SB40: Bill Text

SB40, s. 2414 Section 2414. 77.54 (50) of the statutes is created to read:

SB40,1153,15 77.54 (50) The sales price from the sale of and the storage, use, or other consumption of specified digital goods or additional digital goods that are transferred electronically to the purchaser, if the sale of and the storage, use, or other consumption of such goods sold in a tangible form is exempt from taxation under this subchapter.

SB40, s. 2415 Section 2415. 77.54 (51) of the statutes is created to read:

SB40,1153,21 77.54 (51) The sales price from the sales of and the storage, use, or other consumption of products sold in a transaction that would be a bundled transaction, except that it contains taxable and nontaxable products as described in s. 77.51 (1f) (d), and except that the first person combining the products shall pay the tax imposed under this subchapter on the person's purchase price of the taxable items.

SB40, s. 2416 Section 2416. 77.54 (52) of the statutes is created to read:

SB40,1153,25 77.54 (52) The sales price from the sales of and the storage, use, or other consumption of products sold in a transaction that would be a bundled transaction, except that the transaction meets the conditions described in s. 77.51 (1f) (e).

SB40, s. 2417 Section 2417. 77.54 (53) of the statutes is created to read:

SB40,1154,2 77.54 (53) (a) In this subsection:

SB40,1154,3 1. "Animals" include bacteria, viruses, and other microorganisms.

SB40,1154,4 2. "Manufacturing" has the meaning given in sub. (6m).

SB40,1154,10 3. "Qualified research" means qualified research as defined under section 41 (d) (1) of the Internal Revenue Code, except that research conducted by a public or private institution of higher education or by a governmental unit is "qualified research" if applying the research is intended to be useful in developing a new or improved product or service and the research satisfies section 41 (d) (1) (B) (i) and (C) of the Internal Revenue Code.

SB40,1154,12 (b) The gross receipts from the sale of and the storage, use, or other consumption of:

SB40,1154,17 1. Machines and specific processing equipment, including accessories, attachments, and parts for the machines or equipment, that are used exclusively and directly in raising animals that are sold primarily to a biotechnology business, a public or private institution of higher education, or a governmental unit for exclusive and direct use by any such entity in qualified research or manufacturing.

SB40,1154,22 2. The items listed in sub. (3m) (a) to (m), medicines, semen for artificial insemination, fuel, and electricity that are used exclusively and directly in raising animals that are sold primarily to a biotechnology business, a public or private institution of higher education, or a governmental unit for exclusive and direct use by any such entity in qualified research or manufacturing.

SB40,1155,2 3. Machines and specific processing equipment, including accessories, attachments, and parts for the machines or equipment, that are sold to a biotechnology business and used exclusively and directly in qualified research in biotechnology.

SB40,1155,5 4. Tangible personal property that is sold to a biotechnology business, if the property is consumed or destroyed or loses its identity while being used exclusively and directly in qualified research in biotechnology.

SB40,1155,7 5. Animals that are sold to a biotechnology business and used exclusively and directly in qualified research in biotechnology.

SB40,1155,11 (c) A person who claims an exemption under par. (b) 1. and 2. shall obtain written documentation from the person's customers related to each customer's use of animals, including the percentage of animals sold to the customer that are used exclusively and directly in qualified research.

SB40,1155,13 (d) The department shall publish on the department's Internet site a list of all biotechnology businesses certified by the department.

SB40, s. 2418 Section 2418. 77.54 (53) (b) (intro.) of the statutes, as created by 2007 Wisconsin Act .... (this act), is repealed and recreated to read:

SB40,1155,17 77.54 (53) (b) (intro.) The sales price from the sale of and the storage, use, or other consumption of:

SB40, s. 2419 Section 2419. 77.54 (54) of the statutes, as created by 2007 Wisconsin Act .... (this act), is repealed and recreated to read:

SB40,1155,23 77.54 (54) The sales price from the sale of and the storage, use, or other consumption of tangible personal property and taxable services that are sold by a home exchange service that receives moneys from the appropriation account under s. 20.485 (1) (g) and is operated by the department of veterans affairs.

