tax011_EmR0924.pdf Revenue – Revises Ch. Tax 11 – EmR0924
Publication Date: September 30, 2009
Effective Dates: October 1, 2009 through February 27, 2010
ORDER OF THE DEPARTMENT OF REVENUE ADOPTING AN EMERGENCY RULE
The Wisconsin Department of Revenue hereby adopts an emergency rule interpreting ss. 73.03 and 77.51 to 77.79, Stats., relating to sales and use t
Statutes interpreted: ss. 73.03 and 77.51 to 77.79, Stats.
Statutory authority: ss. 227.24, Stats.
Explanation of agency authority: Section 227.24, Stats., provides an agency may promulgate a rule as an emergency rule without complying with the notice, hearing, and publication requirements of the statutes if preservation of the public peace, health, safety, or welfare necessitates putting the rule into effect prior to the time it would take effect if the agency complied with the procedures.
Related statute or rule: There are no other applicable statutes or rules.
Plain language analysis: This emergency rule does the following:
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. However, the Streamlined Sales Tax Project (SSTP) is a nationwide project that is intended to modernize and simplify the sales and use tax reporting in the states who choose to conform their laws to the requirements contained in the Streamlined Sales and Use Tax Agreement (SSUTA). Adopting the requirements of the SSUTA will help make Wisconsin’s sales and use tax laws more uniform with the sales and use tax laws of the other states that have also conformed their laws to the requirements of the SSUTA.
Comparison with rules in adjacent states:
Minnesota, Michigan and Iowa have conformed their laws to the requirements of the SSUTA and therefore, like Wisconsin, must administer their laws in a manner consistent with the requirements of the SSUTA. These states do this through a combination of statutory provisions and administrative rules.
Illinois has not conformed their laws to the requirements of the SSUTA and is not bound by the requirements contained in the SSUTA.
Summary of factual data and analytical methodologies: 2009 Wisconsin Act 2 adopted statutory changes to bring Wisconsin’s sales and use tax statutes into conformity with the Streamlined Sales and Use Tax Agreement. The department has created this emergency rule to reflect these changes in Wisconsin’s sales and use tax laws.
Analysis and supporting documents used to determine effect on small business: As explained above, this proposed rule is created to reflect changes in Wisconsin’s sales and use tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector: This emergency rule does not have a significant fiscal effect on the private sector.
Effect on small business: This emergency rule does not have a significant effect on small business.
Agency contact person: Please contact Dale Kleven at (608) 266-8253 or dale.kleven@revenue.wi.gov, if you have any questions regarding this emergency 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 one week after the public hearing on this emergency rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Dale Kleven
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
The Department of Revenue finds that an emergency exists and that the attached rule order is necessary for the immediate preservation of the public peace, health, safety or welfare. A statement of the facts constituting the emergency is:
The changes made by this rule order must be effective October 1, 2009, to be in conformity with the Streamlined Sales and Use Tax Agreement. In order to meet this deadline, it is necessary to promulgate this rule as an emergency rule.
This rule is therefore promulgated as an emergency rule and shall take effect upon publication in the official state newspaper. Certified copies of this rule have been filed with the Legislative Reference Bureau, as provided in s. 227.24, Stats.
.
SECTION 1. Tax 11.001(1) and (2)(a) are amended to read:
Tax 11.001(1) Applicability. Chapter Tax 11 is
applicable to the state sales and use taxes imposed under subch. III of ch. 77,
Stats., and is also applicable to the county, and stadium, and
regional transit authority sales and use taxes authorized under subch. V of
ch. 77, Stats.
(2)(a) “Consumers” means persons who purchase and use tangible personal property or items, property, or goods under sec. 77.52 (1) (b), (c), or (d), Stats.
SECTION 2. Tax 11.001(2)(am), (bc), (bg), (bn), (br), and (bw) are created to read:
Tax 11.001(2)(am) “County tax” means the sales and use tax that is authorized under subch. V of ch. 77, Stats.
(bc) “Goods under s. 77.52 (1) (d), Stats.” means specified digital goods and additional digital goods that are sold, leased, licensed, or rented on a permanent or less than permanent basis and regardless of whether the purchaser is required to make continued payments for such right.
(bg) “Items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.” means “items under s. 77.52 (1) (b) Stats.” as defined in par. (bn), “property under s. 77.52 (1) (c), Stats.” as defined in par. (br), and “goods under s. 77.52 (1) (d), Stats.” as defined in (bc).
(bn) “Items under s. 77.52 (1) (b) Stats.” means coins and stamps of the United States that are sold, licensed, leased, rented, or traded as collector’s items above their face value.
(br) “Property under s. 77.52 (1) (c), Stats.” means leased property that is affixed to real property, if the lessor has the right to remove the leased property upon breach or termination of the lease agreement, unless the lessor of the leased property is also the lessor of the real property to which the leased property is affixed.
(bw) “Regional transit authority tax” means a local regional transit authority sales and use tax that is authorized under subch. V. of ch. 77, Stats.
SECTION 3. Tax 11.001(2) (e) and (f)1. and 2. are amended to read:
Tax
11.001(2)(e) “Tax” means the Wisconsin sales or use tax taxes in
effect under ss. 77.52 (1) and (2) and 77.53 (1), Stats. “Tax” also
includes the county, stadium, and regional transit authority taxes
imposed under s. 77.71, Stats.
(f)1.
The sales tax applies to a sale of tangible personal property, items,
property, or goods under secs. 77.52 (1) (b), (c), or (d), Stats., or
services, measured by the gross receipts sales price from the
sale.
2.
The use tax applies to the storage, use, or other consumption of
tangible personal property, items, property, or goods under secs. 77.52 (1)
(b), (c), or (d), Stats., or services sold, measured by the sales purchase
price.
SECTION 4. Tax 11.002(1) and (2)(a) and (d) are amended to read:
Tax 11.002(1) Purpose. The purpose of this section is to set forth the requirements to apply for a seller’s permit, use tax registration certificate, or consumer’s use tax registration certificate on the part of persons intending to operate as a seller at retail in this state, to collect use tax for the convenience of customers, or to report use tax; and to establish time limits within which the department will act on the application.
(2)(a) Seller’s permit. Every individual, partnership, corporation, or other organization making retail sales, licenses, leases, or rentals of tangible personal property or items, property, or goods under secs. 77.52 (1) (b), (c), or (d), Stats., or selling, licensing, performing, or furnishing taxable services at retail in Wisconsin shall have a seller’s permit for each place of operation, unless the seller is exempt from taxation.
Note to LRB: Amend the note at the end of Tax 11.002(2)(a) as follows:
Note: A nonprofit organization’s gross
receipts are exempt from taxation if it meets the requirements under s. 77.54
(7m), Stats. Also see s. Tax 11.35.
(d)
Local exposition registration. Every person selling lodging, food,
beverages and other items described in s. 77.54 (20) (c) 2. candy, as
defined in s. 77.51 (1fm), Stats., prepared food, as defined in s. 77.51 10m),
Stats., and soft drinks, as defined in s. 77.51 (17w), Stats., or renting
automobiles subject to local exposition district taxes shall register with the
department. Upon registration for local exposition district taxes, a separate
seller’s permit or use tax registration certificate only for local exposition
district taxes will not be issued. The seller’s permit or use tax registration
certificate, as described in pars. (a) and (b), issued for sales and use tax purposes
will apply for local exposition district tax purposes.
SECTION 5. Tax 11.002(3) is renumbered 11.002(3)(a)(intro.) and amended as renumbered to read:
Tax 11.002(3)(a)(intro.) A person required to have a seller’s permit or one
of the use tax certificates described in sub. (2) or required to register for
local exposition district taxes shall file an “Application for
Permit/Certificate,” form A-101, with the department at the address shown on
the form. register by one of the following methods: The
application shall include all information and fees required and shall be signed
by the appropriate person described on the form. Security, as described in s.
Tax 11.925, may be required.
SECTION 6. Tax 11.002(3)(a)1. and 2. and (b) are created to read:
Tax 11.002(3)(a)1. Using the department of revenue’s online registration system.
2. Filing an “Application for Business Tax Registration,” form BTR-101, with the department at the address shown on the form. The application shall include all information and fees required and shall be signed by the appropriate person described on the form.
(b) Security, as described in s. Tax 11.925, may be required.
Note to LRB: Replace the note at the end of Tax 11.002(3)(b) with the following:
Note: The online registration system and Form BTR-101 are available on the Department’s website at: http://www.revenue.wi.gov/forms/sales/index.html. Form BTR-101 may also be obtained by writing or calling Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902, telephone (608) 266-2776.
SECTION 7. Tax 11.03(2)(a)(intro.) and 6. and (b)(intro.), (3)(intro.) and (c), and 4(intro.) are amended to read:
Tax
11.03(2)(a)(intro.) Sales Exempt
sales by elementary or secondary schools, the gross receipts from
which are exempt, include:
Notes to LRB: Replace the example at the end of Tax 11.03(2)(a)3. with the following:
Example: A school auditorium is rented to a religious group which conducts a religious revival. The sales price from the rental is exempt.
Replace the examples at the end of Tax 11.03(2)(a)4. with the following:
Examples: 1) A school gymnasium is rented to a professional basketball team which will sell tickets to the event. The sales price from the rental is exempt.
2) A school auditorium is rented to a popular band for one night. The band will sell tickets to its performance. The sales price from the rental is exempt.
6. The transfer of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., to a contractor for performance of a real property construction activity in exchange for a reduction in the contract price, even though the contract provides that the contractor is to supply all materials.
(b)(intro.)
Sales Taxable sales by elementary or secondary schools, the
gross receipts from which are taxable, include:
Notes to LRB: Replace the example at the end of Tax 11.03(2)(b)2. with the following:
Example: A local neighborhood group rents the school gymnasium for its residents to play volleyball. The neighborhood group does not charge its residents to play volleyball. The sales price from the rental is taxable. If the group charged an entry fee to play volleyball, the sales price from the rental of the gymnasium is not taxable because the rental is for resale.
Replace the example at the end of Tax 11.03(2)(b)3. with the following:
Example: A school sponsors an athletic tournament and charges $1 for parking. The sales price from parking is taxable.
(3)(intro.) Sales by
school-related organizations and others. Sales Taxable sales by
school-related organizations and others, not including school districts, the
gross receipts from which are taxable, include:
(c) Sales of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services by technical college districts.
(4)(intro.) Sales to schools
and school-related organizations. Under s. 77.54, Stats., gross
receipts from sales to the following organizations are exempt:
SECTION 8. Tax 11.04 (1), (2)(title), (3), and (5) are amended to read:
Tax 11.04(1) Definition.
In this rule, “exempt entity” means a person qualifying for an exemption under
s. 77.54 (9a) or 77.55 (1), Stats. Section 77.54 (9a), Stats., provides an
exemption for sales to this state or any agency thereof, the University of
Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority,
the Health Insurance Risk-Sharing Plan Authority, the Wisconsin Quality Home
Care Authority, and the Fox River Navigational System Authority; or
any county, municipality city, village, town or school
district in this state or other political subdivision; a county-city
hospital established under s. 66.0927, Stats.; a sewerage commission organized
under s. 281.43 (4), Stats. or a metropolitan sewerage district organized under
ss. 200.01 to 200.15 or 200.21 to 200.65, Stats.; any other unit of government
in this state or any agency or instrumentality of one or more units of
government in this state; any federally recognized American Indian tribe or
band in this state; any joint local water authority created under s. 66.0823,
Stats.; any transit authority created under ss. 59.58 (7) or 66.1039, Stats.;
any corporation, community chest fund, foundation or association organized and
operated exclusively for religious, charitable, scientific or educational
purposes, or for the prevention of cruelty to children or animals, except
hospital service insurance corporations under 613.80 (2), Stats., no part of
the net income of which inures to the benefit of any private stockholder,
shareholder, member or corporation; a local exposition district under subch. II
of ch. 229, Stats.; a local cultural arts district under subch. V of ch. 229,
Stats. Section 77.55 (1), Stats., provides an exemption for sales to the
United States, its unincorporated agencies and instrumentalities, and any
unincorporated [incorporated]agency or instrumentality of the United States
wholly owned by the United States or by a corporation wholly owned by the
United States.
(2)(title) Taxable gross
receipts sales.
(3) Purchases
presumed taxable.
When a contractor and an exempt entity enter into a construction contract to
improve real property, which and the contract provides that the
contractor is to furnish the building materials, it is presumed until the
contrary is established, that deliveries of building materials to the
contractor are made pursuant to purchases made by the contractor.
(5) Exempt gross
receipts sales. A supplier’s sales of building materials made
directly to an exempt entity are not taxable, even though such tangible
personal property or items or property under s. 77.52 (1) (b), (c), or (d),
Stats., is used by the contractor in the erection of a building or
structure, or in the alteration, repair or improvement of real property for the
exempt entity. Suppliers of building materials may presume that a sale is made
directly to an exempt entity if the supplier receives a purchase order from the
exempt entity, and payment for such building materials is received directly
from the exempt entity.
SECTION 9. Tax 11.05(2)(title), (intro.), (a), (b), (d), and (g) are amended to read:
Tax
11.05(2)(title) Taxable
receipts sales.
(intro.)
Taxable
receipts of sales by governmental units include gross receipts
from the following:
(a) Admissions to facilities if the activity being conducted at the facility is amusement, athletic, entertainment or recreational in nature, except as provided in sub. (3) (r), (s), and (y).
(b)
Food and gift stand sales, including sales of, sandwiches, beverages
candy, soft drinks, prepared foods, cigarettes, ice cream,
confections, tobacco products, postcards, books, magazines and other
periodicals described in s. Tax 11.19, and novelties. Newspaper sales are
exempt.
(d) Charges for access to or use of athletic facilities such as baseball and softball diamonds, stadiums and gymnasiums, including entry fees and any charges for lights, heat, janitor fees and equipment, when used for activities which are amusement, athletic, entertainment or recreational in nature, except as provided in sub. (3) (r), (s), (y), and (zg).
(g)
Sales or rental of equipment and office furniture, including the rental of
motor vehicles to employees. Governmental units may not collect tax on
their sales of motor vehicles. Instead, the purchaser shall pay the tax to the
department of transportation when the motor vehicle is registered.
SECTION 10. Tax 11.05(2)(gm) is created to read:
Tax 11.05(2)(gm) Sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), trailers, semitrailers, all-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 11. Tax 11.05(2)(i) to (m), (o), (p), (r), and (s) are amended to read:
Tax
11.05(2)(i) Rental Furnishing of rooms or lodging
facilities, available to the public, to any person residing for a continuous
period of less than one month, except that the tax does not apply to the
receipts from accommodations furnished by any hospitals, sanatoriums, nursing
homes, colleges, or universities operated by governmental units or
furnishing rooms or lodging to a person through the sale of any kind of
time-share property.
(j)
Vending machines Sales of taxable items, property, or goods dispensed
through vending machines, and sales of access to or the use of
amusement devices, if the governmental unit owns the machine or device
or has control over the gross receipts from the machine and its contents
of the contents of the machine or the device.
(k)
Sales of soda water soft drinks and alcoholic beverages, fermented
malt beverages and intoxicating liquor, including sales of these items by
hospitals, sanatoriums, nursing homes, retirement homes, community-based
residential facilities as defined in s. 50.01 (1g), Stats., and day care centers
under ch. 48, Stats., to patients, employees or guests.
(L)
Charges for meals candy, soft drinks, dietary supplements and
prepared foods to “Huber” law prisoners.
(m) Sales of books and supplies, including sales by technical college districts. Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by elementary and secondary schools are exempt under s. 77.54 (4), Stats.
(o)
Auction sales of tangible personal property and items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., but excluding including
motor vehicles as provided in par. (g).
(p) Sales and delivery of trees, shrubs, or gravel to private purchasers. A sale of gravel is not taxable if the gravel is delivered to its final resting place and no further spreading, grading, raking, compacting, or leveling of the gravel will be completed after it is delivered by the seller.
(r)
The gross receipts from sales price received for parking and
providing parking space for motor vehicles and aircraft, and docking or
providing storage space for boats.
(s)
The gross receipts from sales price received for landscaping and
lawn maintenance services, including weed cutting in lawn and garden areas and
along highways, streets and walkways, but not charges for damages described in
sub. (3) (c).
SECTION 12. Tax 11.05(2)(t) is created to read:
Tax 11.05(2)(t) Charges for salvage vehicle inspections.
SECTION 13. Tax 11.05(3)(intro.), (a), (b), (d), and (j) are amended to read:
Tax
11.05(3)(intro.) Gross receipts of Receipts by
governmental units from the following are not taxable:
(a) Fees for licenses and permits, including tavern, cigarette, hunting and fishing, marriage, building and septic tank permits and I.D. cards, including original or duplicate library cards but not camping permits or I.D. cards issued exclusively for obtaining admission to facilities or events taxed under s. 77.52 (2) (a) 2., Stats.
(b)
Water delivered through mains. Wood residue used for fuel and sold for use in a
business activity. Coal, fuel oil, propane, steam, peat, fuel cubes produced
from solid waste and, wood, and biomass as defined in s.
196.378 (1) (ar), Stats., used for fuel, sold for residential use.
Electricity and natural gas sold for residential use and electricity sold
for farm use during the months of November through April. Fuel and
electricity sold for use in farming. Fuel and electricity consumed in
manufacturing tangible personal property or items or property under s. 77.52
(1) (b) or (c), Stats. “Sold” is defined in s. 77.54 (30) (b), Stats. In
this paragraph, “residential use” has the meaning in s. Tax 11.57 (2) (L) 7.
(d)
Rental of buildings or space, such as offices, warehouses and meeting rooms, not
used for activities which are not amusement, athletic, entertainment or
recreational in nature.
(j)
Commissions on vending machines or amusement devices when the governmental unit
does not own the machines or have control of the machines’ gross receipts
and contents machine or device, or does not have the right of access to
the machine or device for stocking or restocking or for removing the receipts
from the machine or device.
SECTION 14. Tax 11.05(3)(jm) is created to read:
Tax 11.05(3)(jm) Sales through vending machines of food and food ingredients, except for candy, soft drinks, dietary supplements, and prepared foods.
SECTION 15. Tax 11.05(3)(k) to (m), (o), (q), and (u) are amended to read:
Tax 11.05(3)(k) Sales or rental of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or services to other governmental units, schools or organizations which hold a certificate of exempt status.
(L)
Meals, food, food products or beverages Food and food ingredients, except soda water beverages, fermented malt beverages and
intoxicating liquor soft drinks
and alcoholic beverages, sold by hospitals, sanatoriums, nursing homes,
retirement homes, community-based residential facilities as defined in s. 50.01
(1g), Stats., and day care centers under ch. 48, Stats., on their premises to
patients, employees, residents or guests; and meals prepared food
sold to the elderly or handicapped by “mobile meals on wheels.”
(m)
Meals, food, food products or beverages, except
soda water beverages, fermented malt beverages and intoxicating liquor, Food and food ingredients furnished in
accordance with any contract or agreement by a public or private institution of
higher education, or paid for to a public or private institution of higher
education through the use of an account of the institution and furnished by the
institution, if either of the following conditions is met:
1.
The meals, food, food products or beverages food and food ingredients are furnished to
an undergraduate student, a graduate student or a student enrolled in a
professional school if the student is enrolled for credit at that institution,
provided the items are consumed by that student.
2.
The meals, food, food products or beverages food and food ingredients are furnished to a
national football league team.
(o)
Sales for resale, if supported by a valid resale exemption
certificate obtained from the purchaser.
(q)
Charges for filing, entering, docketing, recording, or furnishing
certified or uncertified copies of records by a state registrar, register of
deeds, health officer and clerk of court under ss. 59.42 59.40 (3),
59.57 59.43 (2), and 69.22, Stats., or by a filing officer under
s. 409.407 (2) 409.525, Stats., and fees charged by a register in
probate pursuant to s. 814.66, Stats. Also, charges by an “authority,” as
defined in s. 19.32 (1), Stats., for copying copies of a record
under s. 19.35 (1) (a), Stats., including charges for a search of records.
(u)
Gross receipts from telecommunications revenues Revenues
collected in establishing a “911” emergency telephone system under s.
256.35 (3), Stats., and the surcharge established by rule by the public
service commission under s. 256.35 (3m) (f), Stats., for customers of wireless
providers, as defined in s. 256.35 (3m) (a) 6., Stats.
SECTION 16. Tax 11.05(3)(y), (z), (zg), and (zr) are created to read:
Tax 11.05(3)(y) The sale or furnishing the use of recreational facilities on a periodic basis or other recreational rights, including but not limited to, membership rights, vacation services and club memberships, in connection with the sale or use of time-share property, if the facilities or rights are not available to persons who have not purchased the time-share property, other than guests.
(z) The collection of low-income assistance fees under s. 16.957 (4) (a) or (5) (a), Stats.
(zg) Admissions by a governmental unit to participate in any sports activity in which more than 50 percent of the participants are 19 years old or younger.
(zr) Police and fire protection fees imposed under s. 196.025 (6), Stats.
SECTION 17. Tax 11.05(4)(a) and (b)(intro.) are amended to read:
Tax 11.05(4)(a) Section 77.54 (9a),
Stats., exempts sales to and the storage, use or other consumption of tangible
personal property and items, property, and goods under s. 77.52(1) (b), (c)
and (d), Stats., and services by Wisconsin or by any agency of Wisconsin, or
any Wisconsin county, city, village, town, school district, county-city
hospital established under s. 66.0927, Stats., sewerage commission organized
under s. 281.43 (4), Stats., metropolitan sewerage district organized under ss.
200.01 to 200.15 or 200.21 to 200.65, Stats., local exposition district under
subch. II of ch. 229, Stats., joint local water authority created under s.
66.0823, Stats., university of Wisconsin hospitals and clinics authority or any
other unit of government, or any agency or instrumentality of one or more units
of government within Wisconsin the University of Wisconsin Hospitals and
Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance
Risk-Sharing Plan Authority, the Wisconsin Quality Home Care Authority, and the
Fox River Navigational System Authority; any county, city, village, town or
school district in this state; a county-city hospital established under s.
66.0927, Stats.; a sewerage commission organized under s. 281.43 (4), Stats. or
a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21
to 200.65, Stats.; any other unit of government in this state or any agency or
instrumentality of one or more units of government in this state; any federally
recognized American Indian tribe or band in this state; any joint local water
authority created under s. 66.0823, Stats.; any transit authority created under
ss. 59.58 (7) or 66.1039, Stats.; any corporation, community chest fund,
foundation or association organized and operated exclusively for religious,
charitable, scientific or educational purposes, or for the prevention of
cruelty to children or animals, except hospital service insurance corporations
under 613.80 (2), Stats., no part of the net income of which inures to the
benefit of any private stockholder, shareholder, member or corporation; a local
exposition district under subch II of ch. 229, Stats.; a local cultural arts
district under subch. V of ch. 229, Stats.; and a cemetery company or
corporation described under section 501 (c) (13) of the Internal Revenue Code,
if the tangible personal property or taxable services are used exclusively by
the cemetery company or corporation for the purposes of the company or
corporation. However, the exemption does not apply to governmental
units of other states or hospital service insurance corporations under s.
613.80, Stats.
(b)(intro.)
In addition to the invoice or
other billing document being in the name of the governmental unit, A
a Wisconsin governmental unit shall provide one of the following to a
retailer as proof that a sale to the governmental unit is exempt from tax:
Note to LRB: Amend the second note at the end of Tax 11.05(4)(f) as follows:
Note: The interpretations in s. Tax 11.05 are
effective under the general sales and use tax law on and after September 1,
1969, except: (a) Sales by vocational, technical and adult education schools
were exempt from July 1, 1972, through October 3, 1973; (b) Mobile meals on
wheels became exempt October 4, 1973, pursuant to Chapter 90, Laws of 1973; (c)
Admission fees to state parks became exempt on July 1, 1978, pursuant to
Chapter 418, Laws of 1977; (d) Sales of coal, fuel oil, propane, steam and wood
used for fuel became exempt July 1, 1979, and the electricity and natural gas
six-month exemption became effective on November 1, 1979, both pursuant to
Chapter 1, Laws of 1979; (e) A governmental unit’s charges for parking motor
vehicles and aircraft and docking and providing storage space for boats became
taxable June 1, 1980, pursuant to Chapter 221, Laws of 1979; (f) Landscaping
and lawn maintenance services became taxable on May 1, 1982, pursuant to
Chapter 317, Laws of 1981; (g) A governmental unit’s charges for copying public
records became exempt effective April 27, 1984, pursuant to 1983 Wis. Act 287,
later amended effective April 2, 1986, pursuant to 1985 Wis. Act 149 to clarify
that the exemption also applies to confidential records, and again amended
effective May 1, 1992, pursuant to 1991 Wis. Act 269, to include records under
s. 19.35 (1) (a), Stats.; (h) The exemption for peat and fuel cubes produced
from solid waste became effective April 2, 1986, pursuant to 1985 Wis. Act 149;
(i) The exemption for an agency or instrumentality of a Wisconsin governmental
unit became effective June 1, 1986, pursuant to 1985 Wis. Act 149; (j) Wood
residue used for fuel by businesses became exempt on September 1, 1987,
pursuant to 1987 Wis. Act 27; (k) The exemption for admissions to a museum
operated by a nonprofit corporation under lease with the state historical
society became exempt July 20, 1985, pursuant to 1985 Wis. Act 29; (L) The
exclusion of hospital service insurance corporation from the definition of
exempt entity became effective September 1, 1985, pursuant to 1985 Wis. Act 29;
(m) Revenues from establishing a “911” emergency telephone system became exempt
August 1, 1987, pursuant to 1987 Wis. Act 27; (n) State park camping fees
became exempt effective September 1, 1989, pursuant to 1989 Wis. Act 31; (o)
The exemption for animal identification tags and standard samples by the
Wisconsin department of agriculture, trade and consumer protection became
effective October 1, 1993, pursuant to 1993 Wis. Act 16; (p) The exemption for
fuel used in farming became effective October 1, 1991, pursuant to 1991 Wis.
Act 39; (q) The requirement that meals must be served on the premises of
hospitals, nursing homes, etc., for exemption to apply became effective October
1, 1991, pursuant to 1991 Wis. Act 39; (r) The exemption for sales to a local
exposition district became effective April 26, 1994, pursuant to 1993 Wis. Act
263; (s) The exemption for sales of meals by community-based residential
facilities became effective June 1, 1994, pursuant to 1993 Wis. Act 332; (t)
The exemption for sales to the University of Wisconsin Hospitals and Clinics
Authority became effective July 29, 1995, pursuant to 1995 Wis. Act 27; and
(u) The exemption for certain meals, food, food products and beverages
furnished by institutions of higher education was revised to apply only if the
items are furnished to an undergraduate student, a graduate student or a
student enrolled in a professional school if the student is enrolled for credit
at that institution and if the items are consumed by that student, or the items
are furnished to a national football league team, effective for contracts or
agreements entered into on or after October 14, 1997, pursuant to 1997 Wis. Act
27, and further revised to include certain meals, food, food products or
beverages paid for to an institution of higher education through the use of an
account of the institution, if the items are furnished by the institution,
effective December 31, 1997, pursuant to 1997 Wis. Act 41; (v) The
exemption for electricity sold for use in farming was expanded to include sales
of electricity during the entire year, effective for sales on or after May 1,
2000, pursuant to 1999 Wis. Act 9; (w) The exemption for sales from the
collection of public benefit fees became effective October 29, 1999, pursuant
to 1999 Act 9; (x) The exemption for use of recreational facilities in
connection with the sale of time-share property became effective December 1,
1999, pursuant to 1999 Act 9; (y) The exemption for certain items sold from a
vending machine became effective July 1, 2001, pursuant to 1999 Act 9; (z) The
exemption for regional transit authorities and the Wisconsin Home Health Care
Authority became effective July 1, 2009 pursuant to 2009 Act 28; and (zm) The
exemption for federally recognized American Indian tribes or bands in Wisconsin
became effective August 1, 2009 pursuant to 2009 Act 28.
SECTION 18. Tax 11.08 is repealed and recreated to read:
Tax 11.08 Durable medical equipment, mobility-enhancing equipment, and prosthetic devices. (1) general. Certain items may qualify as either “durable medical equipment” or a “prosthetic device,” depending on whether or not the item is worn in or on the body. The distinction between when an item is “durable medical equipment” or a “prosthetic device” is important because an item that is “durable medical equipment” is exempt only when purchased for use by a human being in a person’s home, whereas the purchase of a “prosthetic device” for a human being is exempt regardless of whether or not it is purchased for use in a person’s home.
(2) Durable medical equipment. Section 77.54 (22b), Stats., exempts the sales price from the sale of and the storage, use, or other consumption of durable medical equipment that is for use in a person’s home, along with repair parts, replacement parts, and accessories for that equipment, if the equipment is used for a human being.
(a) ”Durable medical equipment” is defined in s. 77.51 (3pm) to mean “…equipment, including the repair parts and replacement parts for the equipment that is primarily and customarily used for a medical purpose related to a person; that can withstand repeated use; that is not generally useful to a person who is not ill or injured; and that is not placed in or worn on the body. ‘Durable medical equipment’ does not include mobility-enhancing equipment.”
(b) 1. “Use at a person’s home” means that the equipment is sold to an individual for use where they are living, regardless of whether the individual resides in a single family home, apartment building, nursing home, assisted living center, convalescent home, or school dormitory.
2. Durable medical equipment is not for use in a person’s home if it is purchased by a hospital, clinic, nursing home, assisted living center, convalescent home, dental office, chiropractor or optician’s office. In addition, purchases of durable medical equipment by a nursing home, assisted living center and convalescent home are not for use in a person’s home even if the equipment is purchased for use by the residents of the nursing home, assisted living center or convalescent home.
(c) Examples of durable medical equipment that qualify for exemption from Wisconsin sales and use tax if they are purchased for use in a person’s home include the following:
Alternating pressure pads and decubitus pads (eliminate bed sores).
Anesthesia equipment.
Anti-thrombolytic pumps.
Apnea monitors.
Aqua K pumps and pads.
Aspirators (suction pumps).
Audiology equipment.
Bed pans, commodes, urinals.
Billie lights (used for yellow jaundice).
Blanket cradles.
Blood glucose monitoring machines.
Blood pressure machines and cuffs.
Cardiology equipment.
Cauterization equipment.
Cofflator.
Crash carts.
Dialyzers.
Defibrillators (not implanted).
Drug infusion pumps.
Examination tables.
Forceps.
Heat lamps.
Heating pads.
Hospital beds and mattresses.
Incubators and isolettes.
Injection guns for drug delivery.
Infra-red lamps and bulbs for heat therapy.
Intra-aortic balloon pump.
Intravenous stands.
IV therapy arm boards.
Kinetic therapy tables.
Lambs wool pads.
Laser equipment.
Lithotripters.
Mammography equipment.
Medical atomizers.
Medical instruments.
Medical monitoring equipment.
Mini dopplers (measures blood flow & rate).
Nebulizers.
Nerve stimulator programmers.
Ophthalmoscopes.
Ostomy irrigation sets.
Otoscopes.
Over the bed tray tables.
Oxygen concentrators and regulators.
Pacemaker programmers and transmitters.
Patient positioners.
Percussors.
Pillows (abduction, cervical, orthotic).
Platelet separator.
Radiology equipment.
Respirators and respiratory bags.
Respiratory humidifies (connects to oxygen equipment).
Resuscitators.
Scales (chair and sling).
Speech aids (hand held).
Stethoscopes.
Stirrups.
Stretchers.
Suction machines and regulators.
Surgical equipment.
Surgical tables.
Thermometers (oral, rectal, ear, etc.).
Tourniquets (pneumatic and non-pneumatic).
Traction equipment.
Transfusion equipment.
Ultrasound equipment.
Vaporizers.
Ventilators, anesthesia.
Wheelchair cushions (brace or support).
Whirlpools (portable over-the-tub only).
X-ray equipment.
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc’s. Rules and Procedures, available at www.streamlinedsalestax.org.
(d) Examples of items that are not durable medical equipment include the following:
Air purifiers.
Air conditioners, dehumidifiers and humidifiers.
Blankets and sheets.
Closed caption devices.
Cubicle curtains.
Disposable or single use instruments or equipment.
Eating utensils including adjustable utensils.
Exercise equipment.
Hot and cold packs.
Massagers, massage appliances and furniture.
Needles.
Pillows not specifically designed for medical purposes.
Safety equipment such as goggles and shields.
Sitz baths.
Spas not specifically manufactured for medical purposes.
Specimen containers.
Syringes.
Telephone alert systems.
Visually impaired equipment and supplies.
Waterproof sheeting.
(3) Mobility-enhancing Equipment. Section 77.54 (22b), Stats., exempts from Wisconsin sales and use tax the sales price from the sale of mobility-enhancing equipment for human use and its accessories.
(a) “Mobility-enhancing equipment” is defined in s. 77.51(7m), Stats., to mean “…equipment, including the repair parts and replacement parts for the equipment, that is primarily and customarily used to provide or increase the ability of a person to move from one place to another; that may be used in a home or motor vehicle; and that is generally not used by a person who has normal mobility. ‘Mobility-enhancing equipment’ does not include a motor vehicle or any equipment on a motor vehicle that is generally provided by a motor vehicle manufacturer. ‘Mobility-enhancing equipment’ does not include durable medical equipment.”
(b) Examples of mobility-enhancing equipment for a human being that are exempt include the following:
Adjustable or raised toilet seat.
Tub and Shower Stools.
Bed Pull-up Ts.
Canes.
Crutches.
Grab bars and hand rails.
Lift chairs.
Patient lifts.
Scooters and transporters for disabled persons.
Specialty chairs.
Transfer belts and benches.
Walkers.
Wheelchairs and ramps.
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org.
(4) Prosthetic devices. Section 77.54 (22b), Stats., exempts from Wisconsin sales and use tax the sales price from the sale of prosthetic devices and accessories for prosthetic devices that are used for a human being.
(a) “Prosthetic device” is defined in s. 77.51 (11m), Stats., to mean “…a device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.”
(b) A device is “worn in or on the body” if the device is implanted or attached so that it becomes part of the body or if it is carried by the body and does not hinder the mobility of the individual. Items that are attached to the body, but are either stationary or placed on a pole, cart or other device that makes them portable are durable medical equipment and not prosthetic devices. Therefore, these items are only exempt if they are purchased for use in a person’s home.
(c) Examples of prosthetic devices for a human being which are exempt include:
Abdominal belts and supports
Access ports (Port-a-cath).
Ace bandages.
Anti-embolism stockings.
Arch supports.
Arm slings.
Arterial prostheses (artificial arteries implanted into humans).
Artificial body parts (eyes, heart valves, limbs, etc.).
Body implants (bone, hip, knee, ocular, etc.).
Bone cement and wax.
Bone pins, plates, nails, screws, etc.
Braces.
Breast implants.
Burn garments.
Casts, foam padding inside, any part of cast.
Catheters.
Cervical collars.
Cochlear implant devices.
Collagen implants.
Colostomy devices.
Compression sleeves and stockings.
Contact lenses.
Dentures.
Drainage catheters.
Drains, shunts.
Elastic bandages and supports (wrist, ankle, knee, etc.).
Eye glasses.
Gastric bands and intragastric balloons.
Grafts (Vascular, Dacron).
Head halters.
Hearing aids and batteries.
Heel protectors.
Insulin pumps.
Knee immobilizers.
Mastectomy surgical bras.
Maxillofacial devices (implanted).
Nasal cannulas.
Orthopedic shoes.
Ostomy adhesives, barriers, catheters, leg bags and straps, drain bags and pouches, drain valves and tubes, stoma caps, tubing, hernia belts.
Pacemakers.
Penile pumps and implants.
Pressure garments (edema gloves and mast pants).
Salem sump (used to fill or empty stomach).
Seraphim (barrier to separate tissue in the body).
Shoe lifts and inserts.
Slings.
Speaking valves.
Sphincters.
Splints, air or other.
Staples and sutures.
Stents.
Stump shrinkers.
Suspensories.
Synthetic skin implants.
Tissue expander (stimulates skin growth).
Trachea tubes.
Tracheostomy
Traction devices (cervical, pelvic).
Trusses.
Vena cava filters.
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org.
(d) The following are examples of items which if worn in or on the body are also exempt as prosthetic devices:
Bone growth stimulators.
CPAP machines.
Defibrillator and leads.
Electronic nerve and muscle stimulators.
Incontinence control devices.
Infusion pumps.
Programmable drug infusion devices.
Speech generating devices.
TENS devices (nerve stimulators).
Note: If these items are not worn in or on the body, they are not exempt as prosthetic devices, but may be exempt as durable medical equipment if for use by a person in a person’s home.
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org.
(5) Parts, accessories and service. The sales price from the sale of repair and replacement parts, accessories and services to the exempt property identified in s. 77.54 (22b), Stats., is also exempt.
(6) Diabetes supplies. Section 77.54 (28), Stats., exempts from Wisconsin sales and use tax, the “…sales price from the sale of and the storage, use or other consumption to or by the ultimate consumer of supplies used to determine blood sugar level.”
Example: The sales price from the sale of blood glucose test strips is exempt from sales and use tax.
Note: Section Tax 11.08 interprets s. 77.54 (22b), Stats.
Note: The interpretations in s. Tax 11.08 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to 1983 Wis. Act 27; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to 1985 Wis. Act 29; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar levels became exempt March 1, 1989, pursuant to 1987 Wis. Act 399; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to 1989 Wis. Act 31; (e) The exemption for adaptive equipment for a handicapped person’s vehicle became exempt effective June 1, 1990, pursuant to 1989 Wis. Act 238, renumbered by 1989 Wis. Act 359; and (f) The exemption for parts and accessories became effective August 15, 1991, pursuant to 1991 Wis. Act 39.
SECTION 19. Tax 11.09(title), (1), (2), and (3) are repealed and recreated to read:
Tax 11.09 Drugs. (1) Definition. For the exemption in s. 77.54 (14), Stats., “drug” means “…a compound, substance, or preparation, or any component of them, other than food and food ingredients, dietary supplements, or alcoholic beverages, to which any of the following applies:
(a) It is listed in the United States Pharmacopoeia, Homeopathic Pharmacopoeia of the United States, or National Formulary, or any supplement to any of them.
(b) It is intended for use in diagnosing, curing, mitigating, treating or preventing a disease.
(c) It is intended to affect a function or structure of the body.”
(2) Items which are drugs. Drugs include the following items described in sub. (1):
Acne medications.
Alcohol (rubbing).
Analgesics (aspirin, acetaminophen, ibuprofen, ketoprofen, naproxen, etc.).
Antacids.
Antibiotic creams and ointments.
Antifungal creams and sprays.
Antihistamines.
Antiseptics (betadyne, iodine).
Birth control (pills and patches and implants).
Burn remedies.
Contraceptives (creams, gels, foams and medicated condoms).
Cold and cough medicines, drops and lozenges.
Contact lens solutions.
Decongestants.
Dermal fillers (injectable).
Dialysis dialysate solution.
Diaper rash creams.
Enema preparations.
Eye drops.
Gases – medical grade (air, carbon dioxide, helium, nitrogen, oxygen).
Hand sanitizers.
Hydrogen peroxide.
Insulin.
Laxatives.
Lip balm.
Nutrition formulas (enteral and parenteral with a drug facts label).
Oxygen.
Prescription medicines.
Radioactive isotopes.
Rubs, mentholated.
Sleeping pills.
Smoking cessation products such as Nicorette gum, lozenges and patches.
Sterile water (for injections).
Sterile normal saline .9% (IV or irrigation).
Vaccines.
Yeast infection medications.
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org.
(3) Items which are not drugs. Items which are not described in sub. (1) and which are not drugs include:
(a) Alcoholic beverages, soft drinks and distilled water.
(b) Durable medical equipment.
(c) Prosthetic devices.
(d) Mobility-enhancing equipment.
(e) Dietary supplements.
SECTION 20. Tax 11.09(4)(title), (intro.), (a) to (d), and (f) and (5)(title), (intro.), and (b) are amended to read:
Tax
11.09(4)(title) Exempt
sales or use of medicines drugs.
(intro.) Medicines
Drugs shall be exempt if:
(a)
Prescribed by a licensed physician, surgeon, podiatrist or dentist 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. However, oxygen prescribed by a licensed physician, surgeon,
podiatrist or dentist shall be exempt even if it is not dispensed by a
registered pharmacist.
(b) Sold to a licensed physician, surgeon, podiatrist, dentist, or hospital for the treatment of a human being.
(c) Furnished by a licensed physician, surgeon, podiatrist, or dentist to a patient who is a human being for treatment of the patient.
(d)
Furnished by a hospital for treatment of any person by pursuant to
the order of a licensed physician, surgeon, dentist, or podiatrist. For
this exemption, “hospital” has the meaning described in s. 50.33 (2), Stats.,
and does not include nursing homes.
(f)
Furnished without charge to a physician, surgeon, nurse anesthetist, advanced
practice nurse, osteopath, dentist licensed under ch. 447, Stats., podiatrist
licensed under ch. 448, Stats., or optometrist licensed under ch. 449, Stats.,
if the medicine drug may not be dispensed without a prescription.
(5)(title) Taxable sales of medicines
drugs.
(intro.)
Taxable sales of medicines drugs include:
(b) Retail
sales of medicines drugs for pets and work stock, but not for
farm livestock.
SECTION 21. Tax 11.11(1) is amended to read:
Tax
11.11(1) General. Section 77.54
(26), Stats., provides a sales and use tax exemption for tangible personal
property and items and property under s. 77.52 (1) (b) and (c), Stats.,
which becomes a component part of a certain waste treatment facility
facilities.
Note to LRB: Replace the note at the end of Tax 11.11(2) with the following:
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, Bureau of Utility and Special Taxes, PO Box 8971, Madison WI 53708-8971; telephone (608) 266-8162; send an e-mail to utility@revenue.wi.gov; or access the department’s internet web site at www.revenue.wi.gov/contact/slfbust.
SECTION 22. Tax 11.11(2m)(a) is renumbered 11.11(2m)(a)(intro.) and amended as renumbered to read:
Tax 11.11(2m)(a)(intro.)
An industrial waste treatment facility is any property taxed under ch. 70,
Stats., that is built, constructed or installed as a unit used for the
treatment of liquid or other wastes resulting from any process of industry,
manufacture, trade, business or the development of any natural resource purchased
or constructed as a waste treatment facility used exclusively and directly to
remove, store, or cause a physical or chemical change in industrial waste or
air contaminants for the purpose of abating or eliminating pollution of surface
waters, the air, or waters of the state if that property is not used to grow
agricultural products for sale. In this paragraph, “used exclusively” means to
the exclusion of all other uses except:
SECTION 23. Tax 11.11(2m)(a)1. and 2. are created to read:
Tax 11.11(2m)(a)1. For other use not exceeding 5% of total use.
2. To produce heat or steam for a manufacturing process, if the fuel consists of either 95% or more industrial waste that would otherwise be considered superfluous, discarded, or fugitive material or 50 percent or more of wood chips, sawdust, or other wood residue from the paper and wood products manufacturing process, if the wood chips, sawdust, or other wood residue would otherwise be considered superfluous, discarded, or fugitive material.
SECTION 24. Tax 11.11(2m)(b), (3)(intro.) and (5)(a) and (c)1. to 3. are amended to read:
Tax
11.11(2m)(b) Tangible personal property and items and property under s.
77.52 (1) (b) and (c), Stats., becoming a component part of an industrial
waste treatment facility is exempt from the sales and use tax under s. 77.54
(26), Stats., if the facility qualifies for property tax exemption under s.
70.11 (21) (a), Stats.
Note to LRB: Replace the note at the end of Tax 11.11(2m)(b) with the following:
Note: Refer to s. Tax 12.40 for information related to the property tax exemption for industrial waste treatment facilities. For more information regarding the property tax exemption for industrial waste treatment facilities of manufacturers write or call the district office of the Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessments. To locate the district office, write or call Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessment, PO Box 8971, Madison WI 53708-8971; telephone (608) 266-1147. The web site is www.revenue.wi.gov/contact/slfbmta. To ascertain whether a non-manufacturing property would be exempt under s. 70.11(21), Stats., owners may refer to the Wisconsin Property Assessment Manual or contact the local property tax assessor.
(3)(intro.) Municipal waste
treatment exemption.
Tangible personal property and items and property under s. 77.52 (1) (b) and
(c), Stats., which becomes 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.:
Note to LRB: Replace the note at the end of Tax 11.11(3)(d)2. with the following:
Note: For more information regarding the exemption for municipal treatment facilities, write or call Wisconsin Department of Revenue, Bureau of Customer Service, Mail Stop 5-77, PO Box 8902, Madison WI 53708-8902, telephone (608) 266-2772. The web site is www.revenue.wi.gov/contact/pcs.html#cust.
(5)(a) Exempt purchases. The sales and use tax exemption extends to and includes the purchases of tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., by a contractor-installer who incorporates the property into an approved utility waste treatment facility or who incorporates the property into an industrial waste treatment facility or a municipal waste treatment facility. The contractor-installer shall certify the intended exempt use of the item to each supplier in order to relieve the supplier of the duty of collecting and reporting the tax on the sales. Certification of exempt use shall be made on a Wisconsin sales and use tax exemption certificate, form S-211.
(c)1. ‘Utility property taxed under ch. 76, Stats.’ A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., that becomes a component part of a utility waste treatment facility that has not been approved by the department for a property tax exemption under s. 76.025 (1), Stats.
2. ‘Industrial property taxed under ch. 70, Stats.’ Approvals are not required for industrial waste treatment facilities. A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., that becomes a component part of a facility that is determined to not qualify for a waste treatment facility property tax exemption under s. 70.11 (21), Stats.
3. ‘Municipal waste treatment facilities.’ Approvals are not required for municipal waste treatment facilities. A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or items or property under s. 77.52(1) (b) or (c), Stats., that becomes a component part of a facility that is determined not to be a municipal waste treatment facility as provided in sub. (3).
SECTION 25. Tax 11.12(title), (1), (2)(intro.), (d), and (f) are amended to read:
Tax 11.12(title) Farming, including dairy farming,
agriculture, horticulture, and floriculture, silviculture, and
custom farming services.
(1) Statutes. Section 77.54
(3) and (3m), Stats., provides exemptions for certain sales of tangible personal property, or items or
property under s.77.52 (1) (b) or (c), Stats., to persons who are engaged
in farming as a business enterprise, including dairy farming,
agriculture, horticulture, or floriculture, silviculture, and
custom farming services as a business enterprise.
(2)(intro.) Definitions. In this section
and s. 77.54 (3), (3m), and (30) (a) 3. and 5., and (33),
Stats.:
(d)
“Farm livestock medicine drugs” means any substance or
preparation intended for use by external or internal application to farm
livestock used in the diagnosis, cure, mitigation, or
treatment or prevention of disease and which is commonly recognized
by veterinarians as a substance or preparation intended for that use in
farm livestock. This includes antibiotics, dewormers, drugs,
mastitis treatments, medicated shampoos and vaccines in the form of
boluses, capsules, feed additives, fluids, pills, powders, ointments and
salves. This also includes disinfectants, flea powder and flea sprays,
mastitis indicators, teat dips, udder wash and vitamins. “Farm livestock medicine
drug” does not include medicines drugs for work stock, riding
horses used in racing, pleasure riding or show or small domestic
animals, including dogs and cats. It also does not include vitamins,
dewormers, teat dip, udder wash, disinfectants, shampoos, pet foods, flea
powder and flea sprays, laboratory equipment used by a veterinarian, non-medicated
shampoos, non-medicated pet foods, and non-medicated bandages, or plaster
of paris that is used to set an animal’s broken bone.
(f) “Farming” means the business of producing food
products or other useful crops by tilling and cultivating the soil or by
raising cattle, sheep, llamas, poultry, domesticated rabbits or other animals
which produce a food product or which are themselves a food product. In
addition, consistent with chs. 29 and 94, Stats., “farming” includes raising
earthworms, pheasants, foxes, fitch, nutria, marten, fisher, mink, chinchilla,
rabbit, caracul and bees; producing honey products by a beekeeper of 50 or more
hives; commercial raising of fish for food; commercial breeding and raising of
horses and llamas for sale; and raising ginseng, mushrooms and sod. “Farming”
does not include home gardening and other similar noncommercial activities;
breeding or raising dogs, cats, other pets or animals intended for use in
laboratories; operating sporting or recreational facilities, such as riding
stables or shooting preserves; operating stockyards, slaughterhouses or feed
lots as described in par. (g); lumbering and logging, and pulpwood and
sawmill operations; milling and grinding grain; and preparing sausage, canned
goods, jellies, juices or syrup.
SECTION 26. Tax 11.12(2)(k) is repealed and recreated to read:
Tax 11.12(2)(k) 1. “Silviculture” means the business of raising trees for timber, lumber or other wood products. Silviculture includes the logging of timber when it is performed by a person engaged in the business of silviculture and the logging is conducted with respect to that person’s silviculture activity. Silviculture does not include pulp or sawmill operations.
2. “Logging” as used in subd. 1. includes the following activities which occur while in the field:
a. The felling of trees.
b. The delimbing of trees.
c. The cutting of trees into logs, poles, or other units.
d. The transportation of cut timber to a sawmill.
e. Activities conducted in the forest incidental to the felling, cutting and removal of trees from the forest such as the clearing of the forest to allow access to and removal of the timber from the forest land.
SECTION 27. Tax 11.12(4)(a)(intro.) and 1. are amended to read:
Tax 11.12(4)(a)(intro.) Section 77.54 (3) (a),
Stats., exempts: “The gross receipts sales price from the
sales of and the storage, use or other consumption of tractors and machines,
including accessories, attachments, and parts therefore , lubricants,
nonpowered equipment, and other tangible personal property or items or property
under s. 77.52 (1) (b) or (c), Stats., that are used exclusively and
directly, or are consumed or lose their identities, in the business of
farming, including dairy farming, agriculture, horticulture, floriculture,
silviculture, and custom farming services, but excluding automobiles,
trucks, and other motor vehicles for highway use; excluding personal property
that is attached to, fastened to, connected to or built into real property or
that becomes an addition to, component of or capital improvement of real
property and excluding tangible personal property or items or property under
s. 77.52(1) (b) or (c), Stats., used or consumed in the erection of
buildings or in the alteration, repair, or improvement of real property,
regardless of any contribution that that personal property, or item or
property under s. 77.52 (1) (b) or (c), Stats.,, makes to the production
process in that building or real property and regardless of the extent to which
that personal property, or item or property under s. 77.52 (1) (b) or (c),
Stats., functions as a machine, except as provided in par.(c).” For
purposes of this section:
1. ‘Directly.’ Items used “directly” in farming
include a plow and , a combine, and a milking machine.
Items of “indirect” or non-qualifying use include typewriters,
electric drills or other repair tools, dog and cat food computers
used for tracking prices or inventories or for word processing, and lawn and
garden tractors used for mowing lawns and tilling home gardens.
SECTION 28. Tax 11.12(4)(a)2g. and 2r. are created to read:
Tax 11.12(4)(a)2g. ‘Consumed.’ Property is “consumed” in farming when it is used 100% in farming. Items consumed in farming include repair tools used to repair farm machinery or farm equipment, insect control strips, computers used indirectly but solely in the business of farming, test kits to test milk for contaminants, and lubricants used in farm tractors and machines.
2r. ‘Lose their identities.’ Property “loses its identity in farming” when it is used 100% in farming. Property losing its identity in farming includes disinfectants and sanitizers such as iodine and chlorine, water softener salt, and detergents.
SECTION 29. Tax 11.12(4)(a)3., 4.b. to d., and 5.b. are amended to read:
Tax 11.12(4)(a)3. ‘Accessories, attachments and
parts.’ Included within the exemption are accessories, attachments and parts
for tractors and machines used exclusively and directly, or which are
consumed or lose their identities in agriculture the business of
farming. “Accessories” and “attachments” include devices designed to be
mounted on a machine, such as a slow moving vehicle sign attached to a
tractor or pipes attached to an irrigation pump, or devices to be
pushed or pulled by a machine such as a farm wagons wagon and
pipes attached to irrigation pumps or a plow. A machine “part”
means a durable unit of definite, fixed dimensions and includes tractor cabs
tires, oil filters and slow−moving−vehicle signs fuel
pumps. Canvas covers and paint for exempt machines are exempt. “Parts”
does not include fluids such as antifreeze or lubricants, hydraulic
fluids, or diesel fuel anti-gel additives. These are “supplies”
“other tangible personal property” rather than “parts.” and are not
exempt.
4.b.
“Machines which qualify for exemption”
include, if not realty improvements, all-terrain vehicles or trucks not
licensed for highway use, balers, chain saws for orchard or logging use
but not for use in lumbering, pulping or cutting firewood for
personal use or for use in pulpwood or sawmill operations, choppers, corn
pickers, crop conditioners, crop thinners, cultivators, discs, drags, end
loaders, electric clippers and hoof trimmers, electric dehorners, electric
fence chargers not fencing or insulators, electric foggers, fork lifts,
harrows, harvesting combines, hay wagons, manure spreaders, mowers, planters,
plows, powered posthole diggers, pumps and associated piping for irrigation,
rock pickers, rotary hoes, space heaters not for residential use, sprayers,
stalk shredders and windrowers.
c. “Machines which do not qualify for exemption” include tangible personal property and items and property under s. 77.52(1) (b) and (c), Stats., that is attached to, fastened to, connected to or built into real property or that becomes an addition to, component of or capital improvement of real property. Also, tangible personal property, and items and property under s. 77.52 (1) (b) and (c), Stats., used or consumed in the erection of buildings or in the alteration, repair or improvement of real property, regardless of any contribution that the personal property, or item or property under s. 77.52(1) (b) or (c), Stats., makes to the production process in that building or real property and regardless of the extent to which that personal property, or item or property under s. 77.52(1) (b) or (c), Stats., functions as a machine does not qualify for exemption. However, there is an exception for those items specifically mentioned in subd. 4. d.
d. The following items are deemed by statute to
retain their character as tangible personal property and qualify for exemption,
regardless of the extent to which they are fastened to, connected to or built
into real property: auxiliary power generators, bale loaders, barn cleaners and
elevators, conveyors, feed elevators and augers, grain dryers and grinders,
irrigation implements, milk coolers, milking machines, including piping,
pipeline washers and compressors, top and bottom silo unloaders and powered
feeders, excluding platforms and troughs constructed from ordinary building
materials.
5b.
Certain machines in addition to those in subd.
4. qualify for the exemption if purchased by farmers directly from retailers,
even though they are used to make realty improvements after the sale
they are affixed to realty by the farmer, or someone hired by the farmer.
Machines included are automated livestock feeder bunks, but not ordinary
building materials; automatic stock waterers powered by electricity or water
pressure and built into a permanent plumbing system; automatic water softeners,
such as for milkhouses; barn fans and blowers and other ventilating units; unit
heaters and other heating units; water heaters serving production areas; and
water pumps serving production areas.
SECTION 30. Tax 11.12(4)(a)6. is repealed and recreated to read:
Tax 11.12(4)(a)6. ‘Motor vehicles and their accessories, attachments and parts.’ Specifically excluded from the exemption are “motor vehicles for highway use,” which includes motor trucks, automobiles, station wagons, buses and motorcycles. The exclusion from the exemption also applies to accessories, attachments and parts for motor vehicles for highway use. “For highway use” means registered for that use. Charges for labor for the repair of vehicles registered for highway use, such as nurse tanks and trailers, are taxable. Sales of parts for vehicles registered for highway use which are used exclusively and directly in farming or are consumed in farming, such as nurse tanks and trailers, are not taxable.
Note to LRB: Insert the following note at the end of Tax 11.12(4)(a)6.
Note: Nurse tanks may qualify for the exemption provided in s. 77.54 (5) (d), Stats., as mobile units used for mixing and processing if they have pumps to blend and mix the product.
SECTION 31. Tax 11.12(4)(a)7.a. is amended to read:
Tax
11.12(4)(a)7.a. Tools used in construction of
or for making repairs to real estate or farm machinery, such as
block and tackle sets, chain hoists, cutters, electric drills, hammers, powered
or nonpowered hand tools, planers, sharpeners, sanders, saws and
wheelbarrows.
SECTION 32. Tax 11.12(4)(a)7.c. is repealed
SECTION 33. Tax 11.12(4)(a)8. and (b)(intro.), 2., and 6.c. are amended to read:
Tax 11.12(4)(a)8. ‘Sales and use tax.’ A person who
buys without tax by claiming the farming exemption owes the sales tax at the
time the person uses the property or item purchased 5% or more of
total use for a nonexempt purpose in a taxable manner or for a taxable
purpose. Property, items, or goods purchased without tax by claiming
they will be used exclusively and directly in the business of farming, become
subject to the tax when use of the property, items, or goods for nonexempt
purposes exceeds 5% of total use. Property, items, or goods purchased without
tax by claiming they will be consumed or lose their identity in the business of
farming, become subject to the tax when the property, items, or goods are used
for a purpose other than for an exempt use in the business of farming.
(b)(intro.) Section 77.54 (3m), Stats., exempts: “The
gross receipts sales price from the sale of and the storage, use
or other consumption of the following items if they are used exclusively by the
purchaser or user in the business of farming; including dairy farming,
agriculture, horticulture, floriculture, silviculture, and custom
farming services:
(a) Seeds for planting.
(b) Plants.
(c) Feed.
(d) Fertilizer.
(e) Soil conditioners.
(f) Animal bedding.
(g) Sprays, pesticides and fungicides.
(h) Breeding and other livestock.
(i) Poultry.
(j) Farm work stock.
(k) Baling twine and baling wire.
(L) Containers for fruits, vegetables, grain, hay, silage and animal wastes.
(m) Plastic bags, plastic sleeves and plastic sheeting used to store or cover hay or silage.” “Exclusively” as used in s. 77.54 (3m), Stats., and in this section means that the items mentioned in s. 77.54 (3m), Stats., are used solely in farming to the exclusion of all other uses, except that the sales and use tax exemption for those items will not be invalidated by an infrequent and sporadic use other than in farming. For purposes of this section:
2. ‘Plants.’ “Plants” include herbs, shrubs or young trees, slips, seedlings or saplings planted or ready to plant.
6.c. Farmers or contractors may purchase animal waste containers or the component parts of animal waste containers without tax, by issuing their supplier a properly completed “single purchase” exemption certificate.
SECTION 34. Tax 11.12(4)(b)6.e. is repealed
SECTION 35. Tax 11.12(4)(b)7. is amended to read:
Tax 11.12(4)(b)7. ‘Semen.’ Semen used for artificial insemination of livestock is exempt under s. 77.54 (27), Stats.
