(Note) Exemption certificates and their instructions may be obtained free of charge
from the department's web site at www.revenue.wi.gov, by writing to Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902, or by calling (608) 266-2776.
SECTION 48. Tax 11.71 (2) (c) (Example 2) is amended to read:
2) Company C sells prewritten computer software to Customer D for $1,000. In addition, Company C also requires that any customer that purchases the prewritten computer software, must also purchase the training services on how to use the software for $100. Since Company C requires that Customer D purchase the training services as a part of the sale of the prewritten computer software to Customer D, the training services are a service necessary to complete the sale and Company C must charge Wisconsin sales tax on the entire $1,100 it charges Customer D.
SECTION 49. Tax 11.83 (3) (a) is renumbered 11.83 (3) (a) 1. and amended as renumbered to read:
Tax 11.83 (3) (a) 1. The occasional sale of a motor vehicle is taxable, unless the transfer is to the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law of the transferor or is transferred from an individual to a corporation which is solely owned by the individual; and 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.
SECTION 50. Tax 11.83 (3) (a) (intro.) and 2. are created to read:
Tax 11.83 (3) (a) (intro.) The occasional sale of a motor vehicle is taxable, unless one of the following applies:
2. The motor vehicle is sold by a nonprofit organization meeting the requirements in s.
Tax 11.35 (4).
SECTION 51. Tax 11.83 (11) (a) and (b) are amended to read:
Tax 11.83 (11) (a) Motor vehicle dealers with body shops and any other person engaged in motor vehicle repair may purchase for resale without tax tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., which are physically transferred to the customer's vehicle and which leave the repair facility with the
repaired vehicle customer. The property includes paints, paint hardeners, plastic fillers, welding rods, and auto parts.
(b) Tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., not physically transferred to a customer's motor vehicle
and which do not leave the repair facility with the customer are subject to tax. The property includes tools, equipment, and supplies used or consumed in performing motor vehicle repair service. Taxable supplies include sandpaper, masking paper and tape, buffing pads, paint and lacquer thinner, clean and glaze compound, disc pads, paint remover, paint masks, tack rags, steel wool, industrial gases, metal conditioner, brushes, lacquer removing solvent, rubbing compound, wax and grease remover, fluxing materials, disc adhesive, and all other items not physically transferred to the
customer's vehicle customer even though a separate charge may be made to the customer for these supplies.
SECTION 52. Tax 11.83 (15) is created to read:
Tax 11.83 (15)
Vegetable oil and animal fat. Sales of vegetable oil and animal fat to an individual that will be converted to motor vehicle fuel for use in that individual's personal motor vehicle are exempt from sales and use tax if the individual does not sell any of that fuel during the year. This exemption only applies if the motor vehicle fuel is exempt from the motor vehicle fuel tax under s.
78.01(1), Stats.
SECTION 53. Tax 11.84 (1) (b) is repealed and recreated to read:
Tax 11.84 (1) (b) The occasional sale of an aircraft in Wisconsin is taxable unless one of the following applies:
1. The transfer is to the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law of the transferor; the aircraft was previously registered or titled in Wisconsin in the transferor's name, if required to be registered or titled; and the transferor is not engaged in the business of selling aircraft.
2. The sale is by a nonprofit organization meeting the requirements in s.
Tax 11.35 (4).
SECTION 54. Tax 11.84 (2) (c) 2. and 3. are repealed
SECTION 55. Tax 11.84 (2) (c) 4. is renumbered 11.84 (2) (c) 2. and amended as renumbered to read:
Tax 11.84 (2) (c) 2. Towing a banner that is not provided by the person towing it, towing a hang glider pilot or towing a glider.
SECTION 56. Tax 11.84 (4) (g) to (i) are created to read:
Tax 11.84 (4) (g) Sightseeing flights.
(h) Carrying a skydiver.
(i) Towing a hang glider and pilot.
SECTION 57. Tax 11.85 (2) (b) is amended to read:
Tax 11.85 (2) (b) Sales of boats to the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law of the transferor are exempt if the boat was previously registered or titled with the Wisconsin department of natural resources, if required to be registered or titled, or documented under the laws of the United States in the transferor's name and if the transferor is not engaged in the business of selling boats.
SECTION 58. Tax 11.85 (2) (bm) is created to read:
Tax 11.85 (2) (bm) The sale of a boat by a nonprofit organization meeting the requirements in s.
Tax 11.35(4).
SECTION 59. Tax 11.87 (3) (g) is created to read:
Tax 11.87 (3) (g)
Vegetable oil and animal fat. Sales of vegetable oil and animal fat to an individual that will be converted to motor vehicle fuel for use in that individual's personal motor vehicle if the individual does not sell any of that fuel during the year. This exemption only applies if the motor vehicle fuel is exempt from the motor vehicle fuel tax under s.