SB40, s. 2420 Section 2420. 77.55 (1) (intro.) of the statutes is amended to read:

SB40,1156,3 77.55 (1) (intro.) There are is exempted from the computation of the amount of the sales tax the gross receipts sales price from the sale of any tangible personal property or services to:

SB40, s. 2421 Section 2421. 77.55 (2) of the statutes is amended to read:

SB40,1156,11 77.55 (2) There are is exempted from the computation of the amount of the sales tax the gross receipts sales price from sales of tangible personal property to a common or contract carrier, shipped by the seller via the purchasing carrier under a bill of lading whether the freight is paid in advance, or the shipment is made freight charges collect, to a point outside this state and the property is actually transported to the out-of-state destination for use by the carrier in the conduct of its business as a carrier.

SB40, s. 2422 Section 2422. 77.55 (2m) of the statutes is amended to read:

SB40,1156,21 77.55 (2m) There are is exempted from the computation of the amount of sales tax the gross receipts sales price from sales of railroad crossties to a common or contract carrier, shipped wholly or in part by way of the purchasing carrier under a bill of lading, whether the freight is paid in advance or the shipment is made freight charges collect, to a point outside this state if the property is transported to the out-of-state destination for use by the carrier in the conduct of its business as a carrier. Interruption of the shipment for storage, drying, processing or creosoting of the railroad crossties in this state does not invalidate the exemption under this subsection.

SB40, s. 2423 Section 2423. 77.55 (3) of the statutes is amended to read:

SB40,1157,3 77.55 (3) There are is exempted from the computation of the amount of the sales tax the gross receipts sales price from sales of tangible personal property purchased for use solely outside this state and delivered to a forwarding agent, export packer, or other person engaged in the business of preparing goods for export or arranging for their exportation, and actually delivered to a port outside the continental limits of the United States prior to making any use thereof.

SB40, s. 2424 Section 2424. 77.56 (1) of the statutes is amended to read:

SB40,1157,7 77.56 (1) The storage, use or other consumption in this state of property, the gross receipts sales price from the sale of which are is reported to the department in the measure of the sales tax, is exempted from the use tax.

SB40, s. 2425 Section 2425. 77.57 of the statutes is amended to read:

SB40,1157,19 77.57 Liability of purchaser. If a purchaser certifies in writing to a seller that the property, specified digital goods, or additional digital goods purchased will be used in a manner or for a purpose entitling the seller to regard the gross receipts sales price from the sale as exempted by this subchapter from the computation of the amount of the sales tax and uses the property, specified digital goods, or additional digital goods in some other manner or for some other purpose, the purchaser is liable for payment of the sales tax. The tax shall be measured by the sales price of the property, specified digital goods, or additional digital goods to the purchaser, but if the taxable use first occurs more than 6 months after the sale to the purchaser, the purchaser may use as the measure of the tax either that sales price or the fair market value of the property at the time the taxable use first occurs.

SB40, s. 2426 Section 2426. 77.58 (3) (a) of the statutes is amended to read:

SB40,1158,6 77.58 (3) (a) For purposes of the sales tax a return shall be filed by every seller. For purposes of the use tax a return shall be filed by every retailer engaged in business in this state and by every person purchasing tangible personal property, specified digital goods, additional digital goods, or services, the storage, use, or other consumption of which is subject to the use tax, who has not paid the use tax due to a retailer required to collect the tax. If a qualified subchapter S subsidiary is not regarded as a separate entity under ch. 71, the owner of that subsidiary shall include the information for that subsidiary on the owner's return. Returns shall be signed by the person required to file the return or by a duly authorized agent but need not be verified by oath. If a single-owner entity is disregarded as a separate entity under ch. 71, the owner shall include the information from the entity on the owner's return.