Note to LRB: Delete the note at the end of Tax 11.12(4)(b)7.
SECTION 36. Tax 11.12(4)(c) and (d) are created to read:
Tax 11.12(4)(c) Section 77.54(30)(a)3., Stats., exempts the sales price from the sale of: “Electricity sold for use in farming, including but not limited to agriculture, dairy farming, floriculture, silviculture, and horticulture.” Section 77.54(30)(a)5., Stats., exempts the sales price from the sale of: “Fuel sold for use in farming, including but not limited to agriculture, dairy farming, floriculture, silviculture, and horticulture.”
1. Electricity and fuel sold for use in farming includes electricity and fuel sold for use in performing custom farming services.
2. Fuel includes oxygen used to enrich a fuel mixture, or oxygen and acetylene used in a welding process.
(d) Section 77.54 (33), Stats., exempts “The sales price from sales of and the storage, use or other consumption of drugs used on farm livestock, not including workstock.”
SECTION 37. Tax 11.12(5)(a) and (6)(a)1. are amended to read:
Tax 11.12(5)(a) The Sales tax imposed under
s. 77.52 (2) (a) 10., Stats., does not apply to the repair, service,
alteration, fitting, cleaning, painting, coating, towing, inspection or
maintenance of tangible personal property and items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., which farmers if
the farmer may purchase the property, item, or good without tax
under s. 77.54 (3), and (3m), (27), (30)(a)3. and 5., and (33),
Stats. , are also exempt from the sales and use tax under s. 77.52 (2) (a)
10., Stats. Thus, farmers may claim an exemption on the repair services for
their tractors and other farm machines, but not on their furnaces, office
machines or electric drills. Similarly, they may claim an exemption when having
draft horses or horses used exclusively in farming for breeding or to check on
or herd livestock shod, but not when having horses ridden for pleasure shod.
Note to LRB: Insert the following examples at the end of Tax 11.12(5)(a):
Examples: 1) Charges to a farmer for labor to replace a water pump on a motor vehicle registered for highway use are taxable. However, charges to a farmer for labor to replace a water pump on a tractor used exclusively and directly in farming are not taxable.
2) A farmer may claim an exemption when having draft horses or horses used exclusively in farming for breeding or to check on or herd livestock shod, but not when having horses ridden for pleasure shod.
(6)(a)1.
‘Custom work.’ The performance of custom farm services by one farmer for
another farmer, such as plowing a field, planting seeds, harvesting hay
or grain, or logging timber.
SECTION 38. Tax 11.12(6)(b)(title) and (intro.) are repealed and recreated to read:
Tax 11.12(6)(b) Services to tangible personal property. Charges for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection or maintenance of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., are taxable, unless at the time such services are performed, a sale in Wisconsin of the type of property, item or good so serviced would have been exempt from Wisconsin sales tax. Taxable services to tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), or (d), Stats., include:
SECTION 39. Tax 11.12(6)(b)1. and (7)(intro.) are amended to read:
Tax 11.12(6)(b)1. ‘Boarding animals.’ The boarding of dogs, cats, horses used for racing, pleasure riding or show, or other recreational animals. The entire boarding charge is taxable, but the retailer may purchase the feed for the animals without tax by supplying a properly completed exemption certificate claiming an exemption for resale.
Note to LRB: Insert the following example at the end of Tax 11.12(6)(b)2.:
Example: Charges by a farmer for labor to replace a radiator on a motor vehicle registered for highway use are taxable. However, charges by a farmer for labor to replace a radiator on a tractor used exclusively and directly in the business of farming are not taxable.
(7)(intro.) Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by farmers which are taxable include:
SECTION 40. Tax 11.12(7)(a) is repealed
SECTION 41. Tax 11.12(7)(b), (c), (d), and (e) are renumbered 11.12(7)(a), (b), (c), and (d) and amended as renumbered to read:
Tax 11.12(7)(a) Horses for use in racing, pleasure riding, or show.
(b) Llamas for use as pack animals, pets, or to herd sheep.
(c) Flowers, Christmas trees and other decorative trees, plants, or shrubs.
(d) Timber or gravel when the purchaser acquires this property for removal, unless the purchaser pays royalties to lease land.
Note to LRB: Amend the notes at the end of Tax 11.12(7)(d) as follows:
Note: Section Tax 11.12 interprets ss. 77.52 (2) (a) 10.
and 77.54 (3), (3m), (27), (30), and (33) and (34), Stats.
Note: The interpretations in s. Tax 11.12 are effective
under the general sales and use tax law on and after September 1, 1969, except:
(a) Semen became exempt effective July 22, 1971, pursuant to Chapter 64, Laws
of 1971; (b) Baling wire and twine became exempt effective December 24, 1975,
pursuant to Chapter 146, Laws of 1975; (c) The exemption for electricity for
residential use and use in farming and for fuel oil, propane, coal, steam or
wood for residential use became effective July 1, 1979, pursuant to Chapter 1,
Laws of 1979; (d) The definition of “feed lot” became effective December 1,
1981; (e) Farm livestock medicine, milk house supplies and animal bedding
became exempt effective July 1, 1986, pursuant to 1985 Wis. Act 29; (f) The
definition of “exclusively used” became effective October 1, 1989, pursuant to
1989 Wis. Act 31; (g) The farm machinery exemption was revised effective
October 1, 1989, pursuant to 1989 Wis. Act 31; and (h) The exemption for
farm fuel for items other than machines became effective October 1, 1991,
pursuant to 1991 Wis. Act 39; and (i) The exemption for electricity sold for
use in farming was expanded to include sales of electricity during the entire
year, effective for sales on or after May 1, 2000, pursuant to 1999 Wis. Act 9.
SECTION 42. Tax 11.13(2)(a) and (b) are amended to read:
Tax 11.13(2)(a) The holder of a direct pay permit may purchase tangible personal property, items, property, and goods under s. 77.52(1)(b), (c) and (d), Stats., and taxable services, except those in sub. (6) (a) and (b), from a retailer without paying Wisconsin sales or use tax to the retailer.
(b) The direct pay permit holder shall report
Wisconsin use tax on the sales purchase price of tangible
personal property, items, property, and goods under s. 77.52 (1) (b), (c),
and (d), Stats., or and taxable services purchased from a
retailer without tax using a direct pay permit if the property, item, good,
or service is subject to Wisconsin sales or use tax. The tax shall be reported
on the direct pay permit holder’s Wisconsin sales tax return for the period in
which the taxable storage, use, or consumption first occurs in
Wisconsin.
Notes to LRB: 1. Replace the note at the end of Tax 11.13(2)(b) with the following:
Note: Purchase price, for purposes of this paragraph, has the meaning specified in s. 77.51 (15), Stats.
2. Replace the note at the end of Tax 11.13(3)(b) with the following:
Note: Form S-101 is available by writing to Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8902, Madison WI 53708-8902; calling (608) 266-2776; or downloading it from the department’s web site, www.revenue.wi.gov.
3. In the example at the end of Tax 11.13(3)(c), replace the year “2002” in both places it appears with the year “2009.”
4. Replace the example at the end of Tax 11.13(5)(b)3. with the following:
Example: On October 1, 2009, Company A begins using its direct pay permit when purchasing tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., from Company B. Company A provides a written statement to Company B that the use of its direct pay permit will be continuous. All purchases of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, except those described in sub. (6) (a) and (b), by Company A from Company B on or after October 1, 2009, while continuous use is in effect, must be made without paying sales or use tax to the retailer using the direct pay permit. While continuous use of a direct pay permit is in effect, no other exemption certificate may be used.
SECTION 43. Tax 11.13(6)(a)3m. is created to read:
Tax 11.13(6)(a)3m. Section 77.52 (2) (a) 5m., Stats., relating to telecommunications messaging services.
SECTION 44. Tax 11.13(6)(b)(intro.), 1., and 2. are amended to read:
Tax 11.13(6)(b)(intro.) A direct pay permit holder shall pay Wisconsin sales or use tax to a retailer on the retailer’s sale, lease, license or rental to the direct pay permit holder of the following tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.:
1. Tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred to a purchaser in connection with the sale of landscaping services subject to tax under s. 77.52 (2) (a) 20., Stats.
2.
Motor vehicles, boats, snowmobiles, mobile homes not exceeding 45 feet in
length recreational vehicles as defined in s. 340.01 (48r), Stats.,
trailers, semitrailers, all-terrain vehicles or aircraft.
SECTION 45. Tax 11.13(6)(b)3. is repealed and recreated to read:
Tax 11.13(6)(b)3. Candy as defined in s. 77.51 (1fm), Stats., soft drinks as defined in s. 77.51 (17w), Stats., dietary supplements as defined in s. 77.51 (3n), Stats., and prepared foods as defined in s. 77.51 (10m), Stats.
SECTION 46. Tax 11.13(6)(b)4. is repealed
SECTION 47. Tax 11.13(6)(c) and (7)(intro.) are amended to read:
Tax 11.13(6)(c) Exemptions. Although not eligible to be purchased without paying Wisconsin sales or use tax to a retailer using a direct pay permit, the taxable services and tangible personal property, and items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., described in pars. (a) and (b) may be purchased without Wisconsin sales or use tax if a resale, farming, manufacturing or other exemption applies. Documentation is required to purchase without tax, as provided in s. Tax 11.14.
(7)(intro.) A retailer is not liable for sales or use tax
on gross receipts the sales price from the sale of tangible
personal property, items, property, or goods under s. 77.52 (1) (b), (c), or
(d), Stats., or taxable services, except those described in sub. (6) (a)
and (b), to a person who has provided the retailer with the appropriate
information under sub. (5) (a), until the earlier of the following:
SECTION 48. Tax 11.14(2)(a)(intro.) and 1. are amended to read:
Tax 11.14(2)(a)(intro.) Exemption certificates are
signed by purchasers or lessees and are given to sellers or lessors by
purchasers or lessees to verify that a transaction is exempt from
Wisconsin sales and use taxes. Sellers and lessors shall exclude from the
taxable gross receipts sales price those transactions for which
they have accepted a valid exemption certificate in good faith from a
the purchaser. The department has provided retailers with the
following 2 sales and use tax exemption certificates may be used in
Wisconsin:
1. Wisconsin sales and use tax exemption certificate, form S-211. This is a multipurpose form which may be used for any Wisconsin sales and use tax exemption provided by law, except as provided in sub. (14). For direct pay, form S-211 may be used as the document described in s. Tax 11.13 (5) (a) 2. if all of the required information is included on the form S-211.
SECTION 49. Tax 11.14(2)(a)3. is created to read:
Tax 11.14(2)(a)3. Streamlined Sales and Use Tax Exemption Certificate, SSTGB Form F0003. This is a multistate form which may be used to claim any sales or use tax exemption provided under Wisconsin law. Since this is a multistate exemption certificate, purchasers should use caution when issuing this certificate, since it contains various exemptions that are not applicable in Wisconsin and only apply in other states. Purchasers are responsible for knowing if they qualify for the exemption they are claiming in the state in which the exemption is being claimed. The purchaser will be held liable for any tax, interest, and penalties that result from the purchaser claiming an exemption for which they were not eligible.
SECTION 50. Tax 11.14(2)(b) and (c) are amended to read:
Tax
11.14(2)(b) Use of an exemption certificate designed by the department is not
required by law. A person may use a substitute exemption certificate if it
contains all the essential information relating to the transaction and if it is
in a form approved by the department. The law requires that the certificate
Paper exemption certificates must be signed by and bear the name and
address of the purchaser, the name and address of the seller, and
that it include the a general character of the property or
service being purchased description of the purchaser’s business and
the basis of reason for the claimed exemption. An electronic
exemption certificate shall contain the same information as a paper exemption
certificate, except that a signature is not required.
(c) If a purchaser certifies in writing by using
provides an exemption certificate indicating that the property
purchased will be used for activities or under circumstances which make the
purchase of the property exempt from the sales tax or for resale, and the
property is subsequently used by the purchaser in a manner that makes
the property ineligible for exemption from tax, the purchaser shall pay the
is liable for payment of the applicable sales or use tax.
SECTION 51. Tax 11.14(3) and (4) are repealed and recreated to read:
Tax 11.14(3) Effect of obtaining certificate. (a) Except as provided in par. (b), a seller is relieved of liability for the tax if the seller obtains from the purchaser, within 90 days after the date of the sale, a fully completed exemption certificate which indicates that the purchaser will use the property or service in a manner that is exempt from Wisconsin sales and use tax.
(b) A seller is not relieved of its liability to collect and remit the applicable Wisconsin sales or use tax on a sale to a purchaser if any of the following apply:
1. The seller fraudulently fails to collect the sales or use tax.
2. The seller solicits the purchaser to claim an unlawful exemption.
3. The seller accepts an exemption certificate from a purchaser claiming to be an entity that is not subject to sales and use taxes, if both of the following apply:
a. The subject of the transaction covered by the exemption certificate is received by the purchaser at the seller’s Wisconsin location.
b. The exemption certificate clearly and affirmatively indicates that the claimed exemption is not available in Wisconsin.
Note: All retailers should be familiar with the instructions contained in an exemption certificate.
(4) Failure to obtain certificate. (a) A seller who does not obtain an exemption certificate as provided in sub. (3) (a), shall be relieved from liability for the tax if, no later than 90 days after the sale, the seller captures and maintains all of the following data elements in its accounting system, with respect to the transaction upon which an exemption is being claimed:
1. Name and business address of the purchaser.
2. Purchaser’s state tax identification number and state of issue. If the purchaser does not have a state tax identification number then the purchaser’s federal employer identification number is needed. If the purchaser does not have a federal employer identification number then the purchaser’s personal driver’s license number and state of issue is needed.
3. Purchaser’s type of business.
4. The reason for the claimed exemption.
(b) If a seller does not obtain an exemption certificate as provided in sub. (3) (a) or the relevant data elements provided in par. (a), the seller may, within 120 days after it is requested by the department to substantiate a claimed exemption, either obtain, in good faith, a fully completed exemption certificate from the purchaser; or by some other means provide proof that the transaction was not subject to Wisconsin sales or use tax. If a seller cannot prove that a transaction was exempt by one of these methods, the seller is not relieved from liability for the tax, interest or penalties.
(c) A seller accepts an exemption certificate as provided in sub. (3) (a) in good faith if the exemption certificate is fully completed and contains no statement or entry which the seller or lessor knows, or has reason to believe, is false or misleading and the certificate discloses a valid reason for exemption from Wisconsin sales and use tax under Wisconsin law.
SECTION 52. Tax 11.14(5)(a) is amended to read:
Tax 11.14(5)(a) Continuous or blanket exemption certificates do not expire and need not be renewed at any prescribed interval. However, they should be renewed at reasonable intervals in case of a business change, registration number change or discontinuance of the specific business claiming the exemption. The seller should periodically review exemption certificates on file to ascertain that the person claiming the exemption is the person who furnished the certificate.
SECTION 53. Tax 11.14(5)(b) is repealed and recreated to read:
Tax 11.14(5)(b) If a purchaser provides a continuous or blanket exemption certificate, the purchaser may not issue “this time only” purchase orders or similar documents cancelling the continuous or blanket exemption certificate for the one transaction only. In addition, the notation “taxable” on a purchase order is not sufficient to relieve a purchaser of the responsibility for a previously issued continuous or blanket certificate. The seller is not liable for the tax on transactions covered by a valid exemption certificate. If a purchaser does not want a continuous or blanket exemption certificate to apply, it must notify the seller in writing that it is rescinding a previously issued continuous or blanket exemption certificate.
SECTION 54. Tax 11.14(6)(a)1. and 2. and (b)2. are amended to read:
Tax
11.14(6)(a)1. The burden of proving that a sale of property, items, goods,
or services is not at retail is upon the seller unless the seller accepts a
an exemption certificate from the purchaser as provided in sub. (3)
(a) or captures and maintains the data elements as required in sub. (4) (a)
certifying that indicate the property is purchased for resale. If
valid and accepted in good faith from a person who is in the business of
selling tangible personal property or taxable services and who holds a seller’s
permit, Obtaining the certificate or capturing and maintaining
the data elements that indicate the property is purchased for resale,
relieves the seller from liability for the sales tax and the duty of collecting
the use tax.
2. If a purchaser gives an exemption certificate as provided in sub. (3) (a) or provides the data elements described in sub. (4) (a), claiming resale for property acquired and then makes any storage or use of the property other than retention, demonstration, or display while holding it for sale in the regular course of business, the storage or use is taxable to the purchaser as of the time the property is first stored or used. The sales tax shall be reported and paid by the purchaser with the tax return for the period in which the property is first so stored or used.
(b)2.
A general description of the general character of the tangible
personal property or service sold by the purchaser purchaser’s business.
SECTION 55. Tax 11.14(6)(b)3. is repealed
SECTION 56. Tax 11.14(6)(b)4.(intro.) is renumbered 11.14(6)(b)3.(intro.) and amended as renumbered to read:
Tax 11.14(6)(b)3.(intro.) The basis for the claimed exemption including the seller’s permit number of the purchaser, except that:
SECTION 57. Tax 11.14(6)(b)5. is repealed
Note to LRB: Delete the example at the end of Tax 11.14(6)(b)5.
SECTION 58. Tax 11.14(7)(a), (11)(a) and (b), (12)(intro.) and (b) to (f), and (13)(a)1. and (b) are amended to read:
Tax
11.14(7)(a) A supplier which who accepts a properly completed
exemption certificate claiming a manufacturing exemption in good faith
marked for “continuous” use may make sales to the manufacturer without
collecting the tax if the nature of the property or services sold qualifies for
one of the exempt uses claimed by the manufacturer on the form. If an
exemption certificate is a “continuous” form, each purchase order of the
manufacturer shall refer to it. If an individual order contains both exempt
and non-exempt purchases, the purchaser shall designate which items are
taxable.
(11)(a) A retailer of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services may accept from a federal or Wisconsin governmental unit or any federally recognized American Indian tribe or band in Wisconsin, an exemption certificate as provided in sub. (3) (a) or the data elements as required in sub. (4) (a) as proof that a sale is exempt from sales or use tax.
(b) In lieu of accepting an exemption certificate as provided in par. (a), a retailer who issues its billing or invoice in the name of the Wisconsin or federal governmental unit or any federally recognized American Indian tribe or band in Wisconsin, may accept either one of the following:
1. A purchase order or similar written document from the governmental unit or tribe or band, identifying itself as the purchaser.
2. A verbal indication of the governmental unit’s or tribe’s or band’s, certificate of exempt status, or CES, number, which the retailer shall record on the copy of the invoice it retains.
(12)(intro.) The Wisconsin sales and use tax exemption
certificate, form S-211, and the Streamlined Sales and Use Tax Exemption
Certificate, SSTGB Form F0003, may also be used for to claim
any other sales and use tax exemption provided by law, including the following:
(b)
Tangible personal property becoming an ingredient or component part of an
article of tangible personal property in any form destined for sale and
items under s. 77.52 (1) (b), Stats., that are used exclusively and directly by
a manufacturer in manufacturing an article of tangible personal property or
item or property under s. 77.52 (1) (b) or (c), Stats., that is destined for
sale and that becomes an ingredient or component part of the article of
tangible personal property or item or property under s. 77.52 (1) (b) or (c),
Stats., destined for sale or is consumed or destroyed or loses its identity in
manufacturing the article of tangible personal property or item or property
under s. 77.52 (1) (b) or (c), Stats., destined for sale, except as provided in
s. 77.54 (30) (a) 6., Stats.
(c) Trailers or accessories, attachments, parts, supplies, materials, and service on motor trucks, tractors, and trailers which are used exclusively in common or contract carriage.
(d)
Property, items, goods, or services purchased directly by and used by a
religious, charitable, educational, scientific, or other organization or
governmental unit holding a certificate Certificate of exempt status
Exempt Status, “CES”. Sales to organizations holding a
CES also can be shown to be exempt by a retailer’s recording the certificate
number on its bill of sale. A corporation, community chest fund, foundation,
or association organized and operated exclusively for religious, charitable,
scientific, or educational purposes, or for the prevention of cruelty to
children or animals, which is located out-of-state, may use the Wisconsin sales
and use tax exemption certificate, form S-211, or the Streamlined Sales and
Use Tax Exemption Certificate, SSTGB Form F0003, to purchase without tax
even though it has not been issued a Wisconsin certificate of exempt status
CES number.
(e) Railway cars, locomotives and other rolling stock used in railroad operations, or accessories, attachments, parts, lubricants, or fuel therefor.
(f) Commercial vessels and barges of 50-ton burden or over engaged in interstate or foreign commerce or commercial fishing, and accessories, attachments, parts, and fuel therefor.
(13)(a)1. The contractor entered into a written contract or made a formal bid before the effective date of the county or stadium tax to construct, alter, repair, or improve real estate for another person.
(b) The certificate shall give the descriptive name of the contract, job site, county, or stadium tax effective date, date of prime contract and bid, date contract was signed, seller’s name, date of performance of the contract, and contractor’s name and address and shall be signed by the contractor.
SECTION 59. Tax 11.14(15) is renumbered 11.14(15)(a)
SECTION 60. Tax 11.14(15)(b) is created to read:
Tax 11.14(15)(b) A purchaser who uses an exemption certificate in a manner that is prohibited by or inconsistent with Wisconsin law or who provides incorrect information to a seller or certified service provider relating to an exemption being claimed will also be subject to a penalty of $250 for each invoice or bill of sale related to the prohibited or inconsistent use to which the incorrect information applies.
SECTION 61. Tax 11.14(16) is repealed and recreated to read:
Tax 11.14(16) Exemption certificate not needed for certain sales. No exemption certificate is required for sales of property, items, goods, or services that are exempt from Wisconsin sales and use tax under s. 77.54 (7), (7m), (8), (10), (11), (14), (15), (17), (20n), (21), (22b), (31), (32), (35), (36), (37), (42), (44), (45), (46), (51) and (52), Stats.
SECTION 62. Tax 11.15(1)(a) and (c)(intro.) and (2)(title), (intro.), (a), and (d) to (f) are amended to read:
Tax 11.15(1)(a) To be exempt, containers, labels, sacks, cans, boxes, drums, bags or other packaging and shipping materials for use in packing, packaging or shipping tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., shall be “used by the purchaser to transfer merchandise to customers.” Whether the containers or other packaging or shipping materials are returnable or nonreturnable is not a factor. The exemption does not apply to containers used in the incidental transfer of property to customers by persons providing services.
(c)(intro.)
Gross receipts The sales price from the sale of the following
items are is within the exemption:
(2)(title) Items not exempt under s. 77.54 (6) (B), stats.
(intro.)
Gross receipts from the sales Sales of the following items are
not within the this exemption:
(a) Wrapping equipment such as paper holders, tape dispensers, staplers, and string holders.
(d) Computer produced gummed label mailing lists used to address envelopes. However, labels for envelopes used to transfer tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., to customers are exempt.
(e) Containers or other packaging and shipping materials used merely for storage or to transfer merchandise owned by a person from one location to another, such as bakery delivery carts and containers used in delivering bakery products to retailers, where the carts are not transferred by the bakery to the retailer.
Note to LRB: Insert the following examples at the end of Tax 11.15(2)(e):
Examples: 1) Wholesaler A’s truck driver delivers bakery products to Grocery Store B. The truck driver brings the bakery products into Grocery Store B on a cart, puts the bakery products from the cart onto Grocery Store B’s shelves and returns the cart to the truck and provides Grocery Store B with an invoice for the bakery products. The cart is not transferred to Grocery Store B (the bakery retailer), and is not an exempt container.
2) Wholesaler C’s truck driver delivers bread to Grocery Store D. The truck driver brings the bread into Grocery Store D on a cart, and leaves the bread on the cart at Grocery Store D. The truck driver picks up the cart that was left with the last delivery. The truck driver provides Grocery Store D with an invoice for the bread. Grocery Store D’s employees stock its shelves as needed with the bread from the cart. The cart is transferred to Grocery Store D (the bakery retailer), and is an exempt container.
(f) Lumber or other material used for bracing, blocking, skidding, or shoring items while in transit that is not transferred to the customer of the shipped items; and cardboard and paper used to line box cars.
SECTION 63. Tax 11.15(2)(g) is repealed
SECTION 64. Tax 11.15(2)(h) is renumbered 11.15(2)(g) and amended as renumbered to read:
Tax 11.15(2)(g) Price tags and advertising matter used in connection with the sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., including counter display cards used for advertising and display purposes.
SECTION 65. Tax 11.15(2)(i), (j), and (k) are renumbered 11.15(2)(h), (i), and (j)
SECTION 66. Tax 11.15(3)(a) and (b) are amended to read:
Tax
11.15(3)(a) Returnable container deposits received by a retailer at the time
of the retail sale of tangible personal property or items or property under
s. 77.52 (1) (b) or (c), Stats., such as soft drink bottles, beer bottles
and milk containers, and refunds of the deposits may be excluded from the
computation of the taxable gross receipts sales price if
they are excluded from gross receipts the sales price on the
retailer’s books of account.
(b)
If a retailer’s books of account include container deposits in gross
receipts the sales price and if refunds of the deposits are deducted
from gross receipts the sales price, the retailer shall use this
method of reporting the taxable gross receipts sales price
on a sales tax return. Under this method, the gross receipts sales
price from the deposit are is subject to the tax and the tax
may be collected from the customer. However, when the deposit is refunded to
the customer, the applicable sales tax shall also be refunded to the customer.
SECTION 67. Tax 11.15(4) is renumbered 11.15(4)(a) and amended as renumbered to read:
Tax
11.15(4)(a) Gross receipts The sales price from sales to
restaurants, cafeterias, caterers, nursing homes or vending machine operators
of disposable items, including paper and plastic cups, plates, butter chips,
hamburger and frankfurter baskets or buckets, utensils, straws, placemats,
napkins, doggie bags, wrapping materials and toothpicks, transferred to
customers for a valuable consideration by these persons as part of the sale of
food, food products, and beverages to customers are not subject to the
tax.
SECTION 68. Tax 11.15(4)(b) is created to read:
Tax 11.15(4)(b) The sales price from the sale of disposable products to a restaurant that are transferred with candy, soft drinks, dietary supplements and prepared foods furnished for no consideration by the restaurant to the restaurant’s own employees during the employee’s work hours is not subject to the tax.
Note: This exemption does not apply to purchases of items by grocery stores, convenience stores, or other businesses that do not operate restaurants.
SECTION 69. Tax 11.15(5) and (6) are amended to read:
Tax
11.15(5) Demurrage, lease or rental
of fuel storage tanks. A gas supplier’s monthly charge to a customer
for the use of an LPG or other fuel storage tank which remains indefinitely on
the customer’s premises is taxable. The charge a supplier makes because a gas
cylinder is retained by a customer beyond a 30-day period is also taxable.
These “demurrage” charges constitute taxable rentals paid for the continuation
of possession of the container. If a charge is made to the customer for the
use of the container and the container is used exclusively for those
leasing purposes, the gas supplier may issue a resale certificate when the
supplier purchases the container. However, if the gas supplier furnishes a
container or other storage tank to a customer without making a separately
itemized charge for its use, the supplier shall be deemed the consumer of and
shall pay tax on the acquisition of the containers or tanks.
(6) Containers
and packaging materials sold. (a) If a charge is made by a
seller or lessor of tangible personal property or items or property under s.
77.52 (1) (b) or (c), Stats., to a customer for a container or
packaging materials used in connection with the shipment of the property or
item, the charge for the container or packaging materials becomes a
part of the selling sales price or rental charge. If the sale of
the property or item shipped is not subject to or is exempt from tax,
the charge for the container or packaging materials is not subject to or
is exempt from tax. If the sale of the property or item shipped is
subject to tax, the charge for the container or packaging materials is
subject to tax. This paragraph is applicable to the taxation of containers
and packaging materials regardless of whether the charge for the
containers or packaging materials is separately stated or not separately
stated.
(b)
Any credit given by a seller or lessor to a customer for the container or
packaging materials used in connection with the shipment of property or items
which the customer returns to the seller or lessor shall reduce the seller’s or
lessor’s gross receipts sales price subject to tax in the
reporting period during which the materials are returned, if the seller or
lessor included the selling price of the container or packaging
materials in the gross receipts sales price subject to tax, and
the seller or lessor returns the tax to the customer.
SECTION 70. Tax 11.16(1)(a), (b), and (c) are amended to read:
Tax
11.16(1)(a) Exemption. Section 77.54 (5) (b), Stats., provides a sales
and use tax exemption for: “Motor trucks, truck tractors, road
tractors, buses, trailers and semitrailers, and accessories, attachments,
parts, supplies and materials therefor, sold to common or contract carriers who
use the such motor trucks, truck tractors, road tractors, buses,
trailers and semitrailers exclusively as common or contract carriers, including
the urban mass transportation of passengers as defined in s. 71.38.”
(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, 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. (h)
(g).
(c)
Repairs. The sale or furnishing of repair, service, alteration, fitting,
cleaning, painting, coating, towing, inspection, and maintenance service
to exempt vehicles shall be exempt.
SECTION 71. Tax 11.16(1)(d) is renumbered 11.16(1)(d)(intro.) and amended as renumbered to read:
Tax
11.16(1)(d)(intro.) The exemption shall not apply to the following property
used by common or contract carriers: automobiles as defined in s. 340.01
(4), Stats., except an automobile registered as a truck, station wagons as
defined in s. 340.01 (61), 1997 Stats., and self−propelled vehicles for
off−highway use, such as road machinery, fork lifts and other industrial
trucks.
SECTION 72. Tax 11.16(1)(d)1. and 2. are created to read:
Tax 11.16(1)(d)1. Automobiles as defined in s. 340.01 (4), Stats., except an automobile registered as a truck.
2. Self-propelled vehicles for off-highway use, such as road machinery, fork lifts, and other industrial trucks.
Note to LRB: Delete the note at the end of Tax 11.16(1)(d)2.
SECTION 73. Tax 11.16(1)(f) and (h), (2)(a) and (b)1. to 3., and (3)(a) and (b)3. are amended to read:
Tax
11.16(1)(f) Conversion to private use. If a vehicle purchased without
tax is converted to private use, a use tax or sales tax pursuant to s. Tax
11.14 (2) (c) is due. The tax is measured by the sales price of the vehicle to
the purchaser, except that if the taxable use first occurs more than 6
months after the sale to the purchaser, the measure of the tax may be, at the
purchaser’s option, either the sales price or the vehicle’s fair market value
at the time the taxable use first occurs.
(h)
Occasional sales. Motor carriers shall not be are not
required to register as retailers with the department if their gross
receipts the sales price from their sales of tangible
personal property, items, property, and goods under s. 77.52 (1) (b), (c),
and (d), Stats., or and taxable services are $1,000 or less
within a calendar year. Persons who are exempt from registration under this
standard shall pay sales or use tax on all purchases of tangible personal
property, items, property, and goods under s. 77.52 (1) (b), (c), and (d),
Stats., or and taxable services not otherwise exempt,
including items that may be resold to customers. Persons who exceed the
standard shall register with the department and obtain a seller’s permit.
Persons who register may purchase tangible personal property, items,
property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable
services for resale without paying tax by issuing to their supplier a
properly completed resale exemption certificate claiming
resale or they may pay the tax to their supplier and, if the property is
resold, claim a credit for the tax paid against any sales tax due.
Note to LRB: Delete the third example at the end of Tax 11.16(1)(h), renumber the fourth and fifth examples to be the third and fourth examples, and amend the fourth example as renumbered as follows:
4) Towing of vehicles to the repair facility of a
garage-wrecker operator is part of a private repair business which that
is not exempt under par. (a).
(2)(a) Section 77.54 (12), Stats., provides a sales and
use tax exemption for: “The gross receipts sales price
from the sales of and the storage, use or other consumption in this state of
rail freight or passenger cars, locomotives or other rolling stock used in
railroad operations, or accessories, attachments, parts, lubricants or fuel
therefor.”
(b)1.
The sale or furnishing of repair, service, alteration, fitting,
cleaning, painting, coating, towing, inspection, and maintenance service
to exempt rolling stock.
2.
Purchases of any equipment which that is operated on railroad
rails, including an industrial firm’s switching locomotives used to switch
freight cars on its own property, except vehicles which that may
also be used on a highway.
3.
Fuel used to heat a caboose, or run a compressor which that
cools a railway car.
(3)(a) Section 77.54 (13), Stats., provides a sales and
use tax exemption for: “The gross receipts sales price
from the sales of and the storage, use or other consumption in this state of
commercial vessels and barges of 50-ton burden or over primarily engaged in
interstate or foreign commerce or commercial fishing, and the accessories,
attachments, parts and fuel therefor.”
(b)3. The sale or furnishing of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of exempt commercial vessels.
Notes to LRB: 1. Replace the first note at the end of Tax 11.16(3)(c) with the following:
Note: Section Tax 11.16 interprets ss. 77.54 (5) (b), (7) (a), (12), and (13), 77.55 (2m), and 77.57, Stats.
2. Amend the second note at the end of Tax 11.16(3)(c) as follows:
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; and (b) The
exemption for certain railroad crossties became effective July 20, 1985,
pursuant to 1985 Wis. Act 29; (c) Section 340.01(61), which defined “station
wagon” was repealed pursuant to 1999 Wis. Act 80; and (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.
SECTION 74. Tax 11.17(1)(a) and (b), (2), (3), and (4)(a)(intro.), 1., and 2. are amended to read:
Tax
11.17(1)(a) Although professional personnel in hospitals and clinics and other
members of medical professions including physicians, surgeons, oculists,
optometrists, and podiatrists regularly transfer antibiotics, bandages,
splints, and other tangible personal property and items, property,
and goods under s. 77.52 (1) (b), (c), and (d), Stats., to their patients
in the performance of professional services, the transfer of that property,
item or good is an incident of a service rather than a retail sale of the
property, item or good. The persons are, therefore, deemed the
consumers of the items in the same way they are the consumers of other
materials and supplies used by them in the performance of their services.
Accordingly, the suppliers of hospitals, clinics, and members of medical
professions are retailers obligated to register and report tax on sales of
tangible personal property, items, property, and goods under s. 77.52 (1)
(b), (c), or (d), Stats., or and taxable services, unless the
transaction is specifically exempt from the tax.
(b)
Section 77.54 (14) (b), Stats., specifically provides an exemption for medicines
drugs furnished by a licensed physician, surgeon, or podiatrist
to that person’s patient for medical treatment. Section 77.54 (22) (22b),
Stats., provides an exemption for durable medical appliances equipment
for home use, mobility-enhancing equipment and prosthetic devices, and
repair and replacement parts and accessories for such equipment or devices, if
such equipment or devices are used by a human being. The scope of these
exemptions is set forth in ss. Tax 11.08, 11.09, and 11.45.
(2) Purchases by hospitals, except hospital service
insurance corporations under s. 613.80 (2), Stats., are exempt from the sales
and use tax if the hospitals are nonprofit and, as such, qualify as charitable
organizations under s. 77.54 (9a), Stats. Each is issued a certificate
Certificate of exempt status Exempt Status, “CES”, by the
department. When purchasing property, items, goods and services, a
hospital shall furnish its CES number to its supplier, and the supplier may
then make sales of every type of tangible personal property and items,
property and goods under s. 77.52 (1) (b), (c), and (d), Stats., or and
services to the hospital without tax. Hospitals organized for profit do not
qualify for this exemption.
(3) Purchases made by physicians and medical
clinics and physicians that do not hold a Certificate of Exempt
Status, “CES,” are subject to the sales or use tax unless specifically
exempt by law. To be exempt, the items on the exempt list shall be furnished to
patients at the direction of a physician, surgeon, or podiatrist in
conjunction with providing medical service, except for items noted with an
asterisk. These items are exempt even though not purchased under the direction
of the health professional. The following is a partial list of taxable and
exempt purchases of clinics and members of the medical professions.
|
Taxable |
Exempt |
|
Adhesive tape |
*Antiembolism elastic hose and stockings, including parts and accessories |
|
Alcoholic beverages |
|
|
Apparatus and equipment for treatment of diabetes |
*Artificial eyes and limbs, including parts and accessories |
|
Bandages, gauze and cotton |
*Blood sugar level testing supplies |
|
Bed pans |
Bone pins and plates, including parts and accessories |
|
Beds and linens |
*Crutches and wheel chairs, including motorized wheelchairs and scooters, including parts and accessories |
|
Blankets |
Diaphragms |
|
Cold packs and hot packs |
|
|
Compresses and dressings |
|
|
Cosmetics |
Drugs |
|
Deodorants and disinfectants |
Dye |
|
Distilled water |
*Hearing aids and parts, including parts and accessories |
|
Enema kits |
Medical oxygen |
|
Instruments |
|
|
|
|
|
Laboratory equipment and supplies |
Oral contraceptives |
|
Medical equipment |
Pacemakers, including parts and accessories |
|
Needles and syringes |
|
|
Office equipment and |
Prophylactics |
|
Oxygen delivery equipment |
Rubbing alcohol |
|
Paper products |
Suppositories |
|
Printed material |
Sutures |
|
Rib belts and supports |
Vaccines |
|
Soda water beverages |
Vaginal creams and jellies |
|
Soap |
Vitamins |
|
Splints and cast materials |
|
|
Uniforms and gowns |
|
|
X-ray film and machines |
|
(4)(a)(intro.)
The gross receipts sales price from sales of the following are
exempt from the tax:
1. Charges made by hospitals to patients for rooms, medical services, and other items including charges for anesthesia and anesthesia supplies, bandages applied in the hospital, blood and blood plasma, dressings applied in the hospital, intravenous solutions, laboratory tests, oxygen, radiation, and x-ray treatment.
2.
Hospitals’ sales of meals, food, food products and beverages food and
food ingredients, except soft drinks, to patients, staff or visitors served
on the hospitals’ premises.
SECTION 75. Tax 11.17(4)(a)3. is created to read:
Tax 11.17(4)(a)3. Prepared food sold to the elderly or handicapped by persons providing mobile meals on wheels.
SECTION 76. Tax 11.17(4)(b)(intro.) and 3. to 6. are amended to read:
Tax
11.17(4)(b)(intro.) The gross receipts sales price from the
sales of the following are taxable:
3.
Sales of tangible personal property, items, property, and goods under s.
77.52 (1) (b), (c), and (d), Stats., or and taxable service
services by a clinic, which sales are not directly related to the
rendition of medical services.
4.
Sales of meals prepared food and other tangible personal property,
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., or
and taxable services by an organization affiliated with a hospital,
except as provided in par. (a) 3.
Note to LRB: Amend the examples at the end of Tax 11.17(4)(b)4. as follows:
Examples:
1) If a ladies’ auxiliary of a
hospital operates a coffee shop on the hospital premises, and holds or is
required to hold a seller’s permit, gross receipts from the sales by
this business are taxable.
2) Sales by a hospital auxiliary, which holds or is required to hold a seller’s permit, of an emergency response system that links an individual to medical attention by pushing a button which transmits to a communicator connected to a telephone and sends an automatic call for help are taxable telecommunications message services.
5.
Sales of meals, food, food products and beverages soft drinks by
hospitals off the hospitals’ premises, except when sold to the elderly or
handicapped by persons providing “mobile meals on wheels.”.
6.
An optometrist’s sales of tangible personal property and items, property,
and goods under s. 77.52 (1) (b), (c), and (d), Stats., including
nonprescription sun glasses, contact lens solution, thermal and chemical care
units for contact lenses, and other types of tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats.,
ordinarily taxable when sold at retail, unless the gross receipts sales
price from those sales are less than $1,000 within a during the
calendar year. Optometrists whose receipts from taxable property, items,
and goods equal or exceed $1,000 annually in a calendar year
shall register with the department and obtain a seller’s permit. Those whose
receipts from taxable property, items, and goods are less than
$1,000 shall be exempt as occasional sellers and shall pay tax to their
suppliers or a use tax, as appropriate, on purchases of taxable property,
items, or goods.
SECTION 77. Tax 11.18(2)(a)(intro.) and 1. to 3. are amended to read:
Tax
11.18(2)(a)(intro.) The gross
receipts sales price from the following sales to dentists are exempt
under s. 77.54 (14) or (22) (22b), Stats.,when used for a
human being:
1. Medicines
Drugs, including nitrous oxide, oxygen, novocaine, toothpaste,
and bone regeneration materials.
2. Gold, silver, amalgam, and other alloys used to fill teeth and cement and bonding agents used in conjunction with fillings.
3.
Crowns, bridges, bridgework, dentures, inlays, fillings, and other items
fabricated by a dental laboratory, including parts and accessories for
those items, which the dentist installs in the human patient’s mouth.
SECTION 78. Tax 11.18(2)(a)4. is created to read:
Tax 11.18(2)(a)4. Bands, brackets, wire, space maintainers, positioners, and other items installed in a patient’s mouth to prevent or correct a physical deformity or to support a weak or deformed portion of the body.
SECTION 79. Tax 11.18(2)(b) and (3)(a)(intro.) are amended to read:
Tax
11.18(2)(b) The items described in par. (a) include braces and other
corrective and supporting devices individually designed or constructed for a
particular patient, such as braces made by dental laboratories at the
prescription of the orthodontist or dentist, and teeth, mouth and jaw
braces and supports.
(3)(a)(intro.)
The gross receipts sales price from the following sales to dentists
are taxable:
SECTION 80. Tax 11.18(3)(a)1. is repealed and recreated to read:
Tax 11.18(3)(a)1. Dental equipment and surgical instruments.
SECTION 81. Tax 11.18(3)(a)2. and (b) are amended to read:
Tax
11.18(3)(a)2. Dental equipment, surgical instruments, office Office
equipment, office supplies, and consumable supplies used by dentists to conduct
their business.
(b)
Items included in par. (a) include tongue depressors, bandages, cleaning
paste, tooth brushes, dental floss, and cotton.
SECTION 82. Tax 11.19(1) and (2)(a) to (c) are amended to read:
Tax 11.19(1) General. All retail sales of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c), and (d), Stats., including printed material, are subject to the tax, except when a specific exemption applies to the transaction. This section describes exemptions which commonly apply to sales of printed material.
(2)(a)
Section 77.52 (2) (a) 11., Stats., imposes the sales and use tax on certain
services. However, an exemption is provided for the printing or imprinting of
tangible personal property and items, property and goods under s. 77.52 (1)
(b), (c), and (d), Stats., furnished by customers, which property will
be subsequently transported outside Wisconsin by the consumer for advertising
purposes that results in printed materials, catalogs, or envelopes that
are exempt under s. 77.54 (25) or (25m), Stats.
(b) Section 77.54 (15), Stats., provides an exemption for the sale of newspapers, of periodicals sold by subscription and regularly issued at average intervals not exceeding 3 months, or issued at average intervals not exceeding 6 months by an educational association or corporation sales to which are exempt under s. 77.54(9a)(f), Stats., of controlled circulation publications sold to commercial publishers for distribution without charge or mainly without charge or regularly distributed by or on behalf of publishers without charge or mainly without charge to the recipient and of shoppers guides which distribute no less than 48 issues in a 12-month period.
(c) Section 77.54 (25), Stats., provides an exemption for printed material which is designed to advertise and promote the sale of merchandise, or to advertise the services of individual business firms, which printed material is purchased and stored for the purpose of subsequently transporting it outside Wisconsin by the purchaser for use thereafter solely outside Wisconsin. This exemption does not include catalogs or the envelopes in which the catalogs are mailed.
SECTION 83. Tax 11.19(2)(cm) is created to read:
Tax 11.19(2)(cm) Section 77.54 (25m), Stats., provides an exemption for catalogs, as defined in s. 77.51 (1fr), Stats., and the envelopes in which the catalogs are mailed, that are designed to advertise and promote the sale of merchandise or to advertise the services of individual business firms.
SECTION 84. Tax 11.19(2)(d), (e)2. and 4., and (g), (3)(c), and (4)(a) are amended to read:
Tax
11.19(2)(d) Section 77.54 (2m), Stats., provides an exemption for the “gross
receipts sales price from the sales of and the storage, use or other
consumption of tangible personal property or services that are used
exclusively and directly by a manufacturer in manufacturing shoppers guides,
newspapers, or periodicals and that become an ingredient or component of
shoppers guides, newspapers or periodicals or that are consumed or lose their
identity in the manufacture of shoppers guides, newspapers or periodicals,
whether or not the shoppers guides, newspapers or periodicals are transferred
with charge to the recipient.” This exemption applies to newspapers,
shoppers guides and periodicals which are issued at average intervals not
exceeding 3 months or issued at average intervals not exceeding 6 months by
an educational association or corporation sales to which are exempt under s.
77.54(9a)(f), Stats. It does not apply to advertising supplements that are
not newspapers as defined in s. 77.51 (8), Stats.
(e)2.
The purchase from a printer of printing services or tangible personal
property of printed materials in Wisconsin for the publisher.
4. Maintaining, occupying, and using, directly or by means of another person, a place that is in Wisconsin, that is not owned by the publisher and that is used for the distribution of printed material.
(g) Section 77.54 (43), Stats., provides a sales and use tax exemption for raw materials used for the processing, fabricating, or manufacturing of, attaching to or incorporating into, printed materials that are transported and used solely outside Wisconsin.
(3)(c)
The exemption for periodicals is limited to publications which are sold by
subscription and which are regularly issued at average intervals not exceeding
3 months, or issued at average intervals not exceeding 6 months by an
educational association or corporation sales to which are exempt under s.
77.54(9a)(f), Stats., each issue of which contains news or information
written by different authors which is of general interest to the public, or to
some particular organization or group of persons. Each issue must bear a
relationship to prior or subsequent issues in respect to continuity of literary
character or similarity of subject matter, and there must be some connection
between the different issues of the series in the nature of the articles
appearing in them. To qualify for the exemption, the publication must qualify
for the second class mail periodicals rate under U.S. postal
laws and regulations or as a controlled circulation publication under
U.S. postal laws and regulations.
(4)(a)
Printed advertising materials, including catalogs and their mailing
envelopes, may be purchased from Wisconsin or out-of-state suppliers
without tax pursuant to s. 77.54 (25), Stats., when those materials are
purchased and stored for the purpose of subsequently transporting the same
outside Wisconsin by the purchaser for use thereafter solely outside Wisconsin.
The This exemption applies does not apply to
catalogs designed to be used by a retailer’s seller’s potential
customers. See sub. (5m) for information relating to an exemption for
catalogs and the envelopes in which the catalogs are mailed.
SECTION 85. Tax 11.19(4)(b) is repealed and recreated to read:
Tax 11.19(4)(b) The exemption does not apply to printed advertising materials shipped to Wisconsin addresses, except for catalogs and the envelopes in which they are mailed, as provided in s. 77.54 (25m), Stats., parts stock order books, order forms, stocking and purchasing guides, stockholders’ annual reports or proxy statements, display racks, 3-dimensional plastic items designed to be used by wholesalers and retailers, matchbooks, desk pads, golf balls, binders, and playing cards. It also does not apply to the following items if they are not designed to advertise or promote the sale of merchandise:
1. Calendars.
2. Calendar pads.
3. Envelopes.
4. Folders.
5. Parts price lists.
SECTION 86. Tax 11.19(5)(intro) and (a) are amended to read:
Tax 11.19(5)(intro.) Pursuant to s. 77.54 (43), Stats., Wisconsin sales and use tax is not imposed on raw materials if both of the following conditions are met:
(a) The raw materials are processed, fabricated, or manufactured into, attached to, or incorporated into printed materials.
SECTION 87. Tax 11.19(5m) is created to read:
Tax 11.19(5m) Catalogs and their mailing envelopes. (a) Section 77.54(25m), Stats., provides an exemption from Wisconsin sales and use tax for “The sales price from the sale of and the storage, use, or other consumption of catalogs, and the envelopes in which the catalogs are mailed, that are designed to advertise and promote the sale of merchandise or to advertise the services of individual business firms.”
(b) “Catalog” is defined in s. 77.51 (1fr), Stats., to mean “…a printed and bound, stitched, sewed, or stapled book containing a list and description of property or services for sale, regardless of whether a price is specified.”
SECTION 88. Tax 11.19(6) is amended to read:
Tax
11.19(6) Exempt purchasers. Sales of printed material to federal and
Wisconsin governmental units and, any federally recognized American
Indian tribe or band in Wisconsin, Wisconsin public schools, and
certain nonprofit religious, charitable, educational, or scientific
organizations holding a certificate of exempt status are exempt under s. 77.54
(9a) or 77.55 (1), Stats. Sales to federal and Wisconsin governmental units
and public schools need not be supported by exemption certificates, if a copy
of the purchase order from the organization is retained or the governmental
unit’s certificate of exempt status number is recorded on the bill of sale.
Sales to nonprofit organizations holding a certificate of exempt status can be
shown to be exempt by recording the certificate of exempt status number on the
bill of sale.
SECTION 89. Subchapter IV (title) is amended to read:
Subchapter
IV — Gross Receipts Sales Price
SECTION 90. Tax 11.26(title) and (1)(a) are amended to read:
Tax
11.26(title) Other taxes in taxable gross
receipts and sales price and purchase price.
(1)(a)
Tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., sold at retail often is are
subjected to many direct and indirect taxes prior to reaching a retailer. The
taxes are commonly included in the price the retailer pays for the property and
are not separately identifiable as taxes. Occasionally, however, a tax is
either separately passed on to a retailer or is imposed at the retail level of
activity, but is different from and in addition to the sales tax. The tax may
be imposed by Wisconsin, the federal government or a municipality.
SECTION 91. Tax 11.26(1)(b) is repealed and recreated to read:
Tax 11.26(1)(b) In determining the sales price or purchase price used to compute Wisconsin sales or use taxes, the treatment of a tax for sales tax purposes is identical to the treatment that applies for use tax purposes. The same taxes that are included or excluded from the sales price are also included or excluded from the purchase price.
SECTION 92. Tax 11.26(2)(title), (intro.), and (c), and (3)(title) are amended to read:
(2)(title) Taxes specifically
included as part of gross receipts and sales price and purchase price.
(intro.)
The following taxes are included in a retailer’s gross receipts and the
sales price and the purchase price, except as provided in sub. (3):
(c) Any federal stamp tax and manufacturer’s or importer’s excise tax not imposed directly on the purchaser. Federal excise taxes include excise taxes on alcohol, tobacco, motor and aviation fuel except motor fuel taxes refunded, tires, firearms, sporting goods and air or ship transportation.
Note to LRB: Amend the example at the end of Tax 11.26(2)(d) as follows:
Example: Fuel taxes are included in the price of fuel used in
aircraft, boats and for other nonhighway use. The taxes are included in gross
receipts the sales price.
(3)(title) Taxes
specifically excluded from gross receipts or sales price or
purchase price.
SECTION 93. Tax 11.26(3)(intro.) is repealed and recreated to read:
Tax 11.26(3)(intro.) Sections 77.51 (12m) (b) 3. and 77.51 (15b) (b) 3., Stats., exclude from the sales price and purchase price “Any taxes legally imposed directly on the purchaser that are separately stated on the invoice, bill of sale, or similar document that the seller gives to the purchaser.” Therefore, the following taxes are excluded from the sales price or the purchase price if they are separately stated on the invoice, bill of sale, or similar document given to the purchaser:
SECTION 94. Tax 11.26(3)(b) is amended to read:
Tax 11.26(3)(b) Any tax imposed by the United States,
this state or a Wisconsin municipality upon or with respect to retail sales,
whether imposed upon the retailer or consumer, if that federal, state or
municipal tax is measured by a percentage of sales price or gross receipts and
if the retailer is required to pay the tax to the governmental unit which
levied the tax.
Notes to LRB: 1. Amend the introduction to the examples at the end of Tax 11.26(3)(b) as follows:
Examples: Taxes which are not included in a retailer’s gross
receipts sales price, if they are separately stated on the invoice, bill
of sale, or similar document given to the purchaser, include:
2. Amend the third example at the end of Tax 11.26(3)(b) as follows:
3) The county and, stadium and
regional transit authority sales and use taxes imposed under s. 77.71,
Stats.
SECTION 95. Tax 11.27(title) is amended to read:
Tax
11.27(title) Insurance Maintenance
contracts, insurance, and warranties.
SECTION 96. Tax 11.27(1)(a) and (b) are renumbered 11.27(1)(b) and (c) and amended as renumbered to read:
Tax 11.27(1)(b) “Insurance” means a contract or agreement which promises indemnity against loss or damage resulting from perils outside of and unrelated to defects in tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.
(c) “Warranty” means a contract or agreement which promises indemnity against defects in tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c) or (d), Stats., sold.
SECTION 97. Tax 11.27(1)(a) is created to read:
Tax 11.27(1)(a) “Computer software maintenance contract” means a contract that obligates a vendor of computer software to provide a customer with future updates or upgrades to computer software, computer software support services, or both.
SECTION 98. Tax 11.27(2) is amended to read:
Tax
11.27(2) Receipts from insurance. Gross receipts The sales
price from the sale of insurance, except contracts under s. 77.52 (2)
(a) 13m. Stats., are not subject to Wisconsin sales or use tax when
separately stated on the invoice provided to the purchaser.
Note to LRB: Amend the second example at the end of Tax 11.27(2) as follows:
2) Company A rents a vehicle to Customer B for $200. On the invoice, Company A shows a charge for vehicle rental of $175 and a charge for insurance of $25. The charge of $175 is subject to Wisconsin sales or use tax. The $25 charge for the insurance is not subject to tax since it is separately stated on the invoice provided to the purchaser.
SECTION 99. Tax 11.27(3) is repealed and recreated to read:
Tax 11.27(3) Receipts from Maintenance Contracts and Warranties. Section 77.52 (2) (a) 13m., Stats., imposes Wisconsin sales tax on “The sale of contracts, including service contracts, maintenance agreements, computer software maintenance contracts for prewritten computer software, and warranties, that provide, in whole or in part, for the future performance of or payment for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), unless the sale, license, lease, or rental in this state of the property, items, or goods to which the contract relates is or was exempt, to the purchaser of the contract, from taxation under this subchapter.
Note to LRB: Amend the first 3 examples at the end of Tax 11.27(3) as follows:
1) Company A sells a machine to Customer C which will
be used exclusively and directly in manufacturing. Customer C purchases an
extended warranty with the machine. Customer C provides Company A with a
properly completed manufacturer’s exemption certificate. The
sale of the extended warranty is not subject to Wisconsin sales or use tax
because the machine to which it relates is not subject to exempt from
Wisconsin sales or use tax.
2) Customer D, a resident of Minnesota, purchases an
automobile from a dealership in Wisconsin. Customer D makes no use of the
automobile in Wisconsin other than to drive it to his home in Minnesota.
Customer D purchases an extended warranty with the automobile. The sale of the
extended warranty is not subject to Wisconsin sales or use tax because the sale
of the automobile is not subject to exempt from Wisconsin sales
or use tax.
3) Assume the same facts as in Example 2, except that
Customer D does not purchase the extended warranty at the time of sale of the
automobile. Instead, six weeks after the sale, Customer D purchases the
extended warranty from the dealer. The sale of the extended warranty is not
subject to Wisconsin sales or use tax because the automobile to which the sale
relates was not subject to exempt from Wisconsin sales or use
tax.
SECTION 100. Tax 11.27(4)(a) and (b)1. and 2., (5)(title), (a), and (c)1. and 2., (6), and (7) are amended to read:
Tax
11.27(4)(a) Gross receipts The
sales price from charges by a retailer to a customer or an insurer for taxable
repair parts or taxable services performed under an insurance plan are subject
to Wisconsin sales or use tax.
(b)1. A retailer who provides parts or performs taxable repair services to tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., under an insurance plan may purchase the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred to the customer as part of the repair without Wisconsin sales or use tax as property for resale.
2. A person who provides tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., in repairing real property under an insurance plan is the consumer of the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred to a customer as part of the repair to real property and is subject to Wisconsin sales or use tax on the purchase of the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred.
(5)(title) Repairs by retailers under maintenance contracts and warranties.
(a)
Gross receipts The sales price from charges by a retailer to a
customer for taxable repair parts or taxable services performed under a maintenance
contract or warranty and that are not reimbursed by the seller of the
maintenance contract or warranty are subject to Wisconsin sales or use tax.
(c) 1. A retailer who provides parts or performs taxable repair services to tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., under a maintenance contract or warranty may purchase the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., transferred to the customer as part of the repair without Wisconsin sales or use tax as property, items, or goods for resale.
2. A person who provides tangible personal property or items or property, under s. 77.52 (1) (b) or (c), Stats., in repairing real property under a maintenance contract or warranty is the consumer of the tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., transferred to a customer as part of the repair to real property and is subject to Wisconsin sales or use tax on the purchase of the tangible personal property or items or property, under s. 77.52 (1) (b) or (c), Stats., transferred.
Note to LRB: Amend the note at the end of Tax 11.27(5)(c)2. as follows:
Note: Refer to s. Tax 11.68 for information about distinguishing between real and tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
(6) Repairs
not by retailers. If a retailer does not repair tangible personal
property or items, property or good under s. 77.52 (1) (b), (c), or (d),
Stats., under a maintenance contract, warranty or insurance plan,
but instead has another person perform the repairs covered under the maintenance
contract, warranty or insurance plan, the person’s gross receipts sales
price from the sale of the repair to the retailer are is not
subject to Wisconsin sales or use tax provided the retailer gives the person a
properly completed resale exemption certificate. The charge for
repairs by the other person is exempt as a sale for resale whether or not the
original sale of the property, item, or good to which the maintenance
contract, warranty, or insurance plan relates occurred in
Wisconsin. The sales and use tax treatment of the charge by the retailer to
the customer or plan provider is the same as provided in subs. (4) and (5).
Note to LRB: Amend the note at the end of Tax 11.27(6) as follows:
Note: Refer to s. Tax 11.14 for information regarding
exemption certificates, including resale certificates.
(7) Goodwill
work. A retailer who provides free parts or services or both to a
customer under an implied warranty in order to maintain good customer
relations, although not required to do so under a sales agreement, maintenance
agreement, express warranty, or insurance plan may purchase the parts without
Wisconsin sales or use tax as property for resale.
SECTION 101. Tax 11.28(1)(a) and (b), (2)(a) to (e), and (3)(a)(title) are amended to read:
Tax 11.28(1)(a) Section 77.51(14) (k) (15a)
(b) 2., Stats., provides that “sale,” “sale sales,
lease, or rental, for resale, sublease, or subrent” “retail
sale,” “sale at retail” or equivalent terms includes the does not
include any sale of tangible personal property or items, property, or
goods under s. 77.52 (1) (b), (c), or (d), Stats., to a purchaser even
though the property, items, or goods may be used or consumed by another
person to whom the purchaser transfers the property, items, or goods
without valuable consideration, such as gifts and other advertising specialties
distributed gratis at no charge and apart from the sale of other
tangible personal property, items, property, or goods under s. 77.52 (1)
(b), (c), or (d), Stats., or services.
