Tax 11.68 Note
Note: The use tax as provided for in sub. (10) does not apply prior to August 12, 1993, to raw materials purchased outside Wisconsin that are, prior to being stored, used or consumed in Wisconsin, manufactured into tangible personal property by that contractor outside Wisconsin, or that are fabricated or altered outside Wisconsin by that contractor so as to become different or distinct items of tangible personal property from the constituent materials pursuant to the Circuit Court of Dane County decision in Morton Buildings, Inc. vs. Wisconsin Department of Revenue (2/10/92).
Tax 11.68(11)(a)
(a) A contractor who performs real property construction activities may not add tax to any charge for labor or material, since the sales price received from these activities is not taxable. The tax which a contractor pays on its purchases of materials consumed in real property construction increases its cost of the materials and becomes a cost of doing business.
Tax 11.68(11)(b)
(b) A contractor's charges for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of all tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., are taxable. Solely for the purpose of imposing the tax on these services, numerous items that in other circumstances and for other purposes are deemed part of real property are deemed to retain their character as tangible personal property. Accordingly, any construction contractor who is engaged in the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of any items listed in par.
(c) or other items of tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., shall register as a retailer and pay the tax on the sales price received from the performance of these services except that the tax does not apply to the original installation or complete replacement of an item listed in par.
(c), if that installation or replacement is a real property construction activity under s.
77.51 (2), Stats.
Tax 11.68(11)(c)
(c) Section
77.52 (2) (ag), Stats., provides in part that the following items shall be considered to have retained their character as tangible personal property for purposes of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance, regardless of the extent to which the item is fastened to, connected with or built into real property:
Tax 11.68(11)(c)38.
38. Recreational, sporting, gymnasium, and athletic goods and equipment including the following:
Tax 11.68(11)(c)39.
39. Equipment in offices, business facilities, schools, and hospitals but not in residential facilities including personal residences, apartments, long-term care facilities, as defined under s.
16.009 (1) (em), Stats., state institutions, as defined under s.
101.123 (1) (i), Stats., Type 1 juvenile correctional facilities, as defined in s.
938.02 (19), Stats., or similar facilities including the following:
Tax 11.68(11)(d)
(d) Charges for tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., such as a repair part, incorporated into property listed in par.
(c) being repaired are taxable. Because the item repaired is deemed personal property, any tangible personal property or item, property, or good under s.
77.52 (1) (b),
(c), or
(d), Stats., incorporated into it may be purchased by the contractor without tax for resale.
Tax 11.68 Note
Example: If a contractor is engaged to repair a refrigerator, whether free-standing personal property or built-in so as to be a part of real property, in a home, the repair service and any charge for parts are taxable.
Tax 11.68(12)
(12)
Repair services contrasted with replacement services. Section
77.52 (2) (a) 10., Stats., provides that the sales price received for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of all items of tangible personal property or items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., is taxable, except that the tax does not apply to the original installation or complete replacement of an item listed in s.
77.52 (2) (ag), Stats., if that installation or replacement is a real property construction activity under s.
77.51 (2), Stats. When a contractor performs an original installation or complete replacement of an item listed in s.
77.52 (2) (ag), Stats., and that activity is a real property construction activity, the contractor's charges for the installation of the item is not subject to tax imposed under s.
77.52 (2) (a) 10., Stats., and the contractor must pay tax on its purchase of the materials used in making the real property improvement, as described in sub.
(4) (a), unless an exemption applies.
Tax 11.68 Note
Example: A contractor furnishes and installs a new furnace as part of a contract to build a new home for an individual. The installation of the furnace is a real property construction activity. The contractor is the consumer of the furnace, and is liable for tax on its purchase of the furnace. The tax imposed under s.
77.52 (2) (a) 10., Stats., does not apply to the contractor's charges for installing the furnace.
Tax 11.68(13)(a)
(a) Section
77.71 (3), Stats., imposes excise taxes upon a contractor engaged in construction activities, which includes constructing, altering, repairing, or improving real property within any county that has adopted the county sales and use tax. The taxes are measured by the purchase price of the tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., used in constructing, altering, repairing, or improving real property which becomes a component part of real property in that county, unless the contractor has paid the county tax of a county in Wisconsin or a similar local sales tax in another state on the purchase of that property, item, or good.
