Hearing Information
The hearing will be held:
Date: Monday, February 27, 2012
Time: 10:00 A.M.
Location: State Revenue Building
Events Room
2135 Rimrock Road
Madison, WI 53713
Handicap access is available at the hearing location.
Appearances at the Hearing and Submittal of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below no later than February 27, 2012, and will be given the same consideration as testimony presented at the hearing.
Dale Kleven
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Telephone: (608) 266-8253
Analysis by the Department of Revenue
Statutes interpreted
Statutory authority
Explanation of agency authority
Section
73.029, Stats., provides “[t]he department of revenue may require electronic funds transfer only by promulgating rules." This provision applies to proposed rule changes relating to section
Tax 1.12.
Section
77.52 (19), Stats., provides “[t]he department shall by rule provide for the efficient collection of the taxes imposed by this subchapter on sales of tangible personal property, or items, property, or goods under sub. (1) (b), (c), or (d), or services by persons not regularly engaged in selling at retail in this state or not having a permanent place of business, but who are temporarily engaged in selling from trucks, portable roadside stands, concessions at fairs and carnivals, and the like. The department may authorize such persons to sell property or items, property or goods under sub. (1) (b), (c), or (d) or sell, perform, or furnish services on a permit or nonpermit basis as the department by rule prescribes and failure of any person to comply with such rules constitutes a misdemeanor." This provision applies to proposed rule changes relating to Chapter
Tax 11.
Section
77.65 (3), Stats., provides “[t[he department may enter into the agreement to simplify and modernize sales tax and use tax administration in order to substantially reduce the tax compliance burden for all sellers and for all types of commerce. The department may act jointly with other states that are signatories to the agreement to establish standards for the certification of a certified service provider and certified automated system and to establish performance standards for multistate sellers. The department may promulgate rules to administer this section, may procure jointly with other states that are signatories to the agreement goods and services in furtherance of the agreement, and may take other actions reasonably required to implement this section. The secretary of revenue or the secretary's designee may represent this state before the states that are signatories to the agreement." This provision also applies to proposed rule changes relating to Chapter
Tax 11.
Section
227.11 (2) (a), Stats., provides “[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute..."
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
This proposed rule:
• reflects the following tax law changes:
○ Section
77.52 (21), Stats., as revised by
2011 Wisconsin Act 32 to change the sales and use tax treatment of items provided free of charge by a retailer.
○ Section
77.54 (5) (am), Stats., as created by
2011 Wisconsin Act 32 to create a sales and use tax exemption for modular and manufactured homes used in real property construction activities outside Wisconsin.
○ Section
77.54 (11m), Stats., as created by
2011 Wisconsin Act 32 to create a sales and use tax exemption for vegetable oil or animal fat converted to motor vehicle fuel that is exempt from the taxes imposed under s.
78.01 (1), Stats.
• The repeal of the regional transit authorities:
○ provides consistency with the interpretive rules and amendments adopted by the Streamlined Sales Tax Governing Board (SSTGB) to the extent those rules and amendments are consistent with Wisconsin's laws and makes changes to clarify rules based on suggestions made during last year's compliance review conducted by the SSTGB.
○ provides specifically that if the due date of a payment falls on a day the Federal Reserve Bank is closed the payment is timely if it is made on the next day the Federal Reserve is open (existing provisions to be updated are in section
Tax 1.12)
○ removes potentially obsolete language and adds and amends examples where needed for clarification purposes
○ makes corrections to incorrect statutory cross-references
○ correctly reflects the occasional sale provisions contained in Wisconsin law
○ reflects the department's position relating to the Federal Anti-Head Tax Act (
49 U.S.C. 40166) as it applies to Wisconsin sales and use tax
Summary of, and comparison with, existing or proposed federal regulation
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states
The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies
2011 Wisconsin Act 32 and the other legislation referenced in the above plain language analysis made various changes to Wisconsin's sales and use tax laws. The department has created this proposed rule order to reflect these statutory changes. No other data was used in the preparation of this proposed rule order or this analysis.