SB40, s. 2427 Section 2427. 77.58 (3) (b) of the statutes is amended to read:

SB40,1158,18 77.58 (3) (b) For purposes of the sales tax the return shall show the gross receipts of the seller during the preceding reporting period. For purposes of the use tax, in case of a return filed by a retailer, the return shall show the total sales price of the property or taxable services sold, the storage, use or consumption of which became subject to the use tax during the preceding reporting period. In case of a sales or use tax return filed by a purchaser, the return shall show the total sales price of the property and taxable services purchased, the storage, use or consumption of which became subject to the use tax during the preceding reporting period. The return shall also show the amount of the taxes for the period covered by the return and such other information as the department deems necessary for the proper administration of this subchapter.

SB40, s. 2428 Section 2428. 77.58 (6) of the statutes is amended to read:

SB40,1158,23 77.58 (6) For the purposes of the sales tax gross receipts, the sales price from rentals or leases of tangible personal property, specified digital goods, or additional digital goods shall be reported and the tax paid in accordance with such rules as the department prescribes.

SB40, s. 2429 Section 2429. 77.58 (6m) of the statutes is created to read:

SB40,1159,3 77.58 (6m) (a) The department may, in cases where it is satisfied that an undue hardship would otherwise result, permit the reporting of a sales price or purchase price on some basis other than the accrual basis.

SB40,1159,7 (b) The entire sales price of credit transactions shall be reported in the period in which the sale is made without 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.

SB40, s. 2430 Section 2430. 77.58 (9) of the statutes is created to read:

SB40,1159,10 77.58 (9) The department may require a filing fee for sales tax returns that are filed on paper.

SB40, s. 2431 Section 2431. 77.58 (9a) of the statutes is created to read:

SB40,1159,17 77.58 (9a) In addition to filing a return as provided in this section, a person described under s. 77.524 (3), (4), or (5) shall provide to the department any information that the department considers necessary for the administration of this subchapter, in the manner prescribed by the department, except that the department may not require that the person provide such information to the department more than once every 180 days.

SB40, s. 2432 Section 2432. 77.585 of the statutes is created to read:

SB40,1160,2 77.585 Return adjustments. (1) (a) In this subsection, "bad debt" means 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 property, specified digital goods, or additional digital goods that remain in the seller's possession until the full sales price or purchase price is paid, expenses incurred in attempting to collect any debt, debts sold or assigned to 3rd parties for collection, and repossessed property.

SB40,1160,14 (b) A seller may claim as a deduction on a return under s. 77.58 the amount of any bad debt that 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. A seller who claims a deduction under this paragraph shall claim the deduction on the return under s. 77.58 that is submitted for the period in which the seller writes off the amount of the deduction as uncollectible in the seller's books and records and in which such amount is eligible to be deducted as bad debt for federal income tax purposes. If the seller subsequently collects in whole or in part any bad debt for which a deduction is claimed under this paragraph, the seller shall include the amount collected in the return filed for the period in which the amount is collected and shall pay the tax with the return.

SB40,1160,20 (c) For purposes of computing a bad debt deduction or reporting a payment received on a previously claimed bad debt, any payment made on a debt or on an account is applied first to the price of the property, specified digital goods, additional digital goods, or service sold, and the proportionate share of the sales tax on that property, specified digital goods, additional digital goods, or service, and then to interest, service charges, and other charges related to the sale.

SB40,1161,2 (d) A seller may obtain a refund of the tax collected on any bad debt amount deducted under par. (b) that exceeds the amount of the seller's taxable sales as provided under s. 77.59 (4), except that the period for making a claim as determined under s. 77.59 (4) begins on the date on which the return on which the bad debt could be claimed would have been required to be submitted to the department under s. 77.58.