Tax 11.68(13)(b)
(b) Building materials which become a component part of real property are used and consumed at the job site.
Tax 11.68(13)(c)
(c) In providing the services to property subject to taxation under s.
77.52 (2) (a) 10., Stats., a contractor may purchase without county tax for resale tangible personal property and items and goods under s.
77.52 (1) (b) and
(d), Stats., physically or electronically transferred to the customer in conjunction with providing such services.
Tax 11.68(13)(d)
(d) Section
77.77 (3), Stats., provides that the sales tax under s.
77.71 (1), Stats., and the county tax under s.
77.71 (3), Stats., on the sale of building materials to contractors engaged in the business of constructing, altering, repairing, or improving real estate for others are not imposed, if the materials are affixed and made a structural part of real estate and the amount payable to the contractor is fixed without regard to the costs incurred in performing a written contract that was irrevocably entered into prior to the effective date of the county ordinance or special district resolution, or that resulted from the acceptance of a formal written bid accompanied by a bond or other performance guaranty that was irrevocably submitted before that date.
Tax 11.68(13)(e)
(e) The county tax under s.
77.71 (3), Stats., on building materials used in real property construction activities are not imposed if the contractor purchased the building materials before the effective date of the county tax of that county or has paid the sales tax of another county in Wisconsin in purchasing the building materials.
Tax 11.68 Note
Note: Section
Tax 11.68 interprets ss.
77.51 (2),
(12m) (b) 7.,
(12t),
(14) (intro.),
(15a) (b) 1. and
4.,
(15b) (b) 7.,
77.52 (2) (a) 10.,
11., and
20. and
(2m),
77.53 (1),
77.54 (5) (d),
(6) (am) 1.,
4., and
5.,
(9m),
(26),
(26m),
(31),
(41),
(60),
(62m), and
(65),
77.71 (3), and
77.77 (3), Stats.
Tax 11.68 Note
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 20; (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; (y) The exemption for products used in constructing or developing a facility in the electronics and information technology manufacturing zone became effective September 20, 2017, pursuant to
2017 Wis. Act 58; (z) The exemption for building materials that become a part of a facility owned by certain title holding companies described in s. 501 (c) (2) of the Internal Revenue Code became effective for contracts entered into on or after September 1, 2017, pursuant to
2017 Wis. Act 231, and to technical colleges and the UW System, and state veterans organization for contracts entered into on or after July 1, 2018, pursuant to
2017 Wis. Acts 59 and
190, respectively; and (za) The exemption for lump sum contracts was amended to apply to time and materials construction contracts and to subcontractors for construction contracts entered into or extended, modified, or renewed on or after December 1, 2017.
Tax 11.68 History
History: Cr.
