Tax 11.26 (3) (i) The municipal video service provider fee imposed under s. 66.0420 (7), Stats. (j) The federal excise tax imposed on the first retail sale of heavy trucks and trailers under section 4051 of the Internal Revenue Code. SECTION 9. Tax 11.26 (3) (Note 2) is amended to read:
Tax 11.26 (3) (Note 2) Note: The interpretations in s. Tax 11.26 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exclusion for federal and Wisconsin motor vehicle excise taxes refunded became effective December 1, 1997, pursuant to 1997 Wis. Act 27; (b) 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; (c) the The regional transit authority taxes were authorized by 2009 Wis. Act 28 and repealed by 2011 Wis. Act 32; and (d) The definitions of "purchase price" and "sales price" were amended to provide when taxes are not included in the "purchase price" or "sales price," pursuant to 2013 Wis. Act 20; and (e) The definitions of "purchase price" and "sales price" were amended retroactively to September 1, 2014 to exclude the federal excise tax on heavy trucks and trailers, pursuant to 2015 Wis. Act 361. SECTION 10. Tax 11.33 (4) (a) (intro.) and (a) 3. and (5) (c) are amended to read:
Tax 11.33 (4) (a) (intro.) The sale of a motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01 (48r), Stats., trailer, semitrailer, all−terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin is an exempt occasional sale only if one of the following applies: 3. The motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01 (48r), Stats., trailer, semitrailer, all−terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft is sold by a nonprofit organization meeting the requirements in s. Tax 11.35 (4). (5) (c) Sales of motor vehicles, aircraft, boats, recreational vehicles as defined in s. 340.01 (48r), Stats., snowmobiles, trailers, semitrailers, all−terrain vehicles, and utility terrain vehicles, and off-highway motorcycles. Unless exempt, a use tax or sales tax pursuant to s. Tax 11.14 (2) (c) shall be paid by the purchaser at the time the motor vehicle, aircraft, boat, recreational vehicle as defined in s. 340.01 (48r), Stats., snowmobile, trailer, semitrailer, all−terrain vehicle, or utility terrain vehicle, or off-highway motorcycle is registered or titled within Wisconsin. SECTION 11. Tax 11.34 (3) (bg) is amended to read:
Tax 11.34 (3) (bg) A sale of a motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01 (48r), Stats., trailer, semitrailer, all−terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin, is subject to tax unless s. Tax 11.33 (4) (a) 1. or 2. apply. SECTION 12. Tax 11.35 (2) (b), (5) (a) and (a) (Example), (5) (b) and (b) (Example 1) and (Example 2), (6) (a) and (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) are amended to read:
Tax 11.35 (2) (b) "Entertainment" means entertainment provided at an admission event by all persons or groups who are paid in the aggregate more than $500 $10,000 per event by all persons for performing, for reimbursement of expenses or for prize money.
(5) (a) Its sales of otherwise taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or services or its events occur on 20 75 days or less during the calendar year, regardless of the dollar amount of sales. For events involving the sales of tickets, only the actual days of the events are counted, not the days of ticket sales. (Example) Example: A boy scout troop takes orders for Christmas wreaths from October August 1 through November 1. The wreaths are delivered by the troop on December 15 and 16. For purposes of determining whether its events meet the 20 75-day test, the troop should use the days of delivery rather than days orders are taken.
(b) Its taxable sales price for tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), or (d), Stats., and taxable services for the calendar year are $25,000 $50,000 or less, regardless of the number of days on which its sales or events occur. Sales that are nontaxable are not included for purposes of the $25,000 $50,000 sales price test. (Example 1) Examples: 1) A church sells frozen pizzas. Since sales of frozen pizzas are exempt from sales tax, the sales of the frozen pizzas are not counted as part of the sales price for purposes of the $25,000 $50,000 receipts test.
(Example 2) 2) A nonprofit organization, which sells hundreds of Christmas trees, sells 5 Christmas trees for $100 to a public school. Although Christmas trees are taxable tangible personal property, a public school can purchase tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., exempt from sales tax. As a result, this $100 exempt sale to the school is not counted as part of the sales price for purposes of the $25,000 $50,000 receipts test. (6) (a) (Example 1) Examples: 1) Four different bands are paid $200 $3,000 each to perform at various times during a 3-day event. There is an admission charge for access to the event. Since the total payment for entertainment ($800 $12,000) exceeds the $500 $10,000 limit in sub. (2) (b), entertainment is deemed to be involved. As a result, receipts from the event are taxable.