(b)
Section 77.51 (4) (15b) (a), Stats., provides that “gross
receipts sales price” means the total amount of the sale, lease
or rental price from sales at retail consideration, including cash,
credit, property, and services, for which of tangible personal
property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats., or taxable services are sold, licensed, leased or rented,
valued in money, whether received in money or otherwise.
(2)(a)
General. Persons who make gifts of taxable tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or
distribute tangible personal property or items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., gratis at no charge to
others are the consumers of the property, items, or goods and the tax
shall apply to the gross receipts sales price from the sale of
the property, items, or goods to persons making gifts. Taxable sales
include sales of samples, advertising material, display cases, racks,
and other similar marketing aids to manufacturers, distributors, jobbers,
and wholesalers acquiring the property, items, or goods for the purpose
of giving it to retailers for use in selling merchandise to customers.
(b)
Grand opening gifts. A person who sells tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to a
retailer who uses the property, items, or goods as gifts at a grand
opening or similar event, such as an open house, celebrity appearance,
or farm days, cannot accept a resale certificate in good faith if the seller
is aware, or should be aware, of how the property will be used should
charge the retailer the applicable Wisconsin sales or use tax, unless the
retailer provides the seller with a fully completed exemption certificate at
the time of the sale. In cases where a seller furnishes free property to a
retailer for use as gifts at a grand opening or similar event, the seller
furnishing the property to the retailer without charge is subject to the sales
or use tax on the property donated, unless the property is exempt from
use tax under s. 77.56 (3), Stats., because it is donated to an entity exempt
from sales or use tax under s. 77.54 (9a), Stats.
(c)
Gift certificates. The gross receipts sales price from
the sale of a gift certificate are is not taxable because the
certificate represents an intangible right. When a gift certificate is
redeemed for taxable tangible personal property or items, property, or goods
under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, the
transaction is completed and the retailer’s tax liability accrues at that time.
(d)
Gifts shipped out-of-state. When taxable property, items, or goods
to be given as a gift is are purchased at retail and the
purchaser, without obtaining possession of the gift, directs the seller to ship
it to an out-of-state person a location outside Wisconsin,
gross receipts from the sale are the sales price is not subject
to the Wisconsin sales tax.
(e) Awards. Persons transferring tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to salespersons or distributors or both in redemption of awards, such as points, given under a sales incentive plan shall pay the tax on their purchases of the property, items, or goods.
Note to LRB: Amend the note at the end of Tax 11.28(2)(f) as follows:
Note: The amount subject to tax is the sales purchase
price as described in s. Tax 11.32, except that the fair market value may be
used if the requirements of s. 77.57, Stats., are met.
(3)(a)(title) Coupons for free property, items, or goods issued and redeemable by a manufacturer or other third party.
SECTION 102. Tax 11.28(3)(a) is renumbered 11.28(3)(a)(intro.) and is amended as renumbered to read:
Tax 11.28(3)(a)(intro.) When a manufacturer’s or other third party’s
coupons are distributed to consumers and subsequently are redeemed by a
retailer for tangible personal property or items, property, or goods under
s. 77.52 (1) (b), (c), or (d), Stats., without charge, the transfer of the
property, items, or goods by the retailer to the coupon holder is a
sale, not a gift. The consideration for the sale, upon which the measure
of tax is based, if taxable tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., is transferred,
is the amount the manufacturer or other third party reimburses the
retailer for the coupon, less any coupon handling fees paid by the
manufacturer. , if the following conditions are met:
SECTION 103. Tax 11.28(3)(a)1. to 4. are created to read:
Tax 11.28(3)(a)1. The retailer receives consideration from a third party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
2. The retailer is obligated to pass the price reduction or discount on to the purchaser;
3. The amount of the consideration attributable to the sale is a fixed amount and the retailer is able to determine the amount at the time of the sale; and
4. One of the following also applies:
a. The purchaser presents a coupon, certificate, or other documentation to the retailer to claim the price reduction or discount, if the coupon, certificate, or other documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse the retailer for the amount of the price reduction or discount;
b. The purchaser identifies himself or herself to the retailer as a member of a group or organization that may claim the price reduction or discount; or
c. The retailer provides an invoice to the purchaser, or the purchaser presents a coupon, certificate, or other documentation to the retailer that identifies the price reduction or discount as a third party price reduction or discount.
SECTION 104. Tax 11.28(3)(b) and (c)1. and 2., (4)(b) and (c), (5)(b), (6), and (7) are amended to read:
Tax
11.28(3)(b) Cents-off coupons redeemable reimbursed by
manufacturers and other third parties. A common arrangement between
manufacturers or other third parties and retailers involves the use of
cents-off coupons. The coupons are distributed as part of a retailer’s
advertisements issued by manufacturers or other third parties and are
used by consumers toward the purchase of tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. The
retailer then is reimbursed by the manufacturer or other third party.
In this situation, a the retailer’s taxable gross receipts
includes sales price includes the amount which the retailer is
reimbursed and the amount paid by receives from the customer presenting
the coupon. The retailer’s taxable sales price also includes the amount
the retailer receives from the manufacturer, less any coupon handling fees
paid by the manufacturer to the retailer, if the conditions in par. (a) 1.
to 4. are met.
(c)1. When a retailer distributes coupons which its customer may use to obtain free tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., the following shall apply:
a.
When purchasing tangible personal property or items, property, or goods
under s. 77.52 (1) (b), (c), or (d), Stats., which will be given away to
customers who must purchase other property, items, or goods to obtain
the “free” property, item, or good, a retailer may use a
resale an exemption certificate to purchase the free property,
item, or good without payment of the sales tax, since the transaction is
deemed a sale of both the free property, item, or good and the other
property, item, or good. The sale of the free property, item or good
and the other property, item or good by the retailer is subject
to Wisconsin sales or use tax, unless an exemption applies.
b.
A retailer may not use a resale an exemption certificate when
purchasing taxable tangible personal property or items, property, or goods
under s. 77.52 (1) (b), (c), or (d), Stats., which the retailer knows, or
should know, is to be given away to customers without the customers being
required to purchase other property, items, or goods to receive the free
property, item, or good. If the property, item, or good that is
given away was acquired without tax for resale, the retailer shall report the
tax on the property, item, or good.
Note to LRB: Amend the examples at the end of Tax 11.28(3)(c)1.b. as follows:
Examples:
1) A retailer knows key chains it
purchases will be given away to customers when those customers purchase
gasoline, food items, or other tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. The
retailer may purchase the key chains without Wisconsin sales tax by giving a
resale an exemption certificate claiming resale to its
supplier.
2)
A retailer purchases key chains that
are subsequently given away to customers, regardless of whether the customer
makes a purchase. If the retailer purchased the key chains without Wisconsin
sales or use tax by giving its supplier a resale an exemption
certificate claiming resale, the retailer is liable for tax on the key
chains given away.
2.
The taxable gross receipts sales price of retailers, who issue
cents-off coupons which reduce the price of merchandise they sell, and who
receive no reimbursement from a manufacturer or other third party, are
is the reduced amounts amount charged the customer.
(4)(b) A sales promotional agency’s receipts from sales of coupon or voucher books are not taxable, because the agency is selling intangible rights. These intangible rights entitle the purchaser of the coupon or voucher book to receive tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services at a reduced price or for no charge. However, any receipts received by participating retailers from the sales promotional agency are subject to the sales tax, if taxable property, items, goods, or services are furnished to the person using the coupon or voucher. Any additional receipts received by the retailer from the person using the coupons or vouchers also are taxable.
(c) Retailers are subject to the sales and use tax on taxable property, items, or goods transferred when coupons are redeemed without consideration from a sales agency, the consumer or any other person unless an exemption applies.
Note to LRB: Amend the note at the end of Tax 11.28(4)(c) as follows:
Example: Motel A provides a free breakfast with the purchase of lodging. Motel A purchases fruit, milk, cereal, bakery goods including rolls, bagels, muffins, and bread, ground coffee beans, frozen juice, napkins, plastic utensils, and paper plates and cups from a vendor. Motel A prepares the coffee and juice. The food and beverages are placed on a table in the lobby. Motel A’s customers may take as much or as little as they want of the food and beverage items.
Motel
A’s purchases of fruit, milk, cereal, bakery goods, ground coffee beans,
and frozen juice are not subject to Wisconsin sales or use tax because they are
exempt food items not for direct consumption on the premises of the vendor
under s. 77.54 (20) (20n), Stats. Motel A’s purchases of the
napkins, plastic utensils, and paper plates and cups are subject to
sales or use tax because no exemption applies.
(5)(b)
A retailer’s taxable gross receipts sales price may not be
reduced by the retailer’s payments for trading stamps and stamp books or for payments
to customers in redemption of the stamps.
(6) Manufacturer
rebates. A manufacturer’s rebate to a person who purchases tangible
personal property or items, property, or goods under s. 77.52 (1) (b), (c),
or (d), Stats., or taxable services from a retailer is not a reduction of
the retailer’s gross receipts or sales price or purchase price
for the item for sales or use tax purposes.
Note to LRB: Amend the examples at the end of Tax 11.28(6) as follows:
Examples:
1) An automobile manufacturer gives
an automobile dealer’s customer a cash rebate of $1,500 for an automobile
purchased by a customer for $15,000. Taxable gross receipts The
taxable sales price of the dealer from the sale of the automobile are
is $15,000.
2) An automobile manufacturer gives an automobile
dealer’s customer the option of receiving a $1,500 cash rebate or allowing the
$1,500 rebate to be applied against the price of the automobile ($15,000) by
assigning the right to the rebate to the dealer. The customer chooses to assign
the rebate to the dealer and apply the rebate against the price paid for
the automobile and pays the dealer $13,500 ($15,000 - $1,500) for the
automobile. The manufacturer subsequently reimburses the dealer $1,500. Taxable
gross receipts of the dealer The taxable sales price from the sale
of the automobile are is $15,000.
(7) Certain medicines
drugs furnished without charge. No sales or use tax is owed on medicines
drugs furnished without charge to a physician, surgeon, nurse
anesthetist, advanced practice nurse, osteopath, dentist licensed under ch.
447, Stats., podiatrist licensed under ch. 448, Stats., or optometrist licensed
under ch. 449, Stats., if the medicine drug may not be dispensed
without a prescription.
Note to LRB: Amend the example at the end of Tax 11.28(7) as follows:
Example: A drug manufacturer furnishes medicine drug
samples to doctors without charge. The medicine drug samples may
not be dispensed without a prescription. The drug manufacturer does not owe
sales or use tax on its cost of the ingredients for the medicine drug
samples.
SECTION 105. Tax 11.29 is repealed and recreated to read:
Tax 11.29 Leases, licenses and rentals of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c), and (d), Stats. (1) Definitions. (a) “Lease or rental,” as defined in s. 77.51 (7) (a), Stats., means “…any transfer of possession or control of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c) or (d) for a fixed or indeterminate term and for consideration and includes:
1. A transfer that includes future options to purchase or extend.
2. Agreements related to the transfer of possession or control of motor vehicles or trailers, if the amount of any consideration may be increased or decreased by reference to the amount realized on the sale or other disposition of such motor vehicles or trailers, consistent with section 7701 (h) (1) of the Internal Revenue Code.”
(b) “Lease or rental,” as defined in s. 77.51 (7) (a), Stats., does not include “…1. A transfer of possession or control of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d) under a security agreement or deferred payment plan, if such agreement or plan requires transferring title to the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) after making all required payments.
2. A transfer of possession or control of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) under any agreement that requires transferring title to the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) after making all required payments and after paying an option price that does not exceed the greater of $100 or 1 percent of the total amount of the required payments.
3. Providing tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) along with an operator, if the operator is necessary for the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) to perform in the manner for which it is designed and if the operator does more than maintain, inspect, or set up the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d).”
(c) The definition of “lease or rental” provided in pars. (a) and (b) first applies to lease and rental contracts entered into on October 1, 2009 and has no effect on lease or rental contracts entered into prior to October 1, 2009 until such lease or rental contract is renewed, extended, or modified on or after October 1, 2009.
(d) “Receive” as provided in s. 77.522 (1) (a) 1., Stats., “…means taking possession of tangible personal property or items or property under s. 77.52 (1) (b) or (c)…or taking possession or making first use of digital goods under s. 77.52 (1) (d), whichever comes first. ‘Receive’ does not include a shipping company taking possession of tangible personal property or items or property under s. 77.52 (1) (b) or (c) on a purchaser’s behalf.”
(e) “Transportation equipment” as provided in s. 77.522 (1) (a) 2., Stats., means any of the following:
1. Locomotives and railcars that are used to carry persons or property in interstate commerce.
2. Trucks and truck tractors that have a gross vehicle weight rating of 10,001 pounds or greater, trailers, semitrailers, and passenger buses, if such vehicles are registered under the international registration plan under s. 341.405 and operated under the authority of a carrier that is authorized by the federal government to carry persons or property in interstate commerce.
3. Aircraft that are operated by air carriers that are authorized by the federal government or a foreign authority to carry persons or property in interstate or foreign commerce.
4. Containers that are designed for use on the vehicles described in subds. 1. to 3. and component parts attached to or secured on such vehicles.
(2) General rule. (a) The sales price from the lease, license, or rental of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., shall be subject to the sales and use taxes to the same extent that the sales price from the sale of the same property, item, or good would be subject to the tax. A lease is a continuing sale in Wisconsin under s. 77.51 (14) (j), Stats., and a lessor or licensor shall pay tax on the lease, license, or rental receipts sourced to Wisconsin under s. 77.522, Stats., even though the property, item, or good may have been acquired, used, or both previously by the lessee or licensee in another state.
(b) 1. Transfers described in sub. (1) (a) are leases, licenses, or rentals regardless of whether such transfer is considered a lease, license, or rental under generally accepted accounting principles, or any other provision of federal, state, or local law.
2. Transfers described in sub. (1) (b) are not leases, licenses, or rentals, regardless of whether such transfer is considered a lease, license, or rental under generally accepted accounting principles, or any other provision of federal, state, or local law.
(3) Purchases for rental. (a) A lessor’s or licensor’s purchase of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to be used solely for lease, license, or rental shall be exempt as a purchase for resale.
(b) A lessor’s or licensor’s purchase of lubricants, repair parts, and repair services on tangible personal property and property, items, and goods under s. 77.52 (1) (b), (c), or (d), Stats., used solely for leasing, licensing, or renting shall also be exempt as a purchase for resale. However, if the same property, items, or goods are purchased by a renter, licensee, or lessee, the purchases shall be taxable.
(c) Charges by a lessor or licensor to a lessee, licensee, or renter under a maintenance contract on leased tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., shall be taxable.
(4) Property both rented and used personally. If tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are purchased by a person who uses them part of the time and licenses, leases, or rents them out part of the time, the sale of the property, item, or good to the person shall be taxable. The lessor’s or licensor’s rental receipts shall also be taxable, unless the transaction is specifically exempt by statute.
(5) Service vs. rental of equipment. (a) If an item of tangible personal property or item, property, or good under s. 77.52 (1) (b), (c) or (d), Stats., is provided along with an operator that does more than maintain, inspect, or set up the tangible personal property or item, property, or good, the transaction is considered a service and not a lease, license, or rental of tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats.
Example: A backhoe and operator are provided to dig a trench. This transaction is the sale of a service and not a rental of the backhoe.
(b) If an item of tangible personal property or item, property or good under s. 77.52 (1) (b), (c), or (d), Stats., is provided along with an operator that only maintains, inspects, or sets up the tangible personal property or item, property, or good, the transaction is considered a lease, license, or rental of the tangible personal property, item, or good.
Example: Company A rents scaffolding from Company B. Company B provides a person to set up the scaffolding as requested by Company A, to make sure none of the nuts and bolts holding the scaffolding together have loosened up and to move the scaffolding to different locations as requested by Company A. The entire charge by Company B to Company A is for the lease or rental of the scaffolding.
(c) Charges for the rental of motor trucks shall be taxable. However, if drivers are provided by the truck’s owner to operate the trucks, this shall be considered a service and not a lease or rental of the trucks.
(d) The sales price from the lease, license, or rental of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., incidental to the providing of a nontaxable service shall not be taxable. If the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is incidental to the providing of a nontaxable service, the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is consumed by the service provider and the service provider is required to pay any applicable sales or use tax.
(6) Credit for sales tax paid. If a lessor of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., paid a Wisconsin sales tax on the acquisition of the property, item, or good used solely for leasing purposes, the lessor may either request a refund of the sales tax from the seller or the department or may claim a credit against the tax due on rental receipts from the property, item, or good involved under s. 77.585 (2), Stats. If a credit is claimed, it shall expire when the cumulative rental receipts equal the sales price upon which the vendor paid sales tax to Wisconsin.
(7) Sourcing lease, license and rental payments. (a) First or only payment. Except as provided in pars. (c) and (e), for lease, license, and rental agreements that only require one payment and for the first payment on lease, license, and rental agreements that require more than one payment, the lease, license, or rental is sourced to the location where the purchaser receives the product, as follows:
1. If the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is received by the lessee or licensee at the lessor’s or licensor’s business location, the first or only payment is sourced to the lessor’s or licensor’s business location.
2. If the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is not received by the lessee or licensee at the lessor’s or licensor’s business location, the first or only payment is sourced to the location where the lessee or licensee or the lessee’s or licensee’s designated donee receives the product. This would include the location indicated by instructions known to the lessor or licensor for delivery to the lessee or licensee or the lessee’s or licensee’s designated donee. The delivery may be made by the lessor or licensor or by a shipping company hired by the lessee or licensee.
3. If the location cannot be determined under subds. 1. and 2., the first or only payment is sourced to the lessee’s or licensee’s address as indicated by the lessor’s or licensor’s business records, if the records are maintained in the ordinary course of the lessor’s or licensor’s business and if using that address to establish the location of the lease, license, or rental is not in bad faith.
4. If the location cannot be determined under subd. 1., 2., or 3., the first or only payment is sourced to the lessee’s or licensee’s address as obtained during the consummation of the lease, license, or rental, including the address indicated on the lessee’s or licensee’s payment instrument, if no other address is available and if using that address to determine the location of the lease, license, or rental is not in bad faith.
5. If the location cannot be determined under subd. 1., 2., 3. or 4., the first or only payment is sourced as follows:
a. For tangible personal property and items and property under s. 77.52 (1) (b) or (c), Stats., except for prewritten computer software, the first or only payment is sourced to the location from which the property or item was shipped.
b. For prewritten computer software delivered electronically and digital goods under s. 77.52 (1) (d), Stats., the first or only payment is sourced to the location from which the computer software or digital good was first available for transmission by the seller, but not including any location that merely provided the digital transfer of the product sold.
(b) Subsequent periodic payments. Except as provided in pars. (d) and (e), subsequent periodic payments on the lease, license, or rental of tangible personal property and items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are sourced to the property’s, item’s, or good’s primary location. The primary location is the address of the property, item, or good provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith.
(c) Motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment. Leases, licenses, and rentals of motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment are sourced to the primary location of such property as indicated by an address for the property that is provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith, and except that a lease, license, or rental that only requires one payment, shall be sourced as provided in par. (a).
(d) Intermittent use. The sourcing of the lease, license, and rental payments as described in pars. (a), (b), and (c) shall not be altered by any intermittent use of the property, item, or good at different locations.
Example: Company A leases laptop computers that are normally kept in State A and the lease payments are sourced to State A. However, when an employee is travelling and consulting with clients in other states, the employee brings the laptop computer to these other states. The intermittent use of the laptop computer in the other states does not affect the sourcing of these lease payments.
(e) Transportation equipment. Leases, licenses, and rentals of transportation equipment are sourced to the location determined in par. (a).
(6) Special rental situations. (a) Demurrage. The charge a gas supplier makes to a customer-consumer, because a gas cylinder is retained beyond a 30-day or other period, shall be taxable. The “demurrage” charges shall constitute rentals paid for the continuing possession of the cylinders.
(b) Water softeners. The sales price from the rental of a cylinder type water softener which is periodically removed from a customer’s premises for recharging and replaced by another unit shall be taxable.
(c) Chemical toilets. A lessor’s entire charge for the use of chemical toilets used at fairs and other similar events shall be taxable, including cleaning services provided as part of the total charge.
(d) Mobile homes and manufactured homes. Rental of a mobile home as defined in s. 101.91 (10), Stats., and manufactured homes as defined in s. 101.91 (2), Stats., shall be taxable unless:
1. The mobile home or manufactured home is converted to real property by hooking it up to utilities and placing it on a foundation on land owned by the lessor. However, even if it is placed on a foundation and hooked up to utilities, a mobile home or manufactured home shall remain tangible personal property if the lessor does not own the realty on which it is located.
2. The mobile home as defined in s. 101.91 (10), Stats., or manufactured home as defined in s. 101.91 (2), Stats., is rented or leased for a continuous period of one month or more and is used as a residence by the renter or lessee.
(e) Lease cancellation charge. A payment by a lessee to a lessor for the cancellation of a lease of tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., shall be taxable. The payment shall be deemed consideration arising from the original lease since it effectively decreases the term of the lease and thereby increases the rental payments for the actual period the property, item, or good was used.
(f) Delivery and erection. Lessors of scaffolding or other tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., who set forth separate charges for transportation, assembly, and disassembly shall pay tax on their total sales price. A lessee rents property, items, or goods when it is assembled and in place and the charges for transportation, assembly, and disassembly shall be deemed part of a lessor’s rental receipts.
(g) Funeral coaches. The sales price that the owner of a hearse receives when the owner furnishes it without a driver, to a funeral director is subject to tax. However, the sales price the owner of a hearse receives when the owner furnishes it with a driver that does more than maintain, inspect, or set up the hearse is not subject to tax.
(h) Waste reduction and recycling equipment. The lease or rental of waste reduction or recycling machinery and equipment shall not be taxable if used exclusively and directly for waste reduction or recycling activities described in s. 77.54 (26m), Stats.
Note: For information regarding the lease or rental of highway vehicles and mobile mixing units, see s. Tax 11.79.
Note: Section Tax 11.29 interprets ss. 77.51 (4) (c) 5., (13) (k) and (14) (j), 77.52 (1), 77.54 (5) (b) and (d), (26m) and (36) and 77.58 (6), Stats.
Note: The interpretations in s. Tax 11.29 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for mobile homes used for lodging for a continuous period of 1 month or more became effective July 1, 1984, pursuant to 1983 Wis. Act 341; (b) The exemption for the lease or rental of incidental property transferred in providing a nontaxable service became effective as a result of Dept. of Revenue vs. Dow Jones & Company, Inc., (COA-District IV, 1/26/89); and (c) The exemption for waste reduction and recycling equipment became effective July 1, 1984, pursuant to 1983 Wis. Act 426.
SECTION 106. Tax 11.30(1)(a) and (b) are amended to read:
Tax
11.30(1)(a) Sales. If taxable personal property or items, property
or goods under s. 77.52 (1) (b), (c), or (d), Stats., is are
sold on credit, the entire amount of the retailer’s gross receipts sales
price from the sale shall be taxable and shall be reported in on
the tax return for the period in which the sale is made, without any
reduction in the amount of tax payable by the retailer by reason of the
retailer’s transfer at a discount of any open account, note, conditional sales
contract, lease contract or other evidence of indebtedness. A sale
involving the transfer of ownership of tangible personal property or
items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., is
completed at the time and place where possession is transferred by the
seller or the seller’s agent to the purchaser or the purchaser’s agent. The
location to which the sale is sourced is based on s. 77.522, Stats. The
tax shall be reported on taxable gross receipts on the accrual basis,
except when the department is satisfied that an undue hardship would exist and
authorizes reporting on some other basis.
(b)
Repossessions. No deduction from gross receipts the sales
price shall be made if property, items or goods sold on credit is
are repossessed unless the entire consideration paid by the purchaser is
refunded to the purchaser or a deduction for worthless accounts is
allowable as a bad debt under s. 77.51 (4) (b) 4. 77.585(1),
Stats.
SECTION 107. Tax 11.30(2) is repealed and recreated to read:
Tax 11.30(2) Bad debts. (a) Definition of Bad Debt. “Bad debt” is defined in s. 77.585 (1) (a), Stats., to mean “…the portion of the sales price or purchase price that the seller has reported as taxable under this subchapter and that the seller may claim as a deduction under section 166 of the Internal Revenue Code. ‘Bad debt’ does not include financing charges, or interest, sales or use taxes imposed on the sales price or purchase price, uncollectible amounts on tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) that remain in the seller’s possession until the full sales price or purchase price is paid, expenses incurred in attempting to collect any debts, debts sold or assigned to 3rd parties for collection, and repossessed property or items.”
(b) Deduction from measure of tax. A seller may claim as a deduction on a return under s. 77.58, Stats., the amount of any bad debt the seller writes off as uncollectible in the seller’s books and records and that is eligible to be deducted as a bad debt for federal income tax purposes, regardless of whether the seller is required to file a federal income tax return. Only a seller who has previously paid sales or use tax to this state on the accounts may claim the bad debt deduction. However, if a seller uses a certified service provider to file the returns and report the taxes due, the certified service provider may claim the bad debt deduction on the seller’s behalf if the seller has not and will not claim the same deduction. In either case, the deduction shall be claimed on the return for the period in which the seller writes off the amount of the deduction as uncollectible and the amount is eligible to be deducted as a bad debt for federal income tax purposes. That period is defined as any time within the seller’s fiscal or calendar year in which the account is written off. If the seller is out of business when the account becomes worthless, a bad debt deduction may be claimed on the last return filed by that business, or through a refund claim or amended return filed within the statutory time allowed. Notes, which later become worthless, received on the sale of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., shall be treated in the same manner as other worthless accounts.
(c) Recovery of bad debts charged off. If any accounts found worthless and charged off as bad debts are thereafter in whole or in part collected by the seller, the amount so collected shall be included in the first return filed after such collection and the amount of the tax thereon paid with the return. The amounts recovered are first applied to the price of the property, item, good or service and the proportionate share of the sales tax on that property, item, good or service and then to interest, service charges and other charges related to the sale.
(d) Amount deductible. 1. ‘Nontaxable receipts.’ If an account found worthless and charged off as a bad debt is comprised in part of nontaxable receipts, such as interest, financing or insurance, and in part of taxable receipts upon which tax has been paid, a bad debt deduction may be claimed only for the unpaid amount upon which tax has been paid. In determining that amount, all payments and credits to the account shall be applied proportionately against the various charges comprising the amount the purchaser contracted to pay.
2. ‘Expenses of collection’. No deduction is allowable for expenses incurred by the seller in attempting to collect any account receivable, or for that portion of a debt recovered that is retained by or paid to a third party as compensation for services rendered in collecting the account.
(e) Special situations. 1. A purchaser of receivables is not entitled to a bad debt deduction for the receivables which subsequently become worthless.
2. A retailer who sells its receivables and agrees to bear any bad debt loss on them is entitled to a bad debt deduction to the same extent as if the accounts were not sold. However, a bad debt deduction is not allowable when receivables are sold outright at a discount.
3. A contractor engaged in real property construction activities is not entitled to a bad debt deduction, even though the total amount due the contractor under a real property construction contract cannot be collected, as the contractor is the consumer, not the retailer, of the tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., used to fulfill the construction contract.
4. A retailer permitted to report the sales price on the cash receipts basis may not claim a bad debt deduction.
(f) Repossessions. When property, items, or goods on which a receivable exists are repossessed, a bad debt deduction is allowable only to the extent that the seller sustains a net loss of the sales price upon which tax was paid. A net loss occurs when the sum of the pro rata portion of all payments, credits and the wholesale value of the repossessed property, item, or good attributable to the cash sales price of the property, item, or good, is less than the cash sales price upon which sales or use tax was paid.
Example: At the time when the tax rate is 5%, a motor home is purchased on January 1 of a year for a cash price of $15,000 and sales tax of $750. A down payment of $2,150 is made at the date of purchase, leaving a balance to finance of $13,600. The motor home is financed with the seller for a period of one year at the rate of 10% of the amount financed. After receiving periodic payments totaling $6,800, the motor home is repossessed. The wholesale value of the property is $6,000 on the date of repossession due to rather extensive damage to the motor home. The deductible bad debt loss upon repossession of the motor home is computed as follows:
|
|
Cash Sales Price |
Sales Tax |
Finance Charge |
Total |
|
1. Sales price and tax |
$15,000.00 |
$750.00 |
- |
$15,750.00 |
|
2 . Down payment allocation (1) |
2,047.62 |
102.38 |
- |
2,150.00 |
|
3. Balance to finance |
$12,952.38 |
$647.62 |
- |
$13,600.00 |
|
4. Add: Finance harge |
|
|
1,360.00 |
1,360.00 |
|
5. Contract balance |
$12,952.38 |
$647.62 |
$1,360.00 |
$14,960.00 |
|
6. Payments on contract (2) |
5,887.45 |
294.37 |
618.18 |
6,800.00 |
|
7. Contract balance - date of repossession |
$7,064.93 |
$353.25 |
$741.82 |
$8,160.00 |
|
8. Wholesale value of repossession (2) |
5,194.81 |
259.74 |
545.45 |
6,000.00 |
|
9. Deductible loss |
$1,870.12 |
|
|
$1,870.12 |
|
10. Nondeductible loss |
$93.51 |
$196.37 |
289.88 |
|
|
11. Total loss |
$2,160.00 |
|||
|
12. Percentage
of sales price and tax |
95.2381% |
4.7619% |
|
100% |
|
13. Percentage of contract balance (Line 5) |
86.5801% |
4.3290% |
9.0909% |
100% |
(1) The down payment on line 2 is allocated between the total cash sales price of the motor home and the sales tax thereon on the basis of the percentage of each to their total. The percentages are shown on line 12.
(2) The payments on the contract on line 6 and the wholesale value on the date of repossession of the property repossessed on line 8 are allocated on the basis of the contract balances on line 5. The percentages thereof are shown on line 13.
SECTION 108. Tax 11.32(title), (1), (2), and (3)(a) to (c) are amended to read:
Tax
11.32(title) “Gross
receipts” and “Sales price” and “purchase price”.
(1) General.
The amount to which the sales and use tax rate is applied is the “gross
receipts” “sales price” for sales tax and the “sales
price” “purchase price” for use tax. Both “gross receipts” and
“sales price” and “purchase price” mean the total amount of the consideration
for the sale, license, lease or rental from retail sales of tangible
personal property or items, property or goods under s. 77.52 (1) (b), (c),
or (d), Stats., or taxable services, valued in money, whether received in
money or otherwise.
(2) Delivery, handling and service charges. A
retailer’s gross receipts from charges for customer alterations,
handling services, small orders, returned merchandise, restocking, split
shipments, shipping, postage, crating, packing and similar charges for
services related to retail sales, are included in gross receipts the
sales price derived from the sale of taxable tangible personal property,
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or
taxable services. Cancelled order charges are not taxable if there is no
transfer of merchandise to a customer. For orders that include property and
items that are subject to tax and property and items that are not subject to
tax, the amount of the delivery charge that the seller allocates to the
property and items subject to tax shall be based either upon the total sales
price of property and items that are subject to tax as compared to the total
sales price of all of the property and items included in the shipment or on the
weight of the property and items subject to tax compared to the total weight of
all of the property and items included in the shipment.
(3)(a)
Cash discounts, term discounts and coupons that are not reimbursed by a
third party and which are allowed by a retailer directly to customers
reduce the gross receipts sales price subject to the tax. The
customer must receive the discount for the retailer to exclude it from gross
receipts the sales price.
(b)
A retail cooperative’s rebates to members, which are made after the net profit
is determined at the end of a year, are patronage dividends rather than cash
discounts, and are not deductible from the cooperative’s gross receipts sales
price.
(c)
A manufacturer’s cash rebate to a person who purchases tangible personal
property, items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats., or taxable services from a retailer is not a reduction in the
retailer’s gross receipts or sales price or purchase price for
the item, regardless of whether the rebate is paid in cash or is used to reduce
the selling price.
Note to LRB: Amend the example at the end of Tax 11.32(3)(c) as follows:
Example: An automobile is sold for a sticker price of
$18,000. The manufacturer offers a $1,500 rebate with the purchase.
Regardless of whether the customer pays the retailer $18,000 and later receives
$1,500 from the manufacturer or the customer pays the retailer $16,500 ($18,000
sticker price less $1,500 rebate), the retailer shall report a taxable gross
receipts sales price of $18,000 from the sale.
SECTION 109. Tax 11.32(3)(d) is created to read:
Tax 11.32(3)(d) “Sales price” and “purchase price” include consideration paid by third parties if all of the following apply:
1. The seller actually receives consideration from a third party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
2. The seller is obligated to pass the price reduction or discount to the purchaser;
3. The amount of the consideration that is attributable to the sale is a fixed amount and the seller is able to determine that amount at the time of the sale to the purchaser; and
4. One of the following applies:
a. The purchaser presents a coupon, certificate or other documentation to the seller to claim the price reduction or discount, if the coupon, certificate or other documentation is authorized, distributed or granted by a third party with the understanding that the third party will reimburse the seller for the amount of the price reduction or discount;
b. The purchaser identifies himself or herself to the seller as a member of a group or organization that may claim the price reduction or discount; or
c. The seller provides an invoice to the purchaser, or the purchaser presents a coupon, certificate or other documentation to the seller that identifies the price reduction or discount as a third party price reduction or discount.
SECTION 110. Tax 11.32(4)(a)(intro.), (b), and (c) are amended to read:
Tax
11.32(4)(a)(intro.) Section 77.51 (4) (a) 4. 77.585 (7), Stats.,
provides in part that “if a retailer establishes to the department’s
satisfaction of the department that the sales tax…has been added
to the total amount of the sales price and has not been absorbed by the
retailer, the total amount of the sales price shall be the amount received
exclusive of the sales tax imposed.” Therefore, when the tax is collected
from customers who are notified of that fact, the amount of the tax collected
is not included in the base to which the tax applies. The notification may be
by any one of the following methods:
Note to LRB: Amend the example at the end of Tax 11.32(4)(a)3. as follows:
Example: A tavern, located in a county which has a combined
5.5% Wisconsin state and county sales and use tax rate in effect, conspicuously
posts a sign stating “Prices Include Sales Tax.” The tavern’s gross receipts
sales price from sales of food and beverages are $10,000 for the month.
When filing its sales and use tax return, form ST-12, the tavern may deduct
$521.33 of sales tax to arrive at taxable receipts of $9,478.67 ($10,000
1.055 = $9,478.67). The tax payable by the tavern is determined by multiplying
its taxable receipts times the tax rate ($9,478.67 x .055 = $521.33 tax
payable).
(b)
If a retailer cannot collect any tax because all sales are below the minimum
price on which tax is collectible using the straight mathematical
computation described in sub. (5) (a) or under the bracket systems set
forth in subs. sub. (5) and (6) (b), no part of the
retailer’s gross receipts sales price may be treated as tax
collected from customers.
Note to LRB: Amend the example at the end of Tax 11.32(4)(b) as follows:
Example: A vending machine retailer whose only receipts are
from sales of 5¢ items is unable to collect any sales tax from customers, and
the tax applies to the total gross receipts sales price.
(c)
If a vending machine retailer sells taxable property at a price such that a
sales tax is collectible using either the straight mathematical computation
described in sub. (5) (a) or under the bracket systems set forth in subs.
sub. (5) and (6) (b), part of the gross receipts sales
price from these sales shall include sales tax if customers are advised
that the vending machine prices include sales tax.
SECTION 111. Tax 11.32(5) is repealed and recreated to read:
Tax 11.32(5) Straight mathematical computation. (a) A retailer shall determine the amount of tax due on a transaction by combining the applicable tax rates under subchs. III and V, Stats. and multiplying the combined rate times the sales price or purchase price of each item or the total invoice amount. The tax collectible from the customer shall be rounded to the nearest $.0l by using the following rounding procedures:
1. For amounts less than $.005, the amount shall be rounded down to the next lowest penny.
Examples: 1) Tax computed at $.0849999 would be rounded down to $.08.
2) Tax computed at $3.2549 would be rounded down to $3.25.
2. For amounts equal to or greater than $.005, the amount shall be rounded up to the next highest penny.
Examples: 1) Tax computed at $.085000 would be rounded up to $.09.
2) Tax computed at $6.455001 would be rounded up to $6.46.
3) Retailer A sells Customer B three different taxable items in one transaction: Item 1’s selling price is $14.70, item 2’s selling price is $8.30, and item 3’s selling price is $7.10. The aggregate selling price of the taxable items is $30.10. The tax on the invoice provided to the customer may either be calculated by multiplying the 5% tax rate by each item individually (($14.70 x 5% = $0.74) + ($8.30 x 5% = $0.42) + ($7.10 x 5% = $0.36) = $1.52) or by multiplying the 5% tax rate by the aggregate selling price ($30.10 x 5% = $1.51).
(b) The following bracket systems represent straight mathematical computations that comply with s. 77.61 (3m), Stats. and may be used by a retailer to determine the amount of tax due on a transaction. When using the bracket system, a retailer shall determine the amount of tax due on a transaction using either the sales price of each item or the total invoice amount.
1. In locations with no county or stadium district taxes the following bracket system may be used.
|
Amount of Taxable Sale |
5% Tax Collectible |
|
$.01 to $.09 |
0¢ |
|
.10 to .29 |
1¢ |
|
.30 to .49 |
2¢ |
|
.50 to .69 |
3¢ |
|
.70 to .89 |
4¢ |
|
.90 to 1.09 |
5¢ |
On sales exceeding $1.00, the state tax equals 5¢ for each full dollar of sales, plus the tax shown above for the applicable fractional part of a dollar.
2. In counties having a county tax, but no stadium tax, the following bracket system may be used.
|
Amount of Taxable Sale |
Combined State and County Tax of 5.5% |
||
|
$ .01 |
To |
$ .09 |
0¢ |
|
.10 |
To |
.27 |
1¢ |
|
.28 |
To |
.45 |
2¢ |
|
.46 |
To |
.63 |
3¢ |
|
.64 |
To |
.81 |
4¢ |
|
.82 |
To |
.99 |
5¢ |
|
1.00 |
To |
1.18 |
6¢ |
|
1.19 |
To |
1.36 |
7¢ |
|
1.37 |
To |
1.54 |
8¢ |
|
1.55 |
To |
1.72 |
9¢ |
|
1.73 |
To |
1.90 |
10¢ |
|
1.91 |
To |
2.09 |
11¢ |
The state and county tax equals 11¢ for each $2.00 of sales, plus the tax shown above for the fractional part of $2.00.
Example: For a sale of $11.50, the 5.5% tax is 63¢, consisting of 55¢ for $10.00 of sales plus 8¢ for $1.50 of sales.
3. In counties having a stadium tax, but no county tax, the following bracket system may be used.
|
Amount of Taxable Sale |
Combined State and Stadium Tax of 5.1% |
||
|
$ .01 |
to |
$ .09 |
0¢ |
|
.10 |
to |
.29 |
1¢ |
|
.30 |
to |
.49 |
2¢ |
|
.50 |
to |
.68 |
3¢ |
|
.69 |
to |
.88 |
4¢ |
|
.89 |
to |
1.07 |
5¢ |
|
1.08 |
to |
1.27 |
6¢ |
|
1.28 |
to |
1.47 |
7¢ |
|
1.48 |
to |
1.66 |
8¢ |
|
1.67 |
to |
1.86 |
9¢ |
|
1.87 |
to |
2.05 |
10¢ |
|
2.06 |
to |
2.25 |
11¢ |
|
2.26 |
to |
2.45 |
12¢ |
|
2.46 |
to |
2.64 |
13¢ |
|
2.65 |
to |
2.84 |
14¢ |
|
2.85 |
to |
3.03 |
15¢ |
|
3.04 |
to |
3.23 |
16¢ |
|
3.24 |
to |
3.43 |
17¢ |
|
3.44 |
to |
3.62 |
18¢ |
|
3.63 |
to |
3.82 |
19¢ |
|
3.83 |
to |
4.01 |
20¢ |
|
4.02 |
to |
4.21 |
21¢ |
|
4.22 |
to |
4.41 |
22¢ |
|
4.42 |
to |
4.60 |
23¢ |
|
4.61 |
to |
4.80 |
24¢ |
|
4.81 |
to |
4.99 |
25¢ |
|
5.00 |
to |
5.19 |
26¢ |
|
5.20 |
to |
5.39 |
27¢ |
|
5.40 |
to |
5.58 |
28¢ |
|
5.59 |
to |
5.78 |
29¢ |
|
Amount of Taxable Sale |
Combined State and Stadium Tax of 5.1% |
||
|
5.79 |
to |
5.98 |
30¢ |
|
5.99 |
to |
6.17 |
31¢ |
|
6.18 |
to |
6.37 |
32¢ |
|
6.38 |
to |
6.56 |
33¢ |
|
6.57 |
to |
6.76 |
34¢ |
|
6.77 |
to |
6.96 |
35¢ |
|
6.97 |
to |
7.15 |
36¢ |
|
7.16 |
to |
7.35 |
37¢ |
|
7.36 |
to |
7.54 |
38¢ |
|
7.55 |
to |
7.74 |
39¢ |
|
7.75 |
to |
7.94 |
40¢ |
|
7.95 |
to |
8.13 |
41¢ |
|
8.14 |
to |
8.33 |
42¢ |
|
8.34 |
to |
8.52 |
43¢ |
|
8.53 |
to |
8.72 |
44¢ |
|
8.73 |
to |
8.92 |
45¢ |
|
8.93 |
to |
9.11 |
46¢ |
|
9.12 |
to |
9.31 |
47¢ |
|
9.32 |
to |
9.50 |
48¢ |
|
9.51 |
to |
9.70 |
49¢ |
|
9.71 |
to |
9.90 |
50¢ |
|
9.91 |
to |
10.09 |
51¢ |
The state and stadium tax equals 51¢ for each $10.00 of sales, plus the tax shown above for the fractional part of $10.00.
4. In counties having a county tax and a stadium tax, the following bracket system may be used.
|
Amount of Taxable Sale |
Combined State, County and Stadium Tax of 5.6% |
||
|
$ .01 |
to |
$ .08 |
0¢ |
|
.09 |
to |
.26 |
1¢ |
|
.27 |
to |
.44 |
2¢ |
|
.45 |
to |
.62 |
3¢ |
|
.63 |
to |
.80 |
4¢ |
|
.81 |
to |
.98 |
5¢ |
|
.99 |
to |
1.16 |
6¢ |
|
1.17 |
to |
1.33 |
7¢ |
|
1.34 |
to |
1.51 |
8¢ |
|
1.52 |
to |
1.69 |
9¢ |
|
1.70 |
to |
1.87 |
10¢ |
|
1.88 |
to |
2.05 |
11¢ |
|
2.06 |
to |
2.23 |
12¢ |
|
2.24 |
to |
2.41 |
13¢ |
|
2.42 |
to |
2.58 |
14¢ |
|
2.59 |
to |
2.76 |
15¢ |
|
2.77 |
to |
2.94 |
16¢ |
|
2.95 |
to |
3.12 |
17¢ |
|
3.13 |
to |
3.30 |
18¢ |
|
3.31 |
to |
3.48 |
19¢ |
|
3.49 |
to |
3.66 |
20¢ |
|
3.67 |
to |
3.83 |
21¢ |
|
3.84 |
to |
4.01 |
22¢ |
|
4.02 |
to |
4.19 |
23¢ |
|
4.20 |
to |
4.37 |
24¢ |
|
4.38 |
to |
4.55 |
25¢ |
|
4.56 |
to |
4.73 |
26¢ |
|
Amount of Taxable Sale |
Combined State, County and Stadium Tax of 5.6% |
||
|
4.74 |
to |
4.91 |
27¢ |
|
4.92 |
to |
5.08 |
28¢ |
|
5.09 |
to |
5.26 |
29¢ |
|
5.27 |
to |
5.44 |
30¢ |
|
5.45 |
to |
5.62 |
31¢ |
|
5.63 |
to |
5.80 |
32¢ |
|
5.81 |
to |
5.98 |
33¢ |
|
5.99 |
to |
6.16 |
34¢ |
|
6.17 |
to |
6.33 |
35¢ |
|
6.34 |
to |
6.51 |
36¢ |
|
6.52 |
to |
6.69 |
37¢ |
|
6.70 |
to |
6.87 |
38¢ |
|
6.88 |
to |
7.05 |
39¢ |
|
7.06 |
to |
7.23 |
40¢ |
|
7.24 |
to |
7.41 |
41¢ |
|
7.42 |
to |
7.58 |
42¢ |
|
7.59 |
to |
7.76 |
43¢ |
|
7.77 |
to |
7.94 |
44¢ |
|
7.95 |
to |
8.12 |
45¢ |
|
8.13 |
to |
8.30 |
46¢ |
|
8.31 |
to |
8.48 |
47¢ |
|
8.49 |
to |
8.66 |
48¢ |
|
8.67 |
to |
8.83 |
49¢ |
|
8.84 |
to |
9.01 |
50¢ |
|
9.02 |
to |
9.19 |
51¢ |
|
9.20 |
to |
9.37 |
52¢ |
|
9.38 |
to |
9.55 |
53¢ |
|
9.56 |
to |
9.73 |
54¢ |
|
9.74 |
to |
9.91 |
55¢ |
|
9.92 |
to |
10.08 |
56¢ |
The state, county and stadium tax equals 56¢ for each $10.00 of sales, plus the tax shown above for the fractional part of $10.00.
(c) The gross sales and use tax payable by a retailer on retail sales is the total of the applicable tax rates under ss. 77.52 (1) and (2), 77.53 (3) and (9m) and 77.71, Stats., times the retailer’s taxable sales price, regardless of the amount of tax collected from customers.
SECTION 112. Tax 11.32(6) is repealed
SECTION 113. Tax 11.32(7) is renumbered 11.32(6) and amended as renumbered to read:
Tax
11.32(6) Exchanging tangible
personal property or items, property, or goods under s. 77.52 (1) (b), (c),
or (d), stats. Taxable gross receipts include The taxable
sales price includes the exchange of tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., for
taxable or nontaxable services, realty, or intangibles if the person
providing the tangible personal property or items, property, or goods under
s. 77.52 (1) (b), (c), or (d), Stats., receives gross receipts or the
sales price or purchase price valued in money, whether received in money
or otherwise.
Note to LRB: Amend the example at the end of Tax 11.32(6) as follows:
Example: A restaurant operator exchanges meals having retail
price of $100 for radio or television advertising which has an established
price of $100 for this type of advertising service. The restaurant operator
and the radio or television station each have to report gross receipts the
sales price of $100 as a result of the transaction.
SECTION 114. Tax 11.32(8) is repealed
SECTION 115. Tax 11.32(7) is created to read:
Tax 11.32(7) Manufactured homes. The sales price and purchase price do not include 35% of the amount from the sale of a new manufactured home as defined in s. 101.91(11), Stats., not including leases and rentals.
SECTION 116. Tax 11.32(9) is renumbered 11.32(8) and amended as renumbered to read:
Tax
11.32(8) manufactured
buildings Modular
homes. (a) Gross receipts and
The sales price and purchase price from the sale of a “manufactured
building,” “modular home,” as defined in s. 101.71 (6), Stats., that
is tangible personal property when sold, may be reduced by one of the
following:
1. 35% of the sales price.
2.
An amount equal to the sales price minus the cost of the materials that become
an ingredient or component part of the manufactured building modular
home.
(b)
No credit is allowed for trade-ins if gross receipts or the sales
price or purchase price are is reduced under par. (a).
(c)
Once a retailer reduces gross receipts or the sales price or
purchase price by the amount in par. (a) 1. or 2., the retailer shall
continue to use that method of reduction for all sales of manufactured
buildings modular homes, that are tangible personal property when
sold, until such time as the department approves in writing the use of the
other method.
Notes to LRB: Amend the example at the end of Tax 11.32(8)(c) as follows:
Example: Building Manufacturer sells a manufactured
building modular home, as defined in s. 101.71 (6), Stats., in
Wisconsin to Dealer. Dealer will affix the manufactured building modular
home to real property in Wisconsin for Customer under a contract between
Dealer and Customer. This is the first manufactured building modular
home, as defined in s. 101.71 (6), Stats., sold by Building Manufacturer
pursuant to a contract entered into on or after December 1, 1997. Additional
facts are as follows:
$40,000 is the cost of materials
purchased by Building Manufacturer that become an ingredient or component part
of the manufactured building modular home.
$65,000 is the sales price of the manufactured
building modular home by Building Manufacturer to Dealer.
The amount subject to sales tax on the
sale of the manufactured building modular home to Dealer is one
of the following:
(1) $42,250, which is the $65,000 sales price reduced by $22,750 (35% of the sales price).
(2) $40,000, which is the $65,000 sales price reduced by $25,000 (the sales price minus the cost of materials).
If Building Manufacturer chooses the
method under (1) for computing gross receipts the sales price
from the sale of this manufactured building modular home, it must
use the method under (1) for computing gross receipts the sales price
from all future sales of manufactured buildings modular homes,
until the department approves in writing the use of the method under (2).
Amend the second note at the end of Tax 11.32(8)(c) as follows:
Note: The interpretations in s. Tax 11.32 are effective
under the general sales and use tax law on and after September 1, 1969, except:
(a) The 5% sales and use tax rate became effective May 1, 1982 (previously the
rate was 4%); (b) The 35% reduction of gross receipts sales price
from the sale of a new mobile home that is a primary housing unit became
effective January 1, 1987, pursuant to 1985 Wis. Act 29; (c) The 35% reduction
of gross receipts sales price from the sale of a new mobile home
transported in 2 sections became effective October 1, 1991, pursuant to 1991
Wis. Act 39; and (d) The reduction of gross receipts and sales price
and purchase price for sales of manufactured buildings, as defined in s.
101.71 (6), Stats., became effective for sales of property pursuant to
contracts entered into on or after December 1, 1997, pursuant to 1997 Wis. Act
27.
SECTION 117. Tax 11.33(2), (4)(a) to (d), (f), and (g), and (5)(b) to (d) and (f) are amended to read:
Tax 11.33(2) General. Sales of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., and taxable services are not taxable if they are exempt “occasional sales.” However, if the number, scope and character of the sales are such that they exceed the standards in the statutes and this section, a taxable sale occurs.
(4)(a)
Auction sales Five or fewer auctions that are the sale of
personal farm property or household goods which are not held at regular
intervals and that are held by the same auctioneer at the same location
during the year. For indoor locations, “location” means a building,
except that in the case of a shopping center or shopping mall, “location” means
a store.
(b)
Sales by a sole proprietor, who holds or is required to hold a seller’s
permit, of tangible personal property or items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., which has not been used in the course
of the person’s business and is the sales are not the type of
property, items, or goods sold in the course of the person’s business.
However, all tangible personal property or items, property, or goods under
s. 77.52 (1) (b), (c), or (d), Stats., sold by a corporation or partnership
which holds or is required to hold a seller’s permit shall be considered to be
used or sold in the course of the organization’s business activities and is
are taxable.
Note to LRB: Amend the example at the end of Tax 11.33(4)(b) as follows:
Example: A taxpayer operates a service station as a sole
proprietor and holds a seller’s permit for the purpose of selling cigarettes
and repairing motor vehicles. The gross receipts sales price
from selling a refrigerator and stove used in the taxpayer’s residence are not
subject to the sales tax. However, the gross receipts sales price
from the sale of a desk and refrigerator which were used in the service
station’s business activities are subject to the sales tax.
(c) The transfer of a motor vehicle, boat, snowmobile, recreational vehicle, as defined in s. 340.01(48r), Stats., trailer, semitrailer, all-terrain vehicle or aircraft to a spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law, of the transferor provided the property has been previously registered in Wisconsin in the name of the transferor, if required to be registered, and the transferor is not engaged in the business of selling this type of property.
(d) The transfer of a motor vehicle from the transferor’s individual ownership to a corporation owned solely by the transferor or the transferor’s spouse, provided the motor vehicle has been previously registered in Wisconsin in the name of the transferor, if required to be registered, and the transferor is not engaged in the business of selling this type of property. Transferor for purposes of this paragraph means a natural person.
(f) The sale of a business or business assets, not including inventory held for sale, previously used by a seller to conduct its trade or business at a location after that person has ceased actively operating in the regular course of business as a seller of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services as provided in s. 77.51 (9) (a) and (am), Stats.
(g)
The sale of tangible personal property, items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., or taxable services by a person who
does not otherwise hold and is not required to hold a
seller’s permit, if the total taxable gross receipts sales price
from sales of tangible personal property, items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., and taxable services are less than
$1,000 during the calendar year. However, purchases of tangible personal
property, items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats., or taxable services which when resold are exempt under this
paragraph, are taxable purchases by that person. This paragraph does not apply
to nonprofit organizations.
Note to LRB: Amend the examples at the end of Tax 11.33(4)(g) as follows:
Examples:
1) If the gross receipts sales
price from a person’s garage and rummage sales, lawn maintenance services,
bait sales to fishermen, sales of books, charges for parking and other normally
taxable receipts are less than $1,000 during the calendar year, that person’s
receipts are deemed exempt occasional sales under par. (g). However, purchases
by the seller of the tangible personal property or items, property or goods
under s. 77.52 (1) (b), (c), or (d), Stats., which are sold are taxable.
2) Sales of soft drinks by employee groups are not
taxable if the gross receipts sales price from soft drink sales do
does not exceed $1,000 per year. These groups are deemed consumers and a
the supplier’s sales to them are taxable retail sales.
(5)(b)
The sale Sales of a business or the assets of a business when the
seller holds or is required to hold a seller’s permit. The tax applies to the
portion of the gross receipts sales price reasonably attributable
to the taxable personal property such as equipment, furniture and fixtures.
(c)
The sale Sales of motor vehicles, aircraft, boats, mobile
homes not exceeding 45 feet in length recreational vehicles as defined
in s. 340.01(48r), Stats., snowmobiles, trailers, semitrailers and
all-terrain vehicles. 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, mobile home not exceeding 45 feet in length recreational
vehicle as defined in s. 340.01(48r), Stats., snowmobile, trailer,
semitrailer or all-terrain vehicle is registered or titled within Wisconsin.
(d)
A sale Sales made by persons who hold themselves out to the
public as engaged in business, even though their sales may be few and
infrequent. This includes the sales of works of art, handmade articles,
antiques or used property by artists or others who are pursuing a vocation or
part-time business as a seller of this property.
(f)
A sale Sales by persons engaged primarily in the business of
making nontaxable sales of tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., such as
manufacturers and wholesalers. Since these persons are in the business of
selling tangible personal property or items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., the mere fact that only a small
fraction of their total sales are taxable retail sales does not make these
sales exempt occasional sales.
SECTION 118. Tax 11.34(2)(a), (3)(b)1. and 2., (4)(a), and (5)(c) are amended to read:
Tax 11.34(2)(a) The sale of business assets, consisting of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., by a person who holds or is required to hold a seller’s permit at the time of the sale is subject to sales tax, except as provided in sub. (3) (c).
(3)(b)1. The sale is of personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., other than inventory held for sale, previously used by a person to conduct a trade or business at a location.
2.
The sale occurs after the person ceased actively operating the
business in the regular course of business as a seller of tangible
personal property, items, property, or goods under s. 77.52 (1) (b), (c), or
(d), Stats., or taxable services at that location.
(4)(a)
Retailers may personally deliver their seller’s permits to a representative of
the department’s income, sales, inheritance and excise tax division at
the representative’s office during regular office hours. The department shall
presume the permit was received at 12:01 a.m. on the day it is received.
(5)(c) The fact that a business ceases operating and no longer conducts its day-to-day sales of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services may not result in the automatic cancellation of a seller’s permit.
SECTION 119. Tax 11.35(2)(b) is 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 $300 $500
per event by all persons for performing, for reimbursement of expenses or for
prize money.
SECTION 120. Tax 11.35(2)(c) is repealed
SECTION 121. Tax 11.35(2)(d) is renumbered 11.35(2)(c) and amended as renumbered to read:
Tax
11.35(2)(c) “Nonprofit organization” includes a neighborhood association,
church, civic group, garden club, social club or similar organization not
operated or organized for profit where no part of the net income inures to the
benefit of any private shareholder or individual. A governmental unit
described in s. 77.54 (9a) (a) through (e), Stats., is considered a
“similar organization” for purposes of this paragraph.
SECTION 122. Tax 11.35(2)(d) is created to read:
Tax 11.35(2)(d) “Sales price” means sales price as defined in s. 77.51 (15b), Stats., from all sales in Wisconsin of otherwise taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., and services after subtracting allowable exemptions.
SECTION 123. Tax 11.35(3), (4)(c), (5)(a) and (b), (6)(b), (7)(d), and (8) are amended to read:
Tax
11.35(3) General. A nonprofit organization shall charge Wisconsin
sales tax on sales of tangible personal property or items, property, or
goods under s. 77.52 (1) (b), (c), or (d), Stats., and taxable services,
unless the sales qualify as exempt occasional sales or are otherwise exempt.
The occasional sales exemption does not apply to gross receipts the
sales price from the sale of bingo supplies to players or to the sale,
rental or use of regular bingo cards, extra regular cards and special bingo
cards.
(4)(c)
The organization does not have or and is not required to have a
Wisconsin seller’s permit, except for conducting bingo.
(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 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.
(b)
Its taxable gross receipts 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 $15,000 $25,000
or less, regardless of the number of days on which its sales or events occur. Nontaxable
gross receipts may not be Sales that are nontaxable are not included
for purposes of the $15,000 gross receipts $25,000 sales price
test.
Notes to LRB: 1. Amend the examples at the end of Tax 11.35(5)(b) as follows:
Examples:
1) A church sells cookies and
cakes at a bake sale frozen pizzas. Since the sale of cookies
and cakes for off-premises consumption is sales of frozen pizzas are
exempt from sales tax, the sale of these items is sales of the frozen
pizzas are not counted as gross receipts part of the sales price
for purposes of the $15,000 $25,000 receipts test.
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 gross receipts part
of the sales price for purposes of the $15,000 $25,000
receipts test.
2. Amend the examples at the end of Tax 11.35(6)(a) as follows:
Examples:
1) Four different bands are paid $100
$200 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 ($400) ($800) exceeds the $300 $500
limit in sub. (2) (b), entertainment is deemed to be involved. As a result,
receipts from the event are taxable.
2)
Two nonprofit organizations
co-sponsor an admission event at which a band is hired to perform. Each
organization pays the band $200 $300. Since the total payment
for entertainment ($400) ($600) exceeds the $300 $500
limit in sub. (2) (b), entertainment is deemed to be involved. As a result,
receipts from the event are taxable.