SB40,1161,8 (e) If a seller is using a certified service provider, the certified service provider may claim a bad debt deduction under this subsection on the seller's behalf if the seller has not claimed and will not claim the same deduction. A certified service provider who receives a bad debt deduction under this subsection shall credit that deduction to the seller and a certified service provider who receives a refund under this subsection shall submit that refund to the seller.

SB40,1161,14 (f) If a bad debt relates to the retail sales of tangible personal property, specified digital goods, additional digital goods, or taxable services that occurred in this state and in one or more other states, as determined under s. 77.522, the total amount of such bad debt shall be apportioned among the states in which the underlying sales occurred in a manner prescribed by the department to arrive at the amount of the deduction under par. (b).

SB40,1161,21 (2) If a lessor of tangible personal property, specified digital goods, or additional digital goods has reimbursed the vendor for the sales tax on the sale of the property or goods by the vendor to the lessor, the tax due from the lessor on the rental receipts may be offset by a credit equal to the tax otherwise due on the rental receipts from the property or goods for the reporting period. The credit shall expire when the cumulative rental receipts equal the sales price upon which the vendor paid sales taxes to this state.

SB40,1162,2 (3) If a purchaser of tangible personal property, specified digital goods, or additional digital goods has reimbursed the vendor of the property or goods for the sales tax on the sale and subsequently, before making any use of the property or goods other than retention, demonstration, or display while holding it for sale or rental, makes a taxable sale of the property or goods, the tax due on the taxable sale may be offset by the tax reimbursed.

SB40,1162,11 (4) A seller may claim a deduction on any part of the sales price or purchase price that the seller refunds in cash or credit as a result of returned property, specified digital goods, or additional digital goods or adjustments in the sales price or purchase price after the sale has been completed, if the seller has included the refunded price in a prior return made by the seller and has paid the tax on such price, and if the seller has returned to the purchaser in cash or in credit all tax previously paid by the purchaser on the amount of the refund at the time of the purchase. A deduction under this subsection shall be claimed on the return for the period in which the refund is paid.

SB40,1162,15 (5) No reduction in the amount of tax payable by the retailer is allowable in the event property, specified digital goods, or additional digital goods sold on credit are repossessed except where the entire consideration paid by the purchaser is refunded to the purchaser or where a credit for a worthless account is allowable under sub. (1).

SB40,1162,19 (6) A purchaser who is subject to the use tax on the storage, use, or other consumption of fuel may claim a deduction from the purchase price that is subject to the use tax for fuel taxes refunded by this state or the United States to the purchaser that is included in the purchase price of the fuel.

SB40,1162,23 (7) For sales tax purposes, if a retailer establishes to the department's satisfaction 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.

SB40,1163,4 (8) A sale or purchase involving transfer of ownership of property, specified digital goods, or additional digital goods is completed at the time when possession is transferred by the seller or the seller's agent to the purchaser or the purchaser's agent, except that for purposes of sub. (1) a common carrier or the U.S. postal service shall be considered the agent of the seller, regardless of any f.o.b. point and regardless of the method by which freight or postage is paid.

SB40, s. 2433 Section 2433. 77.59 (2m) of the statutes is created to read:

SB40,1163,8 77.59 (2m) The department may audit, or may authorize others to audit, sellers and certified service providers who are registered with the department pursuant to the agreement, as defined in s. 77.65 (2) (a).

SB40, s. 2434 Section 2434. 77.59 (5m) of the statutes is amended to read:

