Tax 11.70 (1) (a) "Advertising and promotional direct mail" means direct mail that has the primary purpose of attracting public attention to a product, person, business, or organization or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization.
(c) "Direct mail" means 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.
SECTION 8. Tax 11.70 (2) (c) and (3) (gm) are amended to read:
Tax 11.70 (2) (c) Sales of signs, circulars, business cards, stationary showcards, banners, posters, bulletins,
advertising and promotional direct mail, 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.
(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.
SECTION 9. Tax 11.70 (3) (n) is created to read:
Tax 11.70 (3) (n) Advertising and promotional direct mail.
Example 1: Company B, located in Wisconsin, contracts with a printer to have 10,000 advertising flyers that are designed to promote Company B's products printed. Once the printer finishes printing the advertising flyers, the printer mails the flyers to the addresses on a mailing list provided by Company B. The addresses are in and outside Wisconsin. The charge by the printer to Company B is exempt from Wisconsin sales and use tax since the advertising flyers are advertising and promotional direct mail.
Example 2: Same as Example 1, except the flyers are sent by the printer to Company B, the purchaser, and Company B mails the flyers to the addresses on the mailing list. The flyers are not advertising and promotional direct mail because the seller/printer is not delivering the flyers to a mass audience or to addresses on a mailing list at the direction of the purchaser.
SECTION 10. Tax 11.70 (Note) is amended to read:
Tax 11.70 (Note) The interpretations in s.
Tax 11.70 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for printing or imprinting of tangible personal property furnished by customers and used out-of-state for advertising became effective March 1, 1970; (b) The exemption for printed advertising material used out-of-state became effective May 21, 1972; (c) The exemption for ingredients or components of shoppers guides, newspapers, and periodicals became effective July 7, 1983; (d) The sales and use tax exemption for raw materials for printed materials transported and used solely outside Wisconsin became effective December 1, 1997, pursuant to
1997 Wis. Act 27; (e) The exemption for catalogs and their mailing envelopes became effective April 1, 2009, pursuant to
2007 Wis. Act 20; (f) The provision that items must be consumed exclusively and directly by a manufacturer in manufacturing property or items destined for sale became effective August 1, 2009, pursuant to
2009 Wis. Act 28; (g) The definitions of bundled transaction and finished artwork became effective October 1, 2009, pursuant to
2009 Wis. Act 2;
and (h) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s.
77.52 (1) (b), Stats., certain leased property affixed to real property under s.
77.52 (1) (c), Stats., and digital goods under s.
77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to
2009 Wis. Act 2; (i) The definition of "direct mail" became effective October 1, 2009 pursuant to 2009 Wis. Act 2; (j) The definition of "advertising and promotional direct mail" became effective May 27, 2010, pursuant to 2009 Wis. Act 330; and (k) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to 2011 Wis. Act 32.
SECTION 11. Tax 11.72 (Note) is amended to read:
Tax 11.72 (Note) The interpretations in s.
Tax 11.72 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Laundries and dry cleaners became the consumers of, and pay tax on the purchases of, items transferred to customers effective September 1, 1983, pursuant to
1983 Wis. Act 27; (b) The exemption for diaper services and cloth diapers became effective July 1, 1990, pursuant to
1989 Wis. Act 335; (c) The repeal of the exemption for cloth diapers became effective October 1,
2002 2009, pursuant to
2009 Wis. Act 2; and (d) The change of the term "gross receipts" to "sales price" became effective October 1, 2009, pursuant to
2009 Wis. Act 2.
SECTION 12. Tax 11.94 (3) (a) is amended to read:
Delivery charges for advertising and promotional direct mail and "other 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. Delivery charges for "advertising and promotional direct mail" are exempt from sales and use tax regardless of whether they are separately stated on the invoice, bill of sale, or similar document.
SECTION 13. Tax 11.94 (Note) is amended to read:
Tax 11.94 (Note) The interpretations in s.
Tax 11.94 are effective under the general sales and use tax law on and after September 1, 1969, except
that the: (a) The definitions of "delivery charges" and "direct mail," and the change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s.
77.52 (1) (b), Stats., certain leased property affixed to real property under s.
77.52 (1) (c), Stats., and digital goods under s.
77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to
2009 Wis. Act 2; (b) The definitions of "advertising and promotional direct mail" and "other direct mail" became effective May 27, 2010, pursuant to 2009 Wis. Act 330; and (c) The sales and use tax exemption for advertising and promotional direct mail, which includes the delivery charges for advertising and promotional direct mail, became effective July 1, 2013, pursuant to 2011 Wis. Act 32.
SECTION 14. Tax 11.945 (3) (a) 1. to 5. are renumbered Tax 11.945 (3) (a) 2. to 6., and Tax 11.945 (3) (a) 3., 4., 5., and 6.a., as renumbered, are amended to read:
Tax 11.945 (3) (a) 3. If the purchaser provides one of the items indicated in subd. 1. a. 2.a. or b., to the seller, the purchaser shall source the sales to the jurisdictions to which the advertising and promotional direct mail is delivered to the recipients and pay or remit to the department the tax imposed under s. 77.53, Stats., on all its purchases of advertising and promotional direct mail for which the tax is due, and in the absence of bad faith the seller is relieved from liability for collecting the tax.
4. If the purchaser provides delivery information as provided in subd. 1. c. 2.c., the seller shall collect the tax source the sales 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.
5. An exemption certificate provided by the purchaser under subd. 1. b. 2.b. remains in effect for all sales by the seller who received the exemption certificate to the purchaser who provided the exemption certificate, in the absence of bad faith.