3)
A nonprofit organization sponsors a
dinner and dance in the high school gymnasium. The dance band is paid in
excess of the $300 $500 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.
4) A nonprofit organization holds a pig roast at the city park and hires a band to play at the park gazebo so that patrons, if they so wish, can be entertained while they eat. There is no admission charge and access to the band is open to anyone, whether they purchase the meal or not. Entertainment is deemed not to be involved. Therefore, the sales by the nonprofit organization may still qualify as exempt occasional sales.
5) Nonprofit Organization A sponsors an admission event
at which a band is hired to perform. The band is paid more than $300 $500.
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.
(6)(b)
A nonprofit organization that would otherwise qualify for exempt occasional
sales, except for the involvement of entertainment, may obtain a temporary
seller’s permit from the department for the day or days involving
entertainment, pay the sales tax on that event, and still have exempt
occasional sales on days not covered by the temporary seller’s permit. Days
and receipts from events involving admissions to entertainment for which a
temporary seller’s permit was obtained are included with all other sales in
determining the 20-day test and the $15,000 $25,000 taxable
receipts test described in sub. (5).
Notes to LRB: 1. Amend the second example at the end of Tax 11.35(6)(b) as follows:
2)
A nonprofit organization holds
several events during the year. For one of the events, the nonprofit
organization obtains a temporary seller’s permit because entertainment is
involved and collects sales tax on its receipts of $5,000 from that event.
Taxable receipts from its other events must be combined with the $5,000 of
receipts from the event for which it held a temporary seller’s permit for
purposes of determining whether the $15,000 $25,000 taxable
receipts test is met.
2. Amend the example at the end of Tax 11.35(7)(b) as follows:
Example: A nonprofit organization has held seven 3-day events
for a total of 21 days each year for the past 5 years. Receipts were always
over $15,000 $25,000, and there were no admissions to
entertainment. 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-day standard. Its seller’s permit may be
delivered to the department for cancellation in good faith.
(7)(d)
If a nonprofit organization has sales in the current year and then delivers
surrenders its seller’s permit to the department for cancellation, sales
made in the current year before turning in the seller’s permit to the
department surrendering it do not qualify as exempt occasional
sales, even if the standards for exempt occasional sales in sub. (4) (a) and
(b) are met.
(8) When sales do not qualify for occasional sales exemption. If a nonprofit organization has sales of tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, and the sales do not qualify as exempt occasional sales, it is required to obtain a seller’s permit and collect and remit sales tax on its taxable sales.
Note to LRB: Amend the first and second notes at the end of Tax 11.35(8) as follows:
Note: To obtain a seller’s permit, a nonprofit organization
shall file Wisconsin form A-101 BTR-101, Application for Permit/Certificate
Business Tax Registration, with the department. Form A-101 BTR-101
may be obtained from any department of revenue office, or by writing or calling
Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902,
telephone (608) 266-2776.
Note: The interpretations contained in s. Tax 11.35 became
effective January 1, 1989, pursuant to 1989 1987 Wis. Act 399.
SECTION 124. Tax 11.38(title), (1)(title), (intro.), and (a), (2)(e), and (3)(b) are amended to read:
Tax
11.38(title) Fabricating,
and processing, and printing.
(1)(title) Sales of fabricating, processing, and printing services.
(intro.) The producing, fabricating, processing, printing, or imprinting of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., for a consideration for consumers who furnish directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting is subject to Wisconsin sales or use tax unless:
(a)
The printing or imprinting is done on tangible personal property which will
subsequently be shipped outside Wisconsin by the consumer for advertising
purposes or items, property, or goods under s. 77.52 (1) (b), (c), or
(d), Stats., that results in printed materials that are exempt under s. 77.54
(25), Stats., or catalogs and their mailing envelopes that are exempt under s.
77.54(25m), Stats.
Notes to LRB: 1. Amend the second and third examples at the end of Tax 11.38(1)(b) as follows:
2) The charge by a feed mill to grind a farmer’s
corn a that the farmer will use as feed is not subject to
Wisconsin sales or use tax because the sale of feed to a farmer is not subject
to Wisconsin sales or use tax under s. 77.54 (3m), Stats. The farmer must
provide the feed mill with a properly completed farmer’s exemption
certificate.
3) The charge by a cooperative to age a cigar
manufacturer’s tobacco for a cigar manufacturer is not subject to
Wisconsin sales or use tax because the a sale of the
tobacco to the a cigar manufacturer is not subject to Wisconsin
sales or use tax under s. 77.54 (2), Stats. The cigar manufacturer must
provide the cooperative with a properly completed manufacturer’s
exemption certificate.
2. Amend the example at the end of Tax 11.38(1)(c) as follows:
Example: Company JKL is in the business of custom making
cabinets. A customer orders a cabinet from Company JKL. Due to time
constraints, Company JKL is unable to make the cabinet. Therefore, Company
JKL contracts with Company MNO to make the cabinet from materials provided by
Company JKL. Company MNO is not subject to Wisconsin sales or use tax on the
charge to Company JKL for making the cabinet if Company JKL provides Company
MNO with a properly completed resale exemption certificate claiming
resale.
(2)(e)
Caterer’s preparation of food for consumption on or off the caterer’s
premises.
Note to LRB: Amend the example at the end of Tax 11.38(3)(a) as follows:
Example: Company PQR is in the business of heat treating
metal for steel manufacturers. Company PQR uses its machinery and equipment
only in providing this heat treating to steel manufacturers. Company PQR is
performing a manufacturing process in acting as a submanufacturer. Since the
machinery and equipment is used exclusively and directly in manufacturing, it
may be purchased without Wisconsin sales or use tax provided Company PQR gives
its supplier a properly completed manufacturer’s exemption certificate.
(3)(b)
Tangible personal property or items under s. 77.52 (1) (b) that are used
exclusively and directly by a manufacturer in manufacturing an article of
tangible personal property or item or property under s. 77.52 (1) (b) or (c),
Stats., destined for sale and which becomes an ingredient or component part of
the property or item destined for sale or is consumed or destroyed or losing
loses its identity in the manufacture of tangible personal property or
item or property under s. 77.52 (1) (b) or (c), Stats., in any form
destined for sale, except for fuel and electricity as provided in s. 77.54
(30) (a) 6., Stats.
SECTION 125. Tax 11.39(1) and (2) are repealed and recreated to read:
Tax 11.39(1) Definitions. (a) 1. Manufacturing means the production by machinery of a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., with a different form, use, and name from existing materials, by a process popularly regarded as manufacturing.
2. Manufacturing does not include storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., research or development, delivery to or from the plant, or repairing or maintaining plant facilities.
(b) “Plant” as defined in s. 77.51 (10b), Stats., means “…a parcel of property or adjoining parcels of property, including parcels that are separate only by a public road, and the buildings, machinery, and equipment that are located on the parcel, that are owned by or leased to the manufacturer.” Plant inventory does not include unsevered mineral deposits as provided in s. 77.51 (10c), Stats.
(2) Scope of manufacturing. (a) Manufacturing:
1. Begins with conveying or raw materials and supplies from plant inventory to the place where the work is performed in the same plant and ends with conveying finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., to the point of first storage in the same plant.
2. Includes conveying work in progress directly from one manufacturing operation to another in the same plant.
3. Includes testing or inspecting, throughout the manufacturing process, the new article of tangible personal property or item or property under s. 77.52 (1) ( b) or (c), Stats., that is being manufactured.
4. Includes storing work in progress in the same plant where the manufacturing occurs.
5. Includes assembling finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.,
6. Includes packaging a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., if the manufacturer or another person on the manufacturer’s behalf performs the packaging and if the packaging becomes part of the new article as it is customarily offered for sale by the manufacturer.
(b) Manufacturing does not include storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., delivery to or from the plant, repairing or maintaining facilities, or research and development.
SECTION 126. Tax 11.39(4)(intro.) and (a) are amended to read:
Tax 11.39(4)(intro.) Nonmanufacturers. Nonmanufacturers ordinarily include the following:
(a) Contractors, when engaged in real property construction activities and installing or repairing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
SECTION 127. Tax 11.39(4)(h) and (i) are repealed
SECTION 128. Tax 11.39(4)(j) to (n) are renumbered 11.39(4)(h) to (L)
SECTION 129. Tax 11.40(1)(a) to (c), (2)(a), (3)(b), (c), and (e), and (4) are amended to read:
Tax
11.40(1)(a) Section 77.54 (6) (a), Stats., exempts the gross receipts sales
price from the sale of and the storage, use or other consumption of “Machines
and specific processing equipment and repair parts or replacements thereof,
exclusively and directly used by a manufacturer in manufacturing tangible
personal property or items or property under s. 77.52 (1) (b) or (c),
Stats., and safety attachments for those machines and equipment.” “Exclusively”,
as used in s. 77.54 (6) (a), Stats., and in this section, means that the
machines and specific processing equipment and repair parts or replacements
thereof are used solely by a manufacturer in manufacturing tangible personal
property or items or property under s. 77.52 (1) (b) or (c), Stats., to
the exclusion of all other uses, except that the sales and use tax exemption
will not be invalidated by an infrequent and sporadic use other than in
manufacturing tangible personal property or items or property under s. 77.52
(1) (b) or (c), Stats. This exemption is to be strictly construed.
(b)
Section 77.54 (6m) 77.51 (7h) (a) , Stats., provides “ For
purposes of s. 77.54 (6) (a) ‘manufacturing’ is ‘Manufacturing’ means
the production by machinery of a new article of tangible personal property
or item or property under s. 77.52 (1) (b) or (c) with a different form,
use, and name from existing materials by a process popularly regarded as
manufacturing., and that begins with conveying raw materials and
supplies from plant inventory to the place where work is performed in the same
plant and ends with conveying finished units of tangible personal property or
item or property under s. 77.52 (1) (b) or (c) to the point of first storage in
the same plant...”
(c)
In determining whether a particular machine or piece of processing equipment is
included in the exemption under par. (a), ss. 77.51 (7h) (a) and s.
77.54 (6) (a), Stats., ss. 77.54 (6) (a) and 77.51 (7h), Stats., must be
considered together.
(2)(a) Machines and processing equipment shall be used by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats. The exemption shall not apply to machines and processing equipment used in providing services or in other nonmanufacturing activities.
Note to LRB: Amend the example at the end of Tax 11.40(2)(a) as follows:
Example: Machines and equipment of a dry cleaner are not used by a manufacturer in manufacturing, because a dry cleaner provides a service and is neither a manufacturer nor producer of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
(3)(b) The exemption applies if machines and processing equipment are used exclusively and directly by a manufacturer to produce other machines or processing equipment which, in turn, are used by the manufacturer to produce tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
(c) The exemption applies if machines and processing equipment are used exclusively and directly by a manufacturer to produce component parts of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
Note to LRB: Amend the example at the end of Tax 11.40(3)(d) as follows:
Example: Machines or equipment used for storage, delivery to or from a plant, repair or maintenance of facilities or equipment, research, or crating or packaging of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., for shipment are not exempt.
(e) The exemption does not apply to tangible personal property or an item, property or good under s. 77.52 (1) (b), (c) or (d), Stats., which is not machinery or equipment, but is used in a manufacturing plant.
(4) Repair of
exempt machinery and processing equipment. The gross receipts sales
price from the sale of and the storage, use or other consumption of repair
or replacement parts and from repair service for exempt machines and processing
equipment are exempt.
SECTION 130. Tax 11.41(title) and (1)(a) are amended to read:
Tax 11.41(title) Exemption of property and items consumed or destroyed in manufacturing.
(1)(a)
Tangible personal property and items under s. 77.52 (1) (b), Stats., that
are used exclusively and directly by a manufacturer in manufacturing an article
of tangible personal property or item or property under s. 77.52 (1) (b) or
(c), Stats., that is destined for sale and that becomes an ingredient or
component part of the article of tangible personal property or item or property
under s. 77.52 (1) (b) or (c), Stats., destined for sale or is consumed or
destroyed or losing loses its identity in the manufacture manufacturing
the article of tangible personal property or item or property under s.
77.52 (1) (b) or (c), Stats., in any form destined for sale is
exempt from Wisconsin sales or use tax under s. 77.54 (2), Stats., except as
provided in s. 77.54 (30) (a) 6., Stats.
SECTION 131. Tax 11.41(1)(b) is repealed and recreated to read:
Tax 11.41(1)(b) Manufacturing is defined in s. 77.51 (7h), Stats., to mean, “… the production by machinery of a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) with a different form, use, and name from existing materials, by a process popularly regarded as manufacturing, and that begins with conveying raw materials and supplies from plant inventory to the place where work is performed in the same plant and ends with conveying finished units of tangible personal property or item or property under s. 77.52 (1) (b) or (c) to the point of first storage in the same plant...”
SECTION 132. Tax 11.41(2)(title), (a)(intro.), and (b) are amended to read:
(2)(title) Property and items exempt.
(a)(intro.)
The following property is and items are within the exemption
provided by s. 77.54 (2), Stats., if the property or item is used
exclusively and directly by a manufacturer in manufacturing tangible personal
property or items or property under s. 77.52 (1) (b) or (c), Stats., destined
for sale and is consumed, destroyed or loses its identity in the
manufacture of tangible personal property manufacturing the property or
item that is destined for sale:
(b)
Tangible personal property and items under s. 77.52 (1) (b), Stats., used
exclusively and directly by a manufacturer and which becoming become
an ingredient or component part of tangible personal property or an item or
property under s. 77.52 (1) (b) or (c), Stats., destined for sale as
tangible personal property or an item or property under s. 77.52 (1) (b) or
(c), Stats., is exempt from Wisconsin sales or use tax.
Note to LRB: Amend the examples at the end of Tax 11.41(2)(b) as follows:
Examples: 1) Property and items sold to an automobile repair shop or other repair business to repair a customer’s product does not qualify for exemption under s. 77.54 (2), Stats., because the property or items are not used exclusively and directly by a manufacturer in manufacturing.
2) A manufacturer-contractor is not entitled to the
exemption when purchasing tangible personal property or items under s. 77.52
(1) (b), Stats., consumed, destroyed or losing its identity in the
manufacture of manufacturing building components which it, as a
contractor, will affix to real property in a real property construction
activity, because the item or property is not sold by the
manufacturer-contractor as tangible personal property or an item or property
under s. 77.52 (1) (b) or (c) Stats.
SECTION 133. Tax 11.41(3) is repealed and recreated to read:
(3) Property and items not exempt. (a) An exemption under sub. 1 (a) is not allowed for property or items consumed or destroyed or losing their identity if any of the following apply:
1. The activity is not manufacturing or is not within the scope of manufacturing.
2. The property or item manufactured is not destined for sale as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats.
(b) The following property and items are not within the exemption provided by s. 77.54 (2), Stats., although the property or item may be exempt under s. 77.54 (6) (a), Stats., if the property or item is a machine or specific processing equipment, or a part for that machine or equipment, used exclusively and directly in manufacturing, as described in s. Tax 11.40:
1. Machine drills and auger bits.
2. Milling cutters.
3. Grinding wheels.
4. Chucks, jigs, and dies.
5. Saw blades.
6. Machine tool holders.
7. Hand tools, including files, wrenches, hammers, saws, screwdrivers, planes, punches, chisels, and spray guns.
8. Wearing apparel for the comfort or welfare of the employee or for the protection of the employee’s clothing, such as helmets, hard hats, work gloves, aprons, coveralls, pants, coats, and fur-lined boots and jackets.
SECTION 134. Tax 11.41(4)(a) is amended to read:
(4)(a)
Fuel and electricity are specifically excluded from the exemption provided by
s. 77.54 (2), Stats. , even though they may be consumed or destroyed or lose
their identity in the manufacture of tangible personal property destined for
sale, except that any residue that is used as a fuel in a business activity and
that results from the harvesting of timber or the production of wood products,
including slash, sawdust, shavings, edging, slabs, leaves, wood chips, bark and
wood pellets manufactured primarily from wood or primarily from wood residue is
exempt from sales or use tax. 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.
SECTION 135. Tax 11.45 is repealed and recreated to read:
Tax 11.45 Sales by pharmacies and drug stores. (1) Taxable sales. All sales of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c) and (d), Stats., by a pharmacy or drug store are taxable under the general sales tax law unless exempted by a specific statute. The most common exemptions are described and enumerated in this section.
(2) Drugs and prescription drugs. “Drug” is defined in s. 77.51 (3pj), Stats., to mean “…a compound, substance, or preparation, or any component of them, other than food and food ingredients, dietary supplements, or alcoholic beverages, to which any of the following applies: (a) It is listed in the United States Pharmacopoeia, Homeopathic Pharmacopoeia of the United States, or National Formulary, or any supplement to any of them. (b) It is intended for use in diagnosing, curing, mitigating, treating, or preventing a disease. (c) It is intended to affect a function or structure of the body.”
(a) Drugs are exempt from the tax if prescribed by a licensed physician, surgeon, podiatrist or dentist to a patient, who is a human being, for treatment and dispensed on prescription filled by a registered pharmacist in accordance with law.
(b) Drugs described in par. (a) which are exempt from the tax include:
1. Pills and capsules.
2. Powders.
3. Liquids, including sterile water and irrigation solutions.
4. Salves and ointments.
5. Insulin.
6. Other preparations consumed orally, injected or applied, including dermal fillers.
7. Parenteral nutrition formulas.
8. Enteral nutrition formulas that contain a drug facts box.
9. Suppositories.
10. Radioactive isotopes such as implanted seeds.
11. Dyes and other contrast media.
12. Other items which remain or dissolve in the body, such as birth control implants including intra-uterine devices (IUD).
13. Gases - medical grade, such as oxygen and nitrous oxide.
14. Vitamins.
15. Vaccines.
16. Oral contraceptives.
17. Medicated dressings.
(c) This exemption does not include:
1. Prosthetic devices, mobility-enhancing equipment, or durable medical equipment.
2. Non-medicated bandages, pads, compresses, supports, or dressings.
3. Alcoholic beverages.
4. Casts and casting materials.
5. Food and food ingredients, including dietary supplements and soft drinks.
(3) prosthetic devices. The exemption for prosthetic devices under s. 77.54 (22b), Stats., applies to sales of all prosthetic devices, including repair and replacement parts, that are used for a human being. The exemption also includes accessories for exempt prosthetic devices.
(a) “Prosthetic device” is defined in s. 77.51(11m), Stats., to mean “…a device, including repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.”
Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment and prosthetic devices can be found in the Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org.
(b) “Prosthetic devices” include the following items, as well as repair and replacement parts and accessories for those items, if they are implanted or worn on the body:
1. Trusses; post-operative shoes; orthopedic shoes, shoe lifts, inserts, arch supports, and heel protectors; braces including ankle, knee, neck, and back braces; knee immobilizers; traction devices; cervical collars; head halters; abdominal belts, binders, and supports; slings; suspensories; and bone pins, plates, nails, screws, wax, and cement.
2. Antiembolism elastic hose and stockings, and compression stockings and sleeves.
3. Pressure garments, including edema gloves, mast pants, and burn garments.
4. Artificial limbs; skin, shoulder, elbow, tendon, testicular, penile, hip, and knee implants and acetabular cups for hip implants; neuro, spinal, and joint membranes implants; adhesion barriers; artificial eyes; ocular, orbital, ear, nose, and throat implants; cochlear implants; maxillofacial devices; hands and feet implants; orthobiologics implants; surgical mesh implants; vena cava filters; artificial heart valves; artificial larynx; trachea tubes; grafts; sphincters; stump shrinkers; gastric bands and intragastric balloons; nasogastric tubes; stents; pacemakers and leads that are implanted or worn; defibrillator and leads that are implanted; and hearing aids and batteries.
5. Contact lenses and corrective eyeglasses (prescription and non-prescription).
6. Ostomy adhesives, barriers, catheters, collection bags and pouches, drain tubes, stoma caps, tubing, belts, hernia belts, and valves, but not barrier prep wipes, barrier powder, or lubricants.
7. Feeding, drainage, urinary and dialysis catheters, access ports, drains, and shunts.
8. Collagen implants, implanted tissue expanders, breast implants and prosthesis, and mastectomy surgical bras.
9. Casts and casting materials, splint and splint materials, staples, sutures, and suture alternatives.
10. Bone growth stimulators, CPAP machines, infuser pumps, programmable drug infusion devices, insulin pumps, penile pumps, electronic speech aids and tracheostomy speaking valves, tens units, and nerve stimulators implanted with leads.
(4) Mobility-enhancing equipment. The exemption for mobility-enhancing equipment under s. 77.54 (22b), Stats., applies to all mobility-enhancing equipment, including repair and replacement parts, that is for human use. The exemption also includes accessories for exempt mobility-enhancing equipment.
(a) “Mobility-enhancing equipment” is defined in s. 77.51 (7m), Stats., to mean “…equipment, including the repair parts and replacement parts for the equipment, that is primarily and customarily used to provide or increase the ability of a person to move from one place to another; that may be used in a home or motor vehicle; and that is generally not used by a person who has normal mobility. ‘Mobility-enhancing equipment’ does not include a motor vehicle or any equipment on a motor vehicle that is generally provided by a motor vehicle manufacturer. ‘Mobility-enhancing equipment’ does not include durable medical equipment.”
(b) “Mobility-enhancing equipment” includes the following items, as well as repair and replacement parts and accessories for those items:
1. Raised toilet seats and tub and shower stools.
2. Canes, crutches, walkers, wheelchairs including motorized wheelchairs and scooters, specialty chairs such as all terrain wheelchairs and pool wheelchairs, and wheelchair ramps.
3. Swivel seats which enable a handicapped person to rotate his or her body, while seated, in order to get into position to rise from a chair.
4. Handrails and grab bars to assist in rising from the commode, tub, or shower.
5. Lift chairs, patient lifts, bed pull-ups including trapeze bars, and transfer belts and benches.
6. Mobility enhancing car seats which are car seats that provide restraint and support (five point harness) for disabled children who have outgrown standard size child car seats but still need the restraint and support provided by car seats.
(5) Durable Medical equipment. The exemption for durable medical equipment under s. 77.54 (22b), Stats., applies to all durable medical equipment, including repair and replacement parts, that is for use in a person’s home, if the equipment is used for a human being. The exemption also includes accessories for exempt durable medical equipment.
(a) “Durable medical equipment” is defined in s. 77.51 (3pm) to mean “…equipment, including the repair parts and replacement parts for the equipment that is primarily and customarily used for a medical purpose related to a person; that can withstand repeated use; that is not generally useful to a person who is not ill or injured; and that is not placed in or worn on the body. ‘Durable medical equipment’ does not include mobility-enhancing equipment.”
(b) 1. “Use in a person’s home” means that the equipment is sold to an individual for use where they are living, regardless of whether the individual resides in a single family home, apartment building, nursing home, assisted living center, convalescent home or school dormitory.
2. Durable medical equipment is not for use in a person’s home if it is purchased by a hospital, clinic, nursing home, assisted living center, convalescent home, dental office, chiropractor or optician’s office. In addition, purchases of durable medical equipment by a nursing home, assisted living center and convalescent home are not for use in a person’s home even if the equipment is purchased for use by the residents of the nursing home, assisted living center or convalescent home.
(c) “Durable medical equipment” includes the following equipment, as well as repair and replacement parts for the equipment if it is primarily and customarily used for a medical purpose related to a person, can withstand repeated use, is not generally useful to a person who is not ill or injured, and that is not placed in or worn on the body:
1. Anesthesia machines and ventilators; anti-thrombolytic pumps; artificial inhalation equipment; audiology equipment including audiometers and acoustic impedance meters or bridges; automatic external defibrillators; autotransfusion equipment; billie lights; bone growth stimulators that are not worn; cardiology machines; cauterization equipment; chair and sling scales; continuous passive motion devices; crash carts; exam and surgical tables and stirrups; electroencephalogram equipment; heat lamps and bulbs; intraaortic balloon pump; kidney dialysis machines and dialyzers; lithotripters; mammography equipment; monitors; MRI/CT machines; needleless drug delivery system injection guns; nerve stimulator programmer; external pacemakers; pacemaker programmers and transmitters; percussors; platelet separators; drug infusion pumps; radiology and ultrasound equipment; pulse oximetery equipment and blood parameter monitors; respiratory equipment; resuscitators; staplers; stretchers; suction regulators; tens units; tourniquets; traction equipment; vaporizers; and medical atomizers and instruments.
2. Apnea monitors and CPAP machines that are not worn.
3. Alternating pressure beds, incubators, hospital beds, kinetic therapy beds, kodel bed pads, pressure reduction therapy beds; blanket cradles, patient positioners, and overbed tables and trays.
4. Abduction, cervical, and orthotic pillows.
5. Enteral and parenteral feeding bags that are generally used for up to 24 hours which will encompass numerous feedings and are then disposed, and enteral and parenteral connectors, pumps, stands, and tubing and feeding plugs.
6. IV poles, stands and reusable therapy arm boards, but not disposable arm boards.
7. Oxygen delivery equipment, oxygen tents or beds, nebulizers, and respiratory bags.
8. Electronic speech aids.
9. Therapeutic heating or cooling pads or compresses or packs.
10. Thermometers; glucose meters; scopes and lasers including stethoscopes, ophthalmoscopes, otoscopes, and endoscopes; and blood pressure equipment.
11. Commodes and collection basins including bed pans, urine containers, and emesis basins.
12. Wheelchair cushions that are braces or supports that are not attached and do not become a component part of the wheelchair itself.
13. Portable over-the-tub whirlpool devices that are not available for sale to the general public and are specifically manufactured for a medical purpose.
(6) Medicare claims. The administrator of Medicare claims, such as surgical care-blue shield, is under contract to withdraw funds from the United States treasury to pay the providers of medical services or for medical supplies and equipment. If the provider of a taxable item bills the administrator directly in full or in part, the portion paid by the administrator is a tax exempt sale to the United States. If the provider of a taxable item bills an individual in full or in part who then seeks reimbursement from Medicare, the portion paid by the administrator to the individual is not an exempt sale to the United States.
Note: Section Tax 11.45 interprets s. 77.54 (14), (14g), (14m), (14s), (22) and (28), Stats.
Note: The interpretations in s. Tax 11.45 are effective under the general sales and use tax law, on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to 1983 Wis. Act 27; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to 1985 Wis. Act 29; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar level became exempt March 1, 1989, pursuant to 1987 Wis. Act 399; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to 1989 Wis. Act 31; and (e) Sales of parts and accessories for certain medical items became exempt effective August 15, 1991, pursuant to 1991 Wis. Act 39.
SECTION 136. Tax 11.46(2)(a), (3)(c), and (4)(a) and (b) are amended to read:
Tax
11.46(2)(a) Meals Prepared foods, as defined in s. 77.51 (10m),
Stats., soft drinks, as defined in s. 77.51 (17w), Stats., candy, as defined in
s. 77.51 (1fm), Stats., dietary supplements, as defined in s. 77.51 (3n),
Stats., or and other tangible personal property and items,
property, and goods under s. 77.52 (1) (b), (c) and (d), Stats., sold by
agency camps or private camps.
(3)(c)
Food, and food products and beverages ingredients,
as defined in s. 77.54 (20) (a) and (b) 77.51 (3t), Stats.,
excluding those food, food products and beverages listed in s. 77.54 (20)
(c), Stats., sold at a camp for consumption off the premises of the camp candy,
soft drinks, dietary supplements, and prepared foods. “Off the premises
of the camp” means a location outside the boundaries of the camp.
(4)(a)
Gross receipts The sales price from the sale of tangible personal
property, items, property, and goods under s. 77.52 (1) (b), (c) and (d),
Stats., or taxable services by agency camps not engaged in a trade or
business and not otherwise required to hold a seller’s permit are exempt from
Wisconsin sales tax if entertainment, as defined in s. 77.54 (7m),
Stats., is not provided.
(b)
An agency camp is not engaged in a trade or business if its sales of otherwise
taxable tangible personal property, items, property, and goods under s. 77.52
(1) (b), (c), and (d), Stats., or services or its events occur on 20 days
or less during the calendar year or if its taxable receipts for the calendar
year are $15,000 $25,000 or less.
SECTION 137. Tax 11.46(5) is repealed and recreated to read:
Tax 11.46(5) Combined charge. (a) Except as provided in par. (b), if a single, combined charge is made for all the privileges extended by a camp and both taxable and nontaxable property, items, goods, and services are provided, and the transaction meets the definition of a “bundled transaction” as defined in s. 77.51 (1f), Stats., the entire charge is subject to tax.
(b) At the retailer’s option, if the retailer can identify by reasonable and verifiable standards from the retailer’s books and records that are kept in the ordinary course of its business for other purposes, including purposes unrelated to taxes, the portion of the price that is attributable to products that are not subject to the tax imposed under this subchapter, that portion of the sales price is not taxable. However, this option does not apply to a transaction that otherwise meets the definition of a bundled transaction if that transaction contains food and food ingredients, drugs, durable medical equipment, mobility-enhancing equipment, prosthetic devices, or medical supplies.
SECTION 138. Tax 11.47(1)(title), (intro.), (a) to (c), and (e), (2)(title), (a), and (b), and (3)(a)(intro.) and 1. to 3. and (b)(intro.) are amended to read:
Tax
11.47(1)(title) Taxable gross receipts sales.
(intro.)
Taxable services and sales of tangible personal property and items, property
and goods under s. 77.52 (1) (b), (c) and (d), Stats., of commercial
photographers and others providing photographic services, including video
taping, include gross receipts from charges for:
(a)
Taking, reproducing, and selling photographs and video tapes videos.
(b) Processing, developing, printing, and enlarging film.
(c) Enlarging, retouching, tinting, or coloring photographs.
(e)
Reproducing copies of documents, drawings, photographs, video tapes videos,
or prints by mechanical and chemical reproduction machines, blue printing and
process camera equipment.
(2)(title) Amounts
included in gross receipts sales price.
(a)
Gross receipts The sales price subject to the tax includes
charges for photographic and video materials, time and talent.
(b)
Modeling fees, mileage charges, equipment rental and charges for props or
similar items made by photographers shall not be deducted from gross
receipts the sales price subject to the tax, whether or not these
charges are separately itemized on the billing to a customer.
(3)(a)(intro.)
Commercial photographers and others providing photographic services, including
video taping services, may purchase, without paying sales or use
tax, any tangible personal property or item, property, or good under
s. 77.52 (1) (b), (c), or (d), Stats., which will be resold or which
becomes a component part of an article of tangible personal property, or
item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale
if a properly completed resale exemption certificate is given the
seller. These items include:
1. Mounts, frames, and sensitized paper used in the finished photograph and transferred to the customer.
2. Video
tapes Videos and film, including colored transparencies and movie
film, in which the negative and the positive are the same, and are permanently
transferred to a customer as part of the taxable photographic service.
3. Containers, labels, or other packaging and shipping materials used to transfer merchandise to customers.
(b)(intro.)
Photographers Except as provided in par. (bm), photographers and
others providing photographic services, including video taping services,
are required to pay tax when purchasing tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c) and (d), Stats.,
which is used, consumed or destroyed in providing photographic services. These
items include:
SECTION 139. Tax 11.47(3)(bm) is created to read:
Tax 11.47(3)(bm) The items and property listed in par. (b) are exempt from tax if used by a manufacturer in manufacturing, as defined in s. 77.51 (7h), Stats., and the requirements for the exemptions provided in s. 77.54 (2), (2m), or (6), Stats., are met.
SECTION 140. Tax 11.47(3)(c) is amended to read:
Tax
11.47(3)(c) If a photographer or other person providing photographic services,
including video taping, gives a resale an exemption certificate
for property, items, or goods to a seller and then uses the property,
item, or good for a taxable purpose, the photographer or other person
providing photographic services shall be liable for use tax at the time the
property, item, or good is first used in a taxable manner.
SECTION 141. Tax 11.48(1)(a) to (d), (2)(intro.), (a), (b), (c)(intro.), 2.(intro.) and b., and 3., (d), and (e), and (3)(a) and (b) are amended to read:
Tax
11.48(1)(a) Landlords are the consumers of household furniture, furnishings,
equipment, appliances, or other items of tangible personal property and
items, property, and goods under s. 77.52(1)(b), (c) and (d), Stats.,
purchased by them for use by their tenants in leased or rented living quarters.
The sales and use tax applies to a landlord’s purchases of all these items.
The gross receipts sales price from a landlord’s charges to the
tenant for use of these items are not subject to the tax even though there may
be a separate charge for them.
(b)
The gross receipts sales price from providing parking space for
motor vehicles and aircraft and from providing docking and storage space for
boats are taxable. If a separate charge is made for the parking, docking,
or storage space, the charge is taxable. However, if a separate charge is not
made and the price of a rental unit includes a charge for a parking, docking,
or storage space, and if similar units are rented at a reduced price if the
parking, docking, or storage space is not utilized, the difference
between the rental price of the 2 similar units is taxable as a charge for
parking, docking, or storage.
(c)
1. The furnishing of rooms or lodging through the sale of a any kind
of time-share property, as defined in s. 707.02 (32), Stats., is taxable
if the use of the rooms or lodging is not fixed at the time of the sale as to
the starting day or the lodging unit, and is for a continuous period of less
than one month is not taxable.
2. The sale, furnishing or use of recreational facilities on a periodic basis and of other recreational rights, including membership rights, vacation services and club memberships, with respect to time-share property, is not taxable, if the facilities are not available to persons who have not purchased the time-share property, other than guests.
Note to LRB: Replace the example at the end of Tax 11.48(1)(c)2. with the following:
Example: If a golf course is available to the general public for a fee, charges for access to the golf course are taxable, even if the charges are made in connection with the sale or use of time-share property.
(d)
The rental for a continuous period of one month or more of a mobile
home, as defined in s. 66.0435 (1) (d) 101.91 (10), Stats., or
a manufactured home, as defined in s. 101.91 (2), Stats., used for
lodging for a continuous period of one month or more as a residence
is exempt from the sales and use tax, whether the mobile home or
manufactured home is classified as real or personal property.
(2)(intro.) Hotels and motels. The furnishing of rooms or lodging to transients by hotelkeepers, motel operators, and other persons furnishing accommodations to the public, regardless of whether membership is required for use of the accommodations, is a taxable service.
(a) “Transient” means any person residing at one location for a continuous period of less than one month. A continuing monthly rental of a particular room or rooms by a business, including a trucking company, railway, or airline, to be used by its employees for layover is not taxable.
(b) The rental of space for meetings, conventions, and similar activities that are not amusement, athletic, entertainment, or recreational in nature, is not taxable. However, the rental of hotel or motel rooms generally used as sleeping accommodations is taxable, regardless of the type of use.
(c)(intro.) Sales of lodging by hotels, motels, and inns to governmental agencies and nonprofit organizations described in s. 77.54 (9a), Stats., and the federal government or to their employees are exempt from sales and use tax if the following 3 conditions are met, regardless of whether the agency or the employee pays for the lodging:
2.(intro.) The hotel, motel, or inn receives any of the following:
b. The certificate of exempt status, CES, number of the nonprofit organization. The hotel, motel, or inn shall enter the CES number on its copy of the invoice or billing document.
3. The hotel, motel, or inn keeps a copy of the documents in subds. 1. and 2. to substantiate that the sale was exempt.
(d) Separately stated charges by hotels, motels, and inns for the rental of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., including televisions and refrigerators, are taxable.
(e)
Hotels, motels, and inns are the consumers of all the property,
items, and goods used to conduct their business, such as beds, bedding,
equipment, advertising materials, supplies and, items, and
property consumed by the occupants of a room as part of the lodging
service. The tax applies to their purchases of all these items.
(3)(a)
The owner of a motel often leases the complete unit, including real and
personal property, to a second party who operates the motel. If the lease does
not indicate the amount of the lease receipts derived from the tangible
personal property and items, property, and goods under s. 77.52 (1) (b), (c)
and (d), Stats., as opposed to the realty and intangible property, the
taxable receipts shall be determined by multiplying the total lease receipts of
each reporting period by the ratio of the lessor’s gross investment in purchase
price of the tangible personal property and items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., to the lessor’s total gross
investment in all real and personal property on the effective date of the
lease being leased to that operator, except as provided in par. (c).
This ratio shall apply as long as the lease agreement between the lessor and
lessee remains unchanged. However, the original ratio and any change in the
ratio resulting from changes in the lease, due to additions to or removal of
real or personal property leased, are subject to review by the department for
reasonableness.
(b)
In computing the The numerator of the ratio in par. (a), is
the purchase price of the tangible personal property and items,
property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., includes
property subject to the sales tax purchased by the lessor, except as
provided in par. (c). This includes furniture, furnishings, equipment,
or trade fixtures in an office, kitchen, restaurant, lounge, rooms, patio,
and other indoor and outdoor areas; beds, bedding, linen, and towels;
vending machines; and maintenance equipment.
Note to LRB: Replace the example at the end of Tax 11.48(3)(b) with the following:
Example: If the lessor’s purchase price of the tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., is $100,000, and the lessor’s gross investment is $500,000 for all real and personal property, items, and goods, taxable lease receipts shall be determined by applying a ratio of 20% ($100,000$500,000) to the gross lease receipts for each sales tax reporting period.
SECTION 142. Tax 11.48(3)(c) is created to read:
Tax 11.48(3)(c) For purposes of par. (a), if the lessor of the property under s. 77.52 (1) (c), Stats., is also the lessor of the real property to which the property under s. 77.52 (1) (c), Stats., is affixed, the numerator of the ratio described in par. (a), does not include the lessor’s gross investment in such property, but the lessor is liable for the sales or use tax on its purchases of such property.
SECTION 143. Tax 11.49(1)(b) to (e) and (2)(a), (b), (c), and (g) to (j) are amended to read:
Tax 11.49(1)(b) The repair, service, alteration, fitting, cleaning, painting, coating, inspection, and maintenance of motor vehicles, including the total amount charged for parts and labor and including motor vehicles and truck bodies owned by nonresidents except as provided in sub. (2).
(c) The towing of motor vehicles, which includes the hauling of motor vehicles by a tow truck, as defined in s. 340.01 (67n), Stats.
Notes to LRB: 1. Replace the second example at the end of Tax 11.49(1)(c) with the following:
2) The charge to a customer by a towing company for towing the customer’s vehicle from a no parking zone is taxable.
2. Amend the third, fourth, and fifth examples at the end of Tax 11.49(1)(c) as follows:
3) The charge to a customer by a towing company for towing a demolished vehicle to a junkyard is taxable.
4) The charge to a Wisconsin governmental unit by a towing company for towing is exempt from tax.
5) The charge to a repair facility by a towing
company for towing a vehicle to the facility for repair which will be
passed on to the customer is not taxable provided the repair facility gives the
towing company a properly completed resale exemption certificate claiming
resale. However, the charge for the towing service to the customer by the
repair facility is taxable.
(d) Retail sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c) and (d), Stats., including motor oil, antifreeze, motor vehicle parts and supplies, tobacco products, candy, and soft drinks by service stations except as provided in sub. (2).
(e)
The gross receipts from operating Charges for car washes, whether
automated or not.
(2)(a)
Sales of gasoline, general aviation fuel and special fuel including diesel and
L.P. fuel, which are subject to the Wisconsin motor vehicle fuel taxes under
ch. 78, Stats. The holder of a Wisconsin special fuel license may issue an
exemption certificate, form S-207, to purchase special fuel without
sales tax. On special fuel which a licensee puts into highway motor vehicles,
the licensee is required to pay the special fuel tax. If motor fuel or special
fuel is purchased without tax under s. 77.54 (11), Stats., because it is
subject to the excise tax imposed under ch. 78, Stats., and then the excise
taxes are later refunded under s. 78.75, Stats., because the buyer does not use
the fuel in operating a motor vehicle upon the public highways, the fuel is
subject to the tax, unless otherwise exempt under s. 77.54 (1), (3), (5), (6)
(c), (9a), (12), (13), (30) (a), Stats., or other exemptions in subch. III, ch.
77, Stats.
(b)
Sales made directly to governmental units of this state, schools or any
corporation, community chest fund, foundation or association organized and
operated exclusively for religious, charitable, scientific or educational
purposes or for the prevention of cruelty to children or animals this
state or any agency thereof, the University of Wisconsin Hospitals and Clinics
Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing
Plan Authority, the Wisconsin Quality Home Care Authority, and the Fox River
Navigational System Authority; any county, city, village, town, or school
district in this state; a county-city hospital established under s. 66.0927,
Stats.; a sewerage commission organized under s. 281.43 (4), Stats. or a
metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21
to 200.65, Stats.; any other unit of government in this state or any agency or
instrumentality of one or more units of government in this state; any federally
recognized American Indian tribe or band in this state; any joint local water
authority created under s. 66.0823, Stats.; any transit authority created under
ss. 59.58 (7) or 66.1039, Stats.; any corporation, community chest fund,
foundation, or association organized and operated exclusively for religious,
charitable, scientific, or educational purposes, or for the prevention of
cruelty to children or animals, except hospital service insurance corporations
under 613.80 (2), Stats., no part of the net income of which inures to the
benefit of any private stockholder, shareholder, member, or corporation; a
local exposition district under subch II of ch. 229, Stats.; a local cultural
arts district under subch. V of ch. 229, Stats. Sales to a cemetery company or
corporation described under section 501 (c) (13) of the Internal Revenue Code,
are exempt from sales and use tax if the cemetery company or corporation uses
the items exclusively for the purposes of the company or corporation. Section
77.55 (1), Stats., provides an exemption for sales to the United States, its
unincorporated agencies and instrumentalities, and any incorporated agency or
instrumentality of the United States wholly owned by the United States or by a
corporation wholly owned by the United States. Sales to employees of these
entities are not exempt, even though the entity may reimburse the employee for
the expenditure.
(c) Sales of accessories, attachments, parts, supplies, and highway fuel for common or contract carrier motor trucks, truck tractors, road tractors, buses, trailers, and semi-trailers used exclusively in common or contract carriage, including the urban mass transportation of passengers as defined in s. 71.38, Stats. This exemption applies to purchases for school buses operated under contract with a public or private school to transport students. A station wagon or van which is not registered as a bus or truck with the division of motor vehicles in the Wisconsin department of transportation does not qualify for this exemption.
(g)
Sales of coal, fuel oil, propane, steam, peat, fuel cubes produced from solid
waste and, wood, and biomass as defined in s. 196.378 (1)
(ar), Stats., used for fuel sold for residential use. In this paragraph,
“residential use” means use in a structure or portion of a structure which is a
person’s permanent residence as defined in s. Tax 11.57 (2) (q) 2. and 3.
(h) Sales of repairs, services, alterations, fitting, cleaning, painting, coating, towing, inspection, and maintenance services to common or contract carrier vehicles exempt under sub. (2) (c), mobile mixing and processing units and the vehicle or trailer on which they are mounted, and motor vehicles not required to be licensed for highway use which are exclusively and directly used in conjunction with waste reduction or recycling activities.
(i) Sales of accessories, attachments, parts, supplies, and materials for mobile mixing and processing units and the vehicle or trailer on which they are mounted, including highway fuel for units operated on public highways.
(j)
Sales of wood any residue used for fuel and sold for use
in a business activity. Wood residue includes that results from the
harvesting of timber or the production of wood products including slash,
sawdust, shavings, edgings, slabs, leaves, wood chips, bark and wood pellets
manufactured primarily from wood or wood residue.
SECTION 144. Tax 11.49(2)(k) and (L) are created to read:
Tax 11.49(2)(k) Sales of fuel consumed in manufacturing tangible personal property, or items or property under s. 77.52 (1) (b) or (c), Stats., in Wisconsin.
(L) Sales of fuel consumed in operating an industrial waste treatment facility.
SECTION 145. Tax 11.49(3)(a) and (b) are amended to read:
Tax 11.49(3)(a) Service station operators who repair motor vehicles may purchase, without tax, “for resale”, repair parts and materials used in the work which are physically transferred to their customers. This includes auto parts, chassis lubricants, wheel greases, car waxes, paints, paint hardeners, plastic body fillers, and welding rods.
(b) A service station operator’s purchases of equipment, tools, supplies, and other property, items, or goods not physically transferred to customers as part of the performance of a taxable service are subject to the sales and use tax. Supplies such as sandpaper, masking paper, masking tape, buffing pads, paint and lacquer thinner, clean and glaze compound, paint remover, tack rags, steel wool, metal conditioner, lacquer removing solvent, rubbing compound, wax and grease remover, fluxing materials, disc adhesives, and other property or items used or consumed in performing motor vehicle repair service are taxable.
SECTION 146. Tax 11.50, 11.51, and 11.52 are repealed and recreated to read:
Tax 11.50 Auctions. (1) Statute. Section 77.51 (13) (b), Stats., provides that every person engaged in the business of making sales at auction of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., owned by the person making the sale or others is a “retailer”. The definition of “retail sale” contained in s. 77.51 (14) (a), Stats., includes any sale at an auction.
(2) Retailer. If an auction company provides complete auction service, it is the retailer. If an auctioneer contracts with the owner of the auctioned property and arranges for clerking the auction, the auctioneer is the retailer. Auctioneers and auction companies who are retailers are responsible for reporting the sales tax on auction receipts even if the owner of the property has a seller’s permit.
(3) Taxable auction receipts. Taxable receipts from auctions include the sales price received from:
(a) Auction sales of heavy equipment and going-out-of-business auction sales of retail stores, motels, wholesalers, manufacturers, contractors, and service enterprises, but not certain sales of personal farm property, as explained in sub. (4) (a). The household goods exemption does not apply to these sales.
(b) Auction sales, including radio and television auction sales held at a location where the auctioneer holds more than 5 auctions during the calendar year.
(c) Auctions sponsored by a nonprofit organization, except as provided in sub. (4) (c). The household goods exemption does not apply to these auctions.
(d) Auction sales of antiques and works of art except when sold with other household goods of which they were a part.
(e) Auction sales of professional or business inventories or equipment, except certain personal farm property as explained in sub. (4) (a), even though they may consist of household goods.
(f) Sheriffs’ sales and other auction sales made pursuant to orders of a Wisconsin court.
(g) Liquidation sales of an insolvent debtor’s assets which are made pursuant to the order of a federal bankruptcy court.
(h) All other auction sales which are not specifically exempt under the law.
(4) Exempt auction receipts. The receipts from the following auction sales are exempt:
(a) Except as provided in sub. (5), auction sales of personal farm property or household goods which are held at a location where the auctioneer holds 5 or fewer auctions during the calendar year. In this paragraph:
1. “Household goods” includes tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., which is associated with maintaining a household and is for family use. “Household goods” does not include:
a. Highway motor vehicles or trailers, snowmobiles, all-terrain vehicles, mini bikes, aircraft and boats.
b. Professional or business inventory or equipment.
Example: Household goods include furniture necessary or ornamental to a house in furnishing or fitting it for use by members of the household. Thus household goods include goods removed from a family home, such as tables, chairs, lamps, appliances, beds, clocks, musical instruments, dressers, lawn and garden equipment, jugs and fruit jars, sporting goods or hobby equipment including bats, balls, tennis racquets, golf clubs, guns and ammunition, and related hunting equipment, fishing equipment, camping equipment, photographic equipment, tools, bicycles, and personal collections of those items.
2. “Personal farm property” includes tractors, implements of husbandry, machines, equipment or other tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., used by the owner in the business of farming. “Personal farm property” does not include racing, pleasure riding, or show horses, pets or other recreational animals not used in farming, highway vehicles and boats.
(b) Sales for resale or sales that are otherwise exempt. If such a sale is made at an auction, the person conducting the auction should obtain a properly completed exemption certificate from the purchaser.
(c) Auction sales by religious, charitable, educational, or civic organizations and other nonprofit organizations that conduct a fund raising event, if both of the following apply:
1. The auctioneer is not the retailer, because the auctioneer’s services are donated.
2. The sales qualify as exempt occasional sales under s. Tax 11.35 (4).
(5) Auction sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), trailers, semi-trailers, all-terrain vehicles, and aircraft. (a) An auctioneer shall collect, report, and remit tax on its sales of any of the following items if the auctioneer is a retailer, unless an exemption applies:
1. Motor vehicles.
2. Boats.
3. Snowmobiles.
4. Recreational vehicles as defined in s. 340.01 (48r), Stats.
5. Trailers.
6. Semi-trailers.
7. All-terrain vehicles.
8. Aircraft.
(b) 1. A buyer who purchases any of the items listed in par. (a) 1. to 8. from an auctioneer who is a retailer shall pay the tax to the auctioneer, unless an exemption applies. If the buyer does not pay the tax to the auctioneer, the buyer shall file a return and pay the tax, as prescribed by the department, prior to registering or titling the item in Wisconsin.
2. Auction sales of the items listed in par. (a) 1. to 8. do not qualify for exemption as occasional sales of personal farm property or household goods if the items are registered or titled or required to be registered or titled in Wisconsin. Auction sales of boats also do not qualify for exemption as occasional sales of personal farm property or household goods if the boats are registered or titled or required to be registered or titled under the laws of the United States.
Note: Section Tax 11.50 interprets s. 77.51 (9) (e), (13) (b) and (14) (intro.) and (a), Stats.
Note: The interpretations in s. Tax 11.50 are effective under the general sales and use tax law on and after September 1, 1969, except that the standard in sub. (4) (d) 2. became effective January 1, 1989, pursuant to 1987 Wis. Act 399.
Tax 11.51 Grocers’ guidelist. (1) General. (a) All sales of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c) and (d), Stats., are taxable except when a specific exemption applies. One of the exemptions is for “food and food ingredients,” which generally exempts all food and food ingredients for human consumption, except candy, soft drinks, dietary supplements, and prepared food .This exemption also does not include many items normally available in grocery and food stores, such as soft drinks, alcoholic beverages, tobacco products, paper products, and detergents.
(b) “Food and food ingredients” is defined in s. 77.51 (3t), Stats., to mean “…a substance in liquid, concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion, or for chewing, by humans and that is ingested or chewed for its taste or nutritional value. ‘Food and food ingredient’ does not include alcoholic beverages or tobacco.”
(c) The lists in sub. (2) shall serve as a guide to grocers to determine the kinds of items that are taxable and exempt.
(2) Guidelists. (a) Taxable sales by grocers. Taxable sales include sales of the following items:
Adhesive tape.
Air fresheners.
Albums.
Ammonia.
Anti-acid products.
Anti-freeze.
Appliances.
Ash trays.
Aspirin.
Auto supplies.
Baby needs, except food.
Bags of all kinds.
Bakeware.
Baking chips, sweetened.
Baking chocolate that contains a sweetener in the form of bars, drops, or pieces.
Barbecue supplies.
Baskets.
Batteries, except hearing aid batteries.
Beauty aids.
Beer.
Binders.
Bird food and supplies.
Bleach.
Blueing.
Bobby pins and rollers.
Books.
Bottled water, sweetened.
Bottles.
Bowl cleaner.
Breath mints, unless they contain flour.
Brooms.
Brushes.
Bubble bath.
Cake decorations, non-edible.
Cake decorations that are candy.
Calcium tablets.
Cameras and supplies.
Can openers.
Candy.
Candy apples.
Canning and freezer supplies.
Caramel apples.
Caramel corn.
Cat food and supplies.
Charcoal and starter.
Chewing gum.
Chocolate chips, sweetened.
Chocolate covered raisins and nuts.
Cigarette lighter fluid, wicks, flints.
Cigarettes.
Cigars.
Cleaning equipment and supplies.
Cleansers.
Clocks.
Clothes lines.
Clothespins.
Clothing.
Cocktail mixes.
Cod liver oil.
Coffee drinks that contain sweeteners, unless it also contains milk or milk products.
Cold remedies.
Combs and brushes.
Confections that are candy.
Cough drops.
Crayons.
Deli items, as explained in sub. (3) (g) 2.
Dental aids.
Deodorants.
Deodorizers.
Detergents.
Diapers
Dietary supplements.
Dinnerware.
Disinfectants.
Distilled spirits.
Dog food and supplies.
Dolls.
Drain cleaners.
Dried fruit with sweeteners.
Drug sundries.
Dry cleaners.
Dry ice.
Dye.
Electrical supplies.
Facial tissues.
Farm and garden implements.
Feminine hygiene needs including napkins and tampons.
Fermented malt beverages.
Fertilizers.
Film.
First aid products.
Flash bulbs.
Flatware.
Floor care products.
Flowers and seeds.
Foil, aluminum and similar products.
Foot care products.
Frames.
Fruit drinks that contain a sweetener and have 50 percent or less fruit juice by volume.
Fuel and lubricants.
Furniture polish.
Games.
Garbage bags and cans.
Garden needs.
Gifts, non-food and nonexempt food.
Ginseng sold as a dietary supplement.
Glassware.
Gloves.
Glue.
Granola bars, unless they contain flour.
Greeting cards.
Grilling supplies.
Grooming aids.
Gum.
Hair care products.
Hardware.
Health and beauty aids.
Heated foods and beverages, as explained in sub. (3) (ar).
Honey roasted and honey coated nuts.
Hosiery.
Household equipment and supplies.
Hygiene products.
Ice blocks
Insect and pest control products.
Insulated containers.
Internal remedies.
Intoxicating liquor.
Iron tablets.
Jewelry.
Juices that contain sweeteners and 50% or less fruit or vegetable juice by volume.
Laundry products.
Lawn furniture.
Light bulbs and fuses.
Lozenges.
Lunch boxes.
Lye.
Magazines.
Manicure needs.
Marshmallows, unless they contain flour.
Mason jars.
Matches.
Medicinal preparations.
Milk of magnesia.
Mineral tablets.
Nail polish and remover.
Nails.
Napkins.
Nonalcoholic beer that contains a sweetener.
Notebooks.
Nursery stock.
Nuts that are candy, such as honey roasted cashews.
Pails.
Paint and paint supplies.
Paper products, including tissues, plates, cups, towels, napkins and writing paper.
Peanuts that are candy, such as honey roasted peanuts.
Pens and pencils.
Periodicals.
Pet food and supplies.
Plants.
Plastic utensils.
Polishes.
Pots and pans.
Powder, face and body.
Prepared foods as explained in sub. (4).
Raisins that are candy, such as yogurt coated raisins.
Razors and blades.
Records.
Root beer.
Rotisseries.
Rubber bands.
Salt, water softener.
Sandwiches that are prepared food.
Sanitary goods.
School supplies.
Scissors.
Sewing aids.
Shampoo and rinse.
Shaving supplies.
Shelf coverings.
Shoe laces and polishes.
Soaps.
Soft drinks.
Sponges.
Starch.
Stationery.
Steel wool.
Stockings.
Sun glasses.
Sun tan lotion.
Tableware.
Taffy apples.
Tape.
Tea drinks that contain sweeteners.
Thread.
Tobacco products.
Toilet tissue.
Tonics.
Tools.
Tooth brushes.
Toothpaste and powders.
Toothpicks.
Toys.
Trail mix that includes candy.
Utensils.
Vegetable juices that contain a sweetener and 50% or less juice by volume.
Video rentals.
Vitamins.
Wash cloths.
Waste baskets.
Watches.
Water, sweetened.
Water conditioners.
Wax paper.
Waxing.
Wearing apparel.
Wine making supplies.
Wrap, foil, plastic and waxed paper.
Writing supplies.
Yogurt covered raisins and nuts.
Zippers.
(b) Exempt sales by grocers. Exempt sales include sales of the following items, but not if the items meet the definition of candy, soft drinks, dietary supplements, or prepared foods:
Apple cider, sweet.
Baby food.
Bakery goods.
Baking powder and soda.
Barbecue sauces.
Berries.
Beverage powders, unless they are a dietary supplement.
Beverages that contain milk.
Biscuit mix.
Bouillon cubes.
Bread and rolls.
Breakfast pastries.
Brownies.
Butter.
Cake mixes and flour.
Cakes, prepared, mixes and snack type.
Canned foods.
Catsup.
Cereal and cereal products.
Cheese.
Chicken.
Chip dip.
Chips, potato, corn and similar items.
Chocolate, unsweetened or not sold in form of bars, drops, or pieces.
Citrus fruits.
Cocoa.
Coffee beans, grounds, freeze dried and coffee substitutes.
Coffee drinks that contain no sweeteners or that contain a milk or milk product.
Condiments.
Cookies and crackers.
Cooking oils.
Cones, ice cream cups.
Cream.
Dairy products.
Deli items, as explained in sub. (3) (g) 1.
Desserts and toppings.
Dinners, frozen.
Doughnuts.
Dressings.
Dried fruits, unsweetened.
Dried milk products.
Eggs.
Fish and fish products.
Flavoring extracts.
Flour.
Food coloring.
Frozen desserts.
Frozen fruit juices.
Frozen fruits and vegetables.
Frozen pizza.
Frozen TV dinners.
Fruit.
Fruit juices that contain more than 50% fruit juice by volume.
Garlic.
Gelatin.
Granola bars, except candy or yogurt coated.
Gravy extracts and mixes.
Grits.
Hash.
Honey.
Ice cream.
Ice cream bars and similar products.
Ice cream in cones.
Ice cubes.
Jams.
Jellies.
Juices that contain more than 50% fruit or vegetable juice by volume.
Ketchup.
Lobster.
Luncheon meats.
Macaroni.
Malted milk powder.
Maraschino cherries.
Margarine.
Marshmallows that contain flour.
Mayonnaise.
Meal.
Meat and meat products.
Meat extracts and tenderizers.
Melons.
Milk and milk products.
Mustard.
Newspapers.
Noodles.
Nuts, except as provided in par. (a).
Oil, cooking, salad.
Oleomargarine.
Olives.
Pancake mix.
Pasta.
Peanut butter.
Peanuts, in shell or canned, salted or not, except as provided in par. (a).
Pectins.
Pepper.
Pickles.
Pie and pie fillings.
Pie crust and mixes.
Popcorn.
Popsicles.
Potato chips.
Potato salad, as explained in sub. (3) (g) 1.
Poultry and poultry products.
Powdered drink mixes, except dietary supplements.
Preserves.
Pretzels.
Puddings.
Raisins, except as provided in par. (a).
Ravioli.
Relishes.
Rice.
Rolls and biscuits.
Salad dressing.
Salt and salt substitutes.
Salted nuts.
Sardines.
Seafood.
Seasonings.
Sherbet.
Shortening.
Soup.
Spaghetti products.
Spices.
Spreads.
Sugar.
Sweeteners.
Syrup.
Tea, bags, leaves or instant.
Tea and ice tea beverages that are not sweetened.
Turkey.
Vanilla and vanilla extract.
Vegetable juices that contain more than 50% juice by volume.
Vegetables.
Vinegar.
Waffle mix.
Water, carbonated, unsweetened.
Water, flavored, unsweetened
Water, unsweetened.