SB40,1164,3 77.59 (5m) A seller who receives a refund under sub. (4) (a) or (b) of taxes that the seller has collected from buyers, who collects amounts as taxes erroneously from buyers, but who does not remit such amounts to the state, or who is entitled to a refund under sub. (4) (a) or (b) that is offset under sub. (5), shall submit the taxes and related interest to the buyers from whom the taxes were collected, or to the department if the seller cannot locate the buyers, within 90 days after the date of the refund, after the date of the offset, or after discovering that the seller has collected taxes erroneously from the buyers. If the seller does not submit the taxes and related interest to the department or the buyers within that period, the seller shall submit to the department any part of a refund or taxes that the seller does not submit to a buyer or to the department along with a penalty of 25% of the amount not submitted or, in the case of fraud, a penalty equal to the amount not submitted. A person who collects amounts as taxes erroneously from buyers for a real property construction activity or nontaxable service may reduce the taxes and interest that he or she is required to submit to the buyer or to the department under this subsection for that activity or service by the amount of tax and interest subsequently due and paid on the sale of or the storage, use, or other consumption of tangible personal property, specified digital goods, or additional digital goods that is are used by the person in that activity or service and transferred to the buyer.

SB40, s. 2435 Section 2435. 77.59 (7) of the statutes is amended to read:

SB40,1164,17 77.59 (7) If the department believes that the collection of any tax imposed by this subchapter will be jeopardized by delay, it shall notify the person determined to owe the tax of its intention to proceed under s. 71.91 (5) for collection of the amount determined to be owing, including penalties and interest. Such notice shall be by certified or registered mail or by personal service and the warrant of the department shall not issue if the person, within 10 days after such notice furnishes a bond in such amount not exceeding double the amount determined to be owing and with such sureties as the department approves, conditioned upon the payment of so much of the taxes, interest, and penalties as shall finally be determined to be due. Nothing in this subsection shall affect the review of determinations of tax as provided in this subchapter and any amounts collected under this subsection shall be deposited with the secretary of administration department and disbursed after final determination of the taxes as are amounts deposited under ss. 71.89 (1) and 71.90 (2).

SB40, s. 2436 Section 2436. 77.59 (9) of the statutes is amended to read:

SB40,1165,7 77.59 (9) If any person fails to file a return, the department shall make an estimate of the amount of the gross receipts sales price of the person person's sales, or, as the case may be, of the amount of the total sales purchase price of tangible personal property, specified digital goods, additional digital goods, or taxable service sold or purchased by the person, the sale by or the storage, use, or other consumption of which in this state is subject to sales or use tax. The estimate shall be made for the period in respect to which the person failed to make a return and shall be based upon any information which is in the department's possession or may come into its possession. Upon the basis of this estimate the department shall compute and determine the amount required to be paid to the state, adding to the sum thus arrived at a penalty equal to 25% thereof. One or more such determinations may be made for one or for more than one period. When a business is discontinued a determination may be made at any time thereafter, within the periods specified in sub. (3), as to liability arising out of that business.

SB40, s. 2437 Section 2437. 77.59 (9n) of the statutes is created to read:

SB40,1165,12 77.59 (9n) (a) Notwithstanding s. 73.03 (47), no seller or certified service provider is liable for tax, interest, or penalties imposed on a transaction under this subchapter in the circumstances covered under sections 306, 328, and 502 of the agreement, as defined in s. 77.65 (2) (a).

SB40,1165,15 (b) A purchaser is not liable for the tax, interest, or penalties imposed on a transaction under this subchapter in the circumstances covered by section 331 of the agreement, as defined in s. 77.65 (2) (a).

SB40, s. 2438 Section 2438. 77.59 (9p) (b) of the statutes is created to read:

SB40,1166,10 77.59 (9p) (b) If a customer purchases a service that is not subject to 4 USC 116 to 126, as amended by P.L. 106-252, or tangible personal property, specified digital goods, or additional digital goods, and if the customer believes that the amount of the tax assessed for the sale of the service, property, or goods under this subchapter is erroneous, the customer may request that the seller correct the alleged error by sending a written notice to the seller. The notice shall include a description of the alleged error and any other information that the seller reasonably requires to process the request. Within 60 days from the date that a seller receives a request under this paragraph, the seller shall review its records to determine the validity of the customer's claim. If the review indicates that there is no error as alleged, the seller shall explain the findings of the review in writing to the customer. If the review indicates that there is an error as alleged, the seller shall correct the error and shall refund the amount of any tax collected erroneously, along with the related interest, as a result of the error from the customer, consistent with s. 77.59 (4). A customer may take no other action against the seller, or commence any action against the seller, to correct an alleged error in the amount of the tax assessed under this subchapter on a service that is not subject to 4 USC 116 to 126, as amended by P.L. 106-252, or tangible personal property, specified digital goods, or additional digital goods unless the customer has exhausted his or her remedies under this paragraph.