(Example 2) 2) Two nonprofit organizations co-sponsor an admission event at which a band is hired to perform. Each organization pays the band $300 $5,500. Since the total payment for entertainment ($600 $11,000) exceeds the $500 $10,000 limit in sub. (2) (b), entertainment is deemed to be involved. As a result, receipts from the event are taxable.
(Example 3) 3) A nonprofit organization sponsors a dinner and dance in the high school gymnasium. The dance band is paid in excess of the $500 $10,000 limit in sub. (2) (b). There is no separate admission charge. However, access to the dance is restricted to those who have purchased the meal. The "meal" charge constitutes an admission charge to an event involving entertainment. Therefore, sales by the nonprofit organization at this event are taxable.
(Example 5) 5) Nonprofit Organization A sponsors an admission event at which a band is hired to perform. The band is paid more than $500 $10,000. Nonprofit Organization A allows Nonprofit Organization B, a separate entity, to sell soft drinks and food at the event for consumption on the premises of the event. Although Nonprofit Organization A's sales at the event do not qualify for the occasional sales exemption, Nonprofit Organization B's sales at the event may qualify as exempt occasional sales. The admission charge to the event involving entertainment is made by Nonprofit Organization A, not Nonprofit Organization B.
(b) A nonprofit organization that would otherwise qualify for exempt occasional sales, except for the involvement of entertainment, may obtain a seller's permit from the department for the day or days involving entertainment, pay the sales tax on that event and request inactivation of its seller's permit after the event, and still have exempt occasional sales on days not covered by the seller's permit. Days and receipts from events involving admissions to entertainment for which a seller's permit was obtained are included with all other sales in determining the 20 75-day test and the $25,000 $50,000 taxable receipts test described in sub. (5). A nonprofit organization that obtains a seller's permit for an event and does not request inactivation of its seller's permit after the event does not qualify for the occasional sale exemption while the seller's permit is active, regardless of the number of days and dollar amount of its sales.
(Example 2) 2) A nonprofit organization holds several events during the year. For one of the events, the nonprofit organization obtains a seller's permit because entertainment is involved, collects sales tax on its receipts of $5,000 from that event and requests inactivation of its seller's permit after the event. Taxable receipts from its other events must be combined with the $5,000 of receipts from the event for which it held a seller's permit for purposes of determining whether the $25,000 $50,000 taxable receipts test is met.
(7) (b) (Example) Example: A nonprofit organization has held seven nineteen 3 4-day events for a total of 21 76 days each year for the past 5 years. Receipts were always over $25,000 $50,000, and there were no admissions to entertainment events. One event has lost money for the past 2 years. The organization intends to discontinue that event for the following year; thus, it may anticipate coming under the 20 75-day standard and request inactivation of its seller's permit in good faith.
(c) (Example 1) Examples: 1) A church held 18 73 days of events or sales in the current year. Receipts for the events equaled $30,000 $70,000 and no entertainment was involved. The church expects to hold the same 18 73 days of events in the following year. It requests inactivation of its seller's permit. However, in the middle of the following year, the church garage is destroyed by fire. An additional 4-day event is held to raise funds to help replace the garage. Only the receipts from days 21 76 and 22 77, the days exceeding the standard, are subject to sales tax.
(Example 2) 2) A garden club is organized in the current year. The garden club is not required to hold a seller's permit and does not apply for one. In the following year, the garden club holds 22 77 days of events with taxable receipts from the events of $30,000 $70,000. Only receipts from days 21 76 and 22 77, the days exceeding the standard, are subject to sales tax.
(d) (Example) Example: A nonprofit organization holds 15 70 days of sales in the current year. The organization holds a seller's permit, files sales and use tax returns and pays sales tax on all its receipts in the current year. At the end of the current year, the organization realizes that its sales would have qualified as exempt occasional sales except for its holding of a seller's permit. The organization may not claim a refund of taxes paid while it held a seller's permit.
