d. Lump sum contracts. Reflects the creation of the exemption in s.
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), reflects 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. Removes 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), reflects 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. Reflects 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. Amends 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. Reflects 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. Reflects the amendment to s.
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. Reflects 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 s.
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), reflects 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.
• Includes “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.
•
Amends 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.
•Amends s.
Tax 11.26 (2) (c) to include “and ammunition" after firearms to the list of federal excise taxes.
•Amends the list of taxes, fees, and charges included and excluded from “sales price" and “purchase price" contained s.
Tax 11.26 (2) and
(3)
o.
Correct error. Amends s.
Tax 11.39 (1) (b), to correct a typographical error. This provision quotes the law and is needed for accuracy.
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
2013 Wisconsin Act 20 made numerous 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
This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated Costs Incurred by Private Sector
This proposed rule does not have a fiscal effect on the private sector.
Effect on Small Business
This proposed rule does not affect small business.
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 11.04 (1) is amended to read:
Tax 11.04 (1)
Definition. 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 Wisconsin Economic Development Corporation,
the Health Insurance Risk-Sharing Plan 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 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 2. Tax 11.05 (4) (a) is 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 Wisconsin Economic Development Corporation,
the Health Insurance Risk-Sharing Plan 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 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.
SECTION 3. Tax 11.08 (4) (a) and (6) (Note 2) are amended to read:
Tax 11.08 (4) (a) “Prosthetic device" is defined in s.
77.51 (11m), Stats., to mean a
replacement, corrective, or supportive device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.
(6) (Note 2) The interpretations in s.
Tax 11.08 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to
1983 Wis. Act 27; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to
1985 Wis. Act 29; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar levels became exempt March 1, 1989, pursuant to
1987 Wis. Act 399; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to
1989 Wis. Act 31; (e) The exemption for adaptive equipment for a handicapped person's vehicle became exempt effective June 1, 1990, pursuant to
1989 Wis. Act 238, renumbered by
1989 Wis. Act 359; (f) The exemption for parts and accessories became effective August 15, 1991, pursuant to
1991 Wis. Act 39; (g) The exemptions provided in s. 77.54 (14s) and (22), Stats., were repealed effective October 1, 2009, and replaced with the exemptions provided under s. 77.54 (22b), Stats., pursuant to
2009 Wis. Act 2;
and (h) The exemption in s.
77.54 (28), Stats., was amended to remove the exemption for apparatus and equipment for the injection of insulin or the treatment of diabetes. These items will still qualify for exemption under s.
77.54 (22b), Stats., if they are for home use, pursuant to
2009 Wis. Act 2; and (i) The clarification that a "prosthetic device" must be a replacement, corrective, or supportive device became effective July 2, 2013, pursuant to 2013 Wis. Act 20.
SECTION 4. Tax 11.11 (2m) (b) (Note) is amended to read:
Tax 11.11 (2m) (b) (Note)
Refer to s. Tax 12.40 for information related to the property tax exemption for industrial waste treatment facilities. For
more information regarding the property tax exemption for industrial waste treatment facilities of manufacturers write or call the district office of the Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessments. To locate the district office, write or call Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessment, PO Box 8971, Madison WI 53708-8971; telephone (608) 266-1147. The web site is
www.revenue.wi.gov/contact/slfbmta.html. To ascertain whether a non-manufacturing property would be exempt under s.
70.11(21), Stats., owners may refer to the Wisconsin Property Assessment Manual or contact the local property tax assessor.
SECTION 5. Tax 11.12 (2) (b) and (7) (d) (Note 1) and (Note 2) are amended to read:
Tax 11.12 (2) (b) “Custom farming services" means the performance of an activity, defined as farming in this section, for a farmer for a fee. The fee may include a cash payment, a share of the harvest or other valuable consideration. “Custom farming services" also includes services performed by a veterinarian to animals that are farm livestock or farm work stock used exclusively in the business of farming.
(Note 2) The interpretations in s.
Tax 11.12 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Semen became exempt effective July 22, 1971, pursuant to
Chapter 64, Laws of 1971; (b) Baling wire and twine became exempt effective December 24, 1975, pursuant to
Chapter 146, Laws of 1975; (c) The exemption for electricity for residential use and use in farming and for fuel oil, propane, coal, steam or wood for residential use became effective July 1, 1979, pursuant to
Chapter 1, Laws of 1979; (d) The definition of “feed lot" became effective December 1, 1981; (e) Farm livestock medicine, milk house supplies and animal bedding became exempt effective July 1, 1986, pursuant to
1985 Wis. Act 29; (f) The definition of “exclusively used" became effective October 1, 1989, pursuant to
1989 Wis. Act 31; (g) The farm machinery exemption was revised effective October 1, 1989, pursuant to
1989 Wis. Act 31; (h) The exemption for farm fuel for items other than machines became effective October 1, 1991, pursuant to
1991 Wis. Act 39; (i) 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; (j) The expansion of the exemption for tangible personal property consumed in farming and the addition of “silviculture" to the definition of farming became effective July 1, 2007, pursuant to
2005 Wis. Act 366;
and (k) 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 (L) The clarification that “custom farming services" includes services performed by veterinarians to farm livestock or work stock used exclusively in the business of farming became effective July 2, 2013, pursuant to 2013 Wis. Act 20.