SB40, s. 2439 Section 2439. 77.59 (9r) of the statutes is created to read:

SB40,1166,17 77.59 (9r) With regard to a purchaser's request for a refund under this section, a seller is presumed to have reasonable business practices if the seller uses a certified service provider, a certified automated system, as defined in s. 77.524 (1) (am), or a proprietary system certified by the department to collect the taxes imposed under this subchapter and if the seller has remitted to the department all taxes collected under this subchapter, less any deductions, credits, or allowances.

SB40, s. 2440 Section 2440. 77.60 (13) of the statutes is created to read:

SB40,1166,24 77.60 (13) A person who uses any of the following documents in a manner that is prohibited by or inconsistent with this subchapter, or provides incorrect information to a seller or certified service provider related to the use of such documents or regarding an exemption to the taxes imposed under this subchapter, shall pay a penalty of $250 for each invoice or bill of sale related to the prohibited or inconsistent use or incorrect information:

SB40,1166,25 (a) An exemption certificate described under ss. 77.52 (13) and 77.53 (10).

SB40,1167,1 (b) A direct pay permit under s. 77.52 (17m).

SB40,1167,2 (c) A direct mail form, as defined in s. 77.522 (1) (a) 1.

SB40, s. 2441 Section 2441. 77.61 (1) (b) of the statutes is amended to read:

SB40,1167,8 77.61 (1) (b) In the case of a motor vehicle motor vehicles, boats, snowmobiles, mobile homes not exceeding 45 feet in length, trailers, semitrailers, all-terrain vehicles, or aircraft purchased from a licensed Wisconsin motor vehicle dealer retailer, the registrant shall present proof that the tax has been paid to such dealer retailer.

SB40, s. 2442 Section 2442. 77.61 (1) (c) of the statutes is amended to read:

SB40,1167,18 77.61 (1) (c) In the case of motor vehicles, boats, snowmobiles, mobile homes not exceeding 45 feet in length, trailers, semitrailers, all-terrain vehicles or aircraft registered or titled, or required to be registered or titled, in this state purchased from persons who are not Wisconsin boat, trailer or semitrailer dealers, licensed Wisconsin aircraft, motor vehicle or mobile home dealers or registered Wisconsin snowmobile or all-terrain vehicle dealers retailers, the purchaser shall file a sales tax return and pay the tax prior to registering or titling the motor vehicle, boat, snowmobile, mobile home not exceeding 45 feet in length, trailer, semitrailer, all-terrain vehicle or aircraft in this state.

SB40, s. 2443 Section 2443. 77.61 (2) of the statutes is renumbered 77.61 (2) (intro.) and amended to read:

SB40,1167,21 77.61 (2) (intro.) In order to protect the revenue of the state:

SB40,1168,10 (a) Except as provided in par. (b), the department may require any person who is or will be liable to it for the tax imposed by this subchapter to place with it, before or after a permit is issued, the security, not in excess of $15,000, that the department determines. In determining the amount of security to require under this subsection, the department may consider the person's payment of other taxes administered by the department and any other relevant facts. If any taxpayer fails or refuses to place that security, the department may refuse or revoke the permit. If any taxpayer is delinquent in the payment of the taxes imposed by this subchapter, the department may, upon 10 days' notice, recover the taxes, interest, costs and penalties from the security placed with the department by the taxpayer in the following order: costs, penalties, delinquent interest, delinquent tax. No interest may be paid or allowed by the state to any person for the deposit of security. 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.