• Clarify Rule. Amend s. Tax 11.16 (1) (b), to include "cell phones," "tracking devices," "GPS units," and "on board recorders" to the list of items in the rule to make it clear that these items qualify as exempt accessories and attachments if they are assigned to and carried on vehicles used exclusively as common and contract carriers. e. Construction Contractors.
• Clarify Rule. Amend the example following s. Tax 11.68 (3) (b), to remove "hot" from "hot water heater" in the example. • Clarify Rule. Amend s. Tax 11.68 (6) (d), to include "underground wiring" to the list of items in the rule to make it clear that the underground wiring becomes part of the realty. • Clarify Rule. Amend s. Tax 11.68 (7) (a) 2, by removing "satellite dishes" from items listed. Create additional item number to be inserted in between s. Tax 11.68 (7) (a) 6. & 7. that clarifies tax treatment for both satellite dishes mounted to concrete foundation and the compact roof mounted satellite dishes that are installed in a residence or a business. • Clarify Rule. Amend s. Tax 11.68 (11) (c), to clarify that the items listed only retain their character as tangible personal property for repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance. f. Correct Error. Amend s. Tax 11.945 (2) (intro.), to remove "telecommunications message services" from the list, since "telecommunications message services" are sourced under the general sourcing hierarchy. g. Fertilizer Blending, Feed Milling, and Grain Drying Machinery and Equipment. Reflect 2013 Wisconsin Act 324, which creates exemptions in s. 77.54 (6) (am) 4. and 5., Stats., for equipment used in a fertilizer blending, feed milling, or grain drying operation and building materials used in constructing or repairing certain holding structures used in a fertilizer blending, feed milling, or grain drying operation. This requires the creation of s. Tax 11.68 (4) (h). It will also be useful to (1) create a new section to explain the exemption, and (2) add examples to s. Tax 11.68 (6) and (7). h. Grocers' Guidelist.
• Clarify Rule. Amend s. Tax 11.51 (2) (a), to include potato chips that are chocolate covered in the taxable list, unless they contain flour. • Clarify Rule. Amend s. Tax 11.51 (2) (b), to clarify "chips, potato, corn and similar items" and "potato chips" are exempt unless they are chocolate covered and do not contain flour as provided in par. (a). • Clarify Rule. Amend s. Tax 11.51 (2) (b), to clarify "ice cream in cones" is exempt only when prepackaged by someone other than the retailer. j. Radio and Television Broadcasting Equipment. Reflect 2013 Wisconsin Act 346, which creates an exemption in s. 77.54 (23n), Stats., for property used by certain commercial radio and television stations. This requires an update to s. Tax 11.63. 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 208 and 2013 Wisconsin Acts 145, 185, 229, 324, 346, and 364 have made numerous changes to Wisconsin's sales and use tax laws. The department has created this proposed rule order to reflect these statutory changes, as well as provide needed clarification and correction as described above. 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 Jen Chadwick at (608) 266-8253 or jennifer.chadwick@wisconsin.gov, if you have any questions regarding this proposed rule. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than October 28, 2016. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Jen Chadwick
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
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SECTION 1. Tax 11.01 (1) (g) is amended to read:
Tax 11.01 (1) (g) Form 9400−376. A department of natural resources form for occasional and dealer sales of all−terrain vehicles and utility terrain vehicles.
SECTION 2. Tax 11.05 (2) (gm) is amended to read:
Tax 11.05 (2) (gm) Sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), Stats., trailers, semitrailers, all−terrain vehicles, utility terrain vehicles, and aircraft. Governmental units must collect the sales tax on its sales of these items. If the governmental unit does not collect the tax from the purchaser, the purchaser shall file a sales tax return and pay the tax prior to titling or registering the property in this state. SECTION 3. Tax 11.11 (3) (intro.) is amended to read:
Tax 11.11 (3) (intro.) Municipal waste treatment exemption. Tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., which become a component or ingredient part of the following municipal facilities that treat waste qualifies for exemption from Wisconsin sales and use tax under s. 77.54 (26), Stats. Municipal facilities that treat waste include: SECTION 4. Tax 11.13 (6) (b) 2. is amended to read:
Tax 11.13 (6) (b) 2. Motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), Stats., trailers, semitrailers, all−terrain vehicles, utility terrain vehicles, or aircraft. SECTION 5. Tax 11.16 (1) (am) (title) is amended to read:
Tax 11.16 (1) (am) (title) Exclusively Definitions.
SECTION 6. Tax 11.16 (1) (am) is renumbered Tax 11.16 (1) (am) 3. and amended to read:
Tax 11.16 (1) (am) 3. As used in s. 77.54 (5) (b), Stats., and this section, “exclusively” "Exclusively" means that the motor trucks, truck tractors, road tractors, buses, trailers, and semitrailers are used solely as common or contract carriers to the exclusion of all other uses, except that the sales and use tax exemption for this tangible personal property will not be invalidated by an infrequent and sporadic use other than as a common or contract carrier. SECTION 7. Tax 11.16 (1) (am) (intro.), 1., and 2. are created to read:
Tax 11.16 (1) (am) (intro.) For purposes of the exemption in s. 77.54 (5) (b), Stats., and this section: 1. "Common carrier" has the same meaning as "common motor carrier" in s. 194.01 (1), Stats. 2. "Contract carrier" has the same meaning as "contract motor carrier" in s. 194.01 (2), Stats. SECTION 8. Tax 11.16 (1) (b) and (3) (Note 2) are amended to read:
Tax 11.16 (1) (b) Accessories and attachments. Accessories, attachments, parts, and supplies for exempt vehicles are exempt from the sales and use tax under s. 77.54 (5) (b), Stats. This exemption includes the following items if they are assigned to and carried on vehicles used exclusively as common or contract carriers: dollies, pianoboards, ladders, walkboards, tire chains, fire extinguishers, flares, bug deflectors, engine block heaters, defroster fans, auxiliary heaters and cooling units and their fuel, radios, flag kits including flags and reflectors, cell phones, tracking devices, global positioning system or "GPS" units, on board recorders, and items designed to be used with a vehicle which protect or secure the vehicle’s load including tape, fitted tarpaulins, tarpaulin straps, furniture pads and covers, load holding chains, logistic straps, and shoring beams. This exemption does not include corrugated boxes, containers, and related materials that are transferred to customers in conjunction with the selling, performing, or furnishing of a moving service, as provided in par. (g). (3) (Note 2) Note: The interpretations in s. Tax 11.16 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The sale of packing materials to a service provider became taxable effective September 1, 1983, pursuant to 1983 Wis. Act 27; (b) The exemption for certain railroad crossties became effective July 20, 1985, pursuant to 1985 Wis. Act 29; (c) Section 340.01 (61), Stats., which defined "station wagon" was repealed pursuant to 1999 Wis. Act 80; (d) In Freight Lime and Sand Hauling, Inc. v. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, November 20, 2002 (CCH 400-646), trucks hauling property of others for hire were found to qualify for exemption, even though the property being hauled had no value; (e) 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; 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 definition of "common motor carrier" was amended, pursuant to 2013 Wis. Act 364, which first applies to motor carrier operations occurring on April 25, 2014.
