Tax 11.15 (3) (a) Returnable container deposits received by a retailer at the time of the retail sale of tangible personal property or items or property under s.
77.52 (1) (b) or
(c), Stats., such as soft drink bottles, beer bottles and
milk containers, and refunds of the deposits may be excluded from the computation of the taxable sales price if they are excluded from the sales price on the retailer's books of account.
SECTION 13. Tax 11.17 (4) (b) 6. is amended to read:
Tax 11.17 (4) (b) 6. An optometrist's sales of tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., including nonprescription sun glasses, contact lens solution,
thermal and chemical care units for contact lenses, and other types of tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., ordinarily taxable when sold at retail, unless the sales price from those sales are less than $1,000 during the calendar year. Optometrists whose receipts from taxable property, items, and goods equal or exceed $1,000 in a calendar year shall register with the department and obtain a seller's permit. Those whose receipts from taxable property, items, and goods are less than $1,000 shall be exempt as occasional sellers and shall pay tax to their suppliers or a use tax, as appropriate, on purchases of taxable property, items, or goods.
SECTION 14. Tax 11.26 (3) (b) (Example 1) and (Example 3) and (Note) are amended to read:
Tax 11.26 (3) (b) (Example 1) The room taxes imposed under s. 66.75 66.0615, Stats., which municipalities or local exposition districts impose on persons furnishing lodging to transients.
(Example 3)
The county
, and stadium
, and regional transit authority sales and use taxes imposed under s.
77.71, Stats.
(Note) The interpretations in s.
Tax 11.26 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exclusion for federal and Wisconsin motor vehicle excise taxes refunded became effective December 1, 1997, pursuant to
1997 Wis. Act 27; (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; and (c) the regional transit authority taxes were authorized by
2009 Wis. Act 28 and repealed by 2011 Wis. Act 32.
SECTION 15. Tax 11.28 (3) (c) 1. (intro.) and a. are amended to read:
Tax 11.28 (3) (c) 1. (intro.) When a retailer distributes coupons which its customer may use to obtain free tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats.,
or taxable services, the following shall apply:
a. When purchasing
tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. taxable products, including services, which will be given away to customers who
must purchase other property, items, or goods to obtain the free property, item, or good make a required purchase consisting of only nontaxable products, a retailer may not
use an exemption certificate to purchase the free
property, item, or good products without
payment of the sales tax
for resale. The retailer is deemed the consumer of the free
property products as provided in s.
77.52 (21) (a), Stats. If the free
property, item, or good was products were acquired without tax for resale, the retailer shall report the tax on its purchase price of
the property, item, or good
those products.
SECTION 16. Tax 11.28 (3) (c) 1. a. (Example), ag., and ar. are created to read:
11.28 (3) (c) 1. a. (Example) A retailer purchases key chains that it will give to customers who purchase eight gallons of gasoline. The gasoline is exempt from sales tax. The retailer is required to pay Wisconsin sales or use tax on its purchase of the key chains.
ag. When purchasing taxable products, including services, which will be given away to customers who make a required purchase consisting of only taxable property, items, or goods, a retailer may purchase the free products without tax for resale. The retailer is deemed to be selling both the required property, item, or good and the product being provided free, as provided in s.
77.52 (21) (b), Stats.
Example: A retailer purchases bicycles that it will give to customers who purchase a sofa. The retailer may purchase the bicycles without tax for resale because the customer must purchase the sofa in order to receive the bicycle.
ar. When purchasing taxable products, including services, which will be given away to customers who make a required minimum purchase that may consist of both taxable and nontaxable property, items, and goods, the retailer may owe tax on its purchase of the free products. If the sales price of all of the taxable products sold equals or exceeds the required minimum purchase, the retailer may purchase the free products without tax for resale. If the sales price of all of the taxable products sold does not equal or exceed the required minimum purchase, the retailer owes tax on its purchase price of the free products to the extent that nontaxable products are included in the required minimum purchases. The retailer may make a reasonable allocation to compute the tax due on its purchase price of the free products. If the retailer does not want to make this allocation, the retailer shall pay tax on its purchase price of the products provided free of charge.
Examples: 1) A retailer provides a free soft drink to each customer that purchases at least $20 worth of property. A customer purchases $15 dollars of taxable property and $5 dollars of nontaxable property and receives the free soft drink. The retailer purchased the soft drink from its supplier for $1. Since 75% of the selling price of the minimum required purchase is from taxable property ($15/$20 minimum purchase requirement = 75%), the retailer is only required to pay tax on the remaining 25% of its $1 purchase price of the soft drink it gave away to this customer.
