PROPOSED ORDER OF THE DEPARTMENT OF REVENUE REPEALING, AMENDING, AND CREATING RULES
The Wisconsin Department of Revenue proposes an order to: repeal Tax 11.26 (2) (i); amend Tax 11.05 (2) (gm), (4) (f), and (4) (Note 1), 11.08 (6) (Note 2), 11.13 (6) (b) 2., 11.14 (2) (b) and (16), 11.26 (2) (q) and (3) (Note 2), 11.33 (4) (a) (intro) and (a) 3. and (5) (c), 11.34 (3) (bg), 11.35 (2) (b), (5) (a) and (a) (Example), (5) (b) and (b) (Example 1) and (Example 2), (6) (a) (Example 1), (Example 2), (Example 3), and (Example 5), (6) (b) and (b) (Example 2), (7) (b) (Example), (7) (c) (Example 1) and (Example 2), (7) (d) (Example), and (8) (Note 2), 11.41 (4) (a), 11.50 (4) (a) 1. a. and (5) (title), 11.52 (7) (Note 1) and (Note 2), 11.55 (2) (a) and (4) (Note 1) and (Note 2), 11.68 (13) (Note 1) and (Note 2), 11.72 (1) (b) 2. and (3) (Note 2), 11.83 (1) (b), 11.97 (3) (b), (c), (d), (e), (f), and (g) and (8) (Note 2); and create Tax 11.01 (1) (gm), 11.26 (3) (i) and (j), 11.50 (5) (a) 9., 11.52 (7) (d), 11.68 (4) (a) (title), (4) (b) (title), (4) (c) (title), (4) (d) (title), (4) (e) (title), (4) (f) (title), (4) (fm), (4) (g) (title), (4) (h) (title), and (4) (i); relating to sales and use tax provisions.
The scope statement for this rule, SS 083-16, was approved by the Governor on September 13, 2016, published in Register No. 729B on September 26, 2016, and approved by the Secretary of Revenue on October 14, 2016. Analysis by the Department of Revenue
Statutes interpreted: Sections 77.51 (3pb), (12m), (13b), (13g), and (15b); 77.52 (2) (a) 6. and (13); 77.53 (10); and 77.54 (1), (7m), (9m), (22b), (28), (30) (a) 6., (62m), and (63), Stats. Explanation of agency authority: Section 77.65 (3), Stats., provides “[t]he department may promulgate rules to administer this subsection…” 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: The rule (1) reflects various law changes, and (2) clarifies multiple rules.
a. Building Materials for Local Government or Nonprofit Facility. Create sec. Tax 11.68 (4) (i) to explain the new exemption provided in 2015 Wis. Act 126 for building materials that become a part of a facility for a local unit of government or nonprofit organization. b. Coin-Operated Laundry. Amend s. Tax 11.72 (1) (b) 2., to state that all receipts from self-service laundry machines are exempt, not just coin-operated, pursuant to 2013 Wis. Act 20.
c. Distribution Facilities. Amend s. Tax 11.55 to reflect the changes made to sec. 77.51 (13b) under 2015 Wis. Act 55, which amends the definition of "retailer" to, under certain conditions, allow a person to operate a distribution facility and make sales of taxable property on behalf of third-party sellers without becoming liable for the tax on such sales. d. Diplomatic Exemption. Amend sec. Tax 11.05 (4) (f) to state that purchases by diplomats from American Institute in Taiwan are now exempt from tax consistent with sec. 77.54 (1).
e. Exemption Certificate Requirements. Amend s. Tax 11.14 (2) (b) to remove the phrase "the name and address of the seller" from the required list of data elements needed on an exemption certificate, to be consistent with the provision of the Streamlined Sales and Use Tax Agreement. g. Federal Excise Tax on Heavy Trucks. Amend sec. Tax 11.26 to provide that the taxable sales price and purchase price does not include the federal excise tax imposed on the first retail sale of heavy trucks and trailers under s. 4051 of the Internal Revenue Code, pursuant to the changes made to s. 77.51 (15b) (b) 3s. under 2015 Wis. Act 361. h. Fuel and Electricity Used in Manufacturing. Amend sec. Tax 11.41 (4) to define the phrase "fuel and electricity consumed in manufacturing" consistent with the definition in s. 77.51 (7h) and s. Tax 2.11. The income tax credit was replaced with a sales tax exemption in 2003 Wis. Act 99. i. Insulin Injection Equipment. Amend second note following s. Tax 11.08 to state that apparatus and equipment for the injection of insulin or the treatment of diabetes qualify for exemption under s. 77.54 (22b), Stats., if they meet the definition of "durable medical equipment" in s. 77.51 (3pm), Stats., and are for use in a person's home, pursuant to 2009 Wis. Act 2. l. Occasional Sale Exemption for Nonprofits. Amend s. Tax 11.35 to explain the changes to the occasional sale exemption, provided in s. 77.54 (7m), as amended by 2015 Wis. Act 364. m. Off-Highway Motorcycles. Update Chapter Tax 11 to reflect 2015 Wis. Act 170, which relates to the registration and operation of off-highway motorcycles. n. Sports and Entertainment Arena Facilities. Create sec. Tax 11.68 (4) (fm) to explain the new exemption provided in s. 77.54 (62m), as created by 2015 Wis. Act 60, for building materials, supplies, and equipment used in the construction or development of sports and entertainment arena facilities. o. Video Service Franchise Fees. Amend s. Tax 11.26 to state that the annual video service provider fee imposed under s. 66.0420 (3) (k), Stats., is included in sales price and purchase price and that the percentage-based state-issued video service provider fee imposed under s. 66.0420 (7), Stats., is not included in sales price and purchase price. 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 has not found a similar rule in an adjacent state.
Summary of factual data and analytical methodologies: 2003 Wisconsin Act 99, 2009 Wisconsin Act 2, 2013 Wisconsin Act 20, and 2015 Wisconsin Acts 55, 60, 126, 170, 251, 361, 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.