(8) (Note 2) Note: The interpretations contained in s. Tax 11.35 became effective January 1, 1989, pursuant to 1987 Wis. Act 399, except: (a) the $25,000 receipts standard, and the $500 entertainment standard became effective January 1, 2006, pursuant to 2005 Wis. Act 25; (b) 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 (c) the 75 day standard, the $50,000 receipts standard, and the $10,000 entertainment standard became effective January 1, 2017, pursuant to 2015 Wis. Act 364. SECTION 13. Tax 11.41 (4) (a) is amended to read:
Tax 11.41 (4) (a) Fuel and electricity are specifically excluded from the exemption provided by s. 77.54 (2), Stats. However, an exemption is provided in s. 77.54 (30) (a) 6., Stats., for fuel and electricity consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., in this state. Consistent with s. 77.51(7h), Stats., "fuel and electricity consumed in manufacturing" means only fuel and electricity used to operate machines and equipment used directly in the step-by-step manufacturing process and does not include fuel and electricity consumed in providing plant heating, cooling, air conditioning, communications, lighting, safety and fire prevention, storing raw materials or finished units of tangible personal property or items or property under s. 77.52(1)(b) or (c), Stats., research and product development, delivery to or from the plant, repairing or maintaining plant facilities, or shipping, advertising, distribution, sales, or administrative department activities. SECTION 14. Tax 11.50 (4) (a) 1. a. and (5) (title) are amended to read:
Tax 11.50 (4) (a) 1. a. Highway motor vehicles or trailers, snowmobiles, all−terrain vehicles, utility terrain vehicles, off-highway motorcycles, mini bikes, aircraft, and boats.
(5) (title) Auction sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), stats., trailers, semi-trailers, all-terrain vehicles, utility terrain vehicles, off-highway motorcycles, and aircraft. SECTION 15. Tax 11.50 (5) (a) 9. is created to read:
Tax 11.50 (5) (a) 9. Off-highway motorcycles
SECTION 16. Tax 11.52 (7) (d) is created to read:
Tax 11.52 (7) (d) Music sold in a tangible or digital form to a person described in 77.54 (63), Stats., for use in a jukebox is exempt from sales and use tax if the music is used exclusively for the jukebox. When the music is sold with a jukebox, the music is exempt as a separate sale from the jukebox if the sales price of the music is stated separately from the sales price of the jukebox on the invoice or bill of sale the seller gives to the purchaser.
SECTION 17. Tax 11.52 (7) (Note 1) and (Note 2) are amended to read:
Tax 11.52 (7) (Note 1) Note: Section Tax 11.52 interprets ss. 77.51 (1fm), (3n), (3t), (13), and (17w), 77.52 (1), (1m), (2) (a) 2., 6., 7., 10., and 11., and (2m), and 77.54 (20n) and (63), Stats. (Note 2) Note: The interpretations in s. Tax 11.52 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The definitions of "candy," "dietary supplement," "food and food ingredient," and "soft drink," the exemption for food and food ingredients, 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 (b) Receipts from all self-service laundry, dry cleaning, pressing, and dyeing machines, including those that are not coin-operated, are not taxable effective October 1, 2013, pursuant to 2013 Wis. Act 20; and (c) The exemption for music in s. 77.54 (63), Stats., became effective June 1, 2016, pursuant to 2015 Wis. Act 251. SECTION 18. Tax 11.68 (4) (a) (title), (b) (title), (c) (title), (d) (title), (e) (title), (f) (title), (fm), (g) (title), (h) (title), and (i), are created to read:
Tax 11.68 (4) (a) (title) Materials used in real property.
(b) (title) Materials sold as personal property.
(c) (title) Machinery and tools purchased by contractors.
(d) (title) Waste treatment facilities.
(e) (title) Waste reduction and recycling.
(f) (title) Sports and entertainment home stadiums.
(fm) Sports and entertainment arena facilities. Under s. 77.54 (62m), Stats., owners, lessees, contractors, subcontractors, or builders, may purchase without sales or use tax building materials, supplies, equipment, and landscaping services acquired solely for or used solely in, the construction or development of sports and entertainment arena facilities, as defined in s. 229.41 (11g), Stats., but not later than one year after certification of completion is issued under s. 229.42 (4e) (d), Stats. (g) (title) Modular and manufactured homes used outside Wisconsin.
(h) (title) Fertilizer blending, feed milling, and grain drying operations.