78.01 (1), Stats.
SECTION 60. Tax 11.87 (4) (b) is amended to read:
Tax 11.87 (4) (b) When a charge to a customer bears little or no relationship to the actual value of taxable food and food ingredients and beverages received,
such as $100 per ticket for a fund raising dinner dance, the tax shall be based on the reasonable value of the taxable food and food ingredients and other tangible personal property, items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., and taxable services received by the customer.
The retailer is responsible for determining the reasonable value and showing that the charge to the patron bears little or no relationship to the actual value received.
SECTION 61. Tax 11.87 (4) (b) (Examples) are created to read:
Tax 11.87 (4) (b) (Examples) 1) Company A puts on a fundraising dinner. Individuals wishing to attend the dinner must pay $300 per person to attend. The actual value of the dinner received is $50. Company A may compute the tax that must be remitted on the $50 since that is the actual value of the dinner received. The actual value in this example is based on the amount that an individual would be required to pay for this dinner if it was not a fundraising dinner.
2) Company B puts on a fundraising dinner and dance. Individuals wishing to attend the dinner and dance must pay $300 per person to attend. The actual value of the dinner received is $50 and the actual value of admission to the dance is $25. Company B may compute the tax that must be remitted on the $75 since that is the actual value of the dinner and admission to the dance that is received. The actual values in this example are based on the amount that an individual would be required to pay for the dinner and to attend the dance if this was not a fundraising dinner and dance.
SECTION 62. Tax 11.88 (title) is amended to read:
Tax 11.88 (title) Manufactured homes, mobile homes, modular homes, and recreational vehicles.
SECTION 63. Tax 11.88 (1) (bm) is created to read:
Tax 11.88 (1) (bm) 1. “Modular home," as defined in s.
101.71 (6), Stats., means any structure or component thereof which is intended for use as a dwelling and satisfies either of the following conditions:
a. Is of closed construction and fabricated or assembled on-site or off-site in manufacturing facilities for installation, connection, or assembly and installation, at the building site.
b. Is a building of open construction which is made or assembled in manufacturing facilities away from the building site for installation, connection, or assembly and installation, on the building site and for which certification is sought by the manufacturer.
2. “Modular home" does not mean any manufactured home under s.
101.91, Stats., or any building of open construction which is not subject to subd. 1. b.
SECTION 64. Tax 11.88 (3) (b) is amended to read:
(b) If the seller of a manufactured or mobile home as part of the sales transaction agrees to permanently affix the home on a foundation on land owned by the purchaser, the seller is a contractor-consumer engaged in improving realty. Sales Except as provided in par. (c), sales of manufactured or mobile homes to the contractor-consumer are subject to the tax, but the sales price from the subsequent sale by the contractor-consumer to the purchaser of the home are not taxable.
SECTION 65. Tax 11.88 (3) (c) and (4m) are created to read:
Tax 11.88 (3) (c) Sales of manufactured homes to the contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.
(4m) Modular homes. (a) The sale of a modular home and the land to which it is permanently affixed is the sale of a realty improvement not subject to the tax.
(b) If the seller of a modular home as part of the sales transaction agrees to permanently affix the home on a foundation, the seller is a contractor-consumer engaged in improving realty. Except as provided in par. (e), the sale of the modular home to the contractor-consumer is subject to the tax, but the sales price from the subsequent sale by the contractor-consumer to the purchaser of the home is not taxable.
(c) The sales or purchase price from the sale of a modular home that is tangible personal property when sold (i.e., the sale to the contractor-consumer), may be reduced by one of the following:
1. 35% of the sales or purchase price.
2. An amount equal to the sales or purchase price of the home minus the cost of materials that become an ingredient or component part of the home.
(d) Once the retailer chooses one of the options provided in par. (c) 1. or 2., the retailer may not use the other option without the written approval of the department.
(e) Sales of modular homes to the contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.
SECTION 66. Tax 11.92 (1) (b) and (d) (intro.) are amended to read:
Tax 11.92 (1) (b) 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
and retained by the seller. 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.
Tax 11.92 (1) (d) (intro.) Every person subject to the county
, or stadium
, or regional transit authority sales and use tax shall keep a record of sales that the person makes that are sourced under s.
77.522, Stats., to each:
SECTION 67. Tax 11.92 (1) (d) 3. is repealed
SECTION 68. Tax 11.92 (1) (e) is amended to read:
Tax 11.92 (1) (e) 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, and regional transit authority use or excise tax in each enacting county, or stadium district or transit authority's district's jurisdiction.