Register, November, 1978, No. 275, eff. 12-1-78; am. (5) (d), (6) (a) 2. and 12., (10) (b),
Register, December, 1983, No. 336, eff. 1-1-84; reprinted to correct error in (10) (b),
Register, January, 1984, No. 337; emerg. cr. (12), eff. 3-24-86; cr. (12),
Register, October, 1986, No. 370, eff. 11-1-86; am. (9) (a),
Register, July, 1987, No. 379, eff. 8-1-87; am. (5) (g) and (12) (a),
Register, April, 1990, No. 412, eff. 5-1-90; am. (1) (b) 1., 2. and 3., (2) (a) and (b), (3) (b) and (c), (4) (a) (intro.) and (b), (5) (intro.), (b), (e), (f), (h) and (j), (6) (a) 2., 4., 5., 6., 9. and 10. and (b), (7), (8), (9) (a), (10) (a), (b) and (d) and (11), cr. (3) (d) and (e),
Register, June, 1991, No. 426, eff. 7-1-91; renum. (9) (b) to be (c); cr. (2) (c), (3) (f) and (9) (b), am. (6) (a) (intro.), 9., 10., (10) (a), (c), and (12) (c),
Register, December, 1992, No. 444, eff. 1-1-93; am. (3) (a),
Register, April, 1994, No. 460, eff. 5-1-94; am. (4) (a) 2., (5) (L) and (10) (c), cr. (6) (a) 15.,
Register, October, 1997, No. 502, eff. 11-1-97; renum. (1), (2) (a) and (b) and (3) (a), (b), (c) to (f) and (4) to (12) to be (2), (3) (a) and (b), and (4) (a), (b) 1., (c) to (f) and (5) to (13) and am. (2) (b) 1., (4) (f), (7) (a) 6., 9., (b), (9) (b), (11) (c), (13) (a) and (c) to (e), cr. (1) and (4) (b) 2., r. (2) (c),
Register, June, 1999, No. 522, eff. 7-1-99;
EmR0924: emerg. am. (1), (2) (a), (b) 1. to 4., (c), (3), (4) (a), (b) 1., (c) to (f), (5) (b), (6) (intro.), (b), (d), (f), (7) (a) (intro.), 1. to 9., 15., (b), (8), (9), (10), (11) (a), (b), (d), (13) (title), (a) and (c) to (e), cr. (6) (bm), r. (6) (g), renum. (6) (h) to (n) to be (6) (g) to (m) and am. (6) (g), r. and recr. (11) (c) and (12), eff. 10-1-09;
CR 09-090: am. (1), (2) (a), (b) 1. to 4., (c), (3), (4) (a), (b) 1., (c) to (f), (5) (b), (6) (intro.), (b), (d), (f), (7) (a) (intro.), 1. to 9., 15., (b), (8), (9), (10), (11) (a), (b), (d), (13) (title), (a) and (c) to (e), cr. (6) (bm), r. (6) (g), renum. (6) (h) to (n) to be (6) (g) to (m) and am. (6) (g), r. and recr. (11) (c) and (12)
Register May 2010 No. 653, eff. 6-1-10;
CR 10-094: am (6) (f), (7) (b)
Register November 2010 No. 659. eff. 12-1-10;
CR 12-014: cr. (4) (g), am. (13) (title), (a), (c) to (e)
Register August 2012 No. 680, eff. 9-1-12;
CR 14-006: r. and recr. (7) (b)
Register August 2014 No. 704, eff. 9-1-14;
CR 16-053: cr. (4) (h), am. (6) (d), (h), (7) (a) 2., 4., cr. (7) (a) 7m., am. (11) (c) (intro.)
Register June 2018 No. 750, eff. 7-1-18;
CR 19-112: cr. (4) (a) (title), (b) (title), (c) (title), (d) (title), (e) (title), (f) (title), (fm), (g) (title), (h) (title), (i)
Register June 2020, No. 774, eff. 7-1-20; correction in (4) (fm), (i) 1. b. made under s.
35.17 Register June 2020, No. 774;
CR 20-018: r. and recr. (4) (i). cr. (4) (j), am. (7) (title), cr. (7) (a) (title), am. (7) (a), r. and recr. (7) (b), am. (9) (a), (Example 1), r. (9) (a) (Example 2)
Register July 2021 No. 787, eff. 8-1-21; correction in (4) (i), (7) (b) 1. a., 4. b. made under s.
35.17, Stats.,
Register July 2021 No. 787;
CR 22-044: r. (4) (fm), am. (13) (title), (a), (c) to (e) Register June 2023 No. 810, eff. 7-1-23. Tax 11.69(1)(1)
Definition. In this section, “financial institution" includes a bank, savings and loan association, savings bank, or credit union.
Tax 11.69(2)
(2)
Exempt sales. Financial institutions are primarily engaged in providing nontaxable services. Those services include charges to customers for cashier's checks, money orders, traveler's checks, checking accounts, and the use of safe deposit boxes.
Tax 11.69(3)
(3)
Taxable sales. A financial institution, except for a federally chartered credit union, shall obtain a seller's permit and file the required sales and use tax returns if it has taxable sales. Taxable sales by a financial institution include the following:
