taxable sales or additional taxable purchases to which the requested records relate.
If the department has given notice to a person to keep certain sales and use tax records, and thereafter additional sales or use taxes are assessed on the basis of information not contained in the records, the department shall impose a penalty equal to 25% of the amount of sales or use tax assessed. This is in addition to all other penalties provided by law.
If a person fails to produce records or documents that were requested by the department, as provided under ss. 73.03 (9)
and 77.59 (2)
, Stats., the penalties under s. 77.61 (19)
, Stats., may be imposed. See s. Tax 11.90
for additional information relating to these penalties.
Tax 11.92 Note
The interpretations in this s. Tax 11.92
are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The 25% penalty in sub. (7) became effective July 20, 1985, pursuant to 1985 Wis. Act 29
; and (b) 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 11.92 History
Cr. Register, July, 1977, No. 259
, eff. 8-1-77; emerg. cr. (1) (d), eff. 3-24-86; cr. (1) (d), Register, October, 1986, No. 370
, eff. 11-1-86; am. (1) (intro.), (a), (b) and (c), (2) (intro.), (3) (intro.) and (c) and (4), cr. (7), Register, June, 1991, No. 426
, eff. 7-1-91; EmR0924
: emerg. am. (1) (intro.) to (c), (2) (b), (3) (c) and (6), renum. (1) (d) to be (1) (d) (intro.) and am., cr. (1) (d) 1. to 3. and (e) eff. 10-1-09;CR 09-090
: am. (1) (intro.) to (c), (2) (b), (3) (c) and (6), renum. (1) (d) to be (1) (d) (intro.) and am., cr. (1) (d) 1. to 3. and (e) Register May 2010 No. 653
, eff. 6-1-10; CR 10-094
: renum. (7) to be (7) (a), cr. (7) (b) Register November 2010 No. 659
, eff. 12-1-10; CR 12-014
: am. (1) (b), (d) (intro.), r. (1) (d) 3., am. (1) (e) Register August 2012 No. 680
, eff. 9-1-12.
Tax 11.925 Sales and use tax security deposits. Tax 11.925(1)(a)(a)
Under s. 77.61 (2) (a)
, Stats., the department may require a person liable for sales and use taxes to make a security deposit before or after a seller's permit is issued. The amount of the security deposit determined by the department may not exceed $15,000. If a person fails or refuses to make a security deposit as requested, the department may refuse to issue a permit or revoke the permit.
As provided in s. 77.61 (2) (b)
, Stats., a certified service provider who has contracted with a seller and filed an application to collect and remit sales and use taxes on behalf of the seller shall submit a surety bond within 60 days after the department notifies the certified service provider that the certified service provider is registered to collect Wisconsin sales and use taxes, to guarantee the payment of such sales and use taxes. However, the secretary of revenue or the secretary's designee may waive this requirement or release the liability with respect to any certified service provider.
In determining whether or not security will be required and the amount of security to be required, the department may consider all relevant factors including the person's:
Evidence of adequate financial responsibility. Evidence may include a person's assets and liabilities, liquidity of assets, estimated expenditures, and potential sales tax liability.
Prior record of filing tax returns and paying taxes of any kind with the department.
Tax 11.925 Note
Example: A temporary or seasonal business having no fixed location which is frequently moved from city to city may be a greater security risk than one operating continually at a fixed location.
Tax 11.925 Note
Example: A sole proprietor or partner having nonbusiness financial resources may be a better risk than a corporation having limited assets.
Although the individual factors listed in par. (a)
may be considered in determining security requirements, each case shall be determined on its merits as evaluated by the department. Protection of the sales and use tax revenues shall be the major consideration in determining security requirements. However, due consideration shall be given to reasonable evidence that security is not necessary.
In instances in which the department determines that a security deposit in excess of $50.00 is required, notification of this requirement shall include a written statement clearly describing the reasons for the requirement and a description or calculation showing how the amount of the security requirement was determined.
(3) Types of security.
Acceptable types of security include, but are not limited to:
Time certificates of deposit issued by financial institutions and made payable to the department. Interest earned on those certificates shall be paid to the depositor.
Fully paid investment certificates issued by savings and loan associations made payable to the depositor. A security assignment, form S-127, shall be completed if this type of security is selected.
Tax 11.925 Note
Note: Form S-127 may be obtained from any Department of Revenue office or by writing or calling: Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708, (608) 266-2278.
Bearer bonds issued by the U.S. government, any unit of Wisconsin municipal government or by Wisconsin schools. The depositor should clip 2 full years' coupons before depositing this type of security.
If a security deposit is required, the amount generally shall be equal to the depositor's average quarterly Wisconsin sales and use tax liability increased to the next highest even $100 amount. The average quarterly sales and use tax liability shall be based on whichever of the following the department considers most appropriate in the circumstances:
The depositor's previous sales and use tax liability at the location specified on the permit.
The predecessor's sales and use tax liability at the location specified on the permit,
Other factors, such as the department's estimate of estimated tax liability based on its experience with other similar activities.
If at the time of the security review the retailer has an outstanding sales and use tax delinquency, the delinquent amount shall be added to the average quarterly sales and use tax liability.
Section 77.61 (2) (a)
, Stats., provides any security deposited under s. 77.61 (2)
, Stats., shall be returned to the taxpayer if the taxpayer has, for 24 consecutive months, complied with all the requirements of subch. III of ch. 77
The 24 month compliance requirement described in par. (a)
shall begin on the day the deposit is received by the department.