Yeast.
Yogurt and yogurt bars, cones and sundaes.
(3) Explanations of some taxable and exempt sales by grocers. For purposes of sub. (2):
(a) 1. “Candy” is defined in s. 77.51 (1fm), Stats., to mean “… a preparation of sugar, honey, or other natural or artificial sweetener combined with chocolate, fruit, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. ‘Candy’ does not include a preparation that contains flour or that requires refrigeration.”
2. Items that otherwise meet the definition of candy and do not require refrigeration but which are sold frozen or refrigerated are still “candy.”
Example: A grocery store sells candy bars at room temperature or from a refrigerated display case. Unless the candy bar is required to be refrigerated, it is still candy when sold, even if it was refrigerated when sold.
(b) 1. “Dietary supplement” is defined in s. 77.51 (3n), Stats., to mean “…a product other than tobacco, that is intended to supplement a person’s diet if all of the following apply:
(a) The product contains any of the following ingredients or any combination of any of the following ingredients:
1. A vitamin.
2. A mineral.
3. An herb or other botanical.
4. An amino acid.
5. A dietary substance that is intended for human consumption to supplement the diet by increasing total dietary intake.
6. A concentrate, metabolite, constituent, or extract.
(b) The product is intended for ingestion in tablet, capsule, powder, soft-gel, gel-cap, or liquid form, or, if not intended for ingestion in such forms, is not represented as conventional food and is not represented for use as the sole item of a meal or diet.
(c) The product is required to be labeled as a dietary supplement as required under 21 CFR 101.36.”
2. Dietary supplements can be identified by the “Supplemental Facts” box found on the label as required by the Code of Federal Regulations, title 21, section 101.36 and include items such as amino acids, antioxidants, bee pollen, enzymes, garlic capsules, ginseng, herbal supplements, immune supports, lecithin, metabolic supplements, vitamins and minerals and zinc lozenges.
(c) “Heated state” means sold at any temperature higher than the air temperature of the room or place where the product is sold.
(d) 1. “Soft drink” is defined in s. 77.51 (17w), Stats., to mean “…a beverage that contains less than 0.5 percent of alcohol and that contains natural or artificial sweeteners. ‘Soft drink’ does not include a beverage that contains milk or milk products; soy, rice, or similar milk substitutes; or more than 50 percent vegetable or fruit juice by volume.”
2. Soft drinks are beverages that are in liquid form and do not include items that are not in liquid form such as powdered fruit drinks, powdered teas and frozen drink concentrates.
3. Natural and artificial sweeteners include corn syrup, dextrose, sucrose, fructose, sucralose, saccharin, and aspartame.
4. a. Water and tea that contain any sweeteners are soft drinks.
b. Water and tea that are unsweetened are not soft drinks, even if carbonated or flavored.
(e) 1. Deli foods sold unheated by weight or volume are exempt, unless utensils are provided, as explained in sub. (4) (d).
2. Deli sales of items sold in a heated state are prepared foods.
Examples: 1) A grocer’s deli sells potato salad, fruit salad, cheese, ham, coleslaw, corned beef and fresh rolls at room temperature. These items are sold by weight or volume and utensils are not provided. The sale of these items is not taxable.
2) A grocer’s deli sells a serving of each of the following for $3.59: potato salad, fruit salad, cheese, ham, coleslaw, corned beef and fresh rolls and provides utensils. The sale is taxable as a sale of prepared food.
3) A grocer’s deli sells party trays by weight or volume in an unheated condition and for which utensils are not provided. The types of party trays include shrimp and sauce, meats, fresh vegetables, fresh fruits, cheeses or cookies. The sale of these party trays is not subject to tax.
(4) prepared food. “Prepared food” is defined in s. 77.51 (10m), Stats., to mean any of the following:
(a) Food and food ingredients sold in a heated state.
Example: A retailer sells heated sandwiches to a customer. The heated sandwich is prepared food.
(b) Food and food ingredients heated by the retailer, except for the following:
1. Two or more food ingredients that are mixed or combined by a retailer for sale as a single item, if the retailer’s primary classification in the North American Industry Classification System (NAICS), 2002 edition, published by the federal office of management and budget is manufacturing under subsector 311, but not including bakeries and tortilla manufacturing under industry group number 3118.
Example: A food manufacturer classified under industry code 31161 of the North American Industry Classification System (NAICS), 2002 edition, makes hot dogs by mixing and combining 2 or more food ingredients, heating the hot dogs so that they are fully cooked and then packaging the hot dogs for sale once they have cooled. Although the hot dogs were heated by the retailer while they were being manufactured, they are not prepared food because they meet the exception in par. (b) 1. and do not meet any of the other definitions of prepared food.
2. Bakery items made by a retailer, including breads, rolls, pastries, buns, biscuits, bagels, croissants, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.
Examples: 1) A bakery mixes ingredients together to make a cake. The cake mix is then heated (baked). Once the cake cools, it is decorated and sold to a customer. Although the cake was heated by the retailer, it is not prepared food because it meets the exception in par. (b) 2. and does not meet any of the other definitions of prepared food.
2) A bakery mixes 2 or more ingredients together to make a bagel. The bagel is then heated and placed in a heated display case for sale to a customer. The bagel is prepared food since it is sold heated. Although the bagel would meet the exception provided in par. (b) 2., since it is sold heated, it is prepared food.
3. Two or more food ingredients mixed or combined by a retailer for sale as a single item, sold unheated, and sold by volume or weight.
(c) Two or more food ingredients mixed or combined by the retailer for sale as a single item, except if any of the following apply:
1. The retailer’s primary classification in the North American Industry Classification System, 2002 edition, published by the federal office of management and budget is manufacturing under subsector 311, but not including bakeries and tortilla manufacturing under industry group number 3118.
2. The item is sold unheated and by volume or weight.
3. The item is a bakery item made by the retailer, including breads, rolls, pastries, buns, biscuits, bagels, croissants, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.
4. The food and food ingredients are only sliced, repackaged, or pasteurized by the retailer.
5. The item contains eggs, fish, meat, or poultry in raw form that requires cooking by the consumer, as recommended by the food and drug administration in chapter 3, part 401.11 of its food code to prevent food-borne illnesses.
(d) Food and food ingredients sold with eating utensils that are provided by the retailer of the food and food ingredients, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. However a “plate” does not include a container or packaging used to transport the food and food ingredients.
1. Eating utensils are provided by the retailer if:
a. The eating utensils are available to the purchasers and the retailer’s sales of food and food ingredients sold in a heated state, 2 or more food ingredients mixed or combined by a retailer for sale as a single item, soft drinks, and alcoholic beverages are more than 75 percent of the retailers total sales at that establishment; or
b. The retailer’s customary practice is to physically give or hand the utensils to the purchaser, except that plates, glasses, or cups that are necessary for the purchaser to receive the food and food ingredients need only be made available to the purchaser.
2.a. The numerator of the percentage described in subd. 1. a. includes only sales of prepared food as defined in pars. (a), (b), and (c) and food for which plates, bowls, glasses, or cups are necessary to receive the food, but not including alcoholic beverages.
b. The denominator of the percentage described in subd. 1. a. includes all food and food ingredients, including prepared food, candy, dietary supplements, and soft drinks, but not including alcoholic beverages.
3.a. If the percentage determined under subd. 2. is 75 percent or less, utensils are considered to be provided by the retailer if the retailer’s customary practice is to physically give or hand the utensils to the purchaser or, in the case of plates, bowls, glasses, or cups that are necessary to receive the food, to make such items available to the purchaser.
b. If the percentage determined under subd. 2. is greater than 75 percent, utensils are considered to be provided by the retailer if the utensils are made available to the purchaser.
4.a. For a retailer whose percentage determined under subd. 2. is greater than 75 percent, an item sold by the retailer that contains 4 or more servings packaged as one item and sold for a single price does not become prepared food simply because the retailer makes utensils available to the purchaser of the item.
b. For a retailer whose percentage determined under subd. 2. is greater than 75 percent, an item sold by the retailer that contains 4 or more servings packaged as one item and sold for a single price does become prepared food if the retailer physically gives or hands utensils to the purchaser of the item, except that plates, bowls, glasses, or cups necessary for the purchaser to receive the food, need only be made available to the purchaser.
c. For purposes of subds. 4. a. and 4. b., serving sizes are based on the information contained on the label of each item sold, except that, if the item sold has no label, the serving size is based on the retailer’s reasonable determination.
5.a. Except as provided in subd. 5. b., if a retailer sells food items that have a utensil placed in a package by a person other than the retailer, the utensils are considered to be provided by the retailer.
b. Except as provided in subds. 3. and 4., if a retailer sells food items that have a utensil placed in a package by a person other than the retailer and the person’s primary classification in the North American Industrial Classification System (NAICS), 2002 edition, published by the federal office of management and budget, is manufacturing under subsector 311, the utensils are not considered to be provided by the retailer.
6.a. For purposes of subd. 1. a., a retailer shall determine the percentage for the retailer’s tax year or business fiscal year based on the retailers data from the retailer’s prior tax or business fiscal year as soon as practical after the retailer’s accounting records are available, but no later than 90 days after the day on which the retailer’s tax or business fiscal year begins.
b. For retailers with more than one establishment in Wisconsin, a single determination under subd. 1. a. that combines the information for all of the retailer’s establishments in Wisconsin shall be made annually, and will apply to all of the retailer’s establishments in Wisconsin.
c. If a retailer has no prior tax or business fiscal year in Wisconsin, the retailer shall make a good faith estimate of its percentage under subd. 1. a. for the retailer’s first tax or business fiscal year and shall adjust the estimate prospectively after the first 3 months of the retailer’s operations if the actual percentage is materially different from the estimated percentage.
(5) Federal food stamps. A grocer’s receipts from federal food stamps are not subject to sales tax even if the items purchased by the consumer are not exempt food or food ingredients under s. 77.54 (20n), Stats.
Note: Section Tax 11.51 interprets ss. 77.51 (4) (cm), 77.52 (1) and 77.54 (15) and (20), Stats.
Note: The interpretations in s. Tax 11.51 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Sales of cigarettes became taxable on September 1, 1975, pursuant to Chapter 39, Laws of 1975; (b) Magazines and periodicals sold over-the-counter became taxable on September 1, 1983, pursuant to 1983 Wis. Act 27; and (c). The definitions of “meals” and “sandwiches” and the tax treatment of prepackaged food combinations became effective August 1, 1997, pursuant to 1997 Wis. Act 237.
Tax 11.52 Coin-operated vending machines and amusement devices. (1) Scope. This section applies to all sales from coin-operated machines, except those located on army, air force, navy, or marine corps exchanges where the operator leases the machines to those exchanges which acquire title to and sell the merchandise through the machines to authorized purchasers from those exchanges.
(2) Definitions. In this section:
(a) “Heated” means the food or beverages have been prepared for sale in a heated condition and which are sold at any temperature higher than the air temperature of the room or place where they are sold.
(b) “Operator” has the meaning in s. 77.52 (1m), Stats.
(c) “Retailer” for purposes of this section means either of the following:
1. Any person who owns or possesses coin-operated vending machines or amusement devices, who controls the operations of the machines as by stocking or removing the receipts from the machines or devices, who has access to the machines or devices for any purpose connected with the sale of merchandise or services through the machines or devices, and whose compensation is based, in whole or in part, upon receipts from sales made through the machines or devices.
2. A person who is responsible for providing laundry, dry cleaning, photographic, photocopy, or other taxable services through vending machines.
Note: If there is a question of who is the retailer for a single machine or device, a determination regarding who is the retailer liable for tax may be obtained by writing to: Wisconsin Department of Revenue, PO Box 8902, Madison, WI 53708-8902.
(3) Seller’s permits. (a) Retailers of tangible personal property, items, property and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services sold through coin-operated vending machines or devices dispensing taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or services shall obtain a seller’s permit. One permit shall be sufficient for all the machines of each retailer.
Note: Refer to s. Tax 11.002 for a description of permit requirements, how to apply for a permit, and the 15-day time period within which the department is required to act on permit applications.
(b) A notice must be affixed to each coin-operated machine or device showing the retailer’s name, address and seller’s permit number.
(4) Taxable receipts. Taxable receipts include receipts from:
(a) Coin-operated machines dispensing tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., such as:
1. Candy.
2. Chewing gum.
3. Dietary supplements.
4. Heated foods and beverages.
4. Prepared foods, such as sandwiches prepared by the retailer.
5. Soft drinks.
6. Non-edible items such as:
a. Beauty supplies, such as make-up, hair spray, nail polish, and combs.
b. Cameras, film, and photography supplies.
c. Cigars, cigarettes, other tobaccos products, and lighters.
d. Drugs and other medical supplies, such as aspirin, bandages, and suntan lotion.
e. Hygiene products, such as soap and shampoo.
f. Photocopies.
g. Photographs.
h. Reading materials.
i. Toys and games.
j. Videos.
k. Wearing apparel, such as gloves, hosiery, shoelaces, and sunglasses.
(b) Coin-operated machines which provide a taxable service, such as telephones, car washes, televisions, vacuums, parking meters, shoe shine machines, bowling ball cleaning machines and coin-operated amusement devices such as juke boxes, pinball machines, shuffleboards, pool tables, slot racing, mechanical rides and games, and penny arcades.
(c) Coin-operated machines of non-governmental retailers located on army, navy, or air force installations, hospitals, or other facilities of the United States government.
(5) Nontaxable receipts. Receipts from the following are not taxable:
(a) Laundry, dry cleaning and pressing machines when the service is performed by the customer through the use of coin-operated, self-service machines.
(b) Coin-operated storage lockers, pay toilets, and scales.
(c) Coin-operated hair drying machines.
(d) Hospitals sales from vending machines of food and food ingredients, except soft drinks to patients, staff, or visitors.
(e) Sales from a vending machine of food and food ingredients except, candy, soft drinks, dietary supplements, and prepared foods.
(6) Reporting and record keeping. (a) The receipts from the sale of taxable property, items, goods, or services from vending machines and amusement devices are subject to sales tax. Thus, taxable receipts include, for example, receipts from property, items, goods, and services selling for one, 5, and 10 cents and more. No deduction shall be permitted for the cost of the property, item, good, or service sold, materials used, labor or service cost, or any other expense, including commissions paid to place machines in an establishment.
(b) Sales tax collected from customers may be deducted from the total receipts before computing the tax payable, if customers are notified the prices include sales tax. If customers are not notified that the prices include sales tax, no deduction shall be allowed. The notification of the customer may be made by either:
1. Conspicuously posting the bracket system charts issued by the department; or
2. Conspicuously posting a sign that states “Prices Include Sales Tax.”
(c) Each retailer shall maintain adequate and complete records including:
1. The location of each machine.
2. The serial number of each machine.
3. Purchases and inventories of all merchandise sold through machines.
4. Receipts from sales of exempt merchandise.
5. Purchase records of all machines and the cost of all supplies of which the retailer is deemed to be the user or consumer.
Example: Purchase records shall be maintained for a vending machine or juke box, including repairs and parts, and records or compact discs used in the juke box.
(7) Sale, license, lease, or rental of machines. (a) Except as provided in par. (b), receipts from the sale, lease, rental, or license to use coin-operated machines and attachments, parts and supplies for the machines are subject to the sales tax. Taxable receipts include sales to persons providing a service, such as laundry and dry cleaning service. If the machines, attachments, parts, or supplies are purchased for use in Wisconsin from an unregistered out-of-state supplier, the purchaser shall remit the use tax directly to the department.
(b) Nontaxable receipts include the lease of coin-operated machines by non-governmental retailers to exchanges of the army, air force, navy, or marine corps which acquire title to and sell merchandise through the machines to authorized purchasers from such exchanges.
(c) Machines purchased exclusively for license, lease, or rental to others may be purchased by the lessor without tax if the lessor gives an exemption certificate to the lessor’s supplier. If the lessor intends to make any use of the machines other than license, lease, or rental, an exemption certificate claiming resale may not be given. In either event, the lessor’s rental receipts are taxable.
Note: Section Tax 11.52 interprets s. 77.52 (1), (1m), (2) (a) 2., 6., 7. and 10. and (2m), Stats.
Note: The interpretations in s. Tax 11.52 are effective under the general sales and use tax law on and after September 1, 1969 unless otherwise noted.
SECTION 147. Tax 11.53(1) is repealed and recreated to read:
Tax 11.53(1) Definition. In this section, “temporary event” means an activity at one place of operation for a brief duration where taxable sales are made. A place of operation includes a fair, carnival, circus, festival or portable roadside stand.
SECTION 148. Tax 11.53(2)(intro.) is renumbered 11.53(2) and amended as renumbered to read:
Tax
11.53(2) Permits for temporary events. Except as provided in sub. (3), a person conducting
business as a retailer at a temporary event shall hold one of the following
permits: a seller’s permit.
SECTION 149. Tax 11.53(2)(a) and (b) are repealed
SECTION 150. Tax 11.53(3) to (5) and (7) are amended to read:
Tax
11.53(3) Exception. Persons, other than nonprofit organizations, not
who do not hold and are not otherwise required to hold a seller’s permit
who have total taxable gross receipts from sales of tangible personal
property, items, property, and goods under s. 77.52 (1) (b), (c), and (d),
Stats., or taxable services of less than $1,000 during the calendar year
are not required to hold a seller’s permit or mobile seller’s permit. Sales
by such persons are exempt occasional sales. However, a person’s purchases of
tangible personal property, items, property, and goods under s. 77.52 (1) (b),
(c), and (d), Stats., and taxable services which when resold are exempt
occasional sales under this section, are taxable purchases by that person.
(4) Security.
Application for a seller’s permit or mobile seller’s permit shall be on
a form prescribed by the department. The applicant shall be subject to
security requirements of s. 77.61 (2), Stats., and may be required to deposit
security in an amount determined by the department, but not in excess of
$15,000.
(5) Returns. Sales
and use tax returns due from persons holding seller’s permits and mobile
seller’s permits are subject to the provisions of s. 77.58, Stats. The
returns shall report the tax due for the period of time or event covered by the
returns and shall be due quarterly, on the last day of the next month following
a calendar quarter unless notified by the department to file on some other
basis under s. 77.52 (19) or 77.58 (1) and (2), Stats., and shall include on
the return gross receipts from all temporary events and other taxable
transactions of the permittee during the reporting period.
(7) Operator reporting requirements. An operator of a swap meet, flea market, craft fair
or similar event shall report to the department for each event, the legal
and business name, address, telephone number, e-mail address, tax
account number, if available, social security number and, if available,
the seller’s permit number of federal employer identification number, if
applicable, for each vendor selling merchandise at the swap meet, flea
market, craft fair, or similar event as provided in s. Tax 11.535.
SECTION 151. Tax 11.535(title), (1), (2)(b), (c), and (d), (3), and (5) are amended to read:
Tax 11.535(title) Operators of a swap meet, flea market, craft fair, or similar event.
(1) Purpose. This section clarifies requirements and establishes a time standard for the reports required under s. 73.03 (38), Stats., which authorizes the department to require operators of swap meets, flea markets, craft fairs, and similar events to report to the department specific identifying information of each vendor selling merchandise at these events.
(2)(b) “Operator” means a person who, or an entity such as an association, partnership, corporation, or nonprofit organization, which arranges, organizes, promotes, or sponsors an event.
(c) “Selling merchandise” means the sale, rental, license, lease, exchange, trade or barter of, or taking orders for merchandise, goods, or products for money or other consideration, or both.
(d) “Similar events” means events which are similar to swap meets, flea markets and craft fairs and includes tradeshows, carnivals, fairs, and fund-raising events.
(3) Report required.
Each operator shall furnish to the department within 10 days following the
close of an event, the name, address, telephone number and e-mail address of
the operator; the name of the event; the date or dates of the event;
and the location of the event; and the real legal name,
business name, address, telephone number, e-mail address, tax account
number, if available, social security number and, if available, the
seller’s permit number of each vendor at the event the federal employer
identification number of each vendor, if applicable.
Note to LRB: Replace the note at the end of Tax 11.535(4) with the following:
Note: Copies of the S-240, Wisconsin Temporary Event Operator and Seller Information reporting form may be obtained at any Department of Revenue office, by calling (608) 266-2776, by electronic mail at sales10@revenue.wi.gov or by writing to Wisconsin Department of Revenue, Post Office Box 8902, Madison, WI 53708.
(5) Alternative reporting method. Operators of continuing or successive events may
report all vendors for each event or may report under an alternative method
approved by the department. Any operator may request approval from the
department of an alternative method of reporting which will provide the
department with the required information on all vendors at each event. The
request shall be made in writing to: Wisconsin Department of Revenue, Operator/Vendor
Program, Post Office Box 8902, Madison, WI 53708 Temporary Events
Program, 265 W Northland Avenue, Appleton, WI 54911. It shall list the
dates and locations of events to be held during the calendar year and the
proposed method for reporting the information required.
SECTION 152. Tax 11.54(title), (1)(a), (b), and (c), (2), (3)(title), (a), and (b), and (4)(a) and (b) are amended to read:
Tax 11.54(title) Temporary amusement, entertainment, or recreational events or places.
(1)(a) “Admission” means the right or privilege to have access to or use of a place, facility or location in Wisconsin where amusement, entertainment, or recreation is provided.
(b)
Pursuant to s. 77.51 (10), Stats., “person” includes any natural person, firm,
partnership, limited liability company, joint venture, joint stock company,
association, public or private corporation, the United States, the state,
including any unit or division of the state, any county, city, village, town,
municipal utility, municipal power district, or other governmental unit,
cooperative, unincorporated cooperative association, estate, trust,
receiver, personal representative, executor, administrator, any
other fiduciary, and any other legal entity, and any
representative appointed by order of any court or otherwise acting on behalf of
others.
(c) “Places of amusement, entertainment or recreation” include, but are not limited to, auditoriums, race tracks, street fairs, rock festivals, or other places where there is any show or exhibition for which any charge is made including, but not limited to, the sale of tickets, gate charges, seat charges, entrance fees, and motor vehicle parking fees.
(2) General. The gross
receipts from the sale of admissions to amusement, entertainment, and
recreational events or places are subject to sales tax.
(3)(title) Entrepreneurs, promoters, sponsors, or managers.
(a) Entrepreneurs, promoters, sponsors, or managers of an amusement, entertainment, or recreational event shall be regarded as retailers for the purposes of s. 77.51 (13) (c), Stats., if the entrepreneurs, promoters, sponsors, or managers have control and direction of the event including activities such as controlling the sale of admissions or admission tickets; controlling or regulating the admittance of all persons to the event or place; determining the nature of the amusement, entertainment, or recreation to be offered; deciding the scale of the prices to be charged for admission; receiving the proceeds from ticket sales, including amounts from ticket agents or brokers; and deciding, or having the right to decide, the disposition of the net profits, if any, realized from the event.
(b) As retailers, the entrepreneurs, promoters, sponsors, or managers are persons liable for the sales tax and are required to hold a seller’s permit for each place of operations pursuant to s. 77.52 (7), Stats., and may be required to post security as provided in s. 77.61 (2), Stats. The retailers are required to have a seller’s permit on the first date on which tickets or admission to an event to be conducted in this state are offered for sale.
(4)(a) Traveling attractions which perform in stadiums, theaters, or other places where the permanent management of the stadium, theater, or other location holds a valid seller’s permit, controls the sale of tickets or admissions, and assumes the liability for the payment of the sales tax.
(b)
Churches or other nonprofit groups which operate within the occasional sale
limitations of provided in s. 77.54 (7m), Stats.
SECTION 153. Tax 11.54(4)(d) is created to read:
Tax 11.54(4)(d) Sales of admissions by a nonprofit organization to participate in any sports activity in which more than 50 percent of the participants are 19 years old or younger.
SECTION 154. Tax 11.55(title), (1), (2)(a), (3), and (4) are amended to read:
Tax 11.55(title) Agents, consignees, lienors, and brokers.
Tax
11.55(1) Undisclosed principal. A person who has possession of tangible
personal property or items, property, or goods under s. 77.52 (1), (b), (c),
or (d), Stats., owned by an unknown or undisclosed principal and has the
power to transfer title to that property, item, or good to a third
person, and who exercises that power, is a retailer whose gross receipts
are subject to the tax.
(2)(a) Gross receipts The sales price received
from the sale of tangible personal property and items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., made by a person with
possession of the property, item, or good who is acting for a known or
disclosed principal, are is taxable to the principal if the principal
is engaged in the full or part-time business of selling tangible personal
property or items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats. If the principal fails to pay the tax, the agent may be liable for
it.
(3) Enforcement of liens. Pawnbrokers, storage persons, and others selling tangible personal
property and items, property, and goods under s. 77.52 (1) (b), (c), and
(d), Stats., to enforce a lien are retailers with respect to such sales,
and tax applies to the gross receipts from such sales.
(4) Repossessions. Repossessions of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by a seller from a purchaser when the only consideration is cancellation of the purchaser’s obligation to pay for the property, item, or good is not a taxable transaction. However, sales at retail of repossessed property (e.g., by finance companies, insurance companies, banks and other financial institutions) are taxable sales.
SECTION 155. Tax 11.56(1)(a), (b)2., and (c), (2)(intro.) and (b), and (3)(a)(intro.), 1., and 2. and (b) are amended to read:
Tax
11.56(1)(a) “Manufacturer” includes a printer or other person who performs any
one or more of the processes in manufacturing printed matter, provided that the
printer or other person qualifies as being engaged in manufacturing under s.
77.51 (7h) (a), Stats., whether or not the printed matter is sold.
(b)2. Using computers, scanners, proofers, typesetters, photographic equipment, film processors, and direct-to-plate equipment exclusively in performing any of the processes listed in subd. 1. “Manufacturing printed matter” does not include using the equipment described in this subdivision to design, write, or compose an original document to be printed.
(c) “Typesetting” includes converting images into standardized letter forms of a certain style which usually are hyphenated, justified and indented automatically by means of machinery and equipment. Typesetting machinery and equipment includes fonts, video display terminals, tape and disc making equipment, computers, and typesetters which are interconnected to operate essentially as one machine. A system shall be considered to operate essentially as one machine whether or not the tape or disc is automatically fed to the typesetter.
(2)(intro.) Printers’ taxable sales. Taxable receipts of printers include gross receipts from the
following, unless otherwise exempt:
(b) Charges for services in connection with the sale of printed matter, such as overtime and set-up charges, die cutting, embossing, folding, and binding operations, and charges for painting signs, show cards, and posters, whether the materials are furnished by the printer or by the customer.
(3)(a)(intro.) Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by persons who are not printers, including so-called “trade shops” such as typesetters, image reproduction manufacturers, color separators and binders, or finishers are taxable unless the sales qualify for a statutory exemption , including the following:
1.
Section 77.54 (2), Stats., which exempts from tax the gross receipts
from sales sales price of “...tangible personal property becoming
or item under s. 77.52 (1) (b) that is used exclusively and directly by a
manufacturer in manufacturing an article of tangible personal property or item
or property under s. 77.52 (1) (b) or (c) that is destined for sale and that
becomes an ingredient or component part of an the article of
tangible personal property or item or property under s. 77.52 (1) (b) or
(c), Stats., destined for sale or which is consumed or destroyed or
loses its identity in the manufacture manufacturing the article
of tangible personal property in any form or item or property under
s. 77.52 (1) (b) or (c), Stats., destined for sale , except as provided
in sub. (30) (a) 6....”
2.
Section 77.54 (2m), Stats., which exempts from tax the gross
receipts from sales sales price of “…tangible personal
property or services that are used exclusively and directly by a
manufacturer in manufacturing shoppers guides, newspapers, or periodicals and
that become an ingredient or component of shoppers guides, newspapers,
or periodicals or that are consumed or lose their identity in the manufacture of
shoppers guides, newspapers, or periodicals, whether or not the shoppers
guides, newspapers, or periodicals are transferred without charge to the
recipient.... The exemption...does not apply to advertising supplements
that are not newspapers.”
(b)
Tangible personal property includes and items under 77.52 (1) (b),
Stats., include typed matter, whether or not combined with artwork, such as
typeset output, a paste-up, mechanical, assembly, camera-ready copy, flat,
or a photoreproduction, including film plates.
SECTION 156. Tax 11.56(4) is repealed and recreated to read:
Tax 11.56(4) Nontaxable sales. (a) Tax does not apply to charges, if stated separately on invoices and in the accounting records, for mailing services such as:
1. Addressing printed matter by hand or mechanically for the purpose of mailing.
2. Enclosing, sealing, and preparing for mailing.
3. Mailing letters or other printed matter.
(b) Tax also does not apply to a printer’s sales of:
1. Catalogs, as defined in s. Tax 11.19 (6) (b), and the envelopes in which the catalogs are mailed.
2. Printed advertising materials for out-of-state use, as provided in s. Tax 11.19 (4).
SECTION 157. Tax 11.56(5), (6)(a)(intro.) and 1. to 3. and (b), and (7)(a) and (b)(intro.) and 1. are amended to read:
Tax
11.56(5) Exempt printing machinery and
equipment. Section 77.54 (6) (a),
Stats., provides that “Machines and specific processing equipment and repair
parts or replacements thereof, exclusively and directly used by a manufacturer
in manufacturing tangible personal property…. or items or property
under s. 77.52 (1) (b) or (c) and safety attachments for those machines and
equipment.” are exempt from the sales or use tax. This includes
machinery and equipment and repair parts or replacements of the machinery and
equipment used exclusively and directly by a manufacturer in the printing
process to manufacture tangible personal property or items or property under
s. 77.52 (1) (b) or (c), Stats.
(6)(a)(intro.) Persons engaged in manufacturing printed matter for sale may purchase the following property and items without tax under the statutes indicated:
1.
Section 77.54 (2), Stats. Property and items, such as paper stock or
printing ink, used exclusively and directly in manufacturing an article of
tangible personal property or item or property under s. 77.52 (1) (b) or (c),
Stats., that is destined for sale and that becoming becomes
an ingredient or component part of an item article of tangible
personal property or item or property under s. 77.52 (1) (b) or (c), Stats.,
destined for sale, such as paper stock or printing ink.
2.
Section 77.54 (2), Stats. Property and items such as chemicals,
emulsions, acids, raw film, lubricating oils, greases, nonoffset spray,
finished art, color separations, plate-ready film, other positives and
negatives, flats, and similar items, used exclusively and directly in
manufacturing an article of tangible personal property or item or property
under s. 77.52 (1) (b) or (c), Stats., destined for sale and which are
consumed, destroyed, or lose their identity in the manufacture of
tangible personal property to be sold and items and property under s.
77.52 (1) (b) and (c), Stats., destined for sale.
Note to LRB: Amend the example at the end of Tax 11.56(6)(a)2. as follows:
Example: A printer’s purchases of positives and negatives which are used exclusively and directly to produce catalogs and shoppers guides it sells to other persons are exempt from the tax.
3. Section 77.54 (6) (b), Stats. Containers and packaging and shipping materials for use in packing, packaging, or shipping printed matter to their customers.
(b) The exemption under s. 77.54 (2), Stats., described in par. (a) 1. and 2., applies to property and items purchased by a person who does not use the property other than to provide it to a manufacturer described in par. (a) for use by the manufacturer exclusively and directly in manufacturing tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., to be sold. The exemption under s. 77.54 (2), Stats., does not apply if the manufactured tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., is not to be sold by the manufacturer to its customer or by the customer.
Note to LRB: Amend the examples at the end of Tax 11.56(6)(b) as follows:
Examples: 1) A paper manufacturer’s purchases of negatives which it transfers to a printer, who uses the negatives exclusively and directly to produce printing which the printer sells to the paper manufacturer are exempt from the tax.
2) An advertising agency’s purchases of color separations which are furnished to a commercial printer who uses the color separations exclusively and directly to produce advertising material the printer sells to the advertising agency are exempt from the tax.
(7)(a)
An The exemption under s. 77.54 (2m), Stats., applies for
to tangible personal property or services that are used exclusively
and directly by a manufacturer in manufacturing shoppers guides, newspapers, or
periodicals and that become an ingredient or component of the
shoppers guides, newspapers, or periodicals or that are consumed or lose
their identity in the manufacture of the shoppers guides, newspapers,
or periodicals, whether or not they are transferred without charge to a
recipient.
(b)(intro.) Section 77.54 (43), Stats., provides that Wisconsin sales or use tax is not imposed on raw materials if both of the following conditions are met:
1. The raw materials are processed, fabricated, or manufactured into, attached to, or incorporated into printed materials.
SECTION 158. Tax 11.56(7)(bm) is created to read:
Tax 11.56(7)(bm) Section 77.52 (2) (a) 11., Stats., provides that the tax does not apply to the service of printing or imprinting tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., that results in printed material, catalogs, or envelopes that are exempt under s. 77.54 (25) or (25m), Stats.
Example: Company Z purchases paper that is used to print catalogs that are designed to advertise and promote the sale of Company Z’s merchandise. The paper is delivered to Company X, a Wisconsin printer, that prints the catalogs for Company Z. The catalogs are shipped both in and outside Wisconsin. The charge by Company X to Company Z for the printing of the catalogs is not taxable. However, Company Z owes tax on its purchase of the paper that it provides to Company X for those catalogs that are not shipped outside Wisconsin for use solely outside Wisconsin. Company Z’s purchase of the paper for those catalogs that are shipped outside Wisconsin is exempt as provided in par. (b).
SECTION 159. Tax 11.56(7)(c) is amended to read:
Tax 11.56(7)(c) The tax applies to purchases of artwork, single color or multicolor separations, negatives, flats, and similar items if those purchases are used in the manufacture of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., not to be sold, other than items exempt under par. (a) or (b). A printer who does not supply paper used in printing tangible personal property is not selling tangible personal property but rather, is selling a service.
Note to LRB: Replace the second example at the end of Tax 11.56(7)(c) with the following:
2) Company B purchases finished artwork from an advertising agency. The artwork and paper are provided to a printer who will print flyers that are not catalogs for Company B. The flyers are provided without charge to customers in Wisconsin. The charge by the advertising agency to Company B is subject to Wisconsin sales and use tax. The exemption under s. 77. 54 (2), Stats., does not apply because the printer is not selling tangible personal property or an item, or property under s. 77.52 (1) (b) or (c), Stats., and the exemption under s. 77.54 (43), Stats., does not apply because the flyers are used in Wisconsin.
SECTION 160. Tax 11.56(8) is created to read:
Tax 11.56(8) Purchases of fuel and electricity for use in manufacturing printed matter. Section 77.54 (30) (a) 6., Stats., provides an exemption 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. “Manufacturing” is defined in s. 77.51 (7h), Stats.
SECTION 161. Tax 11.57(title), (1)(intro.), (a), (h), and (i), and (2)(intro.), (a), and (i) are amended to read:
Tax
11.57(title) Public utilities Utilities.
(1)(intro.)
The gross receipts from the sale Sales of the following tangible
personal property, items, property, and goods under s. 77.52 (1) (b), (c),
and (d), Stats., and services provided by utilities are taxable:
(a) Utility services billed to household, industrial, or commercial customers, with any adjustments for discounts taken by customers in the utility’s next reporting period.
(h) Sales of scrap, gravel, or timber sold for removal.
(i) Sales of tools, used equipment, and other tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., to employees or other purchasers.
(2)(intro.) Gross
receipts from the The following charges sales to
customers are not subject to the tax:
(a) Connection or reconnection charges for natural gas, electricity, and water.
(i)
Sales of gas or other fuel, not including and electricity,
to farmers for use in farming, including but not limited to agriculture,
dairy farming, floriculture, silviculture, and horticulture.
SECTION 162. Tax 11.57(2)(im) is created to read:
Tax 11.57(2)(im) Sales of fuel and electricity consumed in manufacturing tangible personal property, or items or property under s. 77.52 (1) (b) or (c), Stats., in Wisconsin.
SECTION 163. Tax 11.57(2)(L) is repealed and recreated to read:
Tax 11.57(2)(L) Coal, fuel oil, propane, steam, peat, fuel cubes produced from solid waste and wood used for fuel, sold for residential use.
SECTION 164. Tax 11.57(2)(m) to (q) are created to read:
Tax 11.57(2)(m) Biomass, as defined in s. 196.378 (1) (ar), Stats., that is used for fuel sold for residential use.
(n) Electricity and natural gas sold during the months of November, December, January, February, March, and April for residential use. For purposes of this exemption, s. 77.54 (30) (b), Stats., provides that electricity or natural gas is considered sold at the time of billing. If the billing is by mail, the time of billing is the day on which the billing is mailed. In any event, a qualifying customer shall receive only 6 months of service exempt from taxation during the November through April period.
(o) Low-income assistance fees that are charged under s. 16.957 (4) (a) or (5) (a), Stats.
(p) If fuel or electricity is sold to a person partly for an exempt use and partly for a use that is not exempt, no tax shall be collected by the seller on the portion of the sales price of the fuel or electricity that is used for an exempt purpose, as specified on an exemption certificate provided by the purchaser to the seller, as described in par. (q).
(q) 1. Where a building, that contains residential quarters and commercial operations, is heated by one central heating plant, it is necessary to determine the portion of the fuel purchased which qualifies for the “residential use” exemption. The percentage of residential use may be computed by dividing the number of square feet used for residential purposes, excluding common areas, by the total area heated, excluding common areas. If this does not produce a reasonable result, any other reasonable method of estimating may be used. The resulting percentage should be rounded to the nearest 10%.
2. In this subsection, “residential use” means use in a structure or portion of a structure that is a person’s permanent principal residence. Use in a residence includes heating or cooling the premises, heating water, operating fans or other motors, providing lighting, and other ordinary uses by the purchaser in a residence. Residential use includes use in single-family homes, duplexes, townhouses, condominiums, mobile homes, rooming houses, apartment houses, nursing homes, and farm houses, if the structure is used as a person’s permanent principal residence. Residential use includes use in apartment houses, nursing homes, and farm houses even though they are on a commercial or rural meter.
3. “Non-residential use” is use other than “residential use” as defined in subd. 2., and includes any use in the conduct of a trade, business or profession, whether the trade, business or profession is carried on by the owner of the premises or some other person. It includes use in secondary residences, motor homes not used as a permanent principal residence, travel trailers, other recreational vehicles, and transient accommodations. “Transient accommodations” include hotels, motels, inns, travel homes, tourist houses, summer cottages, apartment hotels, or resort lodges or cabins, and any accommodation which is rented for a continuous period of less than one month.
Examples: 1) A person owns a home in Wisconsin where he resides for 7 months each year and a cottage, also in Wisconsin, where he resides for 5 months each year. The home is his principal residence and the cottage is his secondary residence.
2) A person is a resident of Florida and has a home in Florida. The person also retains a home in Wisconsin. The person’s Florida home is her principal residence and her Wisconsin home is her secondary residence.
4. A “continuous” certification designation is provided on the exemption certificate, form S-211, and, if claimed, the form remains in effect until replaced or revoked. A new certificate shall be filed if there is a change in the percentage of exempt use.
SECTION 165. Tax 11.57(3)(a) and (b)(intro.), 1., and 2. and (4)(intro.) are amended to read:
Tax
11.57(3)(a) Persons engaged in the business of providing electrical or gas public
utility service are consumers of the tangible personal property or ,
items, property, and goods under s. 77.52 (1) (b), (c) and (d), Stats., and
taxable services used to provide in providing the utility
services. The tax applies to the sales of the property, items,
goods, or services to them, except where a specific exemption applies, such
as the exemptions shown in sub. (4).
(b)(intro.)
Examples of gross receipts from the sale The purchase, license,
lease, or rental of the following property, items to ,
goods, and services by a public utility which are subject to
the tax are:
1.
Transformers, substation equipment, and other tangible personal property
and items and property under s. 77.52 (1) (b) and (c), Stats., purchased
by a utility and used to construct, improve, or repair a
transmission or distribution line.
2. A contractor’s charges for the construction, improvement, or repair of an overhead utility transmission or distribution line installed under easement or license on land owned by others.
(4)(intro.) The
following sales to public purchases, licenses, leases, or rentals by
utilities are not subject to the tax:
SECTION 166. Tax 11.57(4)(c) is repealed and recreated to read:
Tax 11.57(4)(c) Any residue used as a fuel in a business activity that results from the harvesting of timber or the production of wood products, including slash, sawdust, shavings, edgings, slabs, leaves, wood chips, bark and wood pellets manufactured primarily from wood or wood residue.
SECTION 167. Tax 11.57(4)(d) and (5) are amended to read:
Tax 11.57(4)(d) Charges for X-ray testing of welding joints in the pipe as part of the construction of underground utility pipelines.
(5) Waste
treatment facilities. The gross receipts sales price from
the sales of and the storage, use or other consumption of tangible personal
property and items and property under s. 77.52 (1) (b) and (c), Stats.,
which becomes a component part of an industrial waste treatment facility that
is exempt or that would be exempt under s. 70.11 (21) (a), Stats., if
the property or items were taxable under ch. 70, Stats., is exempt from
sales and use tax.
SECTION 168. Tax 11.57(6) is created to read:
Tax 11.57(6) Transfer of transmission facilities. Excluded from the definition of “sale,” for sales and use tax purposes, is the transfer of transmission facilities, as defined in 196.485 (1) (h), Stats., to a transmission company, as defined in s. 196.485 (1) (ge), Stats., after the organizational start-up date, as defined in s. 196.485 (1) (dv), Stats., of such company in exchange for securities, as defined in s. 196.485 (1) (fe), Stats.
SECTION 169. Tax 11.61(1)(a)(intro.) is amended to read:
Tax
11.61(1)(a)(intro.) Charges made by veterinarians which shall be exempt from
the sales tax include charges for the following professional services for
animals:
SECTION 170. Tax 11.61(1)(a)3. is created to read:
Tax 11.61(1)(a)3. Drugs.
SECTION 171. Tax 11.61(1)(c)(intro.) and 3. and (2)(a) and (b)1. are amended to read:
Tax 11.61(1)(c)(intro.) Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by veterinarians which shall be taxable include the following:
3. Pet food, other than medicated pet food.
(2)(a)
Sales to veterinarians of medicines drugs for pets animals
and sales to veterinarians of other tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., to
be used or furnished by them in the performance of their professional services
to animals shall be subject to the sales or use tax, except as provided in par.
(b) 1.
(b)1.
Veterinarians’ purchases of medicines drugs used on farm
livestock, not including workstock, are exempt from tax.
Note to LRB: Amend the example at the end of Tax 11.61(2)(c) as follows:
Example: A veterinarian purchases medicines drugs
for pets from an out-of-state supplier not registered to collect Wisconsin
sales or use tax. The veterinarian is subject to Wisconsin use tax on the
purchase price of the medicines drugs.
SECTION 172. Tax 11.62(2)(a) and (b) and (3)(a) to (d) are amended to read:
Tax
11.62(2)(a) Over the counter sales by a barber or beauty shop operator of
Sales of tangible personal property and items, property, and goods under s.
77.52 (1) (b), (c), or (d), Stats., including packaged cosmetics, hair
tonics, lotions, shampoo, wigs, falls, and toupees, and other
merchandise and their charges for servicing wigs, hair pieces, or
other tangible personal property or items, property or goods under s. 77.52
(1) (b), (c), or (d), Stats., are subject to sales tax unless par. (b)
applies. A Except as provided in par. (b), a barber or beauty
shop operator who engages in sales subject to sales tax under this subsection
shall register as a retailer and is responsible for collecting and remitting to
the department the tax on taxable sales or charges.
(b)
A barber or beauty shop operator operator’s sales are not subject to
Wisconsin sales tax if the barber or beauty shop operator does not hold and
is not required to hold a Wisconsin seller’s permit. A barber or
beauty shop operator is not required to hold a seller’s permit and register
as a retailer and to collect Wisconsin sales tax if the gross
receipts barber or beauty shop operator’s total taxable receipts
from sales of tangible personal property or, items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services
are less than $1,000 or less within a during the calendar
year.
(3)(a)
Persons A barber or beauty shop operator’s purchases of tangible
personal property, items, property, and goods under s. 77.52 (1) (b), (c), and
(d), Stats., and taxable services ,which when resold are exempt as
occasional sellers sales under sub. (2) (b) shall pay sales or
use tax on all are taxable purchases of property used in the
business, including items that may be resold to customers, items, goods,
and services.
(b)
Persons who register and collect sales tax under sub. (2) (a) may purchase
tangible personal property, such as hair pieces, for resale without paying tax
by issuing their supplier a properly completed resale exemption
certificate, claiming resale.
(c)
Tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., purchased by a barber or beauty shop operator
and used in providing services is are subject to sales or use
tax.
(d)
If a barber or beauty shop operator gives a resale an exemption
certificate claiming resale for tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to a
supplier and then uses or consumes the property, item or good in
providing services, the barber or beauty shop operator is liable for use tax at
the time the property, item or good is first used in a taxable manner.
SECTION 173. Tax 11.63(1)(intro.) and (b), (2)(a), (b), and (c)2., (3), (4), and (5) are amended to read:
Tax
11.63(1)(intro.) Gross receipts from the sale Sales of the following
services are not subject to the sales and use tax:
(b) Advertising space.
(2)(a)
Gross receipts from charges imposed Charges by a radio or
television station for art work, slides, films, tapes, or other tangible
personal property or items, property, or goods under s. 77.52 (1) (b), (c),
and (d), Stats., which the station prepares or produces for its advertisers
or sponsors are subject to the sales and use tax. The gross receipts charges
are taxable even though a station may retain possession of the tangible
personal property or item, property, or good under s. 77.52 (1) (b), (c), or
(d), Stats., because “sale” is defined to include the transfer of not only
title to and possession of tangible personal property and items, property,
and goods under s. 77.52 (1) (b), (c), and (d), Stats., but also the
transfer of enjoyment of tangible personal property and items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats. If an advertiser
maintains any control over the tangible personal property or item, property,
or good under s. 77.52 (1) (b), (c), or (d), Stats., prepared or produced,
such as the right to determine when the property, item, or good will be
used for advertising purposes, the advertiser is deemed to have received the
enjoyment of the property, item, or good.
(b)
Gross receipts Sales from a radio or television auction are
subject to the sales and use tax.
Note to LRB: Amend the example at the end of Tax 11.63(2)(b) as follows:
Example: A radio station has a program where the announcer
places items of merchandise of local retailers or sponsors up for bid to the
station’s listeners. The successful bidder, chosen by the radio station,
delivers the purchase price of the merchandise to the radio station and
receives a purchase certificate that allows him to redeem the merchandise from
the retailer or sponsor. The purchase money is retained by the radio station,
although the retailer is compensated by the station for its participation in
the form of radio advertising. The radio station is subject to sales tax on
the gross receipts from the program.
(c)2.
The merchandise orders are sent directly to the station which accounts for the gross
receipts.
(3) Nontaxable
purchases. Gross receipts from the The sale, license,
lease, or rental of motion picture films or tape, and motion pictures or
radio or television programs for listening, viewing, or broadcast, and the
advertising materials related to the motion picture films or tape, and
motion pictures or radio or television programs, to a motion picture
theater or radio or television station are exempt from the sales and use tax
under s. 77.54 (23m), Stats. Sales of blank or raw video or audio tapes to
television or radio stations are included in this exemption.
(4) Taxable purchases. Radio and television stations are consumers of equipment, materials, and supplies used to conduct their businesses and shall pay sales or use tax on purchases of this tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., except as provided in sub. (3).
(5) Broadcasting towers. Commercial broadcasting towers constituting the transmission antenna system of a radio or television station are deemed, for sales and use tax purposes, either real estate improvements if installed on land owned by the station or tangible personal property if installed on land owned by others. Contractors engaged in construction of broadcasting towers that are real estate improvements are the consumers of building materials used by them in constructing, altering, or repairing those towers and shall pay tax on the cost of the materials. Contractors engaged in construction of broadcasting towers that are tangible personal property may purchase materials used by them in constructing, altering, or repairing those towers without tax for resale. The charge by the contractor to the purchaser is subject to tax.
SECTION 174. Tax 11.64(2) and (3) are amended to read:
Tax
11.64(2) Music played at central studio. The gross receipts
from the furnishing of background music to business, industry, and others from
a central studio over telephone circuits or by FM radio are not subject
to the sales or use tax as a digital audio work. The persons who
provide such service are the consumers of the tapes, tape players,
transmitters, and other tangible personal property and items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats., used to provide the
service, and their purchases of these items, as well as telephone telecommunication
services from the telephone company, are taxable. However In
addition, the gross receipts from equipment leased or rented to the
customer as part of providing this service are taxable. , and an An
exemption for resale may be claimed on the purchase of such leased or rented
equipment, if the equipment is used exclusively for lease or rental and if
the customer has the option of receiving the digital audio work from the
retailer, without also being required to purchase, lease, or rent the equipment
from that same retailer.
(3) Music
played by customer. The lease, rental, hire or license to use all
tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., comprising a background music system are taxable
when the system is located on a customer’s (e.g., lessee’s or licensee’s)
premises and is operated by the customer. Any charge for installing the
system is taxable. The sale of the tapes, equipment, and other tangible
personal property and items, property, and goods under s. 77.52 (1) (b),
(c), and (d), Stats., to the person providing the system (e.g., the lessor
or licensor) is exempt as a sale for resale, since rental is the equivalent
of a resale if the equipment is used exclusively for lease, license, or
rental.
SECTION 175. Tax 11.65(1)(a), (b), and (d) to (g) and (2)(a), (b), (e), and (g) are amended to read:
Tax 11.65(1)(a) The sale of admissions to amusement, athletic, entertainment, or recreational events or places and the furnishing for dues, fees or other considerations, the privilege of access to clubs or the privilege of having access to or the use of amusement, entertainment, athletic, or recreational facilities are taxable. This includes admissions to movies, ballets, musical and dance performances, ball games, campgrounds, circuses, carnivals, plays, hockey games, ice shows, fairs, snowmobile and automobile races, and pleasure tours or cruises.
(b)
The sales tax applies to the gross receipts of organizations which have
as an objective the supplying of amusement, athletic, entertainment, or
recreational facilities to their members such as country clubs, golf clubs,
athletic clubs, swimming clubs, yachting clubs, tennis clubs, and flying
clubs. Taxable sales include the sale, furnishing or use of recreational
facilities on a periodic basis and other recreational rights, including but not
limited to membership rights, vacation services, and club memberships sold
in connection with the sale of time-share properties described in s. 707.02
(32), Stats. The proceeds received from initiation fees, special
assessments, dues, and stock sales of clubs supplying amusement, athletic,
entertainment, or recreational facilities to members are charges for the
privilege of obtaining access to the clubs and are taxable receipts of the
clubs.
(d) The charge for the privilege of fishing in fish ponds is taxable, even if the charge is based in whole or in part on the pounds or size of fish caught. The charge for the privilege of hunting in shooting preserves, pheasant farms, and fenced area bird and animal farms is also taxable, even if the charge is based in whole or in part on the number of game birds or animals taken.
(e) A person who provides boat, tackle, bait, and guide service provides a combination of recreational items which are subject to the tax, but guide service alone is not taxable.
(f)
The sales tax applies to the gross receipts from conducting bingo games.
(g) The receipts from the sale or furnishing of access to campgrounds, other than Wisconsin state park campgrounds, are taxable, whether the fees are collected on a daily, weekly, annual, or other basis.
(2)(a) The dues of civic, fraternal, religious, patriotic, and lodge type organizations which are not organized for the purpose of furnishing amusement, athletic, entertainment, or recreational facilities to their members.
(b) Admissions to museums of history, art, or science, and to auto or trade shows, if professional entertainment is not provided at the show. Also, all admission fees to any museum operated by a nonprofit corporation under a lease agreement with the state historical society, such as the circus world museum.
(e)
The gross receipts sales price from the sales of tangible
personal property, items, property, and goods under s. 77.52 (1) (b), (c),
and (d), Stats., tickets or admissions by any baseball team affiliated with
the Wisconsin department of American legion baseball. (f) Campground fees in
Wisconsin state parks.
(g) Admissions to events conducted by nonprofit organizations when the event does not involve entertainment as provided in s. 77.54 (7m), Stats., the organization is not engaged in a trade or business as defined in s. 77.54 (7m), Stats., and the organization is not otherwise required to hold a seller’s permit. Sales of admissions to events conducted by a nonprofit organization that otherwise meets the requirements of s. 77.54 (7m), Stats., are not subject to tax, even if the nonprofit organization holds a seller’s permit solely for the purpose of conducting bingo games.
SECTION 176. Tax 11.65(2)(h) to (k) are created to read:
Tax 11.65(2)(h) Admissions to places or events located outside Wisconsin.
(i) Sales of and admissions to time-share property as follows:
1. The furnishing of rooms or lodging to a person for a continuous period of less than one month through the sale of any kind of time-share property.
2. The sale, furnishing, or use of recreational facilities on a periodic basis and of other recreational rights, including membership rights, vacation services, and club memberships, with respect to time-share property, if the facilities are not available to persons who have not purchased the time-share property, other than guests.
(j) Sales of admissions by a nonprofit organization to participate in any sports activity in which more than 50 percent of the participants are 19 years old or younger.
(k) Sales of admissions by a gun club, including the sale of a gun club membership, if the gun club is a nonprofit organization and if the gun club provides safety classes to at least 25 individuals in the calendar year.
SECTION 177. Tax 11.65(3), (4)(a) and (b), and (5) are amended to read:
Tax
11.65(3) Prize money. Bowling alley center proprietors
shall pay tax on all their regular bowling fees, including bowling tournament
entrance fees. However, in the case of tournament entrance fees, the
proprietor may subtract from its taxable gross receipts the amount
advertised and set aside for prize money.
(4)(a) Persons conducting recreational events occasionally assert that the receipts are not taxable because they are donations and not charges for admission. To qualify as a donation, a payment shall be totally voluntary and no restriction whatsoever may be placed on the entrance of persons not making a donation. The facts surrounding the requests for the donation shall be obvious that admittance is not restricted to those making a donation. A set amount for the donation, such as through newspaper publicity or signs at the entrance, a turnstile, or restrictive device that shall be passed through, or an attendant requesting a donation at the door shall be presumptive evidence that the charge is not a donation but that the payment is required.
(b) When a charge to a patron bears little or no relationship to the actual value received, such as $100 per ticket for a fund raising dinner dance, the tax may be based on the reasonable value of the tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services received.
(5) Location of event. The receipts from sales of tickets of admissions to places of amusement or athletic events which take place in Wisconsin are taxable, even though some of the tickets may be sold out-of-state. For example, all sales of university of Wisconsin football tickets for games played in Wisconsin are taxable. However, if the university of Wisconsin, as agent, sells tickets for the university of Michigan for a game to be played in Michigan, the receipts are not subject to the Wisconsin sales tax.
SECTION 178. Tax 11.66 is repealed and recreated to read:
Tax 11.66 Telecommunications and telecommunications message services. (1) Definitions. In this section:
(a) “Air-to-ground radio telephone service” means a radio service in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft.
(b) “Ancillary services” are those services that are associated with or incidental to providing telecommunications services, including detailed telecommunications billing, directory assistance, vertical service, and voice mail services.
(c) “Call-by-call basis” means any method of charging for telecommunications services by which the price of such services is measured by individual calls.
(d) “Communications channel” means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.
(e) “Conference bridging service” means an ancillary service that links 2 or more participants of an audio or video conference call and may include providing a telephone number, but does not include the telecommunications services used to reach the conference bridge.
(f) “Customer,” for purposes of this section, means a person who enters into a contract with the seller of telecommunications services or, in any transaction for which the end user is not the person who entered into a contract with a seller of telecommunications services, the end user of the telecommunication services. ‘Customer’ does not include a person who resells telecommunications services or, for mobile telecommunications services, a serving carrier under an agreement to serve a customer outside the home service provider’s licensed service area.
(g) “Customer channel termination point” means the location where a customer inputs or receives communications.
(h) “Detailed telecommunications billing service” means an ancillary service that separately indicates information pertaining to individual calls on a customer’s billing statement.
(i) “Directory assistance” means an ancillary service that provides telephone numbers or addresses.
(j) “Eight hundred service” means a telecommunications service that allows a caller to dial a toll-free number without incurring a charge for the call and is marketed under ‘800,’ ‘855’, ‘866,’ ‘877’, or ‘888’ toll-free calling, or any other number designated as toll-free by the federal communications commission.
(k) “End user” means the person who uses a telecommunications service. In the case of an entity, ‘end user’ means the individual who uses the telecommunications service on the entity’s behalf.
(L) “Fixed wireless service” means a telecommunications service that provides radio communications between fixed points.
(m) “Home service provider” means a home service provider under sec. 124 (5) of P. L. 106-252, the Mobile Telecommunications Sourcing Act. Section 124 (5) of P.L. 106-252 provides that “…‘home service provider’ means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications services.”
(n) “International telecommunications services” means telecommunications services that originate or terminate in the United States, including the District of Columbia and any U.S. territory or possession and originate or terminate outside of the United States, including the District of Columbia and any U.S. territory or possession.
(o) “Internet access services” means sending messages and information transmitted through the use of local, toll, and wide-area telephone service; channel services; telegraph services; teletypewriter; computer exchange services; cellular mobile telecommunications services; specialized mobile radio; stationary two-way radio; paging service; or any other form of mobile and portable one-way or two-way communications; or any other transmission of messages or information by electronic or similar means between or among points by wire, cable, fiber optics, laser, microwave, radio, satellite, or similar facilities. ‘Internet access services’ does not include telecommunications services to the extent that such services are taxable under s. 77.52 (2) (a) 5. am., Stats.
(p) “Interstate telecommunications services” means telecommunications services that originate in one state or U.S. territory or possession and terminate in a different U.S. state or territory or possession.
(q) “Intrastate telecommunications services” means telecommunications services that originate in one state or U.S. territory or possession and terminate in the same state or U.S. territory or possession.
(r) 1. “Mobile telecommunications service” means a mobile telecommunications service under 4 USC 116 to 126, as amended by P.L. 106-252, the Mobile Telecommunications Sourcing Act.
2. “Mobile telecommunications service” is defined in 4 USC 116 to 126, as amended by P.L. 106-252, to mean “… commercial mobile radio service, as defined in section 20.3 of title 47 of the Code of Federal Regulations as in effect on June 1, 1999.”
3. “Commercial mobile radio service” is defined in section 20.3 of title 47 of the Code of Federal Regulations to mean “A mobile service that is:
(a)(1) Provided for profit, i.e., with the intent of receiving compensation or monetary gain;
(2) An interconnected service; and
(3) Available to the public, or to such classes of eligible users as to be effectively available to a substantial portion of the public; or
(b) The functional equivalent of such a mobile service described in paragraph (a) of this section.”