SECTION 69. Tax 11.95(1)(a) is amended to read:
Tax 11.95 (1) (a) Effective for Wisconsin sales and use tax returns filed for periods ending on or after January 1, 1997, for timely reporting state, county, and stadium, and transit authority sales or use tax collected on their retail sales, retailers may deduct 0.5% of the sales and use tax payable on retail sales, except as provided in pars. (am), (b), and (c).
SECTION 70. Tax 11.96 (title) and (1) are amended to read:
Tax 11.96 (title) Delivery of ordinance or resolution; county, stadium, transit authority, and premier resort area tax.
(1) This section clarifies requirements for the timely delivery of county, and stadium
, and transit authority sales and use tax and premier resort area tax ordinances or resolutions to the secretary of revenue.
SECTION 71. Tax 11.96 (2) (g) and (h) are repealed
SECTION 72. Tax 11.96 (3) (intro.) and (Note) are amended to read:
Tax 11.96 (3) (intro.) An ordinance or resolution referred to in s.
77.70,
77.9941 (1) or
(3),
229.68 (15),
or 229.824 (15),
or 66.1039 (4) (s), Stats., is timely delivered to the secretary of revenue if, by the prescribed number of days before the effective date, any of the following occur:
(Note) Section
Tax 11.96 interprets ss.
66.1039 (4) (s), 77.70, 77.705, 77.706, 77.707, 77.708, 77.9941 (1) and (3), 229.68 (15), and 229.824 (15), Stats.
SECTION 73. Tax 11.97 (8) is repealed and recreated to read:
Tax 11.97 (8)
County and special district taxes. Retailers that are registered or required to be registered to collect and remit Wisconsin state sales or use taxes are also required to collect, report, and remit the applicable county and stadium district sales or use taxes, regardless of whether the retailer is engaged in business in the county or special district, as provided in s.
77.73 (3), Stats.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original Updated Corrected
|
Administrative Rule Chapter, Title and Number
|
Chapters Tax 1 and 11 – General administration and sales and use tax
|
Subject
|
Sales tax law changes made by 2011 Wisconsin Act 32 and other legislation
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
GPR FED PRO PRS SEG SEG-S
|
|
Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
Indeterminate
|
Increase Existing Revenues
Decrease Existing Revenues
|
Increase Costs
Could Absorb Within Agency's Budget
Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
State's Economy
Local Government Units
|
Specific Businesses/Sectors
Public Utility Rate Payers
|
Would Implementation and Compliance Costs Be Greater Than $20 million?
Yes X No
|
Policy Problem Addressed by the Rule
|
The rule does not create or revise policy, other than to reflect statutory changes.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
As indicated in the attached fiscal estimate, the fiscal effect of the proposed rule changes was reflected under general fund condition statements subsequent to 2011 Wisconsin Act 32. The rule itself does not create any further economic or fiscal impact or implementation and compliance costs beyond the statutes it interprets.
No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals.
If the rule is not implemented, Chapters Tax 1 and 11 will be incomplete in that they will not reflect current law.
|
Long Range Implications of Implementing the Rule
|
No long-range implications are anticipated.
|
Compare With Approaches Being Used by Federal Government
|
N/A
|
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
N/A
|
Assumptions used in arriving at fiscal estimate
The proposed rule updates Chapter
TAX 11 of the Administrative Code, pertaining to the sales and use tax, to reflect certain sales tax changes contained in
2011 Wisconsin Act 32, the 2011-13 Budget Bill. The proposed rule also amends chapter Tax 1, pertaining to tax administration.
The proposed rule modifies the administrative code to reflect law changes, improve clarity, and add examples to illustrate the tax treatment of certain items.
The proposed rule includes:
○ A sales and use tax exemption for modular and manufactured homes used in real property construction activities outside Wisconsin.
○ A sales and use tax exemption for vegetable oil or animal fat converted to motor vehicle fuel that is exempt from motor vehicle fuel tax.
○ The repeal of regional transit authorities.
○ Change in the tax treatment of items provided free of charge by a retailer.
•
Updates and clarifications to reflect amendments to the Streamlined Sales and Use Tax Agreement.
•
Clarification and examples relating to exempt occasional sales.
•
Changes to reflect the federal preemption on the taxation of air commerce.
•
Clarification that if electronic fund transfers payments are due on a day when the Federal Reserve Bank is closed, the payment due date is revised to be the next day the Federal Reserve Bank is open.
The fiscal effect of the exemptions created under
2011 Wisconsin Act 32 has already been reflected under general fund condition statements subsequent to
2011 Wisconsin Act 32. Since the fiscal impact of the statutory changes has already been reflected, the proposed rule has no fiscal effect.
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN that, pursuant to sections
73.15 (3) and
227.11 (2) (a), Stats., the Department of Revenue will hold a public hearing to consider permanent rules creating section
Tax 2.985, relating to the electronic medical records credit.