Analysis and supporting documents used to determine effect on small business
As explained above, this proposed rule is created to administer Wisconsin's sales and use tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Effect on Small Business
This proposed rule does not have a significant effect on small business.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Agency Contact Person
Please contact Dale Kleven at (608) 266-8253 or
dale.kleven@revenue.wi.gov, if you have any questions regarding this proposed rule.
Text of Rule
SECTION 1. Tax 1.12 (8) (c) is amended to read:
Tax 1.12 (8) (c) When the prescribed due date falls on a weekend, or legal holiday, or day the Federal Reserve Bank is closed, the payment due date is revised to be the first business day immediately following the weekend,
or holiday, or day the Federal Reserve Bank was closed.
SECTION 2. Tax 11.001 (1) is amended to read:
Tax 11.001 (1) Chapter
Tax 11 is applicable to the state sales and use taxes imposed under subch.
III of ch. 77, Stats., and is also applicable to the county
, and stadium
, and regional transit authority sales and use taxes authorized under subch.
V of ch. 77, Stats.
SECTION 3. Tax 11.001 (2) (bw) is repealed.
SECTION 4. Tax 11.001 (2) (e) is amended to read:
Tax 11.001 (2) (e) “Tax" means the Wisconsin sales or use taxes in effect under ss.
77.52 (1) and
(2) and
77.53 (1), Stats. “Tax" also includes the county
, and stadium
, and regional transit authority taxes imposed under s.
77.71, Stats.
SECTION 5. Tax 11.001 (3) (Note) is amended to read:
Tax 11.001 (3) (Note) 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. The regional transit authority taxes were authorized by
2009 Wis. Act 28 and repealed by 2011 Wis. Act 32.
SECTION 6. Tax 11.04 (1) is amended to read:
Tax 11.04 (1) In this rule, “exempt entity" means a person qualifying for an exemption under s.
77.54 (9a) or
77.55 (1), Stats. Section
77.54 (9a), Stats., provides an exemption for sales 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.; a cemetery company or corporation described under section
501 (c)
13 of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation 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 unincorporated [incorporated] agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States.
SECTION 7. Tax 11.05 (3) (b) is renumbered (3) (b) 1. and amended as renumbered to read:
Tax 11.05 (3) (b) 1. Water delivered through mains. Wood residue used for fuel and sold for use in a business activity. Coal, fuel oil, propane, steam, peat, fuel cubes produced from solid waste, wood, and biomass as defined in s.
196.378 (1) (ar), Stats., used for fuel sold for residential use. Electricity and natural gas sold for residential use during the months of November through April. Fuel and electricity sold for use in farming. Fuel and electricity consumed in manufacturing tangible personal property or items or property under s.
77.52 (1) (b) or
(c), Stats.
“Sold" is defined in s. 77.54 (30) (b), Stats. In this paragraph, “residential use" has the meaning in s.
Tax 11.57 (2) (q) 2.
SECTION 8. Tax 11.05 (3) (b) 2. and 3. are created to read:
Tax 11.05 (3) (b) 2. Electricity and natural gas are considered sold at the time of the billing. If the billings are mailed, the time of billing is the day on which the billing is mailed.
3. Fuels other than electricity and natural gas are considered sold at the time possession is transferred from the seller or seller's agent to the purchaser or purchaser's agent, except that a common carrier is the agent of the seller regardless of any f.o.b. point and regardless of the method in which the freight is paid.
SECTION 9. Tax 11.05 (4) (a) and (Note) are amended to read:
Tax 11.05 (4) (a) Section
77.54 (9a), Stats., exempts sales to and the storage, use or other consumption of tangible personal property and items and property under s.
77.52 (1) (b) and
(c), Stats., and services by Wisconsin or by any agency of Wisconsin, 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.; and a cemetery company or corporation described under section
501 (c) (13) of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation.
(Note)
The interpretations in s.