(s) “Nine hundred service” means an inbound toll telecommunications service purchased by a subscriber that allows the subscriber’s customers to call the subscriber’s prerecorded announcement or live service. “Nine hundred service” does not include any charge for collection services provided by the seller of the telecommunications services to the subscriber or for any product or service the subscriber sells to the subscriber’s customers. A “nine hundred service” is designated with the “900” number or any other number designated by the federal communications commission.
(t) “Paging service” means a telecommunications service that transmits coded radio signals to activate specific pagers and may include messages or sounds.
(u) 1. “Place of primary use” means place of primary use as determined under 4 USC 116 to 126, as amended by P.L. 106-252.
2. “Place of primary use” as determined under 4 USC 116 to 126, as amended by P.L. 106-252 means “…the street address representative of where the customer’s use of the mobile telecommunications service primarily occurs, which must be—
(A) the residential street address or the primary business street address of the customer; and
(B) within the licensed service area of the home service provider.”
(v) “Postpaid calling service” means a telecommunications service that is obtained by paying for it on a call-by-call basis using a bankcard, travel card, credit card, debit card, or similar method , or by charging it to a telephone number that is not associated with the location where the telecommunications service originates or terminates. “Postpaid calling service” includes a telecommunications service, not including a prepaid wireless calling service, that would otherwise be a prepaid calling service except that the service provided to the customer is not exclusively a telecommunications service.
(w) “Prepaid calling service” means the right to exclusively access telecommunications services, if that right is paid for in advance of providing such services, requires using an access number or authorization code to originate calls, and is sold in predetermined units or dollars that decrease with use in a known amount.
(x) “Prepaid wireless calling service” means a telecommunications service that provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content, and ancillary services, and that is paid for prior to use and sold in predetermined dollar units whereby the number of units declines with use in a known amount.
(y) “Private communication service” means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of communications channels, regardless of the manner in which the communications channel or group of communications channels is connected, and includes switching capacity, extension lines, stations, and other associated services that are provided in connection with the use of such channel or channels.
(z) “Radio service” means a communication service provided by the use of radio, including radiotelephone, radiotelegraph, paging, and facsimile service.
(zb) “Radiotelegraph service” means transmitting messages from one place to another by means of radio.
(zf) “Radiotelephone service” means transmitting sound from one place to another by means of radio.
(zk) “Service address” as defined in s. 77.51 (17m), Stats., means any of the following:
1. The location of the telecommunications equipment to which a customer’s telecommunications service is charged and from which the telecommunications service originates or terminates, regardless of where the telecommunications service is billed or paid.
2. If the location under subd. 1 is not known by the seller who sells the telecommunications service, the location where the signal of the telecommunications service originates, as identified by the seller’s telecommunications system or, if the signal is not transmitted by the seller’s telecommunications system, by information that the seller received from the seller’s service provider.
3. If the locations described under subds. 1. and 2. are not known by the seller who sells the telecommunications service, the customer’s place of primary use.
(zp) “Telecommunications services” as defined in s. 77.51 (21n), Stats., means electronically transmitting, conveying, or routing voice, data, audio, video, or other information or signals to a point or between or among points. “Telecommunications services” includes the transmission, conveyance, or routing of such information or signals in which computer processing applications are used to act on the content’s form, code, or protocol for transmission, conveyance, or routing purposes, regardless of whether the service is referred to as a voice over Internet protocol service or classified by the federal communications commission as an enhanced or value-added nonvoice data service. “Telecommunications services” does not include any of the following:
1. Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered to a purchaser by an electronic transmission, if the purchaser’s primary purpose for the underlying transaction is the processed data.
2. Installing or maintaining wiring or equipment on a customer’s premises.
3. Tangible personal property.
4. Advertising, including directory advertising.
5. Billing and collection services provided to 3rd parties.
6. Internet access services.
7. Radio and television audio and video programming services, regardless of the medium in which the services are provided, including cable service, as defined in 47 USC 522 (6), audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 CFR 20.3, and the transmitting, conveying, or routing of such services by the programming service provider.
8. Ancillary services.
9. Digital products delivered electronically, including software, music, video, reading materials, or ringtones.
(zs) “Value-added nonvoice data service” means a service that otherwise meets the definition of telecommunications services, in which computer processing applications are used to act on the form, content, code, or protocol of the information or data provided by the service and are used primarily for a purpose other than for transmitting, conveying, or routing data.
(zw) “Vertical service” means an ancillary service that is provided with one or more telecommunications services and allows customers to identify callers and to manage multiple calls and call connections, including conference bridging services.
(zy) “Voice mail service” means an ancillary service that allows a customer to store, send, or receive recorded messages, not including any vertical service that the customer must have to use the voice mail service.
(2) Taxable services. Receipts that are subject to Wisconsin sales or use tax include receipts from the following services, if the services are sourced to Wisconsin as provided in sub. (3):
(a) Telecommunications services, including the following:
1. Intrastate telecommunications services.
2. Interstate telecommunications services.
3. International telecommunications services.
4. Private communication services.
5. 800 services, except interstate 800 services.
6. 900 services.
7. Fixed wireless services.
8. Mobile wireless services.
9. Prepaid calling services.
10. Stationary two-way radio services.
11. Paging services.
12. Facsimile, or FAX, transmission services.
13. Prepaid wireless calling services.
14. Value-added non-voice data services.
15. Residential communications services.
16. Coin-operated telephone services.
(b) Ancillary services, including the following:
1. Conference bridging services.
2. Directory assistance services.
3. Call forwarding services.
4. Voice mail services.
5. Caller ID services.
6. Call waiting services.
(c) Internet access services.
(d) Telecommunications message services that consist of recording telecommunications messages and transmitting them to the purchaser of the service or at that purchaser’s direction, but not including services that are taxable under subs. (a), (ag), or (ar), or services that are incidental, as defined in s. 77.51 (5), Stats., to another service that is not taxable under subch. III of ch. 77, Stats., and sold to the purchaser of the incidental service. Telecommunications message services include the following:
1. Nonmechanical telephone answering services.
Examples: 1) A real estate business, whose employees spend considerable periods of time away from its office, contracts with Company A to answer incoming telephone calls during periods when employees are not available to answer the telephone. Employees of Company A receive the calls to the real estate office by telephone, take messages from incoming callers, and transmit the messages to the real estate company or particular employees in that company. The service provided by Company A is not incidental to another service sold by the company that is not a taxable service. Company A’s charge for this service is subject to Wisconsin sales or use tax.
2) Company B employs an office management service that provides receptionist, typing, filing, scheduling, bookkeeping, and similar services. Employees of the office management service also answer and route incoming telephone calls. When calls cannot be routed, the office management service takes and transmits messages to the appropriate person. This answering service is only a small part of the total services provided.
The telephone answering service provided as a part of the office management service is not subject to Wisconsin sales or use tax because it is incidental to the office management service provided and that office management service is not taxable.
2. Security monitoring services that consist of recording a telecommunications message and notifying the customer or local authorities of the message.
3. Electronic mail services.
4. Mechanical or electronic voice messaging and telephone answering services, except ancillary services.
Example: Company A provides its customers access to an office message system computer through which a customer can deposit or retrieve telephone messages using a touch-tone telephone. The service may be used as a message center, a call forwarding service, or an answering service. Messages are stored in the computer, and the customer may send or retrieve messages, reply to a message directly, reroute messages to others, broadcast messages to a wider group, save selected messages, and cancel messages no longer needed. The service is available 24 hours a day, and the customer accesses the computer through either a toll-free telephone number or a local telephone number. The service provided by Company A is not incidental to another service sold by the company that is not a taxable service and is not associated with or incidental to providing telecommunications services. Company A’s charges for this service are subject to Wisconsin sales or use tax.
(3) Sourcing. This subsection describes the sourcing of telecommunications services, ancillary services, Internet access services, and telecommunications message services.
(a) Telecommunications services.
1. Except as provided in subds. 3. to 7., the sale of a telecommunications service that is sold on a call-by-call basis is sourced to the taxing jurisdiction:
a. where the call originates and terminates, if the call originates and terminates in the same taxing jurisdiction; or
b. where the call either originates or terminates and where the service address is located, if the call does not originate and terminate in the same taxing jurisdiction.
2. Except as provided in subds. 3. to 7., the sale of a telecommunications service that is sold on a basis other than a call-by-call basis is sourced to the customer’s place of primary use, as defined in sub. (1) (u) 2.
3. The sale of a mobile telecommunications service, except an air-to-ground radiotelephone service and a prepaid calling service, is sourced to the customer’s place of primary use, as defined in sub. (1) (u) 2.
4. The sale of a postpaid calling service is sourced to the location where the signal of the telecommunications service originates, as first identified by the seller’s telecommunications system or, if the signal is not transmitted by the seller’s telecommunications system, by information that the seller received from the seller’s service provider.
5. The sale of a prepaid calling service or a prepaid wireless calling service is sourced to the location determined under s. Tax 11.945 (2).
6. The sale of a prepaid wireless calling service is sourced to the location determined under s. Tax 11.945 (2), except that if the location cannot be determined under s. Tax 11.945 (2) (a) to (d), the prepaid wireless calling service occurs at the location determined under s. Tax 11.945 (2) (e) 3., or the location associated with the mobile telephone number, as determined by the seller.
7. a. The sale of a private communication service for a separate charge related to a customer channel termination point is sourced to the location of the customer channel termination point.
b. The sale of a private communication service in which all customer channel termination points are located entirely in one taxing jurisdiction for sales and use tax purposes is sourced to the taxing jurisdiction in which the customer channel termination points are located.
Example: Company A contracts with Telecommunications Provider B for private communication service to send data from Company A’s bank, located in Milwaukee, Wisconsin, to Company A’s automated teller machines or “ATMs,” located in Milwaukee, Wisconsin, and to send data from its ATMs in Milwaukee to its bank in Milwaukee. The charge by Telecommunications Provider B to Company A is based on a certain amount of dedicated channel capacity available to Company A on the communications channel, regardless of the volume of data transmitted or number of transmissions made by Company A. Since all of the customer channel termination points are located in Milwaukee, Wisconsin, the entire service is sourced to Milwaukee.
c. If the segments are charged separately, the sale of a private communication service that represents segments of a communications channel between 2 customer channel termination points that are located in different taxing jurisdictions for sales and use tax purposes is sourced in an equal percentage to both jurisdictions.
Example: Company B contracts with Telecommunications Provider C for private communication service to send data from Company B’s bank, located in Milwaukee, Wisconsin, to Company B’s automated teller machine (ATM) located in Waukesha, Wisconsin. Telecommunications Provider C charges Company B based on the location of the segments of the channel termination points. Since Company B has 2 customer channel termination points that are located in different taxing jurisdictions, one located in Milwaukee and the other located in Waukesha, the charge by Telecommunications Provider C to Company B is sourced equally between the Milwaukee taxing jurisdiction and the Waukesha taxing jurisdiction.
d. If the segments are not charged separately, the sale of a private communication service for segments of a communications channel that is located in more than one taxing jurisdiction for sales and use tax purposes is sourced to each jurisdiction in a percentage determined by dividing the number of customer channel termination points in that jurisdiction by the number of customer channel termination points in all jurisdictions where segments of the communications channel are located.
Example: Company JKL, headquartered in Milwaukee, Wisconsin, has branch offices in Madison, Wisconsin, Green Bay, Wisconsin, Chicago, Illinois and Minneapolis, Minnesota. Company JKL contracts with a telecommunications company for private communication service to send messages between and among its Milwaukee office and the branch offices. Company JKL has exclusive use of the channels while using them. The telecommunications company sells use of the communications channels to other parties while Company JKL is not using them. The charges by the telecommunications company to Company JKL are based on a certain amount of dedicated channel capacity available to Company JKL on the communications channels. The telecommunications company does not bill separately for the segments of the communications channels. Increasing capacity requires a higher charge. The telecommunications company refers to this service as “private line service.” Of the charges by the telecommunications company to Company JKL for this service, 60% are subject to Wisconsin sales or use tax because 3 of the 5 customer channel termination points are located in Wisconsin.
e. No credit for tax paid to another state is allowed where the other state apportions the service in a manner similar to that provided in subd. 7. c. and d.
(b) Ancillary services. Except for detailed telecommunications billing services, ancillary services are sourced to the customer’s place of primary use, as defined in sub. (1) (u) 2..
(c) Internet access services. Internet access services are sourced to the customer’s place of primary use, as defined in sub. (1) (u) 2.
(d) Exceptions. For purposes of subs. (a), (b), and (c), if the location of the customer’s service address, channel termination point, or place of primary use is not known, the location where the seller receives or hands off the signal shall be considered, for purposes of this rule, the customer’s service address, channel termination point, or place of primary use.
(e) Telecommunications message services. Telecommunications message services are sourced to the location determined under s. Tax 11.945 (2), which will generally result in the sale being sourced to the location where the customer, or someone at the direction of the customer, receives the message.
(4) Nontaxable services. The sales price from the sale of or charge for the following services are not taxable:
(a) Interstate or international telecommunications service if the service is sourced to a location outside Wisconsin.
(b) Revenues collected under s. 256.35 (3), Stats., the surcharge established by the public service commission under s. 256.35 (3m) (f), Stats., for customers of wireless providers as defined in s. 256.35 (3m) a. 6., Stats., and the police and fire protection fees under s. 196.025 (6), Stats.
(c) Transfers of telecommunications services to resellers who purchase, repackage and resell the services to customers. The reseller is liable for sales tax on its final retail sales of those services.
(d) Interstate 800 services.
(e) Transfers of services, commonly called “access services,” to an interexchange carrier which permit the origination or termination of telephone messages between a customer in Wisconsin and one or more points in another telephone exchange, and which are resold by the interexchange carrier. The interexchange carrier is liable for sales tax on its final retail sales of those services.
(f) Detailed telecommunications billing services, as defined in sub. (1) (h).
(5) Credit for tax paid to another state. Any person who is subject to the tax under s. 77.52 (2) (a) 5., Stats., on telecommunications services that terminate in Wisconsin and who has paid a similar tax on the same services to another state may reduce the amount of the tax remitted to Wisconsin by an amount equal to the similar tax properly paid to another state on those services or by the amount due Wisconsin on those services, whichever is less. That person shall refund proportionally to the persons to whom the tax under s. 77.52 (2) (a) 5., Stats., was passed on an amount equal to the amounts not remitted.
(6) Purchases by persons providing service. Persons engaged in the business of providing telecommunications services are consumers, not retailers, of the tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., used by them or transferred incidentally by them in providing those services. The tax applies to the sale of the property, items, or goods to them.
Note: Section Tax 11.66 interprets ss. 77.51 (17m) and (21m), 77.52 (2) (a) 5. and 5m., (2m) and (3m) and 77.525, Stats.
Note: The Dane County Circuit Court’s decision of May 22, 1981 in Wisconsin Department of Revenue v. North-West Services Corporation and North-West Telephone Company held that a telephone company may purchase without tax tangible personal property leased or rented to customers in conjunction with an activity open to competition with others who are not public utilities.
Note: The interpretations in s. Tax 11.66 are effective under the general sales and use tax law on or after September 1, 1969, except: (a) Chapter 39, Laws of 1975, effective July 31, 1975, expanded the telephone services subject to the tax to include “telephone services of whatever nature”; (b) Chapter 317, Laws of 1981, imposed the tax on interstate telegraph and telephone service, effective May 1, 1982; (c) “911” service became exempt on August 1, 1987, pursuant to 1987 Wis. Act 27; (d) Telecommunications services originating in Wisconsin and charged to a subscriber in Wisconsin became taxable October 1, 1989, pursuant to 1989 Wis. Act 31; (e) Telecommunications services originating in Wisconsin and charged to a service address in Wisconsin became taxable October 1, 1991, pursuant to 1991 Wis. Act 31; (f) The repeal of the exemption for equipment in central offices of telephone companies became effective September 1, 1995, pursuant to 1995 Wis. Act 27; (g) Telecommunications services paid for by the insertion of coins in a coin-operated telephone became taxable August, 1, 1996, pursuant to 1995 Wis. Act 351; (h) Certain telecommunications message services became taxable December 1, 1997, pursuant to 1997 Wis. Act 27; (i) Telecommunications services originating outside Wisconsin, terminating in Wisconsin and charged to a service address in Wisconsin, except certain services obtained by means of a toll-free number, became taxable December 1, 1997, pursuant to 1997 Wis. Act 27; (j) Credit for sales tax properly paid to another state on interstate telecommunications services became effective October 14, 1997, pursuant to 1997 Wis. Act 27; (k) Sales of rights to purchase telecommunications services became taxable August 1, 1998, pursuant to 1997 Wis. Act 237; and (L) The exemption for interstate private line services no longer applies, effective December 1, 2002.
SECTION 179. Tax 11.67(1) and (2)(a) and (b) are amended to read:
Tax
11.67(1) General. When a transaction involves the transfer of
tangible personal property or items, property, or goods under s. 77.52 (1)
(b), (c), or (d), Stats., along with the performance of a service, the true
objective of the purchaser shall determine whether the transaction is a sale of
tangible personal property or items, property, or goods under s. 77.52 (1)
(b), (c), or (d), Stats., or the performance of a service with the transfer
of the property, item, or good being merely incidental to
the performance of the service. If the objective of the purchaser is to obtain
the personal property, item, or good, a taxable sale of that property,
item, or good is involved. However, if the objective of the purchaser is
to obtain the service, a sale of a service is involved even though, as an
incidence to the service, some tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., may be
transferred.
Note to LRB: Amend the example at the end of Tax 11.67(1) as follows:
Example: A person performing business advisory, record keeping, payroll, and tax services for small businesses is providing a service even though this person may provide forms and binders without charge as part of the service. The person is the consumer, not the seller, of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., furnished as an incidence to the service.
(2)(a)
Since persons engaged in the business of furnishing services are consumers, not
retailers, of the tangible personal property and items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., which they use incidentally
in rendering their services, tax applies to the sale of the tangible personal
property and items, property, and goods under s. 77.52 (1) (b), (c), and
(d), Stats., to them.
(b)
A person who performs a nontaxable service in conjunction with the sale of
tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., is a retailer with respect to the sale, and the
tax applies to the total gross receipts sales price from the sale
without any deduction for the work, labor, skill, time spent, or other
expense of producing the property, item, or good.
SECTION 180. Tax 11.67(2)(c) is renumbered 11.67(2)(c)1. and amended as renumbered to read:
Tax 11.67(2)(c)1. If there is a single charge for providing both taxable and nontaxable services that are not a bundled transaction as defined in s. 77.51 (1f), Stats., the entire charge is subject to the tax, unless it is determined by the department that another method, such as allocation or primary purpose of the transaction, more accurately reflects the tax. If the charges for taxable and nontaxable services are separately stated on an invoice, the tax applies only to the charge properly attributable to the taxable services, unless it is determined by the department that the primary purpose of the transaction method for computing the tax more accurately reflects the tax.
SECTION 181. Tax 11.67(2)(c)2. is created to read:
Tax 11.67(2)(c)2. If there is a single charge for providing both taxable and nontaxable services in a transaction that is a bundled transaction as defined in s. 77.51 (1f), Stats., the entire charge is subject to the tax, except as provided in s. 77.52 (20) (b), Stats.
SECTION 182. Tax 11.67(3)(a), (b), (d)1. and 2., (e)1. and 2., (f), (h), (i), (k), and (L) are amended to read:
Tax
11.67(3)(a) Hospitals and clinics. Hospitals and medical clinics
generally provide nontaxable professional services. They are, therefore, the
consumers of tangible personal property and items, property, and goods under
s. 77.52 (1) (b), (c), and (d), Stats., used in rendering the services.
Hospitals and clinics which, in addition to rendering professional services,
also sell tangible personal property, items, property, or goods under s.
77.52 (1) (b), (c), or (d), Stats., or taxable services are retailers which
and shall obtain a seller’s permit and report the tax on these sales.
Note to LRB: Amend the examples at the end of Tax 11.67(3)(a) as follows:
Examples:
1) Sales of non-prescription medicine
drugs by a hospital or clinic pharmacy are taxable if they are not
dispensed under a prescription.
2) Sales of parking for motor vehicles by a hospital or clinic are taxable.
(b)
Original manuscripts or musical arrangements. The transfer to a
publisher of an original manuscript or musical arrangement for publication is
not a sale of tangible personal property or a digital good under s. 77.52
(1) (d), Stats., and is not subject to the tax. However, the sale of
copies of an author’s or composer’s work is a sale of tangible personal
property or a digital good under s. 77.52 (1) (d), Stats., and is
taxable. The sale of manuscripts a manuscript is taxable if the
manuscript itself is of particular value as an item of tangible personal
property or as a digital good under s. 77.52 (1) (d), Stats., and the
purchaser is buying the property or good, and not the service
which went into it.
(d)1. An interior decorator’s fee is taxable when the decorator’s services are part of a sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. If a decorator bills a client only for the full list price of the property, item, or good sold and then receives the equivalent of a fee through the decorator’s supplier in the form of a trade discount, the decorator shall pay a tax on the full amount billed the client without any deduction for services performed.
Note to LRB: Amend the example at the end of Tax 11.67(3)(d)1. as follows:
Example: A decorator’s fee is taxable when it is added to the bill for tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., on a cost-plus arrangement.
2. A decorator’s fee is not taxable if the fee is solely for services rendered and there is no sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., involved with the transaction.
Note to LRB: Amend the example at the end of Tax 11.67(3)(d)2. as follows:
Example: Designing a decorative scheme, advising clients or recommending colors, paints, wallpaper, fabrics, brands, or sources of supply are nontaxable services.
(e)1. The development of information pursuant to a research and development contract is a sale of a service which is not subject to the sales tax. Although the person performing the research and development may be under contract to provide plans, designs, and specifications, or to test and evaluate a proposed product, the primary objective of the customer is to obtain the results of the technical skill and the experimental and research work of the engineers and other technicians of the researcher.
2. In certain instances under a research and development contract, the information cannot be developed without the production of a prototype. In this situation, if the primary objective of the customer in the transaction is to obtain tangible personal property or an item under s. 77.52 (1) (b), Stats., such as a prototype, the researcher may purchase the material used to construct the prototype without tax as property for resale. The subsequent sale of the prototype by the researcher to the customer is subject to tax unless an exemption applies. If the primary objective of the customer is to obtain the information resulting from production of the prototype, the prototype is considered transferred to the customer incidental to the research and development services. The researcher is subject to tax on the material purchased and used to construct the prototype. Determinations shall be made on a case-by-case basis.
(f)
Recording studios. When a recording studio agrees to furnish or supply
records, acetates, compact discs, or other tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.,
which becomes the property, item, or good of others, the tax applies to
the total gross receipts sales price resulting from the sale of
the tangible personal property and items, property, and goods under s. 77.52
(1) (b), (c), and (d), Stats. Gross receipts The sales price
may not be reduced for labor or service costs, including charges for the use or
rental of studio facilities, even though those costs may be itemized in billing
the customer.
(h) Drafting. Charges made by a self-employed person for commercial drafting are subject to the tax when the charge is for detailed drawings based entirely on specifications and data supplied by architects, engineers, or other business firms. These charges are taxable if the concepts, ideas, specifications, or designs depicted in the drawings produced are the customer’s and the person performing the drafting simply transfers the details supplied by the customer to paper thereby producing a drawing, which is tangible personal property, for use by the customer. It would also be taxable if it is transferred electronically to the purchaser since it is an additional digital good. When the person performing drafting services uses his or her own concepts and ideas in producing detailed drawings for a customer, the sale of the drawings is not a sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.
(i)
Enuresis alarms. Charges for rental of bed-wetting alarm systems are
taxable charges for the use of tangible personal property, not charges for personal
services a service, whether or not the lessor analyzes information
about the user and completes a report based on the information.
(k)
Taxidermists. Gross receipts The sales price from services
taxidermists perform on tangible personal property are is subject
to the tax.
(L)
Car washes. The gross receipts of sales price received by
persons providing car wash service services, including those
providing coin-operated self-service car washes consisting of a pressurized
spray of soap and water, are taxable. These persons are the consumers of the
tangible personal property such as soap, brushes, and towels they
purchase, except for the wax, air freshener, and protectants physically
transferred to a customer’s vehicle. Thus, suppliers may accept a resale
an exemption certificate claiming resale for the wax, air
freshener, and protectants, and other tangible personal
property and items, property, and goods under s. 77.52 (1) (b), (c), and (d),
Stats., sold to car wash operators, but suppliers are liable for the tax
on all other sales of supplies to these operators which will be
physically transferred to the car wash operator’s customers. Car wash
operators are liable for sales or use tax on their purchases of supplies that
they use in providing their services unless those items are physically
transferred to their customers.
Note to LRB: Amend the example at the end of Tax 11.67(3)(m) as follows:
Example: Company B located in Wisconsin solicits advertising
for telephone books yellow pages and compiles, publishes, and delivers the
directories to the subscribers of telephone companies. Company B contracts
with an out-of-state corporation to print the directories. The printer
delivers a portion of the directories to the U.S. Postal Service for delivery
directly to telephone subscribers in Wisconsin. The remaining directories are
delivered to Company B who in turn distributes them to subscribers in
Wisconsin. Company B is not subject to use tax on the directories
delivered by the U.S. Postal Service as well as on the directories which it
distributes to subscribers. However, Company B is subject to use tax on
the directories delivered to it which it distributes to subscribers.
SECTION 183. Tax 11.68(1), (2)(a), (b)1. to 4., and (c), (3)(a) and (b), (4)(a), (b)1., and (c) to (f), (5)(b), and (6)(intro.) and (b) are amended to read:
Tax
11.68(1) Definition. In
this section, “real property construction activities” means activities that
occur at a site where tangible personal property or items or goods under s.
77.52 (1) (b) or (d), Stats., that is are applied or adapted
to the use or purpose to which real property is devoted is are
affixed to that real property, if the intent of the person who affixes that
property, item, or good is to make a permanent accession to the real
property. “Real property construction activities” do not include affixing
property subject to tax under s. 77.52 (1) (c), Stats., to real property or
affixing to real property tangible personal property that remains tangible
personal property after it is affixed.
(2)(a) Construction contractors may be retailers with
respect to some activities and consumers with respect to others. When a
construction contractor acts as a retailer, the contractor shall obtain a
seller’s permit and pay the tax on gross receipts their receipts
from retail sales of tangible personal property, items, property, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services. When
the contractor acts as a consumer, the contractor shall pay the tax on its
purchases of property, items, and goods consumed.
(b)1.
Property, items, and goods it installs which retains its retain
their character as personal property after sale and installation.
2.
Labor or services furnished in installing tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d) Stats.,
which retains its retain their character as personal property
after installation.
3. Labor and material furnished in the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of items of real property which retain their character as tangible personal property for repair purposes.
4. Tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., sold.
(c) Contractors are consumers of tangible personal property and items and goods under s. 77.52 (1) (b) and (d), Stats., they use when engaged in real property construction activities, such as altering, repairing, or improving real property.
(3)(a) Generally, real property construction contractors are persons who perform real property construction activities and include persons engaged in activities such as building, electrical work, plumbing, heating, painting, steel work, ventilating, paper hanging, sheet metal work, bridge or road construction, well drilling, excavating, wrecking, house moving, landscaping, roofing, carpentry, masonry and cement work, plastering, and tile and terrazzo work.
(b) A retailer may also be a real property contractor, such as a department store which sells and installs tangible personal property and items or goods under s. 77.52 (1) (b) or (d), Stats., which becomes a part of real property after installation.
(4)(a)
Under s. 77.51 (2), Stats., contractors who perform real property construction
activities are the consumers of building materials which they use in altering,
repairing, or improving real property. Therefore, suppliers’ sales of
building materials to contractors who incorporate the materials into real
property in performing construction activities are subject to the tax. This
includes raw materials purchased outside Wisconsin that are used by a
contractor in manufacturing tangible personal property or items under s.
77.52 (1) (b), Stats., outside Wisconsin, or that are fabricated or altered
outside Wisconsin by a contractor so as to become different or distinct items
of tangible personal property or items under s. 77.52 (1) (b), Stats.,
from the constituent raw materials, and are subsequently stored, used,
or consumed in Wisconsin by that contractor.
Note to LRB: Amend the note at the end of Tax 11.68(4)(a) as follows:
Note: Prior to August 12, 1993, raw materials purchased outside Wisconsin that were used by a contractor in manufacturing tangible personal property outside Wisconsin or that were fabricated or altered outside Wisconsin by a contractor so as to become different or distinct items of tangible personal property from the constituent raw materials, and were subsequently stored, used, or consumed in Wisconsin by that contractor were not subject to tax pursuant to the Circuit Court of Dane County decision in Morton Buildings, Inc. vs. Wisconsin Department of Revenue (2/10/92).
(b)1.
Property Tangible personal property and property, items, and goods
under s. 77.52 (1) (b), (c), and (d), Stats., which a construction
contractor will resell as personal property may be purchased without tax for
resale. This property includes personal property furnished as part of a
real property construction activity when the personal property retains its
character as personal property after installation. This property also
includes personal property furnished as part of a real property construction
activity when provided as part of a taxable landscaping service.
(c) Machinery and equipment, including road building equipment, tunnel shields, construction machines, and cement mixers, tools, including power saws and hand tools, and supplies, including machine lubricating and fuel oils, form lumber, and industrial gases, purchased by a construction contractor for the contractor’s use are generally either consumed in the process of construction or are removed when the project is completed. The contractor is the consumer of the personal property and shall pay the tax on its purchases of the property. However, an exemption is provided in s. 77.54 (5) (d), Stats., for mobile cement mixers used for mixing and processing and the motor vehicle or trailer on which a mobile mixing unit is mounted, including accessories, attachments, parts, supplies, and materials for the vehicles, trailers, and units.
(d)
Under s. 77.54 (26), Stats., contractors may purchase without sales or use tax
tangible personal property and items and property under s. 77.52 (1) (b) and
(c), Stats., which becomes become a component part of an
industrial waste treatment facility that would be exempt under s. 70.11 (21) (a),
Stats., if the property were taxable under ch. 70, Stats., or a municipal waste
treatment facility, even though they are the consumers of the property and
items.
(e) Under s. 77.54 (26m), Stats., contractors may purchase without sales or use tax waste reduction and recycling machinery and equipment, including parts, which are exclusively and directly used for waste reduction and recycling activities which reduce the amount of solid waste generated, reuse, recycle, or compost solid waste, or recover energy from solid waste, even though they are the consumers of the property.
(f) Under s. 77.54 (41), Stats., contractors, subcontractors, or builders may purchase without sales or use tax building materials, supplies, and equipment acquired solely for or used solely in the construction, renovation, or development of property that would be exempt under s. 70.11 (36), Stats. Section 70.11 (36), Stats., exempts property consisting of or contained in a sports and entertainment home stadium, including but not limited to parking lots, garages, restaurants, parks, concession facilities, transportation facilities, and functionally related or auxiliary facilities and structures; including those facilities and structures while they are being built; constructed by, leased to, or primarily used by a professional athletic team that is a member of a league that includes teams that have home stadiums in other states, and the land on which that stadium and those structures and facilities are located.
(5)(b) Certain types of property that have a variety of functions may be personal property in some instances and additions to real property in others, including boilers, furnaces, stand-by generators, pumps, substations, and transformers. When this property is installed primarily to provide service to a building or structure and is essential to the use of the building or structure, it is a real property improvement. However, when similar property is installed in a manufacturing plant to perform a processing function, it may, as machinery, retain its status as personal property.
(6)(intro.) A construction contractor is the consumer of tangible personal property and items and goods under s. 77.52 (1) (b) and (d), Stats., such as building materials, which is incorporated into or becomes a part of real property, and sales of this personal property to a contractor are subject to the tax. Personal property which becomes a part of real property includes the following:
(b) Built-in household items such as kitchen cabinets, dishwashers, fans, garbage disposals, central vacuum systems, and incinerators.
SECTION 184. Tax 11.68(6)(bm) is created to read:
Tax 11.68(6)(bm) Casework, tables, counters, cabinets, lockers, sinks, athletic and gymnasium equipment attached to the structure in apartment buildings, convalescent homes, or other residential buildings.
SECTION 185. Tax 11.68(6)(d) and (f) are amended to read:
Tax
11.68(6)(d) Buildings Personal property that is used to construct
buildings, and structural and other improvements to buildings, including
awnings, canopies, carpeting, foundations for machinery, floors, including
computer room floors, partitions and movable walls attached in any way to
realty, general wiring and lighting facilities, roofs, stairways, stair lifts,
sprinkler systems, storm doors and windows, door controls, air curtains,
loading platforms, central air conditioning units, building elevators,
sanitation and plumbing systems, and heating, cooling, and ventilation
systems.
(f)
Improvements Personal property that is used to construct improvements
to land, including retaining walls, roads, walks, bridges, fencing, railway
switch tracks, ponds, dams, ditches, wells, underground irrigation systems
except systems sold to and for use by farmers, drainage, storm, and
sanitary sewers, and water supply lines for drinking water, sanitary purposes,
and fire protection.
SECTION 186. Tax 11.68(6)(g) is repealed
SECTION 187. Tax 11.68(6)(h) is renumbered 11.68(6)(g) and amended as renumbered to read:
Tax 11.69(6)(g) Residential water heaters, water softeners, intercoms, incinerators, and garage door opening equipment, except portable equipment.
SECTION 188. Tax 11.68(6)(i) to (n) are renumbered 11.68(6)(h) to (m)
SECTION 189. Tax 11.68(7)(a)(intro.), 1. to 9., and 15. and (b), (8)(title), (intro.), (a), and (b), (9)(title), (a), and (b), (10)(title) and (a) to (c), and (11)(a) and (b) are amended to read:
Tax
11.68(7)(a)(intro.) Contractors shall obtain a seller’s permit and report for
taxation gross receipts the sales price received from the sale
and installation of tangible personal property and items and goods
under s. 77.52 (1) (b) and (d), Stats., furnished under a construction
contract, which retains its character as personal property after installation,
such as:
1. Furniture, radio and television sets and antennas, washers and dryers, portable lamps, home freezers, portable appliances, and window air conditioning units.
2. Communication equipment, including intercoms, pneumatic tube systems, satellite dishes, roof mounted antennas, CATV wiring, and music and sound equipment in business, industrial, or commercial buildings, schools, and hospitals, but not in apartment buildings, convalescent homes, or other residential buildings.
3.
Casework, tables, counters, cabinets, lockers, sinks, athletic and gymnasium
equipment, and related easily movable property attached to the structure in
schools, laboratories, and hospitals, but not in apartment buildings,
convalescent homes or other residential buildings except if attached to
the structure in the bathrooms of such facilities.
4. Machinery, including safety attachments, equipment, tools, appliances, process piping and wiring used exclusively by manufacturers, industrial processors, and others performing a processing function with the items.
5. Office, bank, and savings and loan association furniture and equipment, including office machines, safe deposit boxes, drive-up and walk-up windows, night depository equipment, remote TV auto teller systems, camera security equipment except when used to monitor for unauthorized entry to a building or room in a building, and vault doors.
6. Personal property used to carry on a trade or business, including fixtures and equipment installed in stores, taverns, night clubs, restaurants, ice arenas, bowling centers, hotels and motels, barber and beauty shops, figure salons, theaters, and gasoline service stations. Underground storage tanks at gasoline service stations are real property.
7. Shades, curtains, drapes, venetian blinds, and associated hardware.
8. Radio, television, and cable television station equipment, but not broadcasting towers installed on their owner’s land.
9.
Except as provided in ss. 77.51 (4) (b) 6. (12m) (b) 7. and (15)
(b) 5. (15b) (b) 7. and 77.54 (31), Stats., mobile homes , as
defined in s. 101.91 (10), Stats., and manufactured homes, as defined in ss.
101.91 (11) and (12), Stats., located in a mobile home park on land owned
by a person other than the mobile home or manufactured home owner.
Exemptions are provided by ss. 77.51 (4) (b) 6. (12m) (b) 7. and (15)
(b) 5. and 77.54 (31) (15b) (b) 7., Stats., for 35% of the total
amount for which a new mobile manufactured home, as defined in
s. 101.91 (11), Stats., is sold; provided it is a primary housing unit,
or it is transported in 2 unattached sections and the total size of the
combined sections, not including additions and attachments, is at least 984
square feet measured when the sections are ready for transportation; and the
full amount for which a used mobile home that is a primary housing unit is sold
or purchased. No credit may be allowed for trade-ins and the exemption does
not apply to a lease or rental. The exemption provided in s. 77.54 (31),
Stats., applies to the sale of, but not the lease or rental of, used mobile
homes as defined in s. 101.91 (10), Stats. and used manufactured homes as
defined in s. 101.91 (12), Stats.
15. Stop and go lights, railroad signs and signals, and street identification signs.
(b)
If a few items of tangible personal property, items, property, or goods
under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, minor in
cost in relation to the total amount of a contract, are sold as part of a
contract which includes construction of a building or other structure and no
separate charge is made for the personal property, item, good, or
taxable services service, the cost of the property, item,
good, or taxable services service to the construction
contractor shall be used as the measure of gross receipts subject to
sales tax. If a separate charge is made for any of the property, items,
goods, or services, they are subject to the tax.
Note to LRB: Amend the examples at the end of Tax 11.68(7)(b) as follows:
Examples: 1) A refrigerator and drapes are included in
the contract to construct a new house. The cost of the refrigerator and drapes
to the construction contractor is included in the construction contractor’s
measure of gross receipts subject to sales tax.
2) Landscaping services, minor in amount, are included
in the contract to construct a new house. An amount equal to the charge by the
landscaping subcontractor to the general contractor for landscaping services is
included in the general contractor’s measure of gross receipts subject
to sales tax.
(8)(title) Property,
items, and goods purchased by a person who performs both real property
construction contracting activities and sells tangible personal
property or items, property, or goods under s. 77.51 (1) (b), (c), or (d),
stats., at retail selling, when destination of property, item,
or good purchased is unknown at time of purchase.
(intro.) Section 77.51 (2), Stats., provides in part that “A contractor engaged primarily in real property construction activities may use resale certificates only with respect to purchases of tangible personal property or items or goods under s. 77.52 (1) (b) or (d) which the contractor has sound reason to believe the contractor will sell to customers for whom the contractor will not perform real property construction activities involving the use of such tangible personal property or items or goods under s. 77.52 (1) (b) or (d).” However, some construction contractors who also sell construction supplies at retail do not know when they purchase these supplies whether they will be consumed in construction contracts or resold to others. In these instances, a construction contractor may do one of the following at the time of making purchases:
(a)
Give a resale an exemption certificate claiming resale to
suppliers and purchase the property, item, or good without tax. If the
contractor later resells the property, item, or good, the contractor
shall report the sales and collect and remit the tax on the sales price to
customers. If the property, item,. or good is used in fulfillment of a
construction contract, the contractor shall pay a use tax on its purchase
price.
(b)
Pay sales tax to suppliers on all property, items, and goods purchased.
If the property, item, or good is later consumed in fulfilling a real
property construction contract, the tax obligation is taken care of. If
the property, item, or good is resold at retail, the contractor shall
collect and remit sales tax on these retail sales, but may take as a credit
against the sales tax any tax paid to suppliers at on the
purchase of such property, item, or good.
(9)(title) Property, items, and goods purchased to fulfill a contract with an exempt entity.
(a)
The sales tax exemption provided to governmental units and other exempt
entities, such as churches and nonprofit hospitals, does not apply to building
materials purchased by a contractor for use under a construction contract to
alter, repair, or improve real property for the exempt entity. Gross
receipts The sales price received from sales of these building
materials to a contractor are is subject to the tax if the building
materials become part of real property after construction or installation.
Note to LRB: Amend the first example at the end of Tax 11.68(9)(a) as follows:
1) A contractor shall pay the tax to its supplier of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., purchased to construct a bridge, road, or governmental building, since the property, item, or good becomes a part of realty after installation.
(b)
A contractor may purchase without tax for resale tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats.,
which retains its retain their character as personal property
after installation as described in sub. (7), and taxable services, even
though the resale of the property, item, good, or taxable services
service by the contractor is exempt when sold to a governmental unit or
other exempt entity having a Wisconsin certificate of exempt status. This
property includes furniture; processing machinery or equipment used in a
municipal sewerage or water treatment plant; classroom laboratory sinks, tables,
and other equipment; and seating for an auditorium. Taxable services include
landscaping services. This exemption does not apply to property, items,
goods, or taxable services which becomes become a part of
real property as described in sub. (6) and par. (a).
(10)(title) Use of property, items, and goods purchased outside Wisconsin.
(a) If a construction contractor, when the contractor acts as a consumer, purchases property, items, or goods outside Wisconsin for use in Wisconsin, the contractor shall pay the Wisconsin use tax, but may claim a credit against this use tax for any sales or use tax legally due and paid in the state where the purchase was made.
(b) If a construction contractor purchases property, items, or goods outside Wisconsin which will be stored in Wisconsin and subsequently used in real property construction activities outside Wisconsin, the contractor shall pay the Wisconsin use tax on those purchases, but may claim a credit against this use tax for any sales or use tax legally due and paid in the state where the purchase was made or where the property, item, or good was used prior to being stored in Wisconsin.
(c)
If Wisconsin has jurisdiction over the out-of-state supplier, the supplier
shall collect the use tax and remit it to the department. If the supplier
fails to do so collect the tax, the contractor shall report and
pay the tax to Wisconsin.
(11)(a)
A contractor who performs real property construction activities may not add tax
to any charge for labor or material, since gross receipts the sales
price received from these activities are 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.
(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 this
service 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 gross receipts 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.
SECTION 190. Tax 11.68(11)(c) is repealed and recreated to read:
Tax 11.68(11)(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, regardless of the extent to which the item is fastened to, connected with or built into real property:
1. Furnaces.
2. Boilers.
3. Stoves.
4. Ovens, including associated hoods and exhaust systems.
5. Heaters.
6. Air conditioners.
7. Humidifiers.
8. Dehumidifiers.
9. Refrigerators.
10. Coolers.
11. Freezers.
12. Water pumps.
13. Water heaters.
14. Water conditioners and softeners.
15. Clothes washers.
16. Clothes dryers.
17. Dishwashers.
18. Garbage disposal units.
19. Radios and radio antennas.
20. Incinerators.
21. Television receivers and antennas.
22. Record players.
23. Tape players.
24. Jukeboxes.
25. Vacuum cleaners.
26. Furniture and furnishings.
27. Carpeting and rugs.
28. Bathroom fixtures.
29. Sinks.
30. Awnings.
31. Blinds.
32. Gas and electric logs.
33. Heat lamps.
34. Electronic dust collectors.
35. Grills and rotisseries.
36. Bar equipment.
37. Intercoms.
38. Recreational, sporting, gymnasium, and athletic goods and equipment including by way of illustration but not of limitation, all of the following:
a. Bowling alleys.
b. Golf practice equipment.
c. Pool tables.
d. Punching bags.
e. Ski tows.
f. Swimming pools.
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), state institutions, as defined under s. 101.123 (1) (i), Type 1 juvenile correctional facilities, as defined in s. 938.02 (19), or similar facilities including, by way of illustration but not of limitation, all of the following:
a. Lamps.
b. Chandeliers.
c. Fans.
d. Venetian blinds.
e. Canvas awnings.
f. Office and business machines.
g. Ice and milk dispensers.
h. Beverage-making equipment.
i. Vending machines.
j. Soda fountains.
k. Steam warmers and tables.
L. Compressors.
m. Condensing units and evaporative condensers.
n. Pneumatic conveying systems.
40. Laundry, dry cleaning, and pressing machines.
41. Power tools.
42. Burglar alarm and fire alarm fixtures.
43. Electric clocks.
44. Electric signs.”
SECTION 191. Tax 11.68(11)(d) is amended to read:
Tax
11.68(11)(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 is deemed may be purchased
by the contractor without tax for resale and, therefore, may be
purchased without tax.
SECTION 192. Tax 11.68(12) is repealed and recreated to read:
Tax 11.68(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.
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.
SECTION 193. Tax 11.68(13)(title), (a), (c), (d), and (e) are amended to read:
Tax
11.68(13)(title) County, and
stadium, and regional transit authority taxes on building materials.
(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 a any county, or
special district, or transit authority’s jurisdictional area which
that has adopted the county, or stadium, or transit
authority sales and use tax. The taxes are measured by the sales 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, or special district, or transit
authority’s jurisdictional area, unless the contractor has paid the county,
or stadium, or transit authority tax of a county, or
special district, or transit authority in this state Wisconsin
or a similar local sales tax in another state on the purchase of that property,
item, or good.
(c)
In providing repair the services to real property subject
to taxation under s. 77.52 (2) (a) 10., Stats., a contractor may purchase
without county, or stadium, or transit authority tax for
resale the building materials used in providing the taxable services, and
the county and stadium taxes imposed under s. 77.71 (3), Stats., do not
apply to those purchases 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.
(d)
Section 77.77 (3), Stats., provides that the sales tax under s. 77.71 (1),
Stats., and the county, and stadium, and transit authority
taxes 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
transit authority 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.
(e)
The county, and stadium, and transit authority taxes 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, or stadium, or
transit authority tax of that county, or special district,
or transit authority’s jurisdictional area or has paid the sales tax of
another county, or special district, or transit authority
in this state Wisconsin in purchasing the building materials.
SECTION 194. Tax 11.69(1), (2), (3)(intro.), (a), (f), and (g), (4)(a) to (c), and (5)(a) are amended to read:
Tax 11.69(1) Definition. In this section, “financial institution” includes a bank, savings and loan association, savings bank, or credit union.
(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.
(3)(intro.) A financial institution, except for a
federally chartered credit union, shall obtain a seller’s permit and regularly
file the required sales and use tax returns if it has taxable gross
receipts sales. Taxable gross receipts sales by a
financial institution include sales of the following:
(a)
Charges for providing Providing parking space for motor vehicles.
(f)
Meals and beverages Prepared foods, candy, dietary supplements, and
soft drinks in the institution’s cafeteria.
(g) Personalized imprinted checks, except where the check printer is the retailer of the checks to customers. A check printer is the retailer of checks where it sets the price for the checks, provides the order forms for the checks and invoices or bills the customer for the checks, even though the financial institution collects the order from the customer, charges the customer’s account on behalf of the check printer, and remits the amount due from the account to the check printer.
(4)(a) A financial institution’s purchases subject to
sales or use tax include office furniture and equipment, such as desks, chairs,
couches, writing tables, and office machines, safe deposit boxes,
drive-up and walk-up windows, night depository equipment, vault doors, remote
TV auto teller systems, and camera security equipment except camera
security equipment used to monitor for unauthorized entry to a building or a
room in a building.
(b)
Any tangible personal property or item, property, or good under s. 77.52 (1)
(b), (c), or (d), Stats., purchased by a financial institution to be given
away to a customer, whether or not based upon the amount of a deposit, is taxable
at the time it is purchased. This property includes calendars, playing
cards, plat books, maps, and any other property, items, or
goods transferred to customers to promote business. Checking account and
savings account forms provided to customers free of charge are also subject to
the tax.
(c)
Purchases of tangible personal property or items, property, or goods under
s. 77.52 (1) (b), (c), or (d), Stats., that the financial institution will
resell, rather than give away, may be purchased without tax by giving its
supplier a properly completed resale exemption certificate claiming
resale.
(5)(a) Sales to state chartered credit unions and to federal and state chartered banks, savings and loan associations, and savings banks are taxable, unless resold by the credit union, bank, savings and loan association, or savings bank.
SECTION 195. Tax 11.70(1)(a) and (b) are renumbered 11.70(1)(b) and (c) and amended as renumbered to read:
Tax
11.70(1)(b) “Finished art artwork” means the final art artwork
used for actual reproduction by photomechanical or other processes, or
for display purposes, but does not include web site or home page designs.
Finished art artwork also includes drawings, paintings, designs,
photographs, lettering, paste-ups, mechanicals, or assemblies,
charts, graphs, and illustrative material materials,
regardless of whether such items are not reproduced.
(c)
“Preliminary art artwork” means art artwork
prepared solely for presenting an idea to a client or prospective client.
Preliminary art artwork includes roughs, visualizations,
sketches, layouts, and comprehensives.
SECTION 196. Tax 11.70(1)(a) is created to read:
Tax 11.70(1)(a) “Catalog” means a printed and bound, stitched, sewed, or stapled book containing a list and description of property or services for sale, regardless of whether a price is specified.
SECTION 197. Tax 11.70(2)(a), (b), (c), and (e) and (3)(a), (d), and (g) are amended to read:
(2)(a)
Charges for finished art artwork. Finished art artwork
is tangible personal property, unless it is transferred electronically.
Finished artwork that is transferred electronically is an additional digital
good, as provided in s. 77.51 (1a), Stats.
(b)
Charges for preliminary art artwork all or any part of which
results in the production of finished art artwork or other
tangible personal property or item, property, or good under s. 77.52 (1)
(b), (c), or (d), Stats., by the advertising agency. This preliminary art
artwork is tangible personal property or an item or good under s.
77.52 (1) (b) or (d), Stats.
Note to LRB: Amend the examples at the end of Tax 11.70(2)(b) as follows:
Examples:
1) Company A contracts with an
advertising agency to produce an advertising campaign for Company A’s product.
The advertising agency develops 10 ideas or suggestions, in the form of
preliminary art artwork, for an advertising flyer. Company A
selects one of the ideas, and it is developed into finished art artwork,
which is used to produce flyers.
The charges by the advertising agency for
the production of preliminary art artwork for all 10 ideas are
subject to tax, provided an exemption does not apply to the sale of the
finished art artwork, because one idea was selected and was used
to produce finished art artwork.
2) Company B contracts with an advertising agency to produce a radio commercial. The agency produces a demonstration tape (demo) which contains several different jingles which could be used in the commercial. Company B selects one of the jingles, and the commercial is produced.
The charge by the agency for the demo is
subject to tax. The demo is preliminary art artwork. Since
finished art artwork was produced from the preliminary art
artwork, the charge is subject to tax, unless an exemption applies to
the sale of the finished art artwork.
(c) Sales of signs, circulars, business cards, stationary showcards, banners, posters, bulletins, direct mail advertising, catalogs, brochures, commercials, tapes, or other items of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.
Note to LRB: Amend the first and second examples at the end of Tax 11.70(2)(c) as follows:
Examples:
1) Company C contracts with an
advertising agency to have 10,000 advertising flyers produced. The advertising
agency prepares preliminary art artwork. Company C decides on
one theme and the finished art artwork is produced. The
advertising agency has the flyers printed and delivered to Company C. Company
C mails the flyers to its Wisconsin customers.
The entire charge to Company C by the
advertising agency for the flyers, which includes preliminary art artwork,
finished art artwork, and the flyers, is subject to tax.
2) Assume the same facts as Example 1, except that Company C mails 90% of the flyers to customers outside Wisconsin and 10% to customers in Wisconsin.
Ten percent of the total charge to Company
C by the advertising agency for the flyers, including the preliminary art
artwork, finished art artwork, and flyers, is subject to
tax.
(e)
Producing, fabricating, processing, printing, or imprinting tangible
personal property or items, property, or goods under s. 77.52 (1) (b), (c),
or (d), Stats., for clients for a consideration, even though the client may
furnish the materials used in producing, fabricating, processing, printing,
or imprinting of the tangible personal property, items, or goods.
However, the tax does not apply to the printing or imprinting the tangible
personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats., that results in printed material, catalogs, or envelopes that are
exempt under s. 77.54 (25) or (25m), Stats.
(3)(a)
Preliminary art artwork that does not result in the production of
finished art artwork or other tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.
Note to LRB: Amend the example at the end of Tax 11.70(3)(a) as follows:
Example: Company E contracts with an advertising agency for
an ongoing advertising campaign. The agency submits several suggestions, in
the form of preliminary art artwork, for a spring advertising
campaign. These ideas are rejected by Company E. The charge by the
advertising agency for preliminary art artwork not chosen for
further development is not subject to tax, because the preliminary art artwork
was not developed into finished art artwork.
(d) Consultation, market research, and compiling statistical or other information.
(g) Printed material, other than catalogs and the envelopes in which the catalogs are mailed, which is designed to advertise and promote the sale of merchandise, or to advertise the services of individual business firms, which is purchased and stored for the purpose of subsequently transporting it outside Wisconsin by the client for use thereafter solely outside Wisconsin.
Note to LRB: Amend the example at the end of Tax 11.70(3)(g) as follows:
Example: Company F contracts with an advertising agency to
have 10,000 advertising flyers produced. The advertising agency prepares
preliminary art artwork. Company F decides on one theme and the
finished art artwork is produced. The advertising agency has the
flyers printed and delivered to Company F. Company F mails the flyers to its
customers located outside Wisconsin.
The entire charge to Company F by the
advertising agency for the flyers, which includes preliminary art artwork,
finished art artwork, and the flyers, is exempt from tax because
the printed advertising material is transported outside Wisconsin by Company F
for use by Company F outside Wisconsin.
SECTION 198. Tax 11.70(3)(gm) is created to read:
Tax 11.70(3)(gm) Catalogs, as defined in s. 77.51 (1fr), Stats., and the envelopes in which the catalogs are mailed, if the catalogs are designed to advertise and promote the sale of merchandise or to advertise the services of individual business firms.
Example: Company A contracts with an advertising agency to have 5,000 catalogs that advertise Company A’s products produced. The advertising agency has the catalogs printed. Some of the catalogs are delivered to Company A in Wisconsin and other catalogs are shipped directly to Company A’s prospective customers in and outside Wisconsin.
The entire charge to Company A by the advertising agency for the catalogs, which includes any charges for preliminary artwork, finished artwork, and the catalogs, is exempt from tax because catalogs and the envelopes in which they are mailed are exempt from tax, regardless of whether the catalogs are delivered in or out of Wisconsin.
SECTION 199. Tax 11.70(3)(h) to (m), (4)(a) and (b), (5)(a)(intro.) and (b), (6), and (7)(a)2. and (b) are amended to read:
Tax 11.70(3)(h) Printing or imprinting tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., which will be subsequently transported outside Wisconsin for use outside Wisconsin by the client for advertising purposes.
Note to LRB: Amend the example at the end of Tax 11.70(3)(h) as follows:
Example: Company G contracts with an advertising agency to
produce an advertising flyer. The advertising agency prepares preliminary art
artwork. Company G decides on one theme, and the finished art artwork
is prepared. Company G provides the finished art artwork, paper,
and ink to a Wisconsin printer who prints 10,000 copies of the flyer. The
flyers are mailed by Company G to addresses outside Wisconsin.
The charge to Company G by the printer for the printing of the flyers is exempt from tax because the flyers are transported outside Wisconsin for use outside Wisconsin by Company G for advertising purposes.
(i) Tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., that will be resold by the client.
Note to LRB: Amend the example at the end of Tax 11.70(3)(i) as follows:
Example: Company H has an advertising agency produce
specification sheets for Company H’s products. The specification sheets are
included with the products when sold to Company H’s customers. The advertising
agency produces the finished art artwork and has the printing
done. Company H receives an itemized bill from the advertising agency which
shows a charge for the finished art artwork and the printing.
The entire charge by the advertising
agency to Company H is exempt from tax because the specification sheets are
included with Company H’s products which will be sold to customers. Company H
may claim a resale exemption for the specification sheets by providing the
agency with a properly completed Wisconsin resale exemption
certificate, form S-205 claiming resale.
(j)
Tangible personal property and items under s. 77.52 (1) (b), Stats., used
exclusively and directly by a manufacturer in manufacturing an article of
tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats.,
that is destined for sale and becoming an ingredient or component part of an
the article of tangible personal property or item or property under
s. 77.52 (1) (b) or (c), Stats., destined for sale or which is consumed or
destroyed or loses its identity in the manufacture manufacturing the
article of tangible personal property or item or property under s. 77.52
(1) (b) or (c), Stats., in any form destined for sale.
Note to LRB: Amend the examples at the end of Tax 11.70(3)(j) as follows:
Examples:
1) Company I contracts with a
Wisconsin advertising agency to produce an advertising flyer. The advertising
agency prepares preliminary art artwork. Company I decides on
one theme and the finished art artwork is prepared. Company I
takes the finished art artwork to a Wisconsin printer and has
10,000 flyers printed. The printer uses its own paper and ink to print the
flyers. The flyers are mailed by the printer to addresses in Wisconsin.
The charge to Company I by the advertising
agency for the preliminary art artwork and finished art artwork
is exempt from Wisconsin sales tax because the finished art artwork
is consumed in the production of flyers which are sold by the printer to
Company I.
2) Assume the same facts as Example 1, except that
Company I provides the paper to the printer, in addition to the finished art
artwork.
The charge to Company I by the Wisconsin
advertising agency for the preliminary art artwork and finished art
artwork is subject to Wisconsin sales tax. The printer is selling a printing
service, and not tangible personal property or an item or property under s.
77.52 (1) (b) or (c), Stats., to Company I. The destined for sale
requirement is not met and exemption from tax does not apply. Even though
Company I is furnishing a printing service, however, it is still considered to
be engaged in manufacturing, and its machinery and equipment, if used
exclusively and directly in manufacturing, qualify for exemption under s.
77.54 (6) (a), Stats.
(k) Tangible personal property or services that are used exclusively and directly by a manufacturer in manufacturing shoppers guides, newspapers, or periodicals and that become an ingredient or component of shoppers guides, newspapers, or periodicals or that are consumed or lose their identity in the manufacture of shoppers guides, newspapers, or periodicals, whether or not the shoppers guides, newspapers, or periodicals are transferred without charge to the recipient. This exemption does not apply to advertising supplements that are not newspapers.
Note to LRB: Amend the example at the end of Tax 11.70(3)(k) as follows:
Example: Company J contracts with an advertising agency to
produce a shoppers guide advertisement. The advertising agency produces
layouts and roughs for approval by Company J. Company J approves, and the
finished art artwork for the shoppers guide advertisement is
produced. The preliminary art artwork and finished art artwork
charges are billed to Company J for the job. Company J deals directly with the
shoppers guide publisher to run the advertisement in a shoppers guide. The
advertising agency bills Company J $1,000 for preliminary art artwork
and $3,000 for finished art artwork.
The total $4,000 charge is exempt from
Wisconsin sales or use tax because the preliminary art artwork
results in finished art artwork and the finished art artwork
becomes an ingredient or component part of a shoppers guide, or is consumed or
loses its identity in the manufacture of shoppers guides.
(L)
Containers, labels, sacks, cans, boxes, drums, bags, or other packaging
and shipping materials for use in packing, packaging, or shipping
tangible personal property or items or property under s. 77.52 (1) (b) or
(c), Stats., if the items containers, labels, sacks, cans, boxes,
drums, bags, or other packaging and shipping materials are used by the
purchaser to transfer merchandise to customers. Also exempt are meat casing,
wrapping paper, tape, containers, labels, sacks, cans, boxes, drums, bags,
or other packaging and shipping materials for use in packing, packaging,
or shipping meat or meat products, regardless of whether these items are used
to transfer merchandise to customers.