(i) Building materials for facilities owned by local governmental units and certain nonprofit organizations.
1. Under s. 77.54 (9m), Stats., contractors may purchase without sales or use tax building materials that the contractor, in fulfillment of a real property construction activity, transfers to an entity described in s. 77.54 (9a) (b), (c), (d), (em), and (f), Stats., if the materials become part of a facility in Wisconsin that is owned by the entity. The following provisions apply to the exemption under s. 77.54(9m), Stats.: a. A Wisconsin organization described under s. 77.54 (9a) (f), Stats., must hold a Wisconsin Certificate of Exempt Status number. A non-Wisconsin organization described under s. 77.54 (9a) (f), Stats., is not required to hold a Wisconsin Certificate of Exempt Status number. b. "Facility" means any building, shelter, parking lot, parking garage, athletic field, athletic park, storm sewer, water supply system, or sewerage and waste water treatment facility. Facility does not include highways, streets, roads, sidewalks or paths, regardless of whether located within a facility.
Example: Materials that become a component part of the road, curb, gutters, or sidewalk are not part of a facility, such as black top, cement, and road base materials.
Example: Materials that become a component part of a storm sewer facility and the materials necessary to stabilize those items are part of the storm sewer facility, such as piping, fittings, gravel and other fill necessary to bury the storm sewer piping to protect it from the road. Any road base material used to bring the road to elevation, and the road surface itself is not part of a facility.
Example: Pipes, pipe liner material, manhole structures, manhole covers, manhole liners, and manhole coatings become a component part of the storm sewer facility.
c. A contractor's purchase of building materials transferred to a county, city, village or town, a state governmental unit, or a federal governmental unit outside this state are not exempt.
d. A contractor's purchase of building materials transferred to a person other than an entity described in s. 77.54 (9a) (b), (c), (d), (em), and (f), Stats., is exempt if the person does not use the facility for any purpose other than to transfer it to the entity. Example: Building materials for the construction of a parking ramp that will be owned and operated by a developer prior to transfer to a municipality, does not qualify for the exemption.
e. A subcontractor's purchase of building materials is exempt if the materials are transferred to an entity described in s. 77.54 (9a) (b), (c), (d), (em), and (f), Stats., and, upon completion of the facility, the materials become a part of the facility in Wisconsin that is owned by the entity, pursuant to a contract between a general contractor and the entity, and the general contractor does not use the facility for any purpose other than to transfer it to the entity. f. The exemption applies to contracts entered into on or after January 1, 2016. The exemption does not apply to purchases of building materials after January 1, 2016, for a contract that was entered into prior to January 1, 2016, even if the change order relating to those materials was executed after January 1, 2016.
SECTION 19. Tax 11.68 (13) (Note 1) and (Note 2) are amended to read:
Tax 11.68 (13) (Note 1) Note: Section Tax 11.68 interprets ss. 77.51 (2), (12m) (b) 7., (14) (intro.), (15a) (b) 1. and 4., (15b) (b) 7., 77.52 (2) (a) 10., 11., and 20., 77.53 (1), 77.54 (5) (d), (6) (am) 1., 4. and 5., (9m), (26), (26m), (31), (41), and (60), and (62m), 77.71 (3), and 77.77 (3), Stats. (Note 2) Note: The interpretations in s. Tax 11.68 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Vault doors were not considered personal property until August 1, 1975; (b) Service station equipment such as underground tanks, gasoline pumps and hoists installed in or securely attached to their owner's land was real property, but the property was personal property if the personal property and land were owned by different persons prior to August 1, 1975; (c) Advertising signs were real property if erected on and securely attached to the owner's land prior to August 1, 1975; (d) Landscaping services became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981; (e) The exemption for waste reduction and recycling machinery and equipment became effective July 1, 1984, pursuant to 1983 Wis. Act 426; (f) The exemption for mobile units used for mixing and processing became effective July 20, 1985, pursuant to 1985 Wis. Act 29; (g) The credit for local sales taxes paid to other states became effective April 1, 1986, pursuant to 1987 Wis. Act 27; (h) The exemption for safety attachments for manufacturing machines became effective June 1, 1986, pursuant to 1985 Wis. Act 149; (i) The exemption of 35% of the selling price of new mobile homes and 100% of the selling price of used mobile