SECTION 6. Tax 11.19 (2) (a) is renumbered Tax 11.19 (2) (a) (intro.) and amended to read:
Tax 11.19 (2) (a) (intro.) Section
77.52 (2) (a) 11., Stats., imposes the sales and use tax on certain services. However, an exemption is provided for the printing or imprinting of tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., furnished by customers, that results in
printed materials, catalogs, or envelopes that are exempt under s. 77.54 (25) or (25m), Stats. any of the following:
SECTION 7. Tax 11.19 (2) (a) 1. to 3. are created to read:
Tax 11.19 (2) (a) 1. Printed materials that are exempt under s.
77.54 (25), Stats.
2. Catalogs or their mailing envelopes that are exempt under s.
77.54 (25m), Stats.
3. Advertising and promotional direct mailing that is exempt under s.
77.54 (59), Stats.
SECTION 8. Tax 11.19 (6) (Note 1) and (Note 2) are amended to read:
Tax 11.19 (6) (Note 1) Section
Tax 11.19 interprets ss.
77.51 (1fr),
(8), and
(13h),
77.52 (1), and (2) (a) 11., 77.54 (2m), (9a), (15), (25), (25m),
and (43),
and (59), and 77.55 (1), Stats.
(Note 2) The interpretations in s.
Tax 11.19 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for printing or imprinting of tangible personal property furnished by customers and used out-of-state in sub. (2) (a) became effective March 1, 1970; (b) The exemption for advertising materials used out-of-state in sub. (4) (a) became effective May 21, 1972; (c) The second class mail standard described in sub. (3) became effective August 1, 1974; (d) The exemption for sales of shoppers guides became effective July 1, 1978; (e) The exemption for ingredients and components of shoppers guides, newspapers and periodicals described in sub. (2) (d) became effective July 2, 1983; (f) The definition of newspaper in sub. (3) (a) and the limitation of the periodical exemption to “periodicals sold by subscription" became effective July 2, 1983; (g) The exemption for controlled circulation publication reflected in subs. (2) (b) and (3) (b) became effective September 1, 1983, pursuant to
1985 Wis. Act 149; (h) The provision for foreign publishers described in sub. (2) (e) became effective January 1, 1980 for publishers of books or periodicals or both other than catalogs and January 1, 1990, for all other foreign publishers pursuant to
1989 Wis. Act 336; (i) The definition of storage and use for purposes of imposing use tax does not include storing or using raw materials becoming printed materials to be shipped outside Wisconsin effective October 1, 1993, pursuant to
1993 Wis. Act 16; (j) The sales and use tax exemption for raw materials becoming printed materials transported and used solely outside Wisconsin became effective December 1, 1997, pursuant to
1997 Wis. Act 27; (k) The exemption for periodicals sold by subscription by educational associations and corporations which are exempt under s.
77.54 (9a) (f), Stats., became effective December 1, 1997 pursuant to
1997 Wis. Act 27; (L) The exemption for catalogs became effective April 1, 2009 pursuant to
2007 Wis. Act 20; (m) 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; (n) The definition of “direct mail" became effective October 1, 2009, pursuant to
2009 Wis. Act 2; (o) The definition of “advertising and promotional direct mail" became effective May 27, 2010, pursuant to
2009 Wis. Act 330;
and (p) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to
2011 Wis. Act 32; and (q) Services resulting in advertising and promotional direct mail were excluded from taxable services effective July 1, 2013, pursuant to 2013 Wis. Act 20.
SECTION 9. Tax 11.20 (1) (cg) and (cr) are created to read:
(cr) “Combined group" has the meaning given in s.
71.255 (1) (a), Stats.
SECTION 10. Tax 11.20 (1) (h) is amended to read:
Tax 11.20 (1) (h) “Qualified research" means qualified research as defined under section
41 (d) (1) of the Internal Revenue Code
, except that it includes qualified research that is funded by a member of a combined group for another member of a combined group.
SECTION 11. Tax 11.20 (2) (a) is repealed and recreated to read:
Tax 11.20 (2) (a) The sales price from the sale of and the storage, use, or other consumption of machinery and equipment, including attachments, parts, and accessories, and other tangible personal property or items or property under s.