Note to LRB: Amend the example at the end of Tax 11.70(3)(L) as follows:
Example: An advertising agency produces finished art artwork
to be used on Company K’s shipping boxes. The boxes are used by Company K to
ship its products to its customers. The advertising agency delivers the
finished art artwork to a printer who uses the finished art
artwork to print and produce the boxes which the advertising agency
resells to Company K.
The entire charge for the finished art
artwork and boxes is exempt from Wisconsin sales or use tax because the
boxes are used by Company K in packing, packaging, or shipping merchandise to
customers. Company K should provide the agency with a properly completed exemption
certificate of exemption, form S-207.
(m) Raw materials processed, fabricated, or manufactured into, attached to, or incorporated into printed materials that are transported and used solely outside Wisconsin.
Note to LRB: Amend the example at the end of Tax 11.70(3)(m) as follows:
Example: Company A, located in Wisconsin, publishes catalogs
flyers it gives away to potential customers. Company A purchases paper
from a company who delivers it to a Wisconsin printer that prints the catalogs
flyers for Company A. The catalogs flyers are transported
and used solely outside Wisconsin.
The paper purchased by Company A for the catalogs
flyers is exempt from Wisconsin sales or use tax.
(4)(a)
Tax applies to an advertising agency’s total gross receipts sales
price from the sale of tangible personal property, items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats., or and
taxable services without any deduction for any cost element which becomes a
part of the sales price. These elements include consultation, research, copy,
supervision, model fees, rentals, photostats, typesetting, postage, express,
telephone, travel, agency service fees, or any other labor or service cost
incurred in the production of that property. No deduction may be taken even
though the costs are separately itemized in a billing to the client.
(b)
Tax applies to in-progress billings for production work which ultimately
results in the production of finished art work artwork or other
tangible personal property or items, property, or goods under s. 77.52 (1)
(b), (c), or (d), Stats.
(5)(a)(intro.)
The tax applies to an agency’s gross receipts sales price from the
a sale of or the storage, use, or consumption of tangible
personal property in or items, property, or goods under s. 77.52 (1)
(b), (c), or (d), Stats., sourced to Wisconsin under s. 77.522, Stats.,
regardless of whether:
Note to LRB: Amend the example at the end of Tax 11.70(5)(a)2. as follows:
Example: An agency’s billing to a client in Minnesota for
finished art artwork transferred to a business in Wisconsin is
taxable.
(b)
The sale of tangible personal property, items, property, and goods under s.
77.52 (1) (b), (c), and (d), Stats., or and taxable services
occurs when the advertising agency transfers possession of the tangible
personal property or item, property, or good under s. 77.52 (1) (b), (c), or
(d), Stats., to the client or the client realizes the economic benefits of
the property’s, item’s, or good’s use, even though the property,
item, or good may not be physically transferred to the client.
(6) Fees added to billings. When an amount billed as an agency “fee,” “retainer,” “service charge,” or “commission” represents services rendered which are a part of the sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., the amount is taxable. If it clearly represents a charge or a part of a charge for any nontaxable service rather than for the sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) Stats., it is not taxable. A fee representing both taxable and nontaxable sales shall be reasonably allocated between taxable and nontaxable sales, unless the fee is a bundled transaction, as defined in s. 77.51 (1f), Stats.
Note to LRB: Amend the example at the end of Tax 11.70(7)(a)1. as follows:
Example: Company L is an advertising agency. Company L
purchases various art equipment such as paint brushes, easels, etc., that it
uses in its operations. A portion of the art equipment is sold to the general
public for use. The art equipment Company L sells to the general public may be
purchased by Company L without Wisconsin sales or use tax as property for
resale, provided Company L gives its supplier a properly completed Wisconsin
resale exemption certificate, form S-205 claiming resale.
(7)(a)2. Becomes physically an ingredient or component part of tangible personal property or items, or property under s. 77.52 (1) (b) or (c), Stats., the advertising agency produces and sells.
Note to LRB: Amend the example at the end of Tax 11.70(7)(a)2. as follows:
Example: Company M is an advertising agency that produces
displays for customers. The displays are usually framed or matted photographs
or prints. Company M may purchase the frames, matting, and paper for
photographs and prints without Wisconsin sales or use tax as property for
resale, provided it gives its supplier a properly completed Wisconsin resale
exemption certificate, form S-205 claiming resale.
(b) An
advertising agency is the consumer of all tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats.,
purchased by the agency, other than tangible personal property and
items, property and goods under s. 77.52 (1) (b), (c), and (d), Stats.,
purchased for immediate sale to customers or that are used exclusively and
directly by a manufacturer in manufacturing an article of tangible personal
property or an item or property under s. 77.52 (1) (b) or (c), Stats., that is
destined for sale and that becomes physically an ingredient or
component part of the article of tangible personal property sold or
the item or property under s. 77.52 (1) (b) or (c), Stats., that is destined
for sale by the agency. As the consumer, the advertising agency is
subject to Wisconsin sales or use tax on the tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., purchased.
SECTION 200. Tax 11.71(1)(intro.) and (b) are amended to read:
Tax
11.71(1)(intro.) In this section:
(b) “Automatic data processing equipment” includes computers used for data processing purposes and their peripheral equipment as well as punched card tabulating machines. It does not include tape-controlled automatic drilling, milling, or other manufacturing machinery or equipment.
SECTION 201. Tax 11.71(1)(c) is repealed
SECTION 202. Tax 11.71(1)(d) is renumbered 11.71(1)(c)
SECTION 203. Tax 11.71(1)(d) is created to read:
Tax 11.71(1)(d) “Computer” means an electronic device that accepts information in digital or similar form and that manipulates such information to achieve a result based on a sequence of instructions.
SECTION 204. Tax 11.71(1)(e) is repealed and recreated to read:
Tax 11.71(1)(e) “Computer software” means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task.
SECTION 205. Tax 11.71(1)(em) is created to read:
Tax 11.71(1)(em) “Computer software maintenance contract” means a contract that obligates a vendor of computer software to provide a customer with future updates or upgrades to computer software, computer software support services, or both.
SECTION 206. Tax 11.71(1)(f) is amended to read:
Tax
11.71(1)(f) “Data processing” means the recording and handling of information
by means of mechanical or electronic equipment, commonly referred to as
automatic data processing.
SECTION 207. Tax 11.71(1)(g) is repealed
SECTION 208. Tax 11.71(1)(h) and (i) are renumbered 11.71(1)(g) and (h) and amended as renumbered to read:
Tax 11.71(1)(g) “Input” means the information or data transferred, or to be transferred, from external storage media including punched cards, punched paper tape, and magnetic media into the internal storage of the computer.
(h) “Keypunching” means recording information in cards, paper tapes, or magnetic tapes, disc, or drum by punching holes or otherwise entering information in the cards, tapes, discs, or drums, or recording data on any media to represent letters, digits, and special characters. Keypunching includes the necessary preliminary encoding or marking of the source documents.
SECTION 209. Tax 11.71(1)(j) is renumbered 11.71(1)(i)
SECTION 210. Tax 11.71(1)(j) is created to read:
(j) “Load-and-leave” means delivery to a purchaser by using a tangible storage media that is not physically transferred to the purchaser.
SECTION 211. Tax 11.71(1)(k) is repealed and recreated to read:
Tax 11.71(1)(k) “Prewritten computer software” is defined in s. 77.51 (10r), Stats., to mean “…computer software, including prewritten upgrades, that is not designed and developed by the author or other creator to the specifications of a specific purchaser. The combining of 2 or more ‘prewritten computer software’ programs or prewritten portions of computer software does not cause the combination to be other than ‘prewritten computer software.’ ‘Prewritten computer software’ includes software designed and developed by the author or other creator to the specifications of a specific purchaser if it is sold to a person other than the specific purchaser. For purposes of this subsection, if a person modifies or enhances computer software of which the person is not the author or creator, the person is the author or creator only of the person’s modifications or enhancements. ‘Prewritten computer software’ or a prewritten portion of computer software that is modified or enhanced to any degree, with regard to a modification or enhancement that is designed and developed to the specifications of a specific purchaser, remains ‘prewritten computer software,’ except that if there is a reasonable, separately stated charge or an invoice or other statement of the price given to the purchaser for the modification or enhancement, the modification or enhancement is not ‘prewritten computer software.’”
SECTION 212. Tax 11.71(1)(n) is repealed
SECTION 213. Tax 11.71(1)(o) and (p) are renumbered 11.71(1)(n) and (o)
SECTION 214. Tax 11.71(1)(q) is renumbered 11.71(1)(p) and amended as renumbered to read:
Tax 11.71(1)(p) “Source document” means a document from which basic data are extracted, such as a sales invoice.
SECTION 215. Tax 11.71(2)(intro.), (a)(intro.) and 1., and (b)(intro.) and 1. to 3. are amended to read:
Tax
11.71(2)(intro.) The Receipts from the following transactions
involving automatic data processing equipment, programs computer
software, output, and services are taxable:
(a)(intro.) The retail sale, license, lease, or rental of new or used automatic data processing equipment and charges for the installation, service, and maintenance of this equipment. In this subsection, the following applies to licenses, leases, and rentals:
1. Lease
License, lease, or rental includes a contract by which a licensee or
lessee, for a consideration, obtains the full or partial use of equipment if
the licensee’s or lessee’s employees are located on the premises
where the equipment is located or operate the equipment. A lease License,
lease, or rental does not include obtaining remote access to equipment by
telephone or other means when that person’s employees are not located on the
premises where the equipment is located and they do not operate the
equipment or control its operations. License, lease, or rental also does not
include any transaction in which the licensor or lessor of the equipment
provides the operator of the equipment and the operator does more than
maintain, inspect, or set up the equipment.
(b)(intro.)
The retail sale, lease, rental, or license to use prewritten
computer programs, except custom programs software, including
the maintenance and enhancement of those programs , whether transferred in a
machine readable form such as cards, tapes or discs, or transferred in any
other manner to the lessee or purchaser such as by telecommunications, or
written instructions on coding sheets regardless of how it is delivered
to the purchaser. The tax applies to the total charge for these
programs prewritten computer software, including:
1.
The consideration received for the temporary transfer of possession of a
prewritten or basic operational program computer software for the
purpose of direct use or to be recorded by the customer.
2.
The consideration received for a program prewritten computer software
in the form of license fees or royalty payments, present or future, whether for
a minimum use or for extended periods.
3.
The consideration received for designing, producing, implementing, testing,
or and installing the program prewritten computer
software.
SECTION 216. Tax 11.71(2)(bm) is created to read:
Tax 11.71(2)(bm) The sale of computer software maintenance contracts for prewritten computer software, unless the sale, license, lease, or rental in Wisconsin of the software to which the maintenance contract relates is or was exempt from tax to the purchaser of the contract.
SECTION 217. Tax 11.71(2)(c) and (d) and (3)(intro.), (b), (c), (d), (e)(intro.), and (f)1. and 2. are amended to read:
Tax 11.71(2)(c) The sale of training materials, such as books and manuals, including digital books and manuals furnished to trainees for a specific charge. However, training services are not taxable.
(d) The charge for additional copies of records, reports, or tabulations, including copies produced by means of photocopying, multi-lithing, or by other means. “Additional copies” means all the copies in excess of copies produced on multipart carbon paper simultaneous with the production of the original and on the same printer, whether the copies are prepared by rerunning the same program, by using multiple simultaneous printers, by looping a program so that a program is run continuously, by using different programs to produce the same output product, or by other means.
(3)(intro.)
The gross receipts sales price from the following computer or
data processing services are not taxable:
Note to LRB: Amend the notes at the end of Tax 11.71(3)(a) as follows:
Note: A contract to process a client’s data by the use of a
computer program software or through an electrical accounting
machine programmed by a wired plugboard will usually include receiving the
client’s source documents, recording data in machine readable form such as in
punch cards or on magnetic media, making corrections, rearranging or creating
new information as the result of the processing, and then providing
tabulated listings or recording output on other media. This service is not
taxable, even though the total charge is broken down into specific charges for
each step.
Note: If a client furnishes data and computer programs
software for processing the data and the processing is under the
direction and control of the person providing the service, the processing
service is not taxable, even though charges for the service may be based on
computer time. The true object of this arrangement is considered to be a
service, even though some tangible personal property may be incidentally
transferred to the client.
(b)
Providing custom programs computer software that is not prewritten
computer software.
(c)
Providing program technical support, error correction services, and
maintenance and enhancement to custom programs computer software that
is not prewritten computer software.
(d) Providing time-sharing services which permit persons at different locations to access the same computer through remote access by telephone lines, microwave, or other means. Nontaxable time-sharing exists when a person or that person’s employees, who have access to the equipment, are not located on the premises where the equipment is located and do not operate the equipment or control its operation.
(e)(intro.)
Miscellaneous services which are not part of the sale of a taxable program
including prewritten computer software or other tangible personal
property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d),
Stats., including:
(f)1. Keypunching only, keypunching and keystroke verification, or keypunching and providing a proof list or verification data, or both. Charges for these services are not taxable, whether the cards or tapes are furnished by the customer or by a service bureau.
2. Recording data from source documents directly on magnetic tape, off-line. This operation may include keystroke verifying or proof listing of data, or both, and is comparable to the punch card operation.
SECTION 218. Tax 11.72(1)(a) and (b)(intro.), (2), and (3)(a) and (b) are amended to read:
Tax
11.72(1)(a) The gross receipts sales price received from
selling, performing, or furnishing laundry, dry cleaning, pressing,
and dyeing services are is taxable, except as provided in par.
(b).
(b)(intro.)
The gross receipts sales price from selling, performing,
or furnishing laundry, dry cleaning, pressing, and dyeing services are
is exempt from tax when:
(2) Linen and
clothing suppliers. The gross receipts of sales price
received by lessors from leasing, licensing, or renting clothing,
including uniforms, towels, linens, or similar items, not
including cloth diapers, to commercial establishments or household users under
agreements which provide for furnishing items and cleaning the items when they
become soiled are is subject to the tax. However, the items
furnished to customers under these agreements may be purchased by the lessor
without paying sales or use tax and the charge for cleaning cloth diapers by
a diaper service is not subject to tax.
(3)(a)
Laundries, dry cleaners, and linen or clothing suppliers are the
consumers of and shall pay tax on their purchases of all items transferred to
customers incidentally in providing laundry and dry cleaning services,
including solvents, soaps, detergents, spotting compounds, water repellents,
disinfectants, fabric softeners, starch, dyes, mat compounds, fire repellent
compounds, and marking tags they use for identification purposes. They
also shall pay tax on their purchases of items transferred to customers with
clean linen or clothes, such as hangers, handkerchiefs, bags, boxes, shirt
boards, shoulder guards, twisters, and pins. The tax applies to the gross
receipts sales price on the sale of these items to laundries, dry
cleaners, and linen and clothing suppliers.
(b)
The tax applies to gross receipts the sales price from sales, licenses,
leases, or rentals of machinery and equipment to persons engaged in
performing or furnishing laundry, dry cleaning, pressing, and dyeing
services, and to persons leasing, licensing, or renting linens, towels,
and clothing to industrial, commercial, or household users.
SECTION 219. Subchapter IX (title) is amended to read:
Subchapter IX — Types of Tangible Personal Property and Items, Property, and Goods Under s. 77.52 (1) (b), (c), and (d), Stats.
SECTION 220. Tax 11.78(1)(intro.), (d), and (g) and (2)(intro.) and (c) are amended to read:
Tax 11.78(1)(intro.) Retail sales of the following tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., are subject to the sales and use tax:
(d) Postage charges which are billed by the seller of the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to the purchaser in connection with the sale and delivery of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., if the sale of the property, item, or good is subject to the tax.
(g)
Silver bullion and gold bullion which is physically located in Wisconsin
if the sale is sourced to a location in Wisconsin under s. 77.522, Stats.,
is subject to the sales tax whether the sales contract is entered into in
or outside of Wisconsin. Such Sales of silver and gold bullion purchased
and delivered to the purchaser sourced to a location outside
Wisconsin is are subject to the use tax when the bullion is
brought into the state Wisconsin.
(2)(intro.) Retail sales of the following tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., are not subject to the sales and use tax:
(c)
Sales of bullion to persons in Wisconsin when the purchaser takes a document
of ownership covering bullion remaining outside the state if the sale is
sourced to a location outside Wisconsin under s. 77.522, Stats.
SECTION 221. Tax 11.79(1) and (2)(title), (intro.), and (a) are amended to read:
Tax
11.79(1) General rule. Gross receipts The sales price
received from the license, lease, or rental of motor vehicles
and mobile equipment used on a highway are is subject to the
sales and use tax.
(2)(title) Deductions
from gross receipts sales price.
(intro.)
If the lease or rental agreement is for a long term, in In
determining a lessor’s taxable gross receipts under sub. (1), the cost
of the following items may be deducted if they meet the conditions in sub. (3):
(a) Motor vehicle fuel.
SECTION 222. Tax 11.79(3)(intro.) and (a) are renumbered 11.79(3)(a)(intro.) and 1.
SECTION 223. Tax 11.79(3)(b) is renumbered 11.79(3)(a)2. and amended as renumbered to read:
Tax 11.79(3)(a)2. The charge is separately stated in the lease agreement, billing, or invoice.
SECTION 224. Tax 11.79(3)(c) and (d) are renumbered 11.79(3)(a)3. and (b)
SECTION 225. Tax 11.79(4)(intro.) is amended to read:
Tax
11.79(4)(intro.) In determining a lessor’s taxable gross receipts sales
price under sub. (1), the cost of the following may not be deducted:
SECTION 226. Tax 11.79(5) is repealed and recreated to read:
Tax 11.79(5) Multistate use. (a) The sales price received from the license, lease, or rental of motor vehicles and mobile equipment used on a highway is taxable in Wisconsin if the license, lease, or rental payments are sourced to Wisconsin under s. 77.522, Stats., as described in pars. (b) and (c).
(b) A license, lease, or rental of a motor vehicle, trailer, semitrailer, or aircraft that only requires one payment, is sourced as follows:
1. If the motor vehicle, trailer, semitrailer, or aircraft, is received by the lessee or licensee at the lessor’s or licensor’s business location, the payment is sourced to the lessor’s or licensor’s business location.
2. If the motor vehicle, trailer, semitrailer, or aircraft is not received by the lessee or licensee at the lessor’s or licensor’s business location, the payment is sourced to the location where the lessee or licensee or the lessee’s or licensee’s designated donee receives the product. This would include the location indicated by instructions known to the lessor or licensor for delivery to the lessee or licensee or the lessee’s or licensee’s designated donee. The delivery may be made by the lessor or licensor or by a shipping company hired by the lessee or licensee.
3. If the location cannot be determined under subds. 1. and 2., the payment is sourced to the lessee’s or licensee’s address as indicated by the lessor’s or licensor’s business records, if the records are maintained in the ordinary course of the lessor’s or licensor’s business and if using that address to establish the location of the lease, license, or rental is not in bad faith.
4. If the location cannot be determined under subd. 1., 2., or 3., the payment is sourced to the lessee’s or licensee’s address as obtained during the consummation of the license, lease, or rental, including the address indicated on the lessee’s or licensee’s payment instrument, if no other address is available and if using that address to determine the location of the lease, license, or rental is not in bad faith.
5. If the location cannot be determined under subd. 1., 2., 3., or 4., the payment is sourced to the location from which the motor vehicle, trailer, semitrailer, or aircraft was shipped.
(c) Except as provided in par. (b), licenses, leases, and rentals of motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment, as defined in s. 77.522 (1) (a) 2., Stats., are sourced to the primary location of such property as indicated by an address for the property that is provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith.
SECTION 227. Tax 11.79(6)(intro.) and (c) are amended to read:
Tax
11.79(6)(intro.) Gross receipts The sales price from the rental
or lease license, lease, or rental of the following property shall
be exempt from sales and use tax provided the lessor receives a properly
completed exemption certificate as described in s. Tax 11.14:
(c) Mobile units used for mixing and processing, including the motor vehicle or trailer on which the unit is mounted. Accessories, attachments, parts, supplies, and materials for the mobile unit, vehicle, and trailer are also exempt.
SECTION 228. Tax 11.80(1), (2)(a) and (b), and (3)(a) and (b) are amended to read:
Tax
11.80(1) Ice, including dry ice, is tangible personal property, the retail
sale of which is subject to sales tax, unless sold in an exempt transaction supported
by a properly executed exemption certificate. Ice is sold at retail when
it is sold for use or consumption but not for resale.
(2)(a) Sales of ice blocks through vending machines.
(b) Sales of ice blocks to restaurants, taverns, grocery stores, and meat markets when the ice is consumed in cooling bottled drinks or preserving foods.
(3)(a)
Sales of ice cubes to restaurants, taverns, and soda fountains to
be used exclusively in drinks. The sales are exempt as sales for resale.
(b) Sales to manufacturers, producers, or food processors for use inside the shipping cases of merchandise being transferred to a customer. The sales are exempt as “shipping material” under s. 77.54 (6) (b), Stats.
SECTION 229. Tax 11.80(3)(bm) is created to read:
Tax 11.80(3)(bm) Sales of ice for use inside shipping cases for meat or meat products, regardless of whether such items are used to transfer merchandise to customers. The sales are exempt as “shipping materials” under s. 77.54 (6) (bm), Stats.
SECTION 230. Tax 11.80(3)(c) is amended to read:
Tax
11.80(3)(c) Ice sold to manufacturers which is used exclusively and
directly by the manufacturer in manufacturing an article of tangible personal
property or an item or property under s. 77.52 (1) (b) or (c), Stats., that is
destined for sale and that becomes an ingredient or component part of the
article of tangible personal property or item or property under s. 77.52 (1)
(b) or (c), Stats., destined for sale or is consumed or destroyed or loses
its identity in the manufacture manufacturing the article of
tangible personal property or item or property under s. 77.52 (1) (b) or
(c), Stats., in any form destined for sale.
SECTION 231. Tax 11.80(4)(a) is repealed and recreated to read:
Tax 11.80(4)(a) If ice is sold to a person who will use it both for a taxable purpose and nontaxable purpose, such as for refrigeration and for resale, the purchaser may either purchase the ice without tax by providing a properly completed exemption certificate and then pay the applicable use tax on the ice used in a taxable manner or pay tax on the entire purchase price of the ice and then claim a credit on its sales and use tax return for that portion of the ice that is used in a manner that is not subject to tax.
SECTION 232. Tax 11.81(title) and (1)(intro.), (a), and (b) are amended to read:
Tax
11.81(title) Industrial gases,
welding rods, and fluxing materials, and fuels.
(1)(intro.)
The tax status of retail sales of industrial gases, welding rods, and
fluxing materials depends upon the use of the property by the purchaser.
Section 77.54 (2), Stats., exempts from the sales tax “The gross receipts
sales price from the sales of and the storage, use or other
consumption of tangible personal property or item under s. 77.52(1)(b) becoming
that is used exclusively and directly by a manufacturer in manufacturing an
article of tangible personal property or item or property under s. 77.52(1)(b)
or (c) that is destined for sale and that becomes an ingredient or component
part of an the article of tangible personal property or item
or property under s. 77.52(1)(b) or (c) destined for sale or which
is consumed or destroyed or loses its identity in the manufacture manufacturing
the article of tangible personal property or item or property under s.
77.52(1)(b) or (c) in any form destined for sale, but this
exemption shall not include fuel or electricity except as provided in
sub(30)(a)6.” Section 77.54 (30) (a) 6., Stats., exempts from sales
and use tax, “Fuel and electricity consumed in manufacturing tangible
personal property or items or property under s. 77.52 (1) (b) or (c) in this
state.” Therefore, the sale of industrial gases, welding rods, or
fluxing materials, or fuels shall be:
(a)
Exempt if they are used exclusively and directly by a manufacturer in
manufacturing and become ingredients or components component
parts of tangible personal property or items or property under s. 77.52
(1) (b) or (c), Stats., destined for sale; or
(b)
Exempt if they are used exclusively and directly by a manufacturer in
manufacturing and are consumed, destroyed, or lose their identity in
the manufacture of manufacturing tangible personal property or
items or property under s. 77.52 (1) (b) or (c), Stats., destined for sale,
except the sale of gas is taxable if the gas is used as a fuel. Fuel is
a material used to produce heat or power by burning, or is something that feeds
a fire; or
SECTION 233. Tax 11.81(1)(bm) is created to read:
Tax 11.81(1)(bm) Exempt under s. 77.54 (30) (a) 6., Stats., if they are a fuel consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., in Wisconsin. A fuel is a material used to produce heat or power by burning, or is something that feeds a fire; or
SECTION 234. Tax 11.81(2)(intro.), (a)(intro.) and 2., and (b)(intro.), 1., and 2., (3), and (4) are amended to read:
Tax 11.81(2)(intro.) Common types of industrial gases are argon, helium, hydrogen, nitrogen, acetylene, carbon dioxide, and oxygen.
(a)(intro.)
Sales of industrial gases which are exempt because if they are
used exclusively and directly by a manufacturer in manufacturing and become
an ingredient or component part of an article of tangible
personal property or item or property under s. 77.52 (1) (b) or (c), Stats.,
destined for sale by the purchaser include:
2. Gases such as neon, helium, or argon used as a filler in the production of light bulbs and tubes.
(b)(intro.)
Taxable Exempt sales of gases used by a manufacturer as fuel include:
1. Oxygen used in industrial furnaces that are used in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., in Wisconsin.
2. Acetylene or other gases used in torches that are used in the manufacture of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.
(3) Welding rods. Since welding rods, such as stick electrode and filler rods, are physically transferred and become a part of an item produced or repaired, their sale is exempt if used by the purchaser in producing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., destined for sale or in repairing tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., for a consideration. The sale of welding rods to manufacturers who use them in repairing their machinery used directly and exclusively in manufacturing is exempt. However, the sale of these rods to construction contractors for use in fulfilling real property construction contracts is taxable.
(4) Fluxing materials. Fluxing materials sold to a manufacturer for use exclusively and directly in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., destined for sale are exempt because they are consumed in the manufacturing process. When fluxing materials are sold for use by a manufacturer to repair its own production machinery or equipment, a nonmanufacturing activity, they are taxable. Fluxing materials sold to a repair shop or to a real property construction contractor or to any other nonmanufacturer are taxable.
SECTION 235. Tax 11.82(1)(a) to (c) and (2)(a) to (c) are amended to read:
Tax 11.82(1)(a) In this subsection, “mailing list” means a written or printed list, series, set, group, or aggregation of names or addresses or both or other information concerning persons which is used in circulating material by mail. A mailing list may be in the form of a manuscript list, directory, Cheshire tape, Dick tape, magnetic tape, gummed labels, index cards, or other similar means of identification.
(b)
A mailing list is tangible personal property, except for written, typed, or
printed lists of names and addresses and lists stored in machine-readable form,
such as microfilm and computer tapes and disks, and the sales and use tax shall
apply to the gross receipts sales price from the sale of and the
storage, use, or other consumption of mailing lists in the form of tangible
personal property, including the rental of or the granting of a license to use
those lists. Taxable mailing lists include, but are not limited to mailing
lists which are physically attached to the envelopes, such as Cheshire tapes,
gummed labels, and heat transfers.
(c)
Persons in the business of providing mailing lists are the consumers of the
tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., they purchase and use in producing these lists.
However, any tangible personal property and items, property, and goods under
s. 77.52 (1) (b), (c), and (d), Stats., becoming a component part of
mailing lists when the mailing lists are physically transferred to a customer
by either sale, rental, lease, or license may be purchased for resale
and without tax if the purchaser gives the seller a properly completed resale
exemption certificate.
(2)(a) In this subsection, “addressing” means the preparation of property, items, and goods to be mailed by writing, typewriting, printing, imprinting, or affixing addresses or names and addresses to the property, items, or goods. Addressing includes the preparation of Cheshire tapes, Dick tapes, cards, gummed labels, or similar items which are to be affixed to, or enclosed in, property, items, or goods to be mailed for the purpose of serving as addresses for the property, item, or good. However, addressing does not include these tapes, cards, or labels when they are used for some other purpose, such as reproduction or reference.
(b)
The tax does not apply to charges for services rendered in preparing material
for mailing, including addressing, enclosing, sealing, metering, affixing
stamps, sorting, tying, and sacking in compliance with postal rules and
regulations, if the charges are stated separately on invoices and in accounting
records. Gross receipts The sales price from charges for
envelopes are is taxable, but not separately stated charges for
postage in the sale of prestamped envelopes.
(c) Persons in the business of providing mailing services are consumers of the tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., they purchase and use in performing these services. Consequently, they shall pay the tax when purchasing the property.
SECTION 236. Tax 11.83(1)(a) is amended to read:
Tax 11.83(1)(a) “Actively participates” means the person performs services for the motor vehicle dealership, including selling, accounting, managing, and consulting, for more than 500 hours in a taxable year for which the person receives compensation. “Actively participates” does not include services performed only in the capacity of an investor, including studying and reviewing financial statements or reports on the operation of the business, preparing or compiling summaries or analyses of the finances of the business for the investor’s own use, or monitoring the finances or operations of the activity in a nonmanagerial capacity.
SECTION 237. Tax 11.83(1)(am) is created to read:
Tax 11.83(1)(am) “Mobility-enhancing equipment” means equipment, including the repair parts and replacement parts for the equipment, that is primarily and customarily used to provide or increase the ability of a person to move from one place to another; that may be used in a home or motor vehicle; and that is generally not used by a person who has normal mobility. “Mobility-enhancing equipment” does not include a motor vehicle or any equipment on a motor vehicle that is generally provided by a motor vehicle manufacturer. “Mobility-enhancing equipment” does not include durable medical equipment.
SECTION 238. Tax 11.83(1)(b) and (2)(title) and (intro.) are 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, 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.
(2)(title) Retailers’
taxable gross receipts sales price.
(intro.)
Gross receipts from the The following sales in Wisconsin are
taxable:
Note to LRB: Amend the examples at the end of Tax 11.83(2)(a) as follows:
Examples: 1) Dealer A sells a motor vehicle to Individual
B and accepts the trade-in of two motor vehicles owned by Individual B. The
selling price of the new vehicle is $20,000. The values of the two motor
vehicles traded in by Individual B are $8,000 and $9,000. Gross receipts
The sales price subject to sales tax are is $3,000, the
$20,000 selling price less the $8,000 and $9,000 trade-ins.
2)
Dealer A sells two motor vehicles to
Individual C and accepts the trade-in of a motor vehicle owned by Individual
C. The selling prices of the new vehicles are $10,000 and $12,000. The value
of the motor vehicle traded in is $15,000. Gross receipts The sales
price subject to sales tax are is $7,000, the $22,000 selling
price less the $15,000 trade-in.
SECTION 239. Tax 11.83(2)(am) is created to read:
Tax 11.83(2)(am) The sale of motor vehicles by any retailer registered or required to be registered to collect Wisconsin sales or use tax, regardless of whether the retailer is a motor vehicle dealer.
Example: Landscaper A is registered to collect and remit Wisconsin sales and use tax on its landscaping services. Landscaper A sells a motor vehicle that it had used in its landscpaing business. Landscaper A must collect Wisconsin sales tax on its sale of the motor vehicle and remit the tax to the Department of Revenue on its Wisconsin sales and use tax return.
SECTION 240. Tax 11.83(2)(b) to (d), (3)(title) and (a) to (c), (4)(a) to (c), (5), (6), (7)(title), (a), and (c), and (8)(a), (b)(intro.), 1., 2., 3.(intro.), and 4., and (c)(intro.) and 1. are amended to read:
Tax 11.83(2)(b) The delivery, handling, and preparation of a motor vehicle being sold and the sale of a warranty, relating to the sale of a motor vehicle that is taxable.
(c)
The sale of equipment and accessories with a motor vehicle. However, adaptive
equipment, including parts and accessories, that makes it possible for
handicapped persons to enter, operate or leave a vehicle as defined in s. 27.01
(7) (a) 2., Stats., is exempt from sales and use tax if the equipment is
purchased by the handicapped person, a person acting directly on behalf of the
handicapped person or a nonprofit organization equipment that is not
generally provided by a motor vehicle manufacturer, but which is added to a
motor vehicle may qualify for exemption under s. 77.54 (22b), Stats., as
mobility-enhancing equipment, as defined in sub. (1)(am).
(d)
Sales of parts and labor for repair, service, and maintenance performed
on a motor vehicle, including charges for installation of accessories or
attachments, except charges for adaptive equipment, including parts and
accessories, that makes it possible for handicapped persons to enter, operate
or leave a vehicle mobility-enhancing equipment, as described in
par. (c).
Note to LRB: Delete the note at the end of Tax 11.83(2)(d)
(3)(title) Occasional
sale or purchase of motor vehicles from non-dealers non-retailers.
(a)
The occasional sale of a motor vehicle is taxable, unless the transfer is to
the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild,
son-in-law, or daughter-in-law of the transferor or is transferred from
an individual to a corporation which is solely owned by the individual; and the
motor vehicle has been previously registered in Wisconsin in the name of the
transferor; and the transferor is not a motor vehicle dealer engaged
in the business of selling motor vehicles.
(b)
The purchaser of a motor vehicle from a non-dealer shall pay No motor
vehicle shall be registered or titled in Wisconsin unless the registrant
presents proof that the sales or use taxes imposed by this subchapter have been
paid or the registrant pays the tax due to the department of transportation
before at the time the vehicle is registered for use in this
state.
(c)
A Wisconsin resident purchasing a motor vehicle in a foreign country, or for
delivery in a foreign country, shall pay the Wisconsin use tax when the
resident registers the vehicle in Wisconsin for use in Wisconsin, subsequent to
use in the foreign country. The tax is measured by the full “sales purchase
price,” as defined in s. 77.51 (12m), Stats., of the vehicle.
(4)(a)
The gross receipts sales price from the sales of motor vehicles
or truck bodies to nonresidents of Wisconsin, including members of the armed
forces, who will not use the vehicles or trucks for which the truck bodies were
made in Wisconsin other than in their removal from Wisconsin are is
exempt. Truck bodies include semi-trailers. However, the separate sale of a
“slide-in” camper to a nonresident is taxable if delivery is in the
sale is sourced to Wisconsin as provided s. 77.522, Stats.
(b)
The gross receipts sales price from charges for the repair
by a Wisconsin retailer of a nonresident’s motor vehicle or truck body are
is subject to tax.
(c)
A motor vehicle, trailer, semi-trailer, all-terrain vehicle, or mobile
home recreational vehicle as defined in s. 340.01 (48r), Stats.,
purchased outside Wisconsin by a nonresident of Wisconsin 90 days or
more before bringing the unit into Wisconsin, in connection with a change of
residence to Wisconsin by the individual, is not subject to the Wisconsin use
tax.
(5) Temporary use in Wisconsin. Motor vehicles purchased outside Wisconsin, which are not registered or titled or required to be registered or titled in Wisconsin, brought into Wisconsin by a nondomiciliary for that person’s own storage, use, or other consumption while temporarily in Wisconsin are not subject to use tax when the motor vehicle is not stored, used, or otherwise consumed in Wisconsin in the conduct of a trade, occupation, business, or profession or in the performance of personal services for wages or fees.
(6) Tax
credit for vehicle purchased outside Wisconsin. A motor vehicle
purchased outside Wisconsin and registered in Wisconsin is subject to Wisconsin
use tax, except as noted in sub. (4) (c). However, if the purchase was subject
to a sales or use tax by the state or, the District of Columbia,
or the Commonwealth of Puerto Rico, in which the purchase was made, sales
or use tax paid to the other state or, the District of Columbia,
or the Commonwealth of Puerto Rico may be applied as a credit against and
deducted from the Wisconsin use tax. This credit does not apply to taxes paid
to another country or to municipalities in other states, or to motor
vehicle registration fees.
(7)(title) Transfer by inheritance, gift, or prize.
(a)
The distribution of a motor vehicle to the heir or heirs of an estate is not a taxable
transfer subject to the Wisconsin sales or use tax. However, the sale of a
motor vehicle by a personal representative of an estate is subject to the tax,
and the purchaser shall pay the tax to the department of transportation at the
time of registration.
(c) A motor vehicle donated to an organization described in s. 77.54 (9a), Stats., is not subject to Wisconsin use tax if the motor vehicle has been purchased by the donor tax-free for resale or upon the presentation of a valid exemption certificate, and if the donor has made no other use of the motor vehicle.
(8)(a) General. Motor vehicles purchased without tax for resale by a Wisconsin motor vehicle dealer licensed under s. 218.0101 to 218.0163, Stats., and used for a purpose in addition to retention, demonstration, or display, except motor vehicles loaned to any school or school district for a driver training educational program conducted by the school or school district, are subject to Wisconsin use tax. Motor vehicles used by the dealership solely for retention, demonstration, and display, while holding them for sale in the regular course of business, or solely for leasing to others, such as customers and employees, are not subject to Wisconsin use tax.
(b)(intro.) The amount subject to use tax on a motor vehicle used by a licensed motor vehicle dealer for a purpose in addition to retention, demonstration, or display is one of the following:
1.
Motor vehicles held for sale which are assigned to and used by a specific
dealer employee subject to withholding from federal income tax on wages are
subject to Wisconsin use tax on $104 $140 per motor vehicle
registration plate per month. The $104 $140 amount is effective
January 1, 1999 2009 and is subject to change annually as
explained in the notes following sub. (8) (b).
2.
Motor vehicles held for sale which are assigned to and used by persons holding
an ownership interest in Wisconsin licensed motor vehicle dealerships who are
not subject to withholding for federal income tax purposes, but who actively
participate in the day-to-day operation of the dealership, are subject to
Wisconsin use tax on $104 $140 per motor vehicle registration
plate per month. The $104 $140 amount is effective January 1, 1999
2009 and is subject to change annually as explained in the notes below
following this subdivision.
Note to LRB: Amend the first note at the end of Tax 11.83(8)(b)2. as follows:
Note: As provided in s. 77.53 (1m), Stats., the department
will annually adjust the amount per plate to the nearest whole dollar to
reflect the annual percentage change in the U.S. consumer price index for all
urban customers, U.S. city average, as determined by the United States
department of labor, for the 12 months ending on June 30 of the year before the
change. The department will publicize any rate change in an issue of the Wisconsin
Tax Bulletin and Sales and Use Tax Report prior to the January
1, that the change becomes effective.
3.(intro.) Motor vehicles used by the dealer or any person other than an employee of the dealer and which are held for sale and not assigned to and used by a specific dealer employee subject to federal withholding on wages are subject to Wisconsin use tax on the lease value of the motor vehicle computed on a calendar month basis. If a motor vehicle is used by the dealer for a period of less than one calendar month, the amount subject to use tax is the daily lease value calculated by multiplying the applicable monthly lease value by a fraction, the numerator of which is the number of days used by the dealer for a purpose in addition to retention, demonstration, or display and the denominator of which is the number of days in the calendar month. Lease value is computed using the internal revenue service lease value table contained in 26 CFR 1.61-21 (d) (2). In the lease value table, the “automobile fair market value” is one of the following:
4.
Motor vehicles not held for sale, including motor vehicles properly capitalized
for Wisconsin income or franchise tax purposes, are subject to use tax based on
the sales purchase price of the motor vehicle as defined in s.
77.51 (15) (12m), Stats. However, if the motor vehicles were
purchased without tax using a resale or other exemption certificate and the
first use, in addition to retention, demonstration or display, occurs more than
6 months after the purchase by the dealer, the dealer may use the fair market
value of the motor vehicle at the time of first use as the amount subject to
tax.
(c)(intro.) It is presumed that all dealer plates issued by the department of transportation to a licensed motor vehicle dealer are used each month on motor vehicles assigned to employees subject to withholding for federal income tax purposes or owners who actively participate in the day-to-day operations of the dealership for a purpose in addition to retention, demonstration, or display and are subject to use tax as provided in par. (b) 1. and 2., unless one of the following applies:
1. The motor vehicle dealer keeps adequate records showing that the dealer plates were not used during the month on motor vehicles for a purpose in addition to retention, demonstration, or display.
SECTION 241. Tax 11.83(8)(d) is repealed
SECTION 242. Tax 11.83(10) and (11)(a) and (b) are amended to read:
Tax
11.83(10) Heavy equipment dealers. Heavy equipment dealers who are
not registered with the Wisconsin department of transportation as motor vehicle
dealers because their sales are too few in number to require registration may
not, but who are retailers that hold a Wisconsin seller’s permit, must
charge the sales tax on their sales of motor vehicles. The tax shall be
collected from the purchaser at the time the unit is registered with Wisconsin.
The heavy equipment dealers may purchase motor vehicles for resale they
are going to resell without tax for resale by providing a properly
completed exemption certificate.
(11)(a)
Motor vehicle dealers with body shops and any other person engaged in motor
vehicle repair may purchase for resale without tax tangible personal property and
items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats.,
which is are physically transferred to the customer’s vehicle and
which leaves the repair facility with the repaired vehicle. The property
includes paints, paint hardeners, plastic fillers, welding rods, and
auto parts.
(b)
Tangible personal property and items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., not physically transferred to a customer’s motor
vehicle is are subject to tax. The property includes tools,
equipment, and supplies used or consumed in performing motor vehicle
repair service. Taxable supplies include sandpaper, masking paper and tape,
buffing pads, paint and lacquer thinner, clean and glaze compound, disc pads,
paint remover, paint masks, tack rags, steel wool, industrial gases, metal
conditioner, brushes, lacquer removing solvent, rubbing compound, wax and
grease remover, fluxing materials, disc adhesive, and all other items
not physically transferred to the customer’s vehicle even though a separate
charge may be made to the customer for these supplies.
SECTION 243. Tax 11.83(11)(c) is repealed
SECTION 244. Tax 11.83(12) and (13) are amended to read:
Tax 11.83(12) Exemption for mixing and processing units. Sales, licenses, leases, and rentals of mobile units used for mixing and processing, and the motor vehicles or trailers on which the units are mounted, including accessories, attachments, parts, supplies, and materials for those vehicles, trailers, and units, are exempt from sales and use tax.
(13) Exemption
for vehicles used in waste reduction or recycling. Gross receipts
The sales price from the sale, license, lease, or rental
of vehicles which are not required to be licensed for highway use and which are
used exclusively and directly in waste reduction or recycling activities are
is exempt from sales and use tax.
SECTION 245. Tax 11.84(1)(a), (b)1., (c), and (e)1. and 3.a. and b. are amended to read:
Tax
11.84(1)(a) The sales and use tax applies to the gross receipts sales
price from the sale, license, lease, or rental of aircraft
and from the sale of accessories, components, attachments, parts, supplies,
and materials for aircraft.
(b)1. The transfer is to the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law of the transferor.
(c)
Section 77.61 (1) (a), Stats., provides that no aircraft may be registered in
Wisconsin unless the registrant presents proof that the sales tax has been paid
or a valid exemption was claimed. If the aircraft is purchased from a
person other than a Wisconsin aircraft dealer, the purchaser shall pay the tax
at the time the aircraft is registered with the Wisconsin department of
transportation, division of motor vehicles registrant does not present
proof that the tax has been paid, the registrant shall pay the tax to the
department of transportation at the time the aircraft is registered or titled
in Wisconsin. The tax applies to aircraft registered or customarily
hangared or both in Wisconsin, even though the aircraft also may be used
out-of-state.
(e)1. The aircraft is purchased in another state, as determined under s. 77.522, Stats.
3.a. A corporation, and that corporation and all corporations with which that corporation may file a consolidated return for federal income tax purposes, neither is organized under the laws of Wisconsin nor has real property or other tangible personal property, except aircraft and property such as hangars, accessories, attachments, fuel, and parts required for operation of aircraft, in Wisconsin at the time the aircraft is registered in Wisconsin.
b.
A partnership, and all the corporate partners fulfill the requirements in subd.
3. a., none of the general partners or limited partners who have management or
control responsibilities is domiciled in Wisconsin and the partnership has no
other real property or tangible personal property and no real
property, except aircraft and property such as hangars, accessories,
attachments, fuel, and parts required for operation of aircraft, in
Wisconsin at the time the aircraft is registered in Wisconsin.
SECTION 246. Tax 11.84(1)(e)3.bm. is created to read:
Tax 11.84(1)(e)3.bm. A limited liability company and all of the corporate members fulfill the requirements under subd. 3. a., and none of the managers and none of the members who has management or control responsibilities is domiciled in Wisconsin and the limited liability company has no other tangible personal property and no real property, except aircraft and property such as hangars, accessories, attachments, fuel, and parts required for operation of aircraft, in Wisconsin at the time the aircraft is registered in Wisconsin.
SECTION 247. Tax 11.84(1)(e)3.d. and 4., (2)(a)(intro.) and 1. to 3. and (c)(intro.), (3)(a) and (b), and (4)(intro.) and (c) to (e) are amended to read:
Tax
11.84(1)(e)3.d. An estate, trust, or cooperative, or
unincorporated cooperative association, and that estate, that trust and its
grantor or that cooperative or association does not have real property
or other tangible personal property, except aircraft and property such
as hangars, accessories, attachments, fuel, and parts required for
operation of aircraft, in Wisconsin at the time the aircraft is registered in
Wisconsin.
4.
The department has not determined that the owner, if the owner is a
corporation, trust or, partnership, or limited liability
company, was formed to qualify for the exemption from Wisconsin use tax.
(2)(a)(intro.)
Gross receipts The sales price received from the following shall
be taxable:
1. The sale, license, lease, or rental of aircraft by any retailer registered or required to be registered to collect Wisconsin sales or use tax, regardless of whether the retailer is an aircraft dealer.
2. The sale and delivery in Wisconsin of oil, equipment, parts, and supplies for operation of aircraft, regardless of where the aircraft is flown or used. Sales of general aviation fuel subject to taxation under ch. 78, Stats., are exempt from the sales and use tax.
3. Charges for air frame and engine inspection, maintenance, and repair.
(c)(intro.)
The gross receipts sales price from charges for the following are
taxable:
(3)(a)
Section 77.54 (5) (a), Stats., provides that the tax does not apply to gross
receipts the sales price from aircraft, including accessories,
attachments, parts, and fuel therefor, sold to persons using the
aircraft as certified or licensed carriers of persons or property in interstate
or foreign commerce under authority of the laws of the United States or any
foreign government, or to aircraft sold to a nonresident of this state who will
not use the aircraft in this state other than to remove it from Wisconsin.
Scheduled air carriers and commuter carriers with air carrier operating
certificates shall qualify for this exemption. This exemption does not apply
to persons with air worthiness certificates which indicate certain safety
standards have been met, if they do not otherwise qualify.
(b) The tax does not apply to charges for repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of aircraft used by a certified or licensed carrier of persons or property in interstate or foreign commerce under the laws of the United States or any foreign government.
(4)(intro.)
Gross receipts Amounts received from the following services or
fees are not taxable:
(c)
Advertising promotions such as skywriting and banner towing if the person
towing the banner also provides it, except when the aircraft is leased to a
person who provides a the person’s own pilot.
(d) Emergency rescue service, forest fire spotting, and pipeline inspection service, except where the aircraft is leased to a company which provides its own pilot.
(e) Crop dusting, spraying, fertilizing, and seeding a farmer’s crops. A person in the business of crop dusting, spraying, fertilizing, and seeding for farmers may purchase weed killers, fertilizer, and seed without tax for resale, if these items are used in conjunction with but not incidental to providing the service.
SECTION 248. Tax 11.85(title), (1)(intro.), (a), and (c), and (2)(a) to (d) and (f) are amended to read:
Tax 11.85(title) Boats, vessels, and barges.
(1)(intro.)
Taxable gross receipts involving boats include the following:
(a)
Gross The receipts from the sale, license, lease,
or rental of boats and boat accessories, and of attachments, parts, supplies,
and materials therefor.
(c) Charges for repair, service, alteration, fitting, cleaning, painting, coating, towing, inspecting, and maintaining boats and their accessories or component parts. Services purchased outside Wisconsin, which would be taxable if purchased in Wisconsin, with respect to property later used in Wisconsin, are subject to use tax.
Note to LRB: Insert the following example at the end of Tax 11.85(1)(c):
Example: Individual A, a resident of Wisconsin, takes his boat to Illinois to have it repaired. No Illinois tax is charged to Individual A on the repair services. Individual A brings the boat back to Wisconsin where it is used. Individual A owes Wisconsin use tax on the purchase of the repair services performed in Illinois.
(2)(a)
The sale of a boat not required to be registered in Wisconsin with the
Wisconsin department of natural resources or documented under the laws of the
United States may qualify as an exempt occasional sale if the transferor does
not hold or and is not required to hold a seller’s permit.
(b)
Sales of boats to the spouse, parent, stepparent, father-in-law, mother-in-law,
child, stepchild, son-in-law, or daughter-in-law of the transferor shall
be are exempt if the boat was previously registered with the
Wisconsin department of natural resources or documented under the laws of the
United States in the transferor’s name and if the transferor is not engaged in
the business of selling boats.
(c) Vessels and barges primarily engaged in interstate or foreign commerce or commercial fishing that are documented under the laws of the United States showing a net volumetric tonnage of 50 tons or more are exempt from the tax. Accessories, attachments, and parts attached to the vessel or barge and fuel for the vessels and barges are also exempt.
(d) A boat purchased outside Wisconsin by a nonresident and used by the nonresident while temporarily in Wisconsin shall be exempt from the tax if the boat is not used in Wisconsin in the conduct of a trade, occupation, business, or profession or in the performance of personal services for wages or fees. The use tax does not apply to a boat for an individual’s personal use purchased by a nonresident outside this state 90 days or more before bringing the boat into Wisconsin in connection with a change of domicile to this state.
(f) Section 77.53 (17m), Stats., exempts: “...a boat purchased in a state contiguous to this state, as determined under s. 77.522, by a person domiciled in that state if the boat is berthed in this state’s boundary waters adjacent to the state of the domicile of the purchaser and if the transaction was an exempt occasional sale under the laws of the state in which the purchase was made.”
SECTION 249. Tax 11.85(2)(g) is created to read:
Tax 11.85(2)(g) Section 77.54 (30) (a) 7., Stats., exempts “Fuel sold for use in motorboats that are regularly employed in carrying persons for hire for sport fishing in and upon the outlying waters, as defined in s. 29.001 (63), and the rivers and tributaries specified in s. 29.2285 (2) (a) 1. and 2., if the owner and all operators are licensed under s. 29.514 to operate the boat for that purpose.”
SECTION 250. Tax 11.85(3)(a) and (d) and (5) are amended to read:
Tax
11.85(3)(a) No boat may be registered in this state Wisconsin
unless the registrant presents proof that the sales or use tax has been paid or
that the transaction was exempt. If the boat is purchased from a person
other than a person with a seller’s permit, the purchaser registrant
does not present proof that the tax has been paid, the registrant shall pay
the tax with the boat registration, mailed to Wisconsin Department of
Natural Resources, Boat Registration Section, P.O. Box 7236, Madison, WI 53707
at the time the boat is registered or titled in Wisconsin, even though the boat
may also be used out-of-state.
(d) The “boat” subject to the use tax at the time the boat is registered in this state includes all accessories affixed or attached to the boat when in use. Anchors, boat cushions, marine radios, radar equipment, and other similar accessories are included in the measure of the tax.
Notes to LRB: 1. Amend the note at the end of Tax 11.85(3)(d) as follows:
Note: In a decision dated July 25, 1983, in the case of Alan G. Dwyer vs. Wisconsin Department of Revenue, the Wisconsin Tax Appeals Commission held that the tax applies to boat accessories, including the anchor, boat cushions, and marine radio, in addition to the bare hull of the boat.
2. Amend the note at the end of Tax 11.85(4) as follows:
Note: Sales of bedding, linen, table and kitchenware,
tables, chairs, lubricants, work clothes, acetylene gas, paper towels, etc.,
used on commercial barges vessels or barges of 50 ton burden or
over engaged primarily in interstate or foreign commerce or commercial fishing
are subject to sales and use tax.
(5) Sales to
ships. Sales of tangible personal property, items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats., or and
taxable services delivered to operators of foreign flag ships or ships under
the U.S. flag in a Wisconsin harbor are subject to tax, unless the retailer
receives a properly completed resale or other exemption certificate from
the purchaser.
SECTION 250. Tax 11.86(1)(a) and (b), (2)(a), (3), (4)(a) and (b), (5)(a) to (c), and (6)(intro.), (b), and (d) are amended to read:
Tax 11.86(1)(a) “Utility facilities” include telephone, telegraph, and television lines; electrical, water, and gas transmission and distribution lines; and poles, transformers, and towers, including pipes, conduits, sleeves, risers for cable television lines, or other property by which lines are supported or in which they are contained or connected.
(b) “Real property” includes underground utility facilities; lines, poles, foundations, towers, gravel, and any buildings of a substation located on a utility’s own land; and concrete foundations, anchors, crushed rock, and backfill whether or not on land owned by the utility.
(2)(a)
Gross receipts The sales price from the installation, license,
lease, rental, repair, service, alteration, fitting, cleaning, painting,
coating, towing, inspection, or maintenance of tangible personal property or
items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are
is subject to sales tax.
Note to LRB: Amend the examples at the end of Tax 11.86(2)(b) as follows:
Examples:
1) The gross receipts of charges
by a contractor from for the construction and installation of
an overhead utility facility, or a portion of an overhead utility facility, and
from a sale “in place” of the facility, if installed under an easement on land
owned by a person other than the utility, are taxable. Materials used in the
construction or installation of the property may be purchased without tax for
resale.
2) The gross receipts of charges by a
utility from for the repair, service, alteration, fitting,
cleaning, painting, coating, towing, inspection, or maintenance of an
overhead utility facility, or a portion of an overhead facility of another
utility are taxable. Materials used in the repair, service, alteration,
fitting, cleaning, painting, coating, towing, inspection, maintenance, or
installation may be purchased without tax for resale.
3) Gross receipts from Charges for the
installation, sale, license, lease, rental, repair, service,
alteration, fitting, cleaning, painting, coating, towing, inspection, or
maintenance and removal of underground utility facilities are not subject to
sales or use tax. However, the materials used in the construction or
installation of the underground utility facilities cannot be purchased for resale
and are subject to tax at the time of purchase unless otherwise exempt.
4) X-ray testing of weld joints in the pipe as part of
the construction of an underground utility pipeline is part of the construction
process and the gross receipts charges are not subject to sales
or use tax. However, materials used in the X-ray testing of the underground
utility pipeline cannot be purchased for resale and are subject to tax at the
time of purchase unless otherwise exempt.
(3) Related
expenses. The gross taxable receipts from the performance
of a lump sum contract for the construction of an overhead utility facility,
which is tangible personal property, may not be reduced by expenses in
performing the contract, such as payments for crop damage, site preparation,
restoration work, tree trimming, line clearing, relocating existing lines,
engineering and design work, surveying, purchasing a right-of-way, and
unloading and hauling materials.
Note to LRB: Amend the note at the end of Tax 11.86(3) as follows:
Note: The related expenses described in sub. (3) are costs
of performing the contract and do not affect the amount of taxable gross
receipts.
(4)(a)
The gross taxable receipts from a contract to construct or repair
an overhead utility facility which is tangible personal property may not be
reduced by the amount of hourly charges for the use of equipment.
(b)
The gross receipts from charges for the rental of equipment,
including any charge for an operator of the equipment, for used in
the construction or repair of a utility line to a utility are taxable,
unless the utility employs all of the crew to construct or repair the utility
line, in which case only the charge for the equipment is taxable.
Note to LRB: Amend the note at the end of Tax 11.86(4)(b) as follows:
Note: See s. Tax 11.29 (4) (5) for more
information.
(5)(a)
Gross receipts The sales price received from tree and shrub
trimming services for a utility for the purpose of keeping the overhead
transmission and distribution lines free from interference from nearby trees
and shrubs or inaccessible to children are is not services
which are taxable under s. 77.52 (2) (a) 20., Stats.
(b)
Gross receipts from The sales price received under a separate
contract for tree trimming and line clearing in connection with the
construction of a new utility line are is not taxable.
(c)
Gross receipts The sales price received from a separate charge
for removing an existing utility line are is not taxable.
(6)(intro.)
Gross receipts The sales price received from landscaping and lawn
maintenance services are is taxable. Except as provided in sub.
(5) (a) and (b), landscaping and lawn maintenance services include:
(b) Lawn and garden services, such as planting, mowing, spraying, and fertilizing.
(d) Spreading topsoil and installing sod or planting seed where trenches have been dug or sump pump, transmission, and distribution lines have been buried in residential, business, commercial, and industrial locations, cemeteries, golf courses, athletic fields, stadiums, parking lots, and other areas, and along highways, streets, and walkways.
SECTION 251. Tax 11.87(title) and (1)(b) and (e) are amended to read:
Tax
11.87(title) Meals, Prepared
food, food products and beverages food ingredients, and soft
drinks.
(1)(b)
“Exempt food” means food, food products and beverages not subject to and
food ingredients that are exempt from the sales and use tax as provided in
s. 77.54 (20) and (20m) (20n), Stats.
(e) “Personal care” means assistance with the activities of daily living, including eating, dressing, bathing, and ambulation.
SECTION 252. Tax 11.87(1)(em) is created to read:
Tax 11.87(1)(em) “Prepared food” has the meaning provided in s. Tax 11.51 (4).
SECTION 253. Tax 11.87(1)(h) and (2)(a) and (b) are amended to read:
Tax
11.87(1)(h) “Taxable food” means food, food products and beverages and
food ingredients, including candy, dietary supplements, prepared food, soft
drinks, and alcoholic beverages subject to the sales and use tax.
(2)(a)
General. Generally, the gross receipts sales price from
sales of food or beverages shall be taxable when sold by restaurants,
cafeterias, lunch counters, coffee shops, snack bars, eating houses, hotels,
motels, lodging houses, sororities, fraternities, drug stores, diners, taverns,
vending machines, drive-ins, mobile sales units, clubs, young men’s christian
associations, young women’s christian associations, and similar
businesses, organizations or establishments.
(b)
Sales by generally exempt seller. Certain foods that have been prepared
by a seller by cooking, baking, or other methods shall be taxable food as
“prepared food” even though the seller is principally engaged in the sale
of exempt food. Heated food or beverages mean those products, items, or
components which have been prepared for sale in a heated condition and which
are sold at any temperature which is higher than the air temperature of the
room or place where they are sold.