Tax 11.05 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Sales by vocational, technical and adult education schools were exempt from July 1, 1972, through October 3, 1973; (b) Mobile meals on wheels became exempt October 4, 1973, pursuant to
Chapter 90, Laws of 1973; (c) Admission fees to state parks became exempt on July 1, 1978, pursuant to
Chapter 418, Laws of 1977; (d) Sales of coal, fuel oil, propane, steam and wood used for fuel became exempt July 1, 1979, and the electricity and natural gas six-month exemption became effective on November 1, 1979, both pursuant to
Chapter 1, Laws of 1979; (e) A governmental unit's charges for parking motor vehicles and aircraft and docking and providing storage space for boats became taxable June 1, 1980, pursuant to
Chapter 221, Laws of 1979; (f) Landscaping and lawn maintenance services became taxable on May 1, 1982, pursuant to
Chapter 317, Laws of 1981; (g) A governmental unit's charges for copying public records became exempt effective April 27, 1984, pursuant to
1983 Wis. Act 287, later amended effective April 2, 1986, pursuant to
1985 Wis. Act 149 to clarify that the exemption also applies to confidential records, and again amended effective May 1, 1992, pursuant to
1991 Wis. Act 269, to include records under s.
19.35 (1) (a), Stats.; (h) The exemption for peat and fuel cubes produced from solid waste became effective April 2, 1986, pursuant to
1985 Wis. Act 149; (i) The exemption for an agency or instrumentality of a Wisconsin governmental unit became effective June 1, 1986, pursuant to
1985 Wis. Act 149; (j) Wood residue used for fuel by businesses became exempt on September 1, 1987, pursuant to
1987 Wis. Act 27; (k) The exemption for admissions to a museum operated by a nonprofit corporation under lease with the state historical society became exempt July 20, 1985, pursuant to
1985 Wis. Act 29; (L) The exclusion of hospital service insurance corporation from the definition of exempt entity became effective September 1, 1985, pursuant to
1985 Wis. Act 29; (m) Revenues from establishing a “911" emergency telephone system became exempt August 1, 1987, pursuant to
1987 Wis. Act 27; (n) State park camping fees became exempt effective September 1, 1989, pursuant to
1989 Wis. Act 31; (o) The exemption for animal identification tags and standard samples by the Wisconsin department of agriculture, trade and consumer protection became effective October 1, 1993, pursuant to
1993 Wis. Act 16; (p) The exemption for fuel used in farming became effective October 1, 1991, pursuant to
1991 Wis. Act 39; (q) The requirement that meals must be served on the premises of hospitals, nursing homes, etc., for exemption to apply became effective October 1, 1991, pursuant to
1991 Wis. Act 39; (r) The exemption for sales to a local exposition district became effective April 26, 1994, pursuant to
1993 Wis. Act 263; (s) The exemption for sales of meals by community-based residential facilities became effective June 1, 1994, pursuant to
1993 Wis. Act 332; (t) The exemption for sales to the University of Wisconsin Hospitals and Clinics Authority became effective July 29, 1995, pursuant to
1995 Wis. Act 27; (u) The exemption for certain meals, food, food products and beverages furnished by institutions of higher education was revised to apply only if the items are furnished to an undergraduate student, a graduate student or a student enrolled in a professional school if the student is enrolled for credit at that institution and if the items are consumed by that student, or the items are furnished to a national football league team, effective for contracts or agreements entered into on or after October 14, 1997, pursuant to
1997 Wis. Act 27, and further revised to include certain meals, food, food products or beverages paid for to an institution of higher education through the use of an account of the institution, if the items are furnished by the institution, effective December 31, 1997, pursuant to
1997 Wis. Act 41; (v) The exemption for electricity sold for use in farming was expanded to include sales of electricity during the entire year, effective for sales on or after May 1, 2000, pursuant to
1999 Wis. Act 9; (w) The exemption for sales from the collection of public benefit fees became effective October 29, 1999, pursuant to
1999 Wis. Act 9; (x) The exemption for use of recreational facilities in connection with the sale of time-share property became effective December 1, 1999, pursuant to
1999 Wis. Act 9; (y) The exemption for certain items sold from a vending machine became effective July 1, 2001, pursuant to