Within 30 days after the conclusion of the 24-month period described in par. (a)
, the department shall review the taxpayer's compliance record. If the taxpayer has complied with subch. III of ch. 77
, Stats., the department shall within 60 days after the expiration of the 24-month period certify the deposit for refund.
No delinquencies of sales or use tax, interest, or other charges existed.
No penalties due to negligence or fraud were assessed for filing periods within the 24-month compliance period.
No assessment of additional tax, interest, or other charges for filing periods within the 24-month compliance period is unpaid at the end of the 24-month compliance period.
If a taxpayer does not meet the compliance requirements set forth in par. (d)
, the deposit shall be retained by the department until the taxpayer is in compliance for 24 consecutive months from the date of the latest non-compliance.
Tax 11.925 Note
The interpretations in s. Tax 11.925
are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The return of deposit provisions in sub. (5) became effective March 13, 1980, pursuant to Chapter 125, Laws of 1979
; (b) The $15,000 limit for security deposits became effective October 1, 1985, pursuant to 1985 Wis. Act 29
; and (c) The provision to require certified service providers to submit surety bonds and the provision to allow the secretary of revenue to waive the requirement became effective October 1, 2009, pursuant to 2009 Wis. Act 2
Tax 11.925 History
Cr. Register, July, 1981, No. 307
, eff. 8-1-81; am. (1), (2) (a) 1., 3., and 4., (3) (b) 2., and (5) (c), Register, March, 1991, No. 423
, eff. 4-1-91; am. (1), (2) (b), (3) (b) 1., (5) (c), (d) 4. and 5., r. (3) (a) 3., Register, December, 1992, No. 444
, eff. 1-1-93; EmR0924
: emerg. renum. (1) to be (1) (a) and am., cr. (1) (b), am. (2) (a) 1., (3) (a) 1., (5) (a), (d) 3. and 5., eff. 10-1-09; CR 09-090
: renum. (1) to be (1) (a) and am., cr. (1) (b), am. (2) (a) 1., (3) (a) 1., (5) (a), (d) 3. and 5. Register May 2010 No. 653
, eff. 6-1-10.
Annual filing of sales tax returns. Tax 11.93(1)(1)
A retailer holding a regular seller's permit who during the previous calendar or fiscal year had a sales and use tax liability not exceeding $600 will be notified by the department that it must only file one sales and use tax return for the following year. If the retailer wants to continue to file returns on a quarterly basis, it must contact the department.
Returns and payments of retailers reporting on an annual basis shall be due and payable on the last day of the month following the close of their calendar or fiscal year.
Tax 11.93 Note
The interpretations in s. Tax 11.93
are effective under the general sales and use tax law on and after September 1, 1969, except: (a) A $300 standard applied to taxable years beginning on and after January 1, 1979. Prior to that date, a $100 standard applied; (b) The “annual information return" was eliminated for 1981 and subsequent years, pursuant to Chapter 221, Laws of 1979
; and (c) The $600 standard applies on and after January 1, 2014.
Tax 11.93 History
Cr. Register, December, 1978, No. 276
, eff. 1-1-79; cr. (4), Register, January, 1983, No. 325
, eff. 2-1-83; r. (3) and (4), Register, June, 1991, No. 426
, eff. 7-1-91; EmR0924
: emerg. am. (1), eff. 10-1-09; CR 09-090
: am. (1) Register May 2010 No. 653
, eff. 6-1-10; EmR1323
: emerg. am. (1), eff. 1-1-14; CR 13-095
: am. (1) Register May 2014 No. 701
, eff. 6-1-14.
“Delivery charges" is defined in s. 77.51 (2m)
, Stats., to mean charges by a seller to prepare and deliver tangible personal property, or items, property, or goods under s. 77.52 (1) (b)
, or (d)
, Stats., or services to a location designated by the purchaser of the tangible personal property, or items, property, or goods under s. 77.52 (1) (b)
, or (d)
, Stats., or services, including charges for transportation, shipping, postage, handling, crating, and packing.
When a seller charges a purchaser for the delivery of taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b)
, or (d)
, Stats., the seller's total charge, including any delivery charge, shall be subject to the sales or use tax. It is immaterial whether delivery is made by the seller's vehicle, a common or contract carrier, or the United States postal service.
Tax 11.94 Note
Retailer A sells clothing to Customer B for $100. Retailer A also charges Customer B $10 for delivery of the clothing. Retailer A delivers the clothing to Customer B at a Wisconsin address for which the total applicable sales and use tax rate is 5%. The correct computation of the tax due is as follows:
- See PDF for table
When a seller charges a purchaser for the delivery of nontaxable or exempt tangible personal property or items, property, or goods under s. 77.52 (1) (b)
, or (d)
, Stats., the seller's total charge, including any delivery charge, is not subject to the sales or use tax.
If a shipment includes both taxable and nontaxable property and items the seller shall determine and set forth on the invoice the portion of the delivery charge reasonably allocable to the taxable property and items. The portion allocated to nontaxable property and items is not taxable. If no allocation is made, the total delivery charge shall be taxable.
The total sales price of all of the property and items subject to tax as compared to the total sales price of all of the property and items included in the shipment.