2) Same as Example 1 except that the customer purchases $5 of taxable property and $15 of nontaxable property and receives the free soft drink. Since 25% of the selling price of the minimum required purchases is from taxable property ($5/$20 minimum purchase requirement = 25%), the retailer is only required to pay tax on the remaining 75% of its $1 purchase price of the soft drink it gave away to this customer.
3) Same as Example 1 except that the customer purchased $15 of taxable property and $30 of nontaxable property and receives the free soft drink. Since 75% of the minimum required purchases is from taxable property ($15/$20 minimum purchase requirement = 75%), the retailer is only required to pay tax on the remaining 25% of its $1 purchase price of the soft drink it gave away to this customer.
4) Same as Example 1 except that the customer purchases $25 of taxable property and $30 of nontaxable property and receives the free soft drink. Since at least 100% of the $20 minimum required purchase is from taxable property, the retailer does not owe any sales or use tax on its purchase of the soft drink that it gave away to this customer.
Note: Additional examples can be obtained in
Wisconsin Tax Bulletin 174 (January 2012) available on the department's web site at:
www.revenue.wi.gov.
SECTION 17. Tax 11.28 (3) (c) 1. b. is amended to read:
Tax 11.28 (3) (c) 1. b. A retailer may not use an exemption certificate when purchasing taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., products which the retailer knows, or should know, is are to be given away to customers without the customers being a required to purchase other property, items, or goods to receive the free property, item, or good. If the property, item, or good product that is given away was acquired without tax for resale, the retailer shall report the tax on its purchase price of the property, item, or good
product.
SECTION 18. Tax 11.28 (3) (c) 1. b. (Example 1) is repealed.
SECTION 19. Tax 11.28 (7) (Note) is amended to read:
Tax 11.28 (7) (Note) The interpretations in s.
Tax 11.28 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption from use tax of certain donated property became effective August 9, 1989, pursuant to
1989 Wis. Act 31; (b) The exemption for certain medicines furnished without charge became effective October 14, 1997, pursuant to
1997 Wis. Act 27; (c) Section
77.57, Stats., was amended to remove the portion of the statute that allowed a purchaser to use the lesser of the cost or fair market value of an item that was purchased exempt and whose first taxable use occurred more than 6 months after it was purchased, pursuant to
2009 Wis. Act 2; (d) The requirements for a third party reimbursement to be considered part of the sales price or purchase price of a product are effective October 1, 2009, pursuant to
2009 Wis. Act 2;
and (e) 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 (f) The tax treatment of products provided for free by retailers became effective September 1, 2011 pursuant to 2011 Wis. Act 32.
SECTION 20. Tax 11.32 (6) (Example) is amended to read:
Tax 11.32 (6) (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.
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.
SECTION 21. Tax 11.32 (7) is renumbered 11.32 (7) (a).
SECTION 22. Tax 11.32 (7) (b) and (c) and (8) (d) are created to read:
Tax 11.32 (7) (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.
(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.
(8) (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.
SECTION 23. Tax 11.32 (8) (Note) is amended to read:
Tax 11.32 (8) (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;
and (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.
SECTION 24. Tax 11.33 (4) is repealed and recreated to read:
Tax 11.33 (4) Sales which are exempt occasional sales. Sales which are exempt occasional sales include:
(a) The sale of a motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01 (48r), Stats., trailer, semitrailer, all-terrain vehicle 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:
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.
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.
3. The motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01 (48r), Stats., trailer, semitrailer, all-terrain vehicle or aircraft is sold by a nonprofit organization meeting the requirements in s.
Tax 11.35 (4).
(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:
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.
2. The boat is sold by a nonprofit organization meeting the requirements in s.
Tax 11.35 (4).
(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.
Note: Refer to s.
Tax 11.50 (4) and
(5) regarding exempt occasional sales at auction of personal farm property and household goods.
(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.
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.
(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.
Note: Refer to s.
Tax 11.34 regarding the occasional sales exemption for the sale of a business or business assets.
(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 $1,000 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.
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 $1,000 during the calendar year, that person's receipts are deemed exempt occasional sales under par. (g). 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.
2) Sales of soft drinks by employee groups are not taxable if the sales price from soft drink sales does not exceed $1,000 per year. These groups are deemed consumers and the supplier's sales to them are taxable retail sales.