Note to LRB: Replace the example at the end of Tax 11.87(2)(b) with the following:
Example: When a supermarket roasts chickens on a rotisserie and sells them in a heated condition, the roasted chickens are taxable because they are prepared food.
SECTION 254. Tax 11.87(2)(c) is repealed and recreated to read:
Tax 11.87(2)(c) Prepared Food. Sales of prepared food, as provided in s. Tax 11.51 (4), are taxable.
Note to LRB: Replace the example and note at the end of Tax 11.87(2)(c) with the following:
Examples: 1) Retailer A sells heated food and heated beverages. Heated foods and heated beverages are prepared food and Retailer A’s sales of the heated foods and heated beverages are subject to tax.
2) Restaurant B sells prepared foods and also other foods and food ingredients, including cartons of milk, cookies, and candy. Restaurant B’s sales of prepared foods, based on Restaurant B’s prior tax year, are more than 75% of its total sales of food and food ingredients. Restaurant B makes napkins and straws available to the purchaser. Restaurant B’s sales of the food and beverages, including the cartons of milk are subject to tax since (a) Restaurant B’s sales of prepared foods are more than 75% of Restaurant B’s total sales of food and food ingredients, based on Restaurant B’s prior tax year; and (b) napkins and straws are available to the purchaser.
3) Same as Example 2, except that the seller is a convenience store instead of a restaurant. The answer is the same as in Example 2.
4) Convenience Store C sells prepared foods and other foods and food ingredients, including cartons of milk, cookies, soft drinks, and candy. Convenience Store C’s sales of prepared foods, based on its prior tax year, are less than 75% of its total sales of food and food ingredients. Convenience Store C makes napkins and straws available to the purchaser, but does not physically hand or give the straws or napkins to the purchaser. Convenience Store C’s sales of heated food, heated beverages, soft drinks, and candy are subject to tax, but Convenience Store C’s sales of milk and cookies are not subject to tax since (a) Convenience Store C’s sales of prepared foods are less than 75% of Convenience Store C’s total sales of food and food ingredients, based on its prior tax year; and (b) Convenience Store C makes the napkins and straws available to the purchaser, rather than physically giving or handing the napkins or straws to the purchaser.
5) Same as Example 4, except that Convenience Store C’s customary practice is to physically give or hand the napkins and straws to the purchaser. Convenience Store C’s sales of heated food, heated beverages, soft drinks, candy, cookies, and cartons of milk are subject to tax since Convenience Store C’s customary practice is to physically give or hand the napkins and straws to the purchaser. The tax applies to these sales even though Convenience Store C’s sales of prepared foods are less than 75% of its total sales of food and food ingredients.
6) Grocery Store A has a self-service salad bar. Grocery Store A’s sales of prepared foods, based on its prior tax year, are less than 75% of its total sales of food and food ingredients. The plates necessary to receive the food items at the salad bar, along with the forks, knives, and napkins are made available to the purchaser. Grocery Store A’s sales of the self-service salad bar items are subject to tax since the plates necessary to receive the food items at the salad bar are made available to the purchaser.
SECTION 255. Tax 11.87(2)(d)(intro.) and 1. to 3. are amended to read:
Tax
11.87(2)(d)(intro.) Meals, food, Food and food products and
beverages ingredients, sold by caterers shall be are
generally taxable as prepared foods. For purposes of this
paragraph:
1.
“Caterer” means a person engaged in the business of preparing meals, food,
and drinks, and serving these items on premises designated by a purchaser.
When an agreement with a caterer provides that the caterer shall prepare and
serve food “prepared foods” either for a stated price per meal,
for a lump sum, or for a price per plate, the consideration paid shall
constitute taxable gross receipts.
2.
Charges made by a caterer for preparing and serving meals or drinks prepared
foods to social clubs, service clubs, fraternal organizations, or
other nonexempt purchasers shall constitute exempt sales for resale only
if the purchasers are regularly engaged as retailers of meals prepared
foods, hold a seller’s permit and give resale or a properly
completed exemption certificates certificate to the caterer.
3.
The tax shall apply to items purchased by caterers, including dishes,
silverware, linen napkins, tablecloths, punch fountains, coffee silver service,
and glassware, which are used by caterers to serve food or beverages to their
customers, or used in conjunction with providing catering service, unless
customers are charged a separate and optional amount for their use. However
In addition, items such as tents, public address systems, portable dance
floors, portable bars, chairs, and tables may be purchased without tax
for resale, if used exclusively for rental purposes by a caterer and if
customers pay specific taxable rental charges are charged a separate
and optional amount for their use. Disposable items transferred to
customers for a valuable consideration, including paper and plastic cups and
plates, plastic eating utensils, napkins, straws, placements placemats,
and toothpicks also may be purchased without tax for resale.
SECTION 256. Tax 11.87(2)(e) is repealed and recreated to read:
Tax 11.87(2)(e) Vending machine sales. A vending machine operator’s receipts from candy, dietary supplements, prepared foods, and soft drinks are taxable.
SECTION 257. Tax 11.87(2)(f), (g)2., (h), (i)(title), (intro.), 1.(intro.) and a. to d., and 2.(intro.), a., and b., (j), and (k)1. and (3)(intro.), (a), and (b) are amended to read:
Tax
11.87(2)(f) Cover and minimum charges. Cover charges or minimum
charges, whether listed separately on a bill or collected as an admission fee
or fixed charge, which entitle the patron to receive entertainment or to dance
as well as to receive prepared food, meals or drinks candy,
dietary supplements, soft drinks, or other taxable property, items, or goods,
shall be taxable. If prepared food, meals or drinks candy,
dietary supplements, soft drinks, or other taxable property, items, or goods
are furnished, prepared, or served at locations other than the place of
business of the seller or in a room other than a regular dining room and an
extra charge is made for the service, the entire amount shall be taxable.
(g)2.
A flat amount or flat percentage, whether designated as a tip or as a service
charge, that is added to the price of a meal prepared food or other
taxable food or food ingredient under a requirement of the seller or an
arrangement made with the seller is a part of the selling sales
price of the meals prepared food or other taxable food or food
ingredient and shall be subject to the tax, regardless of whether the
amount or flat percentage may be subsequently paid over in whole or in part by
the seller to employees.
(h)
Huber law meals. Meals Prepared foods, candy, dietary
supplements, and soft drinks sold to “Huber Law” prisoners by a sheriff or
a governmental unit shall be subject to the tax.
(i)(title)
Meals Food and food ingredients to employees.
(intro.)
Sales of meals prepared foods, candy, dietary supplements, and soft
drinks to employees by an employer for a consideration shall be taxable.
For purposes of this paragraph:
1.(intro.)
A consideration shall be deemed made for meals prepared foods, candy,
dietary supplements, and soft drinks if any one of the following conditions
is met:
a.
The employee pays cash for meals the prepared foods, candy, dietary
supplements, and soft drinks consumed.
b.
An actual, specific charge for meals the prepared foods, candy,
dietary supplements, and soft drinks is deducted from an employee’s wages.
c.
An employee receives meals the prepared foods, candy, dietary
supplements, and soft drinks in lieu of cash to bring the employee’s
compensation up to the legal minimum wage.
d.
An employee has the option to receive cash for meals the prepared
foods, candy, dietary supplements, and soft drinks not consumed.
2.(intro.) In the absence of any of the conditions in subd. 1., a consideration is not deemed made when:
2.a.
A value is assigned to meals prepared foods, candy, dietary
supplements, and soft drinks only as a means of reporting the fair market
value of an employee’s meals prepared foods, candy, dietary
supplements, and soft drinks for FICA, social security, or union contract
purposes.
b.
An employee who does not consume available meals prepared foods,
candy, dietary supplements, and soft drinks has no recourse against the
employer for additional cash wages.
(j)
Transportation companies. The sale of meals prepared foods,
candy, dietary supplements, and soft drinks and liquor by transportation
companies, such as airlines or railways, to a customer while operating in
Wisconsin for a specific charge shall be taxable. These meals prepared
foods, candy, dietary supplements, soft drinks, and alcoholic
beverages may be purchased by the transportation companies without tax for
resale. However, if the sales price of the meal prepared food,
candy, dietary supplements, soft drinks, or beverage alcoholic
beverages is not separately stated to the customer, the tax shall apply to
purchases of these meals prepared foods, candy, dietary supplements,
soft drinks, and alcoholic beverages by transportation companies.
(k)1.
When members of an exempt or nonexempt organization meet at a hotel, restaurant,
or other place of business where food or drinks are sold and the members pay
for the items, the place of business shall be considered selling directly to
the members and not to the organization except as provided in subds. 2. and 3.
The sales shall, therefore, be subject to the tax, even if the organization
collects from the members, pays the seller, and retains a portion of the
collections for its own purposes. In these situations, the organization shall
be deemed acting for its members’ convenience and not purchasing and reselling meals
prepared foods.
(3)(intro.)
The following meals food and food ingredients shall be exempt:
(a)
Health care facilities. Meals, food, Food and food products
or beverages ingredients, except soda water beverages soft
drinks, fermented malt beverages, and intoxicating liquor, sold by
hospitals, sanatoriums, nursing homes, retirement homes, community-based
residential facilities as defined in s. 50.01 (1g), Stats., or day care centers
registered under ch. 48, Stats., and served on their premises. However,
if an affiliated organization sells the items, the exemption does not apply.
Note to LRB: Amend the example at the end of Tax 11.87(3)(a) as follows:
Example: If a ladies’ auxiliary of a hospital, separate from the hospital, operates a coffee shop on the hospital premises, although the ladies’ auxiliary is a nonprofit organization, the prepared food and drinks sold at the coffee shop are taxable.
(b)
“Meals on wheels”. Meals, food, food products or beverages Prepared
food sold to the elderly or handicapped by persons providing “mobile meals
on wheels.”
SECTION 258. Tax 11.87(3)(c)(intro.) is repealed and recreated to read:
Tax 11.87(3)(c)(intro.) Food and food ingredients furnished in accordance with any contract or agreement or paid for to such institution through the use of an account of such institution, by a public or private institution of higher education to any of the following:
SECTION 259. Tax 11.87(3)(c)1. and 2., (d), and (e) are amended to read:
Tax
11.87(3)(c)1. The meals, food, food products or beverages are furnished to
an An undergraduate student, a graduate student, or a student
enrolled in a professional school if the student is enrolled for credit at that
the public or private institution, provided the items of
higher education and if the food and food ingredients are consumed by that
the student.
2. The
meals, food, food products or beverages are furnished to a A
national football league team.
(d)
Groceries. Sales of food, and food products and
beverages for human consumption ingredients, except candy, dietary
supplements, prepared foods, and soft drinks are exempt from tax under s.
77.54 (20) (20n), Stats. This includes sales of prepackaged ice
cream, ice milk, or sherbet in pint or larger sizes, whether
prepackaged by the vendor or a supplier. Sales of smaller sized containers of
these products are taxable. in any size container and also Sales of
ice cream, ice milk, sherbet, or yogurt as cones, sundaes, sodas,
and shakes and frozen chocolate bars made from these products are
taxable.
(e)
Supervised boarding facilities. The portion of the monthly fee charged
by a supervised boarding facility for low income adults who are receiving or
are eligible for social security, supplemental security income, veterans
administration, or other disability and retirement benefits reflecting
the value of meals prepared foods provided.
SECTION 260. Tax 11.87(3)(f) is created to read:
Tax 11.87(3)(f) Food and food ingredients to employees. Purchases by restaurants of candy, soft drinks, dietary supplements, prepared foods, and disposable products that are transferred with such items, are exempt from sales and use tax if the restaurant transfers such items to its employees during the employee’s work hours for no consideration.
SECTION 261. Tax 11.87(4)(b) is amended to read:
Tax
11.87(4)(b) Fund-raising events. When a charge to a customer bears
little or no relationship to the actual value of meals, food, food products
taxable food and food ingredients and beverages received, such as $100
per ticket for a fund raising dinner dance, the tax shall be based on the
reasonable value of the taxable food and food ingredients and other
tangible personal property, items, property, and goods under s. 77.52 (1)
(b), (c), and (d), Stats., and taxable services received by the customer.
SECTION 262. Tax 11.88 is repealed and recreated to read:
Tax 11.88 Manufactured homes, mobile homes, and recreational vehicles. (1) Definitions. For purposes of this section:
(a) 1. “Manufactured home,” as defined in s. 101.91 (2), Stats., means either of the following:
a. A structure that is designed to be used as a dwelling with or without a permanent foundation and that is certified by the federal department of housing and urban development as complying with the standards established under 42 USC 5401 to 5425.
b. A mobile home, unless a mobile home is specifically excluded under the applicable statute.
2. As provided in 42 USC sec. 5402 (6), “manufactured home” means “…a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein; except that such term shall include any structure which meets all the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the Secretary and complies with the standards established under this chapter; and except that such term shall not include any self-propelled recreational vehicle.”
(b) “New manufactured home,” as defined in s. 101.91 (11), Stats., means “…a manufactured home that has never been occupied, used or sold for personal or business use.”
(c) “New recreational vehicle,” as defined in s. 218.10 (7), Stats., means “…a recreational vehicle which has never been occupied, used or sold for personal or business use.”
(d) “Recreational vehicle,” as defined in s. 340.01 (48r), Stats., means “…a vehicle that is designed to be towed upon a highway by a motor vehicle, that is equipped and used, or intended to be used, primarily for temporary or recreational human habitation, that has walls of rigid construction, and that does not exceed 45 feet in length.”
(e) “Recreational vehicle dealer” has the meaning given in s. 218.10 (1g), Stats.
(f) “Retailer” is a person who has or is required to have a certificate under s. 77.52 (7), Stats., or s. 77.53 (9), Stats., and who holds or is required to hold a permit issued under s. 77.52 (9), Stats., or s. 77.53 (9m), Stats.
(g) “Used manufactured home,” as defined in s. 101.91 (12), Stats., means “…a manufactured home that has previously been occupied, used or sold for personal or business use.”
(h) “Used recreational vehicle” has the meaning given in s. 218.10 (9), Stats.
(2) Manufactured and Mobile homes as personal property vs. realty improvement. A manufactured or mobile home is personal property if it is located in a manufactured home community, a mobile home park, or other place where the land on which the manufactured or mobile home is located is not owned by the manufactured or mobile home owner. A manufactured or mobile home is a realty improvement if it is permanently affixed to land owned by the owner of the manufactured or mobile home. It is permanently affixed to the land for sales tax purposes if the manufactured or mobile home sits on a foundation and is connected to utilities. “On a foundation” means it is off the wheels and sitting on some other support.
(3) Sales of manufactured and mobile homes which are realty improvements. (a) The sale of a manufactured or mobile home and the land to which it is permanently affixed is the sale of a realty improvement not subject to the tax. The sale of a manufactured or mobile home which is a realty improvement on the land of the seller, and which is acquired by the purchaser for removal from the seller’s land for permanent attachment to the purchaser’s land, is the sale of realty.
(b) If the seller of a manufactured or mobile home as part of the sales transaction agrees to permanently affix the home on a foundation on land owned by the purchaser, the seller is a contractor-consumer engaged in improving realty. Sales of manufactured or mobile homes to the contractor-consumer are subject to the tax, but the sales price from the subsequent sale by the contractor-consumer to the purchaser of the home are not taxable.
(4) Sales and rentals of manufactured and mobile homes which are personal property. (a) Under s. 77.54 (31), Stats., the total sales price from the sale of a used mobile home or a used manufactured home is exempt from the sales and use tax.
(b) Under s. 77.51 (15b) (b) 7. and (12m) (b) 7., Stats., 35% of the total sales price from the sale of a new manufactured home is exempt from the tax. No credit is allowed for trade-in allowances on the purchase of these new manufactured homes.
(c) Under s. 77.54 (36), Stats., the rental of a mobile home or a manufactured home used for residence for a continuous period of one month or more is exempt from the sales and use tax, whether the manufactured or mobile home is classified as real or personal property.
(d) Under s. 77.54 (7), Stats., recreational vehicles transferred to the spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law of the transferor are exempt occasional sales if the recreational vehicle, as defined in s. 340.01 (48r), Stats., has been previously registered or titled in Wisconsin in the name of the transferor and the transferor is not engaged in the business of selling recreational vehicles.
(e) Under s. 77.53 (18), Stats., the use tax does not apply to a manufactured home or mobile home purchased by a nonresident outside Wisconsin 90 days or more before bringing the manufactured or mobile home into Wisconsin in connection with a change of domicile to Wisconsin.
(5) Payment of tax. (a) No recreational vehicle may be registered in Wisconsin unless the registrant presents proof that the sales or use tax has been paid or that the registrant’s acquisition of the recreational vehicle was exempt from the tax. If the recreational vehicle registrant does not present proof that the tax has been paid, the registrant shall pay the tax at the time the recreational vehicle is registered with the department of transportation even though the recreational vehicle may also be used out-of-state.
(b) If a recreational vehicle purchased outside Wisconsin is subject to the Wisconsin use tax, a credit is permitted against the Wisconsin use tax for any sales or use tax paid to the state in which the recreational vehicle was purchased.
(6) Consignment sales. When a recreational vehicle dealer has possession of a recreational vehicle owned by another person, the principal, the dealer is the retailer responsible for reporting tax on the transaction if the dealer makes the sale without disclosing the identity of the principal to the purchaser. If the principal is disclosed to the purchaser on the invoice or in the sales contract, the principal is the seller of the recreational vehicle and the tax on the transaction shall be paid under sub. (4) (a), provided the recreational vehicle dealer does not take title to the recreational vehicle. If the dealer does take title, the dealer is the seller.
Note: For information regarding principals, see s. Tax 11.55.
Note: Section Tax 11.88 interprets ss. 77.51 (2), (4) (b) 6., (13) (am) and (15) (b) 5., 77.52 (2) (a) 1., 77.53 (17) and (18), 77.54 (7), (31) and (36), 77.61 (1) (a) and (c), 218.10 (3), (7) and (9) and 340.01 (29), Stats.
Note: The interpretations in s. Tax 11.88 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Nonretailer sales of mobile homes became taxable effective August 1, 1977, pursuant to Chapter 29, Laws of 1977; (b) Nonretailer sales of mobile homes exceeding 45 feet in length became exempt effective July 1, 1978, pursuant to Chapter 418, Laws of 1977; (c) Rental of a mobile home that is personal property for lodging for a continuous period of one month or more became exempt effective July 1, 1984, pursuant to 1983 Wis. Act 341, clarified effective April 1, 1986, pursuant to 1985 Wis. Act 149; (d) Gross receipts from a used mobile home became exempt effective January 1, 1987, pursuant to 1985 Wis. Act 29; (e) Thirty-five percent of the gross receipts from the sale of new mobile homes became exempt January 1, 1987, pursuant to 1985 Wis. Act 29; (f) The exemption from use tax of mobile homes purchased 90 or more days before moving to Wisconsin became effective August 1, 1987, pursuant to 1987 Wis. Act 27; (g) The exemption for transfers to in-laws became effective August 15, 1991, pursuant to 1991 Wis. Act 39; and (h) The exemption for certain new mobile homes transported in two unattached sections became effective October 1, 1991, pursuant to 1991 Wis. Act 39.
SECTION 263. Tax 11.91(1)(a), (2)(b)1., and (3)(b) are amended to read:
Tax 11.91(1)(a) A purchaser or assignee of the business or stock of goods, including furniture, fixtures, equipment, and inventory, of any retailer liable for sales or use tax shall be personally liable for the payment of the sales or use tax if the purchaser or assignee fails to withhold a sufficient amount of the purchase price to cover the taxes due.
(2)(b)1. Consideration paid for tangible property and items, property, and goods, under s. 77.52 (1) (b), (c), and (d), Stats., and for intangibles such as leases, licenses, and good will.
(3)(b) The purchaser shall submit a written request to the department for a clearance certificate. An oral request for a clearance certificate shall not be accepted. The letter requesting the certificate shall include the real name, business name, and seller’s permit number, if known, of the prior operator. All sales tax returns for all periods during which the predecessor operated shall be filed with the department before it may issue the certificate.
SECTION 264. Tax 11.92(1)(intro.) and (a) to (c) are amended to read:
Tax 11.92(1)(intro.) All persons selling, licensing, leasing, or renting tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services and every person storing, using, or otherwise consuming in Wisconsin tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services shall keep adequate and complete records so that they may prepare complete and accurate tax returns. These records shall include the normal books of account ordinarily maintained by a prudent business person, together with all supporting information such as beginning and ending inventories, records of purchases and sales, cancelled checks, bills, receipts, invoices which shall contain a posting reference, cash register tapes, credit memoranda which shall carry a reference to the document evidencing the original transaction or other documents of original entry which are the basis for the entries in the books of account, and schedules used in connection with the preparation of tax returns. These records shall show:
(a)
The gross receipts sales price from sales of tangible personal
property, items, property, and goods under s. 77.52 (1) (b), (c), and (d),
Stats., or and taxable services, or licenses, rentals,
or leases of tangible personal property and items, property, and goods under
s. 77.52 (1) (b), (c), and (d), Stats., including any services that are a
part of the sale or, license, lease, made within or
rental sourced to Wisconsin under s. 77.522, Stats., even if the
seller, licensor, or lessor regards the receipts as taxable or
nontaxable. Taxable gross receipts shall be reported on the accrual
basis, except when the department is satisfied that an undue hardship would
exist and authorizes reporting on some other basis.
(b)
The basis for all deductions claimed in filing returns, including resale and
exemption certificates obtained from customers. Exempt sales to governmental
units and public schools need not be supported by exemption certificates, if
the supplier retains a copy of the exempt entity’s purchase order and the
supplier’s invoice or billing document. Sales to organizations holding a
certificate of exempt status, CES, including religious or charitable
organizations, can be shown to be exempt by recording the CES number on the
seller’s copy of the bill of sale. All other Except as provided in
this paragraph, s. 77.52 (13), Stats., and s. 77.53 (10), Stats., exempt
sales shall be supported by an exemption certificate signed by the purchaser
and retained by the seller, unless the merchandise sold is specifically
exempted by statute regardless of use, such as groceries. Documents
necessary to support claimed exemptions from tax liability, such as bills of
lading and purchase orders, shall be maintained in a manner in which they
readily can be related to the transaction for which exemption is sought.
(c)
Total purchase price of all tangible personal property, items, property, and
goods under s. 77.52 (1) (b), (c), and (d), Stats., or and
taxable services purchased for sale, license, lease, rental, storage, use,
or other consumption or lease in Wisconsin.
SECTION 265. Tax 11.92(1)(d) is renumbered 11.92(1)(d)(intro.) and amended as renumbered to read:
Tax
11.92(1)(d)(intro.) Every person subject to the county, stadium, or
regional transit authority sales and use tax shall keep a record of sales that
the person completes in makes that are sourced under s. 77.522,
Stats., to each:
SECTION 266. Tax 11.92(1)(d)1. to 3. and (e) are created to read:
Tax 11.92(1)(d) 1. County that has in effect an ordinance imposing a county tax under s. 77.70, Stats.
2. Stadium district that has in effect a resolution imposing the tax under s. 77.705 or 77.706, Stats.
3. Jurisdictional area of each regional transit authority that has in effect a resolution imposing the tax under s. 77.708, Stats.
(e) Every person shall keep a record of the purchase price of property, items, and goods on which the person is subject to county, stadium, and regional transit authority use or excise tax in each enacting county, stadium district or transit authority’s jurisdiction.
SECTION 267. Tax 11.92(2)(b), (3)(c), and (6) are amended to read:
Tax 11.92(2)(b) Microfilm rolls are indexed, cross referenced, labeled to show beginning and ending numbers or beginning and ending alphabetical listing of documents included, and are systematically filed.
(3)(c) Audit trail and supporting documents. The audit trail shall be designed so that the details underlying the summary accounting data may be identified and made available to the department upon request. The record keeping system should be so designed that supporting documents, such as sales invoices, purchase invoices, exemption certificates, and credit memoranda, shall be readily available.
(6) Failure to maintain records. In the absence of suitable and adequate records, the department may determine the amount of tax due by using any information available, whether obtained from the taxpayer’s records or from any other source. Failure to maintain and keep complete and accurate records may result in penalties or other appropriate action provided by law, including the disallowance of deductions, credits, and exemptions and the inclusion of additional taxable sales or additional taxable purchases to which the requested records relate.
SECTION 268. Tax 11.925(1) is renumbered 11.925(1)(a) and amended as renumbered to read:
Tax 11.925(1)(a) Under s. 77.61 (2) (a), Stats., the department may require a person liable for sales and use taxes to make a security deposit before or after a seller’s permit is issued. The amount of the security deposit determined by the department may not exceed $15,000. If a person fails or refuses to make a security deposit as requested, the department may refuse to issue a permit or revoke the permit.
SECTION 269. Tax 11.925(1)(b) is created to read:
Tax 11.925(1)(b) As provided in s. 77.61 (2) (b), Stats., a certified service provider who has contracted with a seller and filed an application to collect and remit sales and use taxes on behalf of the seller shall submit a surety bond within 60 days after the department notifies the certified service provider that the certified service provider is registered to collect Wisconsin sales and use taxes, to guarantee the payment of such sales and use taxes. However, the secretary or revenue or the secretary’s designee may waive this requirement or release the liability with respect to any certified service provider.
SECTION 270. Tax 11.925(2)(a)1., (3)(a)1., and (5)(a) and (d)3. and 5. are amended to read:
Tax 11.925(2)(a)1. Evidence of adequate financial responsibility. Evidence may include a person’s assets and liabilities, liquidity of assets, estimated expenditures, and potential sales tax liability.
(3)(a)1. Cash, certified check, or money order.
(5)(a) Section 77.61 (2) (a), Stats., provides: “. . . Any security deposited under this subsection shall be returned to the taxpayer if the taxpayer has, for 24 consecutive months, complied with all the requirements of this subchapter.”
(d)3. No delinquencies of sales or use tax, interest, or other charges existed.
5. No assessment of additional tax, interest, or other charges for filing periods within the 24-month compliance period is unpaid at the end of the 24-month compliance period.
SECTION 271. Tax 11.93(1) is amended to read:
Tax 11.93(1) A retailer holding a regular seller’s
permit who during the previous calendar or fiscal year had a sales and use tax
liability not exceeding $300 will be notified by the department of the
option of filing that they must only file one sales and use tax return
for the following year or of continuing to file returns on a quarterly basis.
Retailers who elect filing one return a year shall notify the department of
that election. If the retailer wants to continue to file returns on a
quarterly basis, they must contact the department of revenue.
SECTION 272. Tax 11.94 is repealed and recreated to read:
Tax 11.94 Delivery Charges. (1) Definition. ”Delivery charges” is defined in s. 77.51 (2m), Stats., to mean “…charges by a seller to prepare and deliver tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or services to a location designated by the purchaser of the tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or services, including charges for transportation, shipping, postage, handling, crating, and packing.”
(2) Taxability of delivery charges. (a) When a seller charges a purchaser for the delivery of taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., the seller’s total charge, including any delivery charge, shall be subject to the sales or use tax. It is immaterial whether delivery is made by the seller’s vehicle, a common or contract carrier, or the United States postal service.
Example: Retailer A sells clothing to Customer B for $100. Retailer A also charges Customer B $10 for delivery of the clothing. Retailer A delivers the clothing to Customer B at a Wisconsin address for which the total applicable sales and use tax rate is 5%. The correct computation of the tax due is as follows:
|
Selling price of clothing ... $100.00 |
|
Delivery charge.......... ... __10.00 |
|
Subtotal................... $110.00 |
|
Tax at 5% ($110 5%) ___5.50 |
|
Total........................ $115.50 |
(b) When a seller charges a purchaser for the delivery of nontaxable or exempt tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., the seller’s total charge, including any delivery charge, is not subject to the sales or use tax.
(c) 1. If a shipment includes both taxable and nontaxable property and items the seller shall determine and set forth on the invoice the portion of the delivery charge reasonably allocable to the taxable property and items. The portion allocated to nontaxable property and items is not taxable. If no allocation is made, the total delivery charge shall be taxable.
2. The allocation in subd. 1. is computed based on either:
a. The total sales price of all of the property and items subject to tax as compared to the total sales price of all of the property and items included in the shipment; or
b. The total weight of all of the property and items subject to tax as compared to the total weight of all of the property and items included in the shipment.
(d) A Wisconsin purchaser who purchases taxable property and items without tax for use in Wisconsin is subject to the use tax or sales tax pursuant to s. Tax 11.14 (2) (c) based on the “purchase price” of the property and items to the purchaser. The “purchase price” shall include delivery charges paid by the Wisconsin purchaser to the seller for shipment of the property and items to the purchaser. The “purchase price” does not include delivery charges paid by the Wisconsin purchaser to a carrier independent of the seller when the purchaser arranges for the transportation.
Example: If the “delivered price” of a carload of lumber is $6,000, including delivery charges, and the purchaser pays the delivery charges directly to the common carrier and deducts the payment from the amount due the seller, the delivery charges are borne by the seller and are included in the seller’s measure of the tax.
(3) Direct Mail. (a) Delivery charges for direct mail are not subject to sales or use tax if the delivery charges are separately stated on the invoice, bill of sale, or similar document that the seller gives to the purchaser.
(b) “Direct mail” is defined in s. 77.51 (3pd), Stats., to mean “…printed material that is delivered or distributed by the U.S. postal service or other delivery service to a mass audience or to addressees on a mailing list provided by or at the direction of the purchaser of the printed material, if the cost of the printed material or any tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) included with the printed material is not billed directly to the recipients of the printed material. ‘Direct mail’ includes any tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d) provided directly or indirectly by the purchaser of the printed material to the seller of the printed material for inclusion in any package containing the printed material, including billing invoices, return envelopes, and additional marketing materials. ‘Direct mail’ does not include multiple items of printed material delivered to a single address.”
Note: Section Tax 11.94 interprets ss. 71.51 (4) (a) 3., (14) (intro.) and (d), (14r) and (15) (a) and 77.52 (1), Stats.
Note: The interpretations in s. Tax 11.94 are effective under the general sales and use tax law on and after September 1, 1969.
SECTION 273. Tax 11.945 is created to read:
Tax 11.945 Sourcing Transactions. (1) Definitions.
(a) “Product,” as provided in s. 77.51 (11d), Stats., “…includes tangible personal property, and items, property, and goods under s. 77.52 (1) (b), (c), and (d), and services.”
(b) “Receive,” as defined in s. 77.522 (1)(a)1., Stats., means “…taking possession of tangible personal property or items or propery under s. 77.52 (1) (b) or (c); making first use of services; or taking possession or making first use of digital goods under s. 77.52 (1) (d), whichever comes first. ‘Receive’ does not include a shipping company taking possession of tangible personal property or items or property under s. 77.52 (1) (b) or (c) on a purchaser’s behalf.”
(c) “Transportation equipment,” as defined in s. 77.522 (1) (a) 2., Stats., means “…any of the following:
a. Locomotives and railcars that are used to carry persons or property in interstate commerce.
b. Trucks and truck tractors that have a gross vehicle weight rating of 10,001 pounds or greater, trailers, semitrailers, and passenger buses, if such vehicles are registered under the international registration plan under s. 341.405 and operated under the authority of a carrier that is authorized by the federal government to carry persons or property in interstate commerce.
c. Aircraft that are operated by air carriers that are authorized by the federal government or a foreign authority to carry persons or property in interstate or foreign commerce.
d. Containers that are designed for use on the vehicles described in subd. 2. a. to c. and component parts attached to or secured on such vehicles.”
(2) Sourcing – General. Except as provided in subs. (3), (4), and (5), and except as provided in s. Tax 11.66 (3) relating to the sourcing of telecommunications services, ancillary services, Internet access services, and telecommunications message services, a sale is sourced to a location based on the following:
(a) If a purchaser receives the product at a seller’s business location, the sale is sourced to that business location.
(b) If a purchaser does not receive the product at a seller’s business location, the sale is sourced to the location where the purchaser, or the purchaser’s designated donee receives the product. This would include the location indicated by instructions known to the seller for delivery to the purchaser or the purchaser’s designated donee. The delivery may be made by the seller or by a shipping company hired by the seller.
(c) If the location of a sale cannot be determined under pars. (a) and (b), the sale is sourced to the purchaser’s address as indicated by the seller’s business records, if the records are maintained in the ordinary course of the seller’s business and if using that address to establish the location of the sale is not in bad faith.
(d) If the location of a sale cannot be determined under pars. (a), (b), and (c), the sale is sourced to the purchaser’s address as obtained during the consummation of the sale, including the address indicated on the purchaser’s payment instrument, if no other address is available and if using that address to determine the location of the sale is not in bad faith.
(e) If the location of a sale cannot be determined under pars. (a), (b), (c), and (d), including the circumstance in which the seller has insufficient information to determine the locations under pars. (a), (b), (c), and (d), the location of the sale is sourced as follows:
1. If the item sold is tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., the sale is sourced to the location from which the tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., is shipped.
2. If the item sold is a digital good or computer software delivered electronically, the sale is sourced to the location from which the digital good or computer software was first available for transmission by the seller, not including any location that merely provided the digital transfer of the product sold.
3. If a service is sold, the sale is sourced to the location from which the service was provided.
(3) Direct Mail. (a) A sale of direct mail is sourced to the location from which the direct mail was shipped if the purchaser does not provide to the seller any of the following:
1. The purchaser’s direct pay permit.
2. An exemption certificate claiming direct mail.
3. Other information that indicates the appropriate taxing jurisdiction to which the direct mail is delivered to the ultimate recipients.
(b) If the purchaser provides one of the items indicated in par. (a) 1. or 2., to the seller, the purchaser shall pay or remit to the department the tax imposed under s. 77.53, Stats., on all its purchases of direct mail for which the tax is due and the seller is relieved from liability for collecting the tax.
(c) If the purchaser provides delivery information as provided in par. (a) 3., the seller shall collect the tax according to that information, and in the absence of bad faith, the seller is relieved of any further obligation to collect tax on any transaction for which the seller has collected tax pursuant to the delivery information provided by the purchaser.
(d) An exemption certificate provided by the purchaser under par. (a) 2. remains in effect for all sales by the seller who received the exemption certificate to the purchaser who provided the exemption certificate, unless the purchaser revokes the exemption certificate in writing and provides such revocation to the seller.
(4) Sourcing leases, licenses, and rentals. (a) First or only payment. Except as provided in pars. (c) and (e), for lease, license, and rental agreements that only require one payment and for the first payment on lease, license, and rental agreements that require more than one payment, the lease, license, or rental is sourced to the location where the purchaser receives the product, as follows:
1. If the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is received by the lessee or licensee at the lessor’s or licensor’s business location, the first or only payment is sourced to the lessor’s or licensor’s business location.
2. If the tangible personal property or item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., is not received by the lessee or licensee at the lessor’s or licensor’s business location, the first or only payment is sourced to the location where the lessee or licensee or the lessee’s or licensee’s designated donee receives the product. This would include the location indicated by instructions known to the lessor or licensor for delivery to the lessee or licensee or the lessee’s or licensee’s designated donee. The delivery may be made by the lessor or licensor or by a shipping company hired by the lessee or licensee.
3. If the location cannot be determined under subds. 1. and 2., the first or only payment is sourced to the lessee’s or licensee’s address as indicated by the lessor’s or licensor’s business records, if the records are maintained in the ordinary course of the lessor’s or licensor’s business and if using that address to establish the location of the lease, license, or rental is not in bad faith.
4. If the location cannot be determined under subds. 1., 2., and 3., the first or only payment is sourced to the lessee’s or licensee’s address as obtained during the consummation of the lease, license, or rental, including the address indicated on the lessee’s or licensee’s payment instrument, if no other address is available and if using that address to determine the location of the lease, license, or rental is not in bad faith.
5. If the location cannot be determined under subds. 1., 2., 3., and 4., the first or only payment is sourced as follows:
a. For tangible personal property and items and property under s. 77.52 (1) (b) or (c), Stats., except for computer software delivered electronically, the first or only payment is sourced to the location from which the property or item was shipped.
b. For prewritten computer software delivered electronically and digital goods under s. 77.52 (1) (d), Stats., the first or only payment is sourced to the location from which the computer software or digital good was first available for transmission by the seller, but not including any location that merely provided the digital transfer of the product sold.
Example: Company A sells digital goods that it develops at its location in Wisconsin. Company A also has a server located outside Wisconsin from which Company A merely provides the digital transfer of the digital goods. The digital goods are first available for transmission from its Wisconsin location. Company A does not know the location to source the sale of digital goods under subds. 1. to 4. and therefore will source the sale under subd. 5. to the Wisconsin location. The sale cannot be sourced to the location of the server outside Wisconsin, because at that location, Company A merely provides the digital transfer of the digital good.
(b) Subsequent periodic payments. Except as provided in pars. (d) and (e), subsequent periodic payments on the lease, license, or rental of tangible personal property and items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., are sourced to the property’s, item’s, or good’s primary location. The primary location is the address of the property, item, or good provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith.
(c) Motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment. Leases, licenses, and rentals of motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment are sourced to the primary location of such property as indicated by an address for the property that is provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith, and except that a lease, license, or rental that only requires one payment shall be sourced as provided in par. (a).
(d) Intermittent use. The sourcing of the lease, license, and rental payments as described in pars. (a) and (b), shall not be altered by any intermittent use of the property, item, or good at a different location.
Example: Company A leases laptop computers that are normally kept in State A and the lease payments are sourced to State A. However, when an employee is travelling and consulting with clients in other states, the employee brings the laptop computer to these other states. The intermittent use of the laptop computer in the other states does not affect the sourcing of these lease payments.
(e) Transportation equipment. Leases, licenses, and rentals of transportation equipment are sourced to the location determined in par. (a).
(5) Florists. (a) 1. “Retail florist” is defined in s. 77.522 (5), Stats., to mean “…a person engaged in the business of selling cut flowers, floral arrangements, and potted plants and who prepares such flowers, floral arrangements, and potted plants. ‘Retail florist’ does not include a person who sells cut flowers, floral arrangements, and potted plants primarily by mail or via the Internet.”
2. A retailer who does not prepare and sell cut flowers, floral arrangements, and potted plants, such as a person who only takes orders for cut flowers, floral arrangements, and potted plants and then transmits those orders to a retail florist, is not a “retail florist.”
(b) Except as provided in par. (c), sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and services by florists are sourced the same as provided in sub. (2).
(c) Sales by a retail florist in which the retail florist receives an order from a customer and then transmits that order to a second retail florist who will prepare and deliver the order at the customer’s direction are sourced to the location where the first retail florist received the order from the customer. The first retail florist that received the order from the customer must collect and remit the applicable Wisconsin sales or use taxes based on the location where that retail florist received the order from the customer. The sale from the second retail florist to the first retail florist is not subject to Wisconsin sales or use tax if the first retail florist provides the second retail florist an exemption certificate claiming resale.
Example: Retail Florist A located in Wisconsin receives an order from a customer, who wants the flowers delivered to a location in Kentucky. Retail Florist A contacts Retail Florist B, located in Kentucky, and has Retail Florist B prepare the order and deliver it to the location in Kentucky. This sale is sourced to Retail Florist A’s location in Wisconsin.
(d) Sales by persons who are not retail florists but who take orders for cut flowers, floral arrangements, and potted plants from customers and transmit those orders to a person who is a retail florist are sourced as provided in sub. (2).
SECTION 274. Tax 11.95(1)(a) is amended to read:
Tax
11.95(1)(a) Effective for Wisconsin sales and use tax returns filed for
periods ending on or after January 1, 1997, for timely reporting state, county and,
stadium, and transit authority sales or use tax collected on their retail
sales, except as provided in par. (b) , retailers may deduct 0.5% of
the sales and use tax payable on retail sales, except as provided in pars. (am),
(b), and (c).
SECTION 275. Tax 11.95(1)(am) and (c) and (3)(d) are created to read:
Tax 11.95(1)(am) Effective for taxes payable on October 1, 2009 and thereafter, the retailer’s discount that may be deducted on a sales and use tax return is limited to $1,000 per reporting period.
(c) Certified service providers that receive compensation under s. 73.03 (61) (h), Stats., for the taxes reported on a return are not entitled to the retailer’s discount on that return.
(3)(d) The certified service provider that is filing the sales and use tax return is receiving compensation under 73.03 (61) (h), Stats., with respect to the taxes reported on that return.
SECTION 276. Tax 11.96(title), (1), and (2)(a) and (b) are amended to read:
Tax 11.96(title) Delivery of ordinance or resolution; county, stadium, transit authority, and premier resort area tax.
(1) Purpose. This section clarifies requirements for the timely delivery of county, stadium, and transit authority sales and use tax and premier resort area tax ordinances or resolutions to the secretary of revenue.
(2)(a)
Adoption of county tax ordinance. Any Wisconsin county may
impose county sales and use taxes and any Wisconsin municipality or county
wholly within a premier resort area under s. 66.1113, Stats., may impose a
premier resort area tax, by adopting an ordinance. Under ss. s.
77.70 and 77.9941 (1), Stats., a certified copy of that ordinance shall
be delivered to the secretary of revenue at least 120 days prior to its
effective date. The effective date of the ordinance may only be on the
first day of January, the first day of April, the first day of July, or the
first day of October.
(b)
Repeal of county tax ordinance. Under ss. s. 77.70
and 77.9941 (3), Stats., a county or municipality described in
par. (a) may repeal a county sales and use tax or a premier resort area tax
by delivering a certified copy of the repeal ordinance to the secretary of
revenue at least 60 120 days before the effective date of the
repeal. The effective date of the repeal may only be December 31.
SECTION 277. Tax 11.96(2)(c) to (h) are created to read:
(c) Adoption of premier resort area tax ordinance. Any Wisconsin municipality or county wholly within a premier resort area under s. 66.1113, Stats., may impose a premier resort area tax, by adopting an ordinance. Under s. 77.9941 (1), Stats., a certified copy of that ordinance shall be delivered to the secretary of revenue at least 120 days prior to its effective date. The effective date of the ordinance may only be on the first day of January, the first day of April, the first day of July, or the first day of October.
(d) Repeal of premier resort area tax ordinance. Under s. 77.9941 (3), Stats., a county or municipality described in par. (c) may repeal a premier resort area tax by delivering a certified copy of the repeal ordinance to the secretary of revenue at least 60 days before the effective date of the repeal. The effective date of the repeal may only be December 31.
(e) Adoption of stadium tax resolution. A baseball park district created under subch. III of ch. 229, Stats., or a football stadium district created under subch. IV of ch. 229, Stats., may impose a stadium district sales and use tax, by adopting a resolution. Under ss. 229.68 (15) and 229.824 (15), Stats., a certified copy of that resolution shall be delivered to the secretary of revenue at least 120 days prior to its effective date. The effective date of the ordinance may only be on the first day of January, the first day of April, the first day of July, or the first day of October.
(f) Repeal of stadium tax resolution. A baseball park district and a football stadium district described in par. (e) may repeal a baseball or football stadium district tax by delivering a certified copy of the repeal resolution to the secretary of revenue at least 120 days before the effective date of the repeal. The effective date of the repeal may only be on the first day of January, the first day of April, the first day of July, or the first day of October.
(g) Adoption of transit authority resolution. A transit authority created under s. 66.1039, Stats., may impose a transit authority sales and use tax, by adopting a resolution under s. 66.1039 (4) (s), Stats. Under s. 66.1039 (4) (s) 1., Stats., a certified copy of the resolution shall be delivered to the secretary of revenue at least 120 days prior to its effective date. The effective date of the resolution may only be on the first day of January, the first day of April, the first day of July, or the first day of October.
(h) Repeal of transit authority resolution. A transit authority described in par. (g) may repeal a transit authority tax by delivering a certified copy of the repeal resolution to the secretary of revenue at least 120 days before the effective date of the repeal. The effective date of the repeal may only be on the first day of January, the first day of April, the first day of July, or the first day of October.
SECTION 278. Tax 11.96(3) is amended to read:
Tax
11.96(3) Delivery of ordinance or resolution. An ordinance or
resolution referred to in s. 77.70 or, 77.9941 (1) or (3), 229.68
(15), 229.824 (15), or 66.1039 (4) (s), Stats., is timely delivered to the
secretary of revenue if, by the prescribed number of days before the effective
date, any of the following occur:
(a) The ordinance or resolution is hand delivered to and received by the secretary of revenue.
(b) The ordinance or resolution is mailed in a properly addressed envelope with the postage duly prepaid, if the envelope is postmarked before midnight and the ordinance or resolution is received by the secretary of revenue within 5 days after the prescribed date.
(c) The ordinance or resolution is delivered by a carrier other than the U.S. postal service and the ordinance is received by the secretary of revenue.
SECTION 279. Tax 11.97(1)(a) is amended to read:
Tax 11.97(1)(a) Out-of-state retailers shall register and collect a state’s use tax if the retailer is subject to the state’s jurisdiction. The United States supreme court has resolved certain jurisdictional questions by interpreting the due process clause of the 14th Amendment to the U.S. Constitution. The court has said due process requires that there be some definite link, some minimum connection between the state and the person, property, or transaction it seeks to tax. If this minimum connection, often called “nexus,” is established, the out-of-state seller shall register and collect the state’s use tax.
SECTION 280. Tax 11.97(1)(b)8. is created to read:
Tax 11.97(1)(b)8. Quill Corp. vs. North Dakota, 504 U.S. 298 (1992).
SECTION 281. Tax 11.97(2)(a) and (3)(b) to (f) are amended to read:
Tax
11.97(2)(a) Section 77.51 (13) (k), Stats., defines “retailer” to include any
person deriving rentals from a lease of tangible personal property or items,
property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., situated
in sourced to this state as provided under s. 77.522, Stats.,
and s. 77.51 (14) (j), Stats., defines a lease as a continuing sale.
(3)(b)
Any retailer leasing or renting out any tangible personal property or items
or property under s. 77.52 (1) (b) or (c), Stats., located in sourced
to this state under s. 77.522, Stats.
(c) Any retailer maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, agent, or other person, an office, place of distribution, sales or sample room, or place, warehouse, or storage place, or other place of business in this state.
(d) Any retailer having any representative, including a manufacturer’s representative, agent, salesperson, canvasser, or solicitor operating in Wisconsin under the authority of the retailer or its subsidiary for the purpose of selling, delivering, or taking orders for any tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services.
(e) Any person servicing, repairing, or installing equipment or other tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., in Wisconsin.
(f) Any person delivering property, items, or goods into this state in company operated vehicles.
SECTION 282. Tax 11.97(3)(h) and (i) are created to read:
Tax 11.97(3)(h) Any retailer selling tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services for storage, use, or other consumption in Wisconsin, unless otherwise limited by federal law.
(i) Any person who has an affiliate in Wisconsin, if the person is related to the affiliate and if the affiliate uses facilities or employees in Wisconsin to advertise, promote, or facilitate the establishment of or market for sales of items by the related person to purchasers in Wisconsin or for providing services to the related person’s purchasers in Wisconsin, including accepting returns of purchases or resolving customer complaints. For purposes of this paragraph, two persons are “related” if any of the following apply:
1. One person, or each person, is a corporation and one person and any person related to that person in a manner that would require a stock attribution from the corporation to the person or from the person to the corporation under section 318 of the Internal Revenue Code owns directly, indirectly, beneficially, or constructively at least 50% of the corporation’s outstanding stock value.
2. One person, or each person, is a partnership, estate, or trust and any partner or beneficiary; and the partnership, estate, or trust and its partners or beneficiaries; own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the other person or both persons.
3. An individual stockholder and the members of the stockholder’s family, as defined in section 318 of the Internal Revenue Code, owns directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of both persons’ outstanding stock value.
SECTION 283. Tax 11.97(5)(a)4. and (6) are amended to read:
Tax 11.97(5)(a)4. Maintaining, occupying, and using, directly or by means of another person, a place in Wisconsin, that is not owned by the publisher and that is used for the distribution of printed materials.
(6) Registration.
Every out-of-state retailer engaged in business in this state and not required
to hold a seller’s permit who makes sales for storage, use, or other
consumption in this state, except as provided in sub. (5), shall apply for a
use tax registration certificate. The registration form is titled “Application
for Permit/Certificate Business Tax Registration,” form A-101
BTR-101.
Note to LRB: Amend the note at the end of Tax 11.97(6) as follows:
Note: Form A-101 BTR-101 may be obtained from
any department of revenue office, or by writing or calling Wisconsin Department
of Revenue, P.O. Box 8902, Madison, WI 53708-8902, telephone (608) 266-2776.
SECTION 284. Tax 11.98(1)(intro.) and (d), (2)(c), and (3) are amended to read:
Tax 11.98(1)(intro.) The secretary may reduce the delinquent interest rate from 18% to 12% per year effective for all determinations, assessments, or other actions for additional tax made by the department on or after August 1, 1981, when the secretary determines the reduction fair and equitable, if the person from whom delinquent taxes are owing:
(d) Pays the sales and use taxes, reduced amount of interest, and any penalties associated with them within 30 days of receiving notice from the department of the reduction.
(2)(c) If the taxpayer is a natural person, any circumstances which may have prevented payment such as death, imprisonment, hospitalization, or other institutionalization.
(3) Determination
not appealable. The secretary’s determination under this rule section
is not appealable.
SECTION 285. Tax 11.985 is created to read:
Tax 11.985 Bundled transactions. (1) Definitions. In this section:
(a) 1. "Bundled transaction" means the retail sale of 2 or more products, not including real property and services to real property, if the products are distinct and identifiable products and sold for one nonitemized price.
2. "Bundled transaction" does not include any of the following:
a. The sale of any products for which the sales price varies or is negotiable based on the purchaser's selection of the products included in the transaction.
Example: Retailer A enters into a contract with Customer B to provide various information technology services. Customer B selects the information technology services it wants from Retailer A. Through negotiation, Retailer A and Customer B agree on a price based on the services selected and Retailer A bills Customer B one nonitemized price for all of the services. Since the price was based on the products selected by Customer B, the transaction is not a bundled transaction.
b. The retail sale of tangible personal property and a service, if the tangible personal property is essential to the use of the service, and provided exclusively in connection with the service, and if the true object of the transaction is the service. The Wisconsin sales and use tax treatment of this transaction would follow the tax treatment of the service provided.
c. The retail sale of a service and items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., if such items, property, or goods are essential to the use of the service, and provided exclusively in connection with the service, and if the true object of the transaction is the service. The Wisconsin sales and use tax treatment of this transaction would follow the tax treatment of the service provided.
d. The retail sale of services, if one of the services is essential to the use or receipt of a second service, and provided exclusively in connection with the second service, and if the true object of the transaction is the second service. The Wisconsin sales and use tax treatment of this transaction would follow the tax treatment of the second service.
e. A transaction that includes taxable and nontaxable products, if the seller's purchase price or the sales price of the taxable products is no greater than 10 percent of the seller's total purchase price or sales price of all the bundled products, as determined by the seller using either the seller's purchase price or sales price, but not a combination of both, or, in the case of a service contract, the full term of the service contract.
f. The retail sale of taxable tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., and tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., that is exempt from the taxes imposed under this subchapter, if the transaction includes food and food ingredients, drugs, durable medical equipment, mobility-enhancing equipment, prosthetic devices, or medical supplies and if the seller's purchase price or the sales price of the taxable tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., is no greater than 50 percent of the seller's total purchase price or sales price of all the tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., included in what would otherwise be a bundled transaction, as determined by the seller using either the seller's purchase price or the sales price, but not a combination of both.
(b) “Distinct and identifiable product” does not include any of the following:
1. a. Packaging, including containers, boxes, sacks, bags, bottles, and envelopes; and other materials, including wrapping, labels, tags, and instruction guides; that accompany, and are incidental or immaterial to, the retail sale of any product.
b. Packaging that is incidental or immaterial to the retail sale of a product, including grocery sacks, shoeboxes, dry cleaning garment bags, and express delivery envelopes and boxes.
2. a. A product that is provided free of charge to the consumer in conjunction with the required purchase of another product, if the sales price of the other product does not vary depending on whether the product provided free of charge is included in the transaction.
b. Products that are provided free of charge, including a free car wash provided by a gas station with the purchase of 15 or more gallons of gas, a free place setting of dinnerware provided by a grocery store with the purchase $50 or more in groceries, and a free cap provided by an auto parts store with the purchase of a case of motor oil.
3. a. Any items specified in the definition of “purchase price” in s. 77.51 (12m) (a), Stats., or “sales price” in s. 77.51 (15b) (a), Stats.
b. Items that are specified in the definition of “purchase price” and “sales price” include the cost of the property sold, the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, charges by the seller for any services necessary to complete the sale, delivery charges, and installation charges.
(c) 1. “One nonitemized price” does not include:
a. A price that is separately identified by product on a binding sales document, or other sales-related document, that is made available to the customer in paper or electronic form, including an invoice, a bill of sale, a receipt, a contract, a service agreement, a lease agreement, a periodic notice of rates and services, a rate card, or a price list.
b. A price for which the sales price varies or is negotiable based on the purchaser's selection of the products included in the transaction even if the seller only provides one price on its invoice to the purchaser.
Example: Retailer C enters into a contract with Customer D to provide various information technology services. Customer D selects the information technology services it wants from Retailer C. Through negotiation, Retailer C and Customer D agree on a price based on the services selected and Retailer C bills Customer D one price for all of the services, some of which are taxable and some of which are not taxable. Although the invoice from Retailer C to Customer D only contains one price for all of the services, since the price was based on the products selected by Customer D, the price is not “one nonitemized price.”
c. A single price that is equal to the total of the individually priced or itemized products contained in the supporting sales related documentation such as a catalog, price list, or service agreement.
2. If a transaction includes a bundle of products that are sold for one nonitemized price and also one or more additional products that were individually priced or itemized from the bundled products in a catalog or price list, but the invoice provided to the purchaser only included one price, the additional products that were individually priced in the catalog or price list are not part of the bundled transaction.
3. If a transaction is not sold for one nonitemized price as provided in subds. 1 and 2., and the transaction is further discounted, without itemizing the discount for each product, this will not cause the transaction to now be characterized as a bundled transaction. Unless sales related documentation or information is provided to show the allocation of the discount, the discount is to be allocated pro rata among the otherwise separately itemized products.
(d) “Product” includes tangible personal property, and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and services. For purposes of this rule, “product” does not include real property or services to real property.
(2) Taxable receipts. (a) Except as provided in par. (b), the entire sales price of a bundled transaction is subject to Wisconsin sales or use tax.
(b) 1. At the retailer’s option, if the retailer can identify, by reasonable and verifiable standards from the retailer’s books and records that are kept in the ordinary course of its business for other purposes, including purposes unrelated to taxes, the portion of the price that is attributable to products that are not subject to the tax imposed under this subchapter, that portion of the sales price is not taxable.
2. The option provided to the retailer under subd. 1. does not apply to a bundled transaction that contains food and food ingredients as defined in s. 77.51 (3t), Stats., drugs as defined in s. 77.51 (3pj), Stats., durable medical equipment as defined in s. 77.51 (3pm), Stats., mobility-enhancing equipment as defined in s. 77.51 (7m), Stats., prosthetic devices as defined in s. 77.51 (11m), Stats., or medical supplies.
(3) Nontaxable receipts. The receipts from the following types of transactions are not subject to Wisconsin sales or use tax. Although these transactions would generally be thought of as being bundled transactions, since they meet certain specific conditions, they are excluded from the definition of a bundled transaction.
(a) The sales price received from sales of taxable products sold in what would be a bundled transaction, except that the sales price of the taxable products in the transaction are 10 percent or less of the seller’s total sales price of all of the products in the transaction or the seller’s total purchase price of the taxable products in the transaction are 10 percent or less of the seller’s total purchase price of all of the products in the transaction. However, the first person combining the products shall pay the Wisconsin sales or use tax on their purchase price of the taxable items.
(b) If the transaction includes food and food ingredients as defined in s. 77.51 (3t), Stats., drugs as defined in s. 77.51 (3pj), Stats., durable medical equipment as defined in s. 77.51 (3pm), Stats., mobility-enhancing equipment as defined in s. 77.51 (7m), Stats., prosthetic devices as defined in s. 77.51 (11m), Stats., or medical supplies, the sales price received from sales of taxable products sold in what would be a bundled transaction, except that the sales price of the taxable products in the transaction are 50 percent or less of the seller’s total sales price of all of the products in the transaction or the seller’s total purchase price of the taxable products in the transaction are 50 percent or less of the seller’s total purchase price of all of the products in the transaction.
The rules contained in this order shall take effect on October 1, 2009.
DEPARTMENT OF REVENUE
Dated: ________________________ By: ___________________________
Roger M. Ervin
Secretary of Revenue
E:Rules/Chapter 11 Proposed Order (emergency)
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FISCAL ESTIMATE FORM |
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2009 Session |
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INTRODUCTION # |
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CORRECTED SUPPLEMENTAL |
Admin. Rule # |
Chapter Tax 11 Streamlined Sales Tax Implementation (emergency) |
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Subject PROPOSED ORDER OF THE DEPARTMENT OF REVENUE REPEALING, RENUMBERING, RENUMBERING AND AMENDING, AMENDING, REPEALING AND RECREATING, AND CREATING RULES |
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Fiscal Effect |
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Assumptions Used in Arriving at Fiscal Estimate:
2009 Wisconsin Act 2 adopted statutory changes to bring Wisconsin into conformity with the Streamlined Sales and Use Tax Agreement (SSUTA). The SSUTA is the result of an effort by state governments, with input from local governments and the private sector, to simplify and modernize sales and use tax administration. Under the agreement, Wisconsin must use standard definitions for sales tax purposes.
The proposed rule conforms ch. Tax 11 to current law, as modified by the Streamlined Sales and Use Tax Agreement provisions of 2009 Wisconsin Act 2. The rule provides guidance in the application of the law by providing specific examples of items that are both included and excluded from certain SSUTA definitions. The rule provides examples of exempt durable medical equipment, exempt prosthetic devices, and exempt mobility enhancing equipment. The rule also provides several guide lists – including items typically sold by grocers that are subject to the sales tax and items typically sold by grocers that are exempt from the tax.
Since the fiscal effect of conforming Wisconsin law to the SSUTA was included in the fiscal estimate of 2009 Wisconsin Act 2, the rule has no fiscal effect.
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FISCAL ESTIMATE WORKSHEET |
Detailed Estimate of Annual Fiscal Effect 2009 Session |
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ORIGINAL UPDATED
CORRECTED SUPPLEMENTAL |
LRB # 09 |
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Admin. Rule # Chapter Tax 11 Streamlined |
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INTRODUCTION # |
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Subject PROPOSED ORDER OF THE DEPARTMENT OF REVENUE REPEALING, RENUMBERING, RENUMBERING AND AMENDING, AMENDING, REPEALING AND RECREATING, AND CREATING RULES