77.52 (1) (b) or
(c), Stats., that are sold to any of the following and that are consumed or destroyed or lose their identities while being used exclusively and directly in qualified research is exempt:
1. A person engaged in manufacturing in this state at a building assessed under s.
70.995, Stats.
2. A person engaged primarily in biotechnology in this state.
3. A combined group member who is conducting qualified research for another combined group member and that other combined group member is a person described under subd. 1. or 2.
SECTION 12. Tax 11.20 (2) (b), (Example 2), (Example 3), (c), (d) (Example 1) to (Example 5), and (e) (L) (Example) and (3) (a) 2. and (b) are amended to read:
Tax 11.20 (2) (b) For purposes of determining whether a person is engaged primarily in manufacturing or biotechnology in this state under par. (a), only activities in Wisconsin are considered. When a person conducts activities in Wisconsin in addition to manufacturing or biotechnology, the person must allocate its activities between its manufacturing and biotechnology activities and its other activities using a reasonable and consistent method. If a person's manufacturing and biotechnology activities in Wisconsin are more than 50% of its total activities in Wisconsin, the person is engaged primarily in manufacturing or biotechnology in this state.
(Example 2) Company B performs research and development services at locations outside of Wisconsin
that constitute biotechnology. Company B
also manufactures tangible personal property at a
location building in Wisconsin
, assessed under s. 70.995, Stats.
The manufacturing activity does not constitute biotechnology. This is Company B's only activity in Wisconsin. The products manufactured in Wisconsin are used by Company B in performing its research and development services at locations outside of Wisconsin. Company B is
not engaged primarily in
manufacturing biotechnology in Wisconsin
since
but is engaged in manufacturing
is its only activity in Wisconsin
at a building assessed under s. 70.955, Stats.
(Example 3) Company X manufactures machinery at a plant outside of Wisconsin. Company X operates a facility in Wisconsin that is devoted solely to research and development relating to the products Company X manufactures. Although Company X's activities in Wisconsin are research and development activities that constitute qualified research, its activities in Wisconsin are not biotechnology. The research and development activities are Company X's only activities in Wisconsin. Therefore, Company X is
not neither engaged
primarily in manufacturing
in Wisconsin at a building assessed under s. 70.995, Stats., or nor engaged primarily in biotechnology in Wisconsin.
(c) For purposes of determining whether an activity is qualified research under par. (a) 1. or 2., the regulations under Treas. Reg. section 1.41-4 apply, except that qualified research that is funded by a member of a combined group for another member of a combined group shall remain qualified research for purposes of this subsection.
(d) (Example 1) Company A is engaged
primarily in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Company A purchases a machine that it will use directly in conducting qualified research at its manufacturing plant in Wisconsin and purchases it exempt from Wisconsin sales tax claiming the exemption in par. (a). After completing the qualified research and having made no use of the machine other than direct use in qualified research, Company A begins using the machine exclusively and directly in its manufacturing operation, which is another exempt use
under s. 77.54 (6) (a), Stats. Company A does not owe Wisconsin sales or use tax on its purchase of the machine since it
only used uses the machine
only in an exempt manner.
(Example 2) Company B is engaged
primarily in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Company B purchases a machine that it will use directly in conducting qualified research at its manufacturing plant in Wisconsin. More than 5% of Company B's total use of this machine will be for conducting research and development projects that do not meet the definition of qualified research. Company B's purchase of the machine is taxable because it is not used exclusively in qualified research.
(Example 3) Company C is engaged
primarily in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Company C develops a new product in an activity that is qualified research. Company C purchases a variety of raw materials. Some of these materials are used exclusively and directly and destroyed in qualified research. Once the qualified research is completed, Company C consumes the remaining raw materials in activities that are not qualified research. Company C's purchases of the raw materials that it uses exclusively and directly and destroys in qualified research are exempt under par. (a) 2. Company C's purchases of the raw materials that it uses in activities that are not qualified research do not qualify for
this exemption
under par. (a).
(Example 4) Manufacturer P is engaged
primarily in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Manufacturer P contracts with Company D to produce a prototype that is tangible personal property. Manufacturer P's primary objective in this transaction is to obtain the prototype, rather than a research and development service. Company D may purchase the materials used to construct the prototype without tax for resale. Manufacturer P will use the prototype exclusively and directly in one of its research and development activities that constitutes qualified research and may claim the exemption under par. (a) on its purchase of the prototype.
(Example 5) Manufacturer F is engaged
primarily in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Manufacturer F contracts with Company E to perform research services.