6.a. Except as provided in subd. 5. b. 6.b., if a transaction is a bundled transaction that includes "advertising and promotional direct mail," subds. 1. 2. to 4. 5. only apply if the primary purpose of the transaction is the sale of products or services that meet the definition of advertising and promotional direct mail.
SECTION 15. Tax 11.945 (3) (a) 1. is created to read:
Tax 11.945 (3) (a) 1. Sales of advertising and promotional direct mail sourced to Wisconsin are exempt from Wisconsin sales and use taxes. However, sales of advertising and promotional direct mail sourced to another state may be subject to that other state's sales or use tax.
SECTION 16. Tax 11.945 (5) (d) (Note 2) is amended to read:
Tax 11.945 (5) (d) (Note 2) (a) The interpretations under s.
Tax 11.945 are effective beginning October 1, 2009, pursuant to
2009 Wis. Acts 2 and
28; and (b) The definitions of "advertising and promotional direct mail" and "other direct mail" and the provisions relating to the sourcing of transactions that include these types of items are effective May 27, 2010, pursuant to
2009 Wis. Act 330; and (c) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to 2011 Wis. Act 32.
SECTION 17. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s.
227.22 (2) (intro.), Stats.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original ⍽ Updated ⍽Corrected
|
Administrative Rule Chapter, Title and Number
|
Chapter Tax 11 – Sales and use tax
|
Subject
|
Sales and use tax provisions concerning advertising and promotional direct mail and prosthetic devices
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
⍽ GPR
⍽ FED ⍽ PRO ⍽ PRS ⍽SEG ⍽ SEG-S
|
|
Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
⍽Specific Businesses/Sectors
⍽ Public Utility Rate Payers
|
Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes
X No
|
Policy Problem Addressed by the Rule
|
The rule does not create or revise policy, other than to reflect current law and department policy.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
As indicated in the attached fiscal estimate, the fiscal effects of the sales and use tax exemption created under 2011 Wisconsin Act 32 have already been reflected under general fund condition statements subsequent to 2011 Wisconsin Act 32. Since the fiscal impacts of the statutory changes have already been reflected, the proposed rule has no fiscal effect.
No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals.
If the rule is not implemented, Chapter Tax 11 will be incomplete in that it will not reflect current law or department policy.
|
Long Range Implications of Implementing the Rule
|
No long-range implications are anticipated.
|
Compare With Approaches Being Used by Federal Government
|
N/A
|
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
N/A
|
FISCAL ESTIMATE FORM
|
|
2011 Session
|
X ORIGINAL
⍽ UPDATED
|
LRB #
|
|
|
INTRODUCTION #
|
|
⍽ CORRECTED
⍽ SUPPLEMENTAL
|
Admin rule #
|
Chapter Tax 11: Prosthetic devices, advertising and promotional direct mail
|
Subject
Proposed order of the Department of Revenue relating to sales and use tax provisions concerning advertising and promotional direct mail and prosthetic devices.
|
|
Fiscal Effect
|
State: X No State Fiscal Effect
Check columns below only if bill makes a direct appropriation or
affects a sum sufficient appropriation
⍽ Increase Existing Appropriation ⍽ Increase Existing Revenues
⍽ Decrease Existing Appropriation ⍽ Decrease Existing Revenues
⍽ Create New Appropriation
|
Increase Costs - May be Possible to Absorb Within Agency's Budget ⍽ Yes ⍽ No
⍽ Decrease Costs
|
Local: X No Local Government Costs
|
1. ⍽ Increase Costs
|
3 ⍽ Increase Revenues
|
5. Types of Local Governmental Units Affected:
|
⍽ Permissive
⍽ Mandatory
|
⍽ Permissive ⍽ Mandatory
|
⍽ Towns ⍽ Villages
⍽ Cities
|
2. ⍽ Decrease Costs
|
4. Decrease Revenues
|
⍽ Counties ⍽ Others
|
|
⍽ Permissive
⍽ Mandatory
|
⍽ Permissive ⍽ Mandatory
|
⍽ School Districts ⍽ WTCS Districts
|
Fund Sources Affected
⍽ GPR
⍽ FED
⍽ PRO ⍽ PRS
⍽ SEG
⍽ SEG-S
|
Affected Ch. 20 Appropriations
|
Assumptions Used in Arriving at Fiscal Estimate:
The proposed rule updates Chapter TAX 11 of the Administrative Code, pertaining to the sales and use tax, to reflect certain sales tax changes contained in 2011 Wisconsin Act 32, the 2011-13 Budget Bill. The proposed rule also amends chapter TAX 11 provisions pertaining to prosthetic devices and cloth diapers.
The proposed rule modifies the administrative code to reflect law changes and add examples to illustrate the tax treatment of certain items.
The proposed rule includes:
• A sales and use tax exemption for advertising and promotional direct mail created under 2011 Wisconsin Act 2.
• Updates to the list of taxable and exempt purchases of prosthetic devices to reflect current law.
• A modification to correctly reflect the effective date of the repeal of the sales and use tax exemption for
cloth diapers.
The fiscal effects of the exemptions created under 2011 Wisconsin Act 32 have already been reflected under general fund condition statements subsequent to 2011 Wisconsin Act 32. Since the fiscal impacts of the statutory changes have already been reflected, the proposed rule has no fiscal effect.
|
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That, pursuant to ss.
71.80 (1) (c) and
227.11 (2) (a), Stats., the Department of Revenue will hold a public hearing to consider permanent rules revising chapters Tax 1, 2, and 11 relating to general provisions of income taxation and sales and use tax.
Hearing Dates and Locations
Date: Monday, April 1, 2013
Time: 11:00 a.m.
Location: Events Room
State Revenