This statement of scope was approved by the Governor on August 2, 2013.
Rule No.
Relating to
Sales and use tax provisions.
Rule Type
Permanent.
1. Detailed Description of the Objective of the Proposed Rule
The objectives of the rule are (1) reflect law changes in
2013 Wisconsin Act 20, and (2) correct two errors in current rule provisions.
a. Custom farming services. Reflect the creation of s.
77.51 (2d), Stats., to provide that “custom farming services" includes services performed by veterinarians to farm livestock or work stock used exclusively in the business of farming. This requires updates to the provisions of ss.
Tax 11.12 and
11.61.
c. Health Insurance Risk-Sharing Plan Authority. Reflect the amendment to s.
77.54 (9) (a), Stats. Due to the dissolution of the Health Insurance Risk-Sharing Plan and Authority, the exemption for sales made to the authority is being rescinded. This requires updates to ss.
Tax 11.04 (1),
11.05 (4), and
11.49 (2) (b).
d.
Lump sum contracts. Reflect the creation of the exemption in sec. 77.54 (60), Stats. This provision exempts certain property sold by a contractor as a part of a lump sum contract and deems the contractor the consumer of such property, with exception. Amendments are needed to s.
Tax 11.68 (7) (b) and the examples following it.
e.
“Place of primary use." In s.
Tax 11.66 (1) (u), reflect the amendments to s.
77.522 (4) (a) 9., Stats., so the definition of “place of primary use" in the rule is the same as current law. Remove s.
Tax 11.66 (u) 1. and 2. as these are included in the amended definition.
f.
“Prepaid wireless calling service." In s.
Tax 11.66 (1) (x), reflect the amendments to s.
77.51 (10f), Stats., so the definition of “prepaid wireless calling service" in the rule is the same as current law.
g.
Printing exemptions. Reflect the creation of s.
77.54 (61), Stats. This requires updates to the provisions of s.
Tax 11.56.
h.
Property transferred incidentally with a taxable service. Amend the first note at the end of s.
Tax 11.48 and the first note at the end of s.
Tax 11.67 to reference s.
77.52 (21), Stats.
j.
Qualified research and animal raising. Reflect the repeal of s.
77.54 (57) (b) 1. and
2., Stats., the renumbering of s.
77.54 (57) (a) 1f., Stats., to s.
77.51 (1c), Stats., the renumbering of s.
77.54 (57) (a) 1m., Stats., to s.
77.51 (1d), Stats., the renumbering of s.
77.54 (57) (a) 4., Stats., to s.
77.51 (10rn), Stats., the amending of s.
77.54 (57) (a) 5.and
(b) 4., Stats., and the creation of s.
77.54 (57d), Stats. This requires updates to the provisions of s.
Tax 11.20.
k.
Self-service laundry machines. Reflect the amendment to sec. 77.52 (2) (a) 6., Stats. Receipts from self-service laundry machines that are operated by tokens and magnetic cards are no longer subject to sales and use tax. This requires an update to s.
Tax 11.52 (5) (a).
l.
Services resulting in advertising and promotional direct mail. Reflect the amendment to s.
77.52 (2) (a) 11., Stats. The sale of advertising and promotional direct mail became exempt from sales and use tax effective July 1, 2013, pursuant to
2011 Wis. Act 32. The amendment of sec. 77.52 (2) (a) 11., Stats., provides that the services of producing, fabricating, processing, printing, or imprinting that result in advertising and promotional direct mail are also not taxable. This requires updates to ss.
Tax 11.19 (2) (a),
11.56 (7) (bm), and
11.70 (2) (e).
m. “
Sales price" and “purchase price."
•
In s.
Tax 11.26 (3), reflect the amendments to s.
77.51 (12m) (a) and
(15b) (a), Stats., along with the creation of s.
77.51 (12m) (b) 3m. and
(15b) (b) 3m., Stats., to exclude from “sales price" and “purchase price" taxes imposed on the seller that are separately stated that the seller may, but is not required to, pass on and collect from the user or consumer.
•
Include “fees and charges" as an addition to taxes in several parts of the rule to make it clear that taxes, fees and charges are covered under this rule.
•
Amend s.
Tax 11.26 (2), to include “regardless of whether they are separately stated on the invoice, bill of sale, or other similar document given by the seller to the purchaser," for taxes, fees and charges included in sales price and the purchase price.
•
Amend s.
Tax 11.26 (2) (c) to include “and ammunition" after firearms to the list of federal excise taxes.
•
Amend the list of taxes, fees and charges included and excluded from “sales price" and “purchase price" contained s.
Tax 11.26 (2) and
(3) as follows:
ii. Add the following taxes, fees and charges in s. Tax 11.26 (2):
•
Federal medical device excise tax. imposed under s. 4191 of the internal revenue code.
•
Federal universal service fund fee
•
Dry cleaning fee imposed under s.
77.9961, Stats.
•
Dry cleaning products fee imposed under s.
77.9962, Stats.
•
PUC fee imposed under s.
196.85, Stats.
•
Telephone relay service surcharge imposed under s.
196.858, Stats.
•
Telecommunications utility trade practices surcharge imposed under s.
196.859, Stats.
•
State issued franchise fee (video) imposed under s.
66.0420 (7), Stats.
•
Petroleum inspection fee imposed under s.
168.12, Stats.
•
Motor fuel taxes imposed under s.
78.01, Stats.
iv.
Add the following taxes, fees and charges in s.
Tax 11.26 (3)
•
Police and fire protection fee imposed under s.
196.025 (6), Stats.
•
Low-income assistance fees imposed under s.
16.957 (4) &
(5), Stats.
•
Landline 911 charge imposed under s.
256.35 (3), Stats.
•
State USF fee imposed under s.
196.218, Stats.
o.
Correct error. Amend sec. Tax 11.39 (1) (b), to correct a typographical error. This provision quotes the law and is needed for accuracy.
2. Description of Existing Policies Relevant to the Rule, New Policies Proposed to be Included in the Rule, and an Analysis of Policy Alternatives
Existing policies are as set forth in the rules. New policy is being proposed to reflect the law changes described above. If the rules are not changed, they will be incorrect in that they will not reflect current law or current department policy.
3. Detailed Explanation of Statutory Authority for the Rule (Including the Statutory Citation and Language)
Section
77.65 (3), Stats., provides "[t]he department may promulgate rules to administer this section
…"
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..."
4. Estimate of Amount of Time that State Employees will Spend Developing the Rule and of Other Resources Necessary to Develop the Rule
The department estimates it will take approximately 100 hours to develop the rule.
5. List with Description of all Entities that may be Affected by the Proposed Rule
Purchasers and sellers of the products described above.
6. Summary and Preliminary Comparison with any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Proposed Rule
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
7. Anticipated Economic Impact of Implementing the Rule (Note if the Rule is Likely to Have a Significant Economic Impact on Small Businesses)
No economic impact is anticipated.
8. Contact Person
Dale Kleven, (608) 266-8253.
Revenue
This statement of scope was approved by the Governor on August 2, 2013.
Rule No.
Relating to
Sales tax filing frequency.
Rule Type
Permanent and Emergency.
1. Finding/Nature of Emergency (Emergency Rule Only)
Section
77.58 (1), Wis. Stats., provides that retailers must file sales tax returns quarterly, except as provided in s.
77.58 (1) (a) and
(b) which allows for sales tax returns to be filed monthly.
Section
77.58 (5), Wis. Stats., provides that the department may require returns and payments on the amount of taxes for other than a quarterly period if it deems it necessary to ensure payment to or facilitate the collection by the state of the amount of taxes. The department has provided for annual sales tax returns by rule in s.
Tax 11.93 (1) for retailers that have an annual tax liability of $300 or less.
Section
77.58 (1) (a), Wis. Stats., as amended by
2013 Wis. Act 20, requires retailers to file sales tax returns monthly if their tax liability exceeds $1,200 in any quarter. This change goes into effect on January 1, 2014. Under prior law, retailers were required to file monthly sales tax returns if their tax liability exceeded $600 in any quarter.
Because Wisconsin Act 20 doubles the threshold upon which a monthly sales tax return is required to be filed ($600 to $1200), s.
Tax 11.93 (1) should also be changed to reflect a similar increase in the threshold upon which an annual sales tax return can be filed.
As the statutory change to the monthly filing standard goes into effect on January 1, 2014, the corresponding change to the annual filing standard in s.
Tax 11.93 (1) should also go into effect on January 1, 2014. There is insufficient time for the permanent rule to be effective on January 1, 2014.
2. Detailed Description of the Objective of the Proposed Rule
The objectives of the rule are to:
•
Amend the reference in sec. Tax 11.93 to increase the annual filing standard to $600 (currently $300) to allow more retailers to file sales tax returns annually. This is consistent with changes made to s.
77.58 (1) (a), Stats., by
2013 Wisconsin Act 20, to allow more retailers to file sales tax returns less frequently (quarterly rather than monthly).
This change would make this rule consistent with recent changes to s.
77.58 (1) (a), Stats.
3. Description of the Existing Policies Relevant to the Rule, New Policies Proposed to be Included in the Rule, and an Analysis of Policy Alternatives
Existing policies are as set forth in the rules. A new policy is being proposed to reflect a law change concerning how frequently smaller retailers must file sales tax returns. If the rule is not changed, only a portion of smaller filers will be allowed to file less frequently.
This change would make this rule consistent with recent changes to s.
77.58 (1) (a), Stats.
4. Detailed Explanation of Statutory Authority for the Rule (Including the Statutory Citation and Language)
Section
77.58 (5), Stats., provides “The department, if it deems it necessary to ensure payment to or facilitate the collection by the state of the amount of taxes, may require returns and payments of the amount of taxes for other than quarterly periods. The department may, if satisfied that the revenues will be adequately safeguarded, permit returns and payments of the amount of taxes for other than quarterly periods
…"
Section
77.65 (3), Stats., provides “[t]he department may promulgate rules to administer this section
…"
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..."