(g) Sales by nonprofit organizations meeting the requirements in s.
77.54 (7m), Stats.
Note: Refer to s.
Tax 11.35 regarding the occasional sales exemption for nonprofit organizations.
SECTION 25. Tax 11.33 (5) (title) is amended to read:
Tax 11.33 (5) (title) Sales which are not exempt occasional sales.
SECTION 26. Tax 11.33 (5) (b) (Example) is created to read:
Tax 11.33 (5) (b) (Example) The sale by a sole proprietor holding a seller's permit of a motor vehicle used in the sole proprietor's business is taxable unless it qualifies as an exempt occasional sale under s.
Tax 11.33 (4) (a) 1. or
2.
SECTION 27. Tax 11.34 (1) and (3) (a) and (b) (intro.) are amended to read:
Tax 11.34 (1) This section describes the
occasional sales exemption
under s. 77.54 (7) (a), Stats., for the
occasional sale of a business or business assets as
provided
described in s.
77.51 (9) (a) and
(am), Stats.
(3) (a) Pursuant to s.
77.51 (9) (a) and
(am), Stats., a person holding or required to hold a seller's permit at the time of disposition of business assets may not claim
the occasional sales exemption that a sale of a business asset is an occasional sale, except as provided in par. (b).
(b) (intro.) A sale, other than a sale described in par. (bg) or (br), is exempt from sales and use tax as an occasional sale if all of the following conditions are met:
SECTION 28. Tax 11.34 (3) (bg) and (br) are created to read:
Tax 11.34 (3) (bg) A sale of a motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01 (48r), Stats., trailer, semitrailer, all-terrain vehicle or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin, is subject to tax unless s.
Tax 11.33 (4) (a) 1. or
2. apply.
Example:
A business has four business locations in Wisconsin and has ceased all of its business activities at one location. All of the business assets at the location where the business has ceased operating, including one motor vehicle that it used in its business, are being sold. The business is required to continue to hold a seller's permit for its other three locations. The motor vehicle is sold, but the purchaser is not a person described in s.
Tax 11.33 (4) (a) 1. or
2. The sale of the motor vehicle is not an exempt occasional sale of a business asset and the seller is required to collect tax on its sale of the motor vehicle.
(br) A sale of a boat that is registered or titled or required to be registered or titled in Wisconsin or under the laws of the United States is subject to tax unless s.
Tax 11.33 (4) (b) 1. applies.
SECTION 29. Tax 11.35 (1) is amended to read:
Tax 11.35 (1) This section describes the occasional sales exemption for nonprofit organizations as provided in s.
77.54 (7) and (7m), Stats.
SECTION 30. Tax 11.49 (2) (b) and (d) are amended to read:
Tax 11.49 (2) (b) Sales made directly to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority,
the Wisconsin Quality Home Care Authority, and the Fox River Navigational System Authority; any county, city, village, town, or school district in this state; a county-city hospital established under s.
66.0927, Stats.; a sewerage commission organized under s.
281.43 (4), Stats., or a metropolitan sewerage district organized under ss.
200.01 to
200.15 or
200.21 to
200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s.
66.0823, Stats.
; any transit authority created under s. 59.58 (7) or 66.1039, Stats.; any corporation, community chest fund, foundation, or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s.
613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member, or corporation; a local exposition district under subch.
II of ch. 229, Stats.; a local cultural arts district under subch.
V of ch. 229, Stats. Sales to a cemetery company or corporation described under section
501 (c) (13) of the Internal Revenue Code, are exempt from sales and use tax if the cemetery company or corporation uses the items exclusively for the purposes of the company or corporation. Section
77.55 (1), Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. Sales to employees of these entities are not exempt, even though the entity may reimburse the employee for the expenditure.
(d) Sales to farmers of parts and repairs for tractors or farm machines used exclusively and directly in farming, but this exemption does not apply if these items are used in motor vehicles for highway use.
SECTION 31. Tax 11.51 (2) (a) and (b) are amended to read:
Tax 11.51 (2) (a) Adhesive tape.
Air fresheners.
Albums.
Alcoholic beverages.
Almond bark.
Ammonia.
Anti-acid products.
Anti-freeze.
Appliances.
Ash trays.
Aspirin.
Auto supplies.
Baby needs, except food.
Bags of all kinds.
Bakeware.
Baking chips, sweetened.