Manufacturer F and Company E are not members of the same combined group. Company E will provide a prototype that is tangible personal property to Manufacturer F along with these services. Manufacturer F's primary objective in this transaction is to obtain the research and development services. Company E's primary activity in Wisconsin is the provision of professional engineering services that do not involve biotechnology
, and Company E is not a manufacturer. Company E may not claim the exemptions under par. (a), since Company E is
not
neither engaged
primarily in manufacturing
in Wisconsin at a building assessed under s. 70.995, Stats., or
nor engaged primarily in biotechnology in Wisconsin. In addition, Company E cannot purchase the materials without tax for resale that it uses to construct the prototype, because Company E uses the prototype in performing its research services. The prototype is transferred to Manufacturer F incidental to the research services.
(e) (L) (Example) This example illustrates records that are generally acceptable as adequate to document the exemptions under par. (a).
Company A is
primarily engaged in manufacturing in Wisconsin
at a building assessed under s. 70.995, Stats. Company A attempts to make a new and improved widget. Upon approval of a project, Company A documents the scope and goals of the project, the uncertainties that exist in accomplishing these goals, and the processes by which Company A hopes to eliminate the uncertainties. In addition, contemporaneously with conducting the research project, Company A documents: (1) the location or locations at which the research is conducted, (2) the machinery and equipment used in the project and the manner used, (3) the various materials and supplies used in attempting to produce the improved widget, the purpose and manner in which such items were used, (4) the processes applied, (5) the results achieved throughout the research process, and (6) the point at which Company A either abandons the research project or achieves the goal of eliminating the uncertainties involved with the development of the new widget. Company A purchased various machinery and equipment, and supplies and materials used in conjunction with development of the new widget without tax claiming the purchases are exempt under par. (a). In general, contemporaneous records kept in the manner and detail described will be accepted and used by the department in making its determinations regarding whether the taxpayer is entitled to claim the exemptions under par. (a).
(3) (a) 2. Seeds for planting, plants, feed, fertilizer, soil conditioners, animal bedding, sprays, pesticides and fungicides, breeding and other livestock, poultry, farm work stock, baling twine and baling wire, containers for fruits, vegetables, grain, hay, silage and animal wastes, plastic bags, plastic sleeves and plastic sheeting used to store or cover hay or silage, medicines drugs, semen for artificial insemination, fuel, and electricity, that are used exclusively and directly in raising such animals.
(b) For purposes of determining whether an activity is qualified research under par. (a), the regulations under Treas. Reg. section 1.41-4 apply, except that qualified research that is funded by a member of a combined group for another member of a combined group shall remain qualified research for purposes of this subsection.
SECTION 13. Tax 11.20 (4) (e) 2. (Note 1) and (Note 2) are created to read:
(Note 2)
Note: The interpretations in s.
Tax 11.20 are effective beginning January 1, 2012, pursuant to
2009 Wis. Act 28, except for the following amendments effective July 2, 2013, pursuant to
2013 Wis. Act 20: (a) “Qualified research" was amended to include research funded by one member of a combined group for another member of a combined group; (b) The exemption for property used in qualified research by persons engaged primarily in manufacturing in Wisconsin was amended to apply to property used in qualified research by a person engaged in manufacturing in Wisconsin at a building assessed under s.
70.995, Stats.; (c) The exemption for property used in qualified research was amended to include use by one member of a combined group who is conducting qualified research for another combined group member who is either engaged in manufacturing in Wisconsin at a building assessed under s.
70.995, Stats., or is primarily engaged in biotechnology; and (d) The change of the term “medicines" to “drugs."
SECTION 14. Tax 11.26 (title), (1) (a) and (b), and (2) (title), (intro.), (c), and (h) are amended to read:
Tax 11.26 (title) Other taxes, fees, and charges in taxable sales price and purchase price.
(1) (a) Tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., sold at retail are subjected to many direct and indirect taxes
, fees, and charges prior to reaching a retailer. The taxes
, fees, and charges are commonly included in the price the retailer pays for the property and are not separately identifiable as taxes
, fees, and charges. Occasionally, however, a tax
, fee, or charge is either separately passed on to a retailer or is imposed at the retail level of activity, but is different from and in addition to the sales tax. The tax
, fee, or charge may be imposed by Wisconsin, the federal government, or a municipality.
(b) In determining the sales price or purchase price used to compute Wisconsin sales or use taxes, the treatment of a tax, fee, or charge for sales tax purposes is identical to the treatment that applies for use tax purposes. The same taxes, fees, and charges that are included or excluded from the sales price are also included or excluded from the purchase price.
(2) (title) Taxes, fees, and charges included as part of sales price and purchase price.
(intro.) The following taxes, fees, and charges are included in the sales price and the purchase price, regardless of whether they are separately stated on the invoice, bill of sale, or other similar document given by the seller to the purchaser, except as provided in sub. (3):
(c) Any federal stamp tax and manufacturer's or importer's excise tax not imposed directly on the purchaser. Federal excise taxes include excise taxes on alcohol, tobacco, motor and aviation fuel except motor fuel taxes refunded, tires, firearms and ammunition, sporting goods, and air or ship transportation.