homes became effective January 1, 1987, pursuant to 1985 Wis. Act 29; (j) The exemption for property used in constructing professional sports and home entertainment stadiums became effective October 1, 1991, pursuant to 1991 Wis. Act 37; (k) The 35% reduction in gross receipts for new mobile homes transported in 2 unattached sections became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (L) Tangible personal property purchased outside Wisconsin, stored in Wisconsin and subsequently used outside Wisconsin became taxable October 1, 1991, pursuant to 1991 Wis. Act 39; (m) Raw materials purchased outside Wisconsin, manufactured, fabricated or otherwise altered by the contractor outside Wisconsin and used in real property construction by the contractor in Wisconsin became subject to use tax effective August 12, 1993, pursuant to 1993 Wis. Act 16; (n) In Tom Kuehne Landscape Contractor, Inc. vs. Wisconsin Department of Revenue, Wisconsin Court of Appeals, District IV, No. 86-1813, October 29, 1987 (CCH 202-919), highway signs, sign bridges, delineator posts and guardrails were found to remain tangible personal property after installation; (o) The stadium tax on building materials became effective January 1, 1996, pursuant to 1995 Wis. Act 56; (p) The change to the definition of "real property construction activities" to include only those activities that take place at a site where tangible personal property is affixed to real property became effective for sales of property pursuant to contracts entered into on or after December 1, 1997, pursuant to 1997 Wis. Act 27; (q) The clarification of the tax treatment of the original installation or complete replacement of certain deemed items became effective on October 1, 2001, pursuant to 2001 Wis. Act 16; (r) The changes in the use of the terms mobile homes and manufactured homes became effective January 1, 2008, pursuant to 2007 Wis. Act 11; (s) 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; (t) The exemption for modular homes and manufactured homes used in real property construction activities outside Wisconsin became effective September 1, 2011 pursuant to 2011 Wis. Act 32; and (u) The exemption for lump sum contracts first applied to contracts entered into on or after October 1, 2013, pursuant to 2013 Wis. Act 20; (v) The exemption for building materials acquired solely for holding structures used in a fertilizer blending, feed milling, or grain drying operation became effective April 19, 2014, pursuant to 2013 Wis. Act 324; (w) The exemption for building materials, supplies, and equipment used in the construction or development of sports and entertainment arena facilities became effective August 14, 2015, pursuant to 2015 Wis. Act 60; and (x) The exemption for building materials that become a part of a facility owned by a local government or exempt nonprofit organization first applies to contracts entered into January 1, 2016, pursuant to 2015 Wis. Act 126. SECTION 20. Tax 11.72 (1) (b) 2. and (3) (Note 2) are amended to read:
Tax 11.72 (1) (b) 2. The services are performed by the customer through the use of coin-operated, self-service machines. Coin-operated, self-service machines do not include machines activated by tokens or magnetic cards.
(3) (Note 2) Note: The interpretations in s. Tax 11.72 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Laundries and dry cleaners became the consumers of, and pay tax on the purchases of, items transferred to customers effective September 1, 1983, pursuant to 1983 Wis. Act 27; (b) The exemption for diaper services and cloth diapers became effective July 1, 1990, pursuant to 1989 Wis. Act 335; (c) The repeal of the exemption for cloth diapers became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (d) The change of the term "gross receipts" to "sales price" became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (e) The exemption for coin-operated, self-service laundry machines was expanded to include all self-service machines effective October 1, 2013, pursuant to 2013 Wis. Act 20. SECTION 21. Tax 11.83 (1) (b) is amended to read:
Tax 11.83 (1) (b) “Motor vehicle” means a self−propelled vehicle, such as an automobile, truck, truck−tractor, or motorcycle, designed for and capable of transporting persons or property on a highway. In this section, “motor vehicle” does not include a self−propelled vehicle which is not designed or used primarily for transportation of persons or property, and is only incidentally operated on a public highway, such as a farm tractor, snowmobile, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, fork lift truck, or road machinery as defined in s. 340.01 (52), Stats. “Motor vehicle” does not include a vehicle which is not self−propelled, such as a trailer or semitrailer. SECTION 22. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.), Stats.
DEPARTMENT OF REVENUE
Dated: By: ___________________________
Peter W. Barca
Secretary of Revenue
