CR 20-027 Rule Text

PROPOSED ORDER OF THE DEPARTMENT OF REVENUE AMENDING RULES

The Wisconsin Department of Revenue proposes an order to: amend Tax 11.002 (3) (a) 3. a. and b., 11.01 (2) (c) 1. (Note), 11.09 (4) (a), 11.11 (2) (Note) and (3) (d) 2. (Note), 11.17 (3) (Chart), 11.20 (3) (a) 2., 11.34 (4) (a) 3. (Note), 11.46 (4) (b), 11.535 (4) (Note) and (5), 11.61 (1) (a) 4., (2) (b) 1., and (2) (c) (Note 2), 11.88 (6), and 11.925 (3) (b) 2; relating to sales and use tax provisions.

The scope statement for this rule, SS 099-19, was approved by the Governor on October 3, 2019, published in Register No. 766A1 on October 7, 2019, and approved by the Secretary of Revenue on October 29, 2019.

Analysis by the Department of Revenue

Statutes interpreted:

Tax 11.002 – ss. 77.982 (4), 77.991 (4), 77.9941 (4), 77.9951 (3), 77.996(1), 77.9964(2), and 196.025(6)(cm), Stats.

Tax 11.01 – ss. 66.0165 (1m) (f) 2., 77.982, 77.991,77.9941, 77.9951, 77.9964, and 196.025(6)(cm), Stats.

Tax 11.09 – s. 77.54(14m), Stats.

Tax 11.11 – s. 77.54(26), Stats.

Tax 11.17 – ss. 77.51(3pj) and (17w) and 77.54(14), (20n), and (22b), Stats.

Tax 11.20 – s. 77.54(3m), Stats.

Tax 11.34 – ss. 77.51(9)(a) and (am) and (14g)(h), 77.52(12) and 77.54(7), Stats.

Tax 11.46 - s. 77.54 (7m), Stats.

Tax 11.535 – s. 73.03(38), Stats.

Tax 11.61 - ss. 77.51(1bm), 77.52(2)(a)10., 77.54(33), Stats.

Tax 11.88 – ss. 77.51 (7i) and (13)(c) and (q), 77.52(3m), and 77.523, Stats.

Tax 11.925 – s. 77.61(2), Stats.

Statutory authority: Sections 77.65 (3) and 227.11 (2) (a), Stats.

Explanation of agency authority: 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...”

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.

Related statute or rule: There are no other applicable statutes or rule.

Plain language analysis: The rule updates various sections as identified in the JCRAR report submitted on March 26, 2019, as follows.

a.

Streamlined Sales Tax Registration System. Section Tax 11.002 (3) (a) 3. a. and b. are amended to address a name change to the Streamlined Sales Tax Registration System.

b.

Addresses and other contact information. Sections Tax 11.01 (2) (c) 1. (Note), 11.11 (2) (Note) and (3) (d) 2. (Note),11.34 (4) (a) 3. (Note), 11.535 (4) (Note) and (5) and Tax 11.925 (3) (b) 2. (Note) are amended to update old email and mailing addresses and telephone numbers.

c.

Insulin. Section Tax 11.09 (4) (a) is amended to clarify that insulin administered by a licensed pharmacist for treatment of diabetes as directed by a physician is deemed dispensed on a prescription as provided by sec. 77.54(14m), Stats.

d.

Purchases by medical clinics and hospitals. Section Tax 11.17 (3) (Chart) is amended to remove several items from taxable and exempt lists because they are no longer defined terms or are unclear as to use to definitively state they are taxable or exempt.

e.

Beekeeping. Sections Tax 11.20 (3) (a) 2. and 11.61 (1) (a) 4., (2) (b) 1., and (2) (c) (Note 2) are amended to include the tax treatment of drugs and services furnished by veterinarians for bees and products used in raising bees for research per 2017 WI Act 59.

f.

Occasional sale exemption for nonprofit organizations. Section Tax 11.46 (4) (b) is amended to update receipt and day thresholds for the nonprofit occasional sale exemption, as provided by 2015 Act 364, amending sec. 77.54(7m), Stats.

g.

References. Section Tax 11.88 (6) is amended to correct a rule reference.

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: The department has created this proposed rule order to reflect these statutory changes as well as provide needed clarification and correction as described above.

Analysis and supporting documents used to determine effect on small business: This rule makes changes to reflect current law and current department policy. This proposed rule order 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 order makes no policy or other changes having an effect on small business.

Agency contact person: Contact Jen Chadwick at [phone] or [e-mail], 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. 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

[e-mail]

SECTION 1. Tax 11.002 (3) (a) 3. a. and b. are amended to read:

Tax 11.002 (3) (a) 3. a. Using the Streamlined Sales Tax Governing Board's Central Registration System (SSTGBCRS SSTRS). The information submitted using the SSTGBCRS SSTRS is obtained by the department on a daily basis and will be used to automatically register a person in Wisconsin. If the department determines that additional information is necessary to process the registration, a person will be contacted by the department.

b. Except for a seller who uses a certified service provider, a seller who registers through the SSTGBCRS SSTRS may indicate at the time of registration that it anticipates making no taxable sales in Wisconsin and is not required to file a sales and use tax return in Wisconsin until such time as the seller makes a taxable sale that is sourced to Wisconsin. However, once the seller makes a taxable sale in Wisconsin, the seller is required to file a sales and use tax return in Wisconsin by the last day of the month following the end of the calendar quarter in which the sale occurred and continue to file returns by the last day of each calendar quarter thereafter, unless they are it is notified in writing by the department of a different filing frequency.

SECTION 2. Tax 11.01 (2) (c) 1. (Note) is amended to read:

Tax 11.01 (2) (c) 1. Note: Written requests should be e-mailed to [e-mail] [e-mail], faxed to [phone], or addressed to Mandate eFile Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison WI 53708-8949.

SECTION 3. Tax 11.09 (4) (a) is amended to read:

Tax 11.09 (4) (a) Prescribed for the treatment of a human being by a person authorized to prescribe the drugs, and dispensed on prescription filled by a registered pharmacist in accordance with law. Insulin furnished by a pharmacist to a person for treatment of diabetes as directed by a physician shall be deemed dispensed on prescription.

SECTION 4. Tax 11.11 (2) (Note) and (3) (d) 2. (Note) are amended to read:

Tax 11.11 (2) Note: Refer to s. Tax 6.40 for information on how to request approvals for property tax exemption for utility waste treatment facilities. For more information regarding exemptions for waste treatment facilities owned by a utility, including railroads, airlines, and pipelines, approved by the department, write to Wisconsin Department of Revenue, Manufacturing and Utility Section Bureau, PO Box 8971, Madison WI 53708-8971; telephone [phone]; send an e-mail to [e-mail] [e-mail]; or access the department's internet web site at http://www.revenue.wi.gov/contact/slfbmta.html www.revenue.wi.gov and search "waste treatment facilities".

(3) (d) 2. Note: For more information regarding the exemption for municipal treatment facilities, write, email or call Wisconsin Department of Revenue, Bureau of Customer Service Bureau, Mail Stop 5-77, PO Box 8902 8949, Madison WI 53708-8902 8949, email [e-mail]; telephone [phone]-2776. The web site is www.revenue.wi.gov.

SECTION 5. Tax 11.17 (3) (Chart) is amended to read:

Tax 11.17 (3) (Chart)