1999 Wis. Act 9; (z) The exemption for fuel consumed in manufacturing became effective January 1, 2006, pursuant to
2003 Wis. Act 99; (zb) The exemption for regional transit authorities and the Wisconsin
Quality Home Health Care Authority became effective July 1, 2009, pursuant to
2009 Wis. Act 28; (ze) The exemption for federally recognized American Indian tribes or bands in Wisconsin became effective August 1, 2009, pursuant to
2009 Act 28; (zh) The requirement that governmental units collect sales tax on their sales of used motor vehicles became effective October 1, 2009, pursuant to
2009 Wis. Act 2; (zL) The exemption for low-income assistance fees became effective July 1, 2005, pursuant to
2005 Wis. Act 141; (zp) The exemption for certain admissions to sports activities by governmental units became effective July 1, 2009, pursuant to
2009 Wis. Act 28; (zr) The exemption for the police and fire protection fee became effective July 1, 2009, pursuant to
2009 Wis. Act 28; (zu) 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 (zy) The exemption for sales of food and food ingredients, except soft drinks, by any facility certified or licensed under ch.
48, Stats., became effective May 6, 2010, pursuant to
2009 Wis. Act 204; and (zz) The exemption for regional transit authorities was repealed effective September 28, 2011, pursuant to 2011 Wis. Act 32 and the exemption for the Wisconsin Quality Home Care Authority was repealed effective June 29, 2011, pursuant to 2011 Wis. Act 10.
SECTION 10. Tax 11.12 (3) is amended to read:
Tax 11.12 (3) A retailer shall have a signed exemption certificate for every exempt sale made to a farmer, except that if the exemption certificate is received electronically, a signature is not required. The certificate shall be used only for categories of items listed on it. Every invoice to which the certificate refers must contain the seller's name, the farmer's name and address, the date of sale and a brief description of the product sold.
SECTION 11. Tax 11.14 (2) (a) 3., (6) (b) 1., (8), (9), (10) (intro.), and (13) (b) are amended to read:
Tax 11.14 (2) (a) 3. Streamlined Sales and Use Tax Exemption Certificate, SSTGB Form F0003 or Streamlined Sales and Use Tax Exemption Certificate - Wisconsin, Form S-211-SST. This is a These are multistate form forms which may be used to claim any sales or use tax exemption provided under Wisconsin law. Since this is a these are multistate exemption certificate certificates, purchasers should use caution when issuing this certificate these certificates, since it contains they contain various exemptions that are not applicable in Wisconsin and only apply in other states. Purchasers are responsible for knowing if they qualify for the exemption they are claiming in the state in which the exemption is being claimed. The purchaser will be held liable for any tax, interest, and penalties that result from the purchaser claiming an exemption for which they were not eligible.
(6) (b) 1. The name, and address
, and the signature of the purchaser, except that if the exemption certificate is received electronically, a signature is not required.
(8) A retailer shall have a signed exemption certificate for every exempt sale made to a farmer, except that if the exemption certificate is received electronically, a signature is not required.
(9) A retailer shall have a signed exemption certificate if the sale of fuel oil, propane, coal, steam or wood for residential or farm use is partially exempt from sales or use tax, except that if the exemption certificate is received electronically, a signature is not required. If the sale is 100% exempt, an exemption certificate is not required.
(10) (intro.) A retailer of electricity or natural gas shall have a signed exemption certificate, except that if the exemption certificate is received electronically, a signature is not required, for all sales of electricity or natural gas for residential or farm use which are exempt from sales or use tax unless any, or all, of the following apply:
(13) (b) The certificate shall give the descriptive name of the contract, job site, county or stadium tax effective date, date of prime contract and bid, date contract was signed, seller's name, date of performance of the contract, and contractor's name and address and shall be signed by the contractor, except that if the certificate is received electronically, a signature is not required.
SECTION 12. Tax 11.15 (3) (a) is amended to read:
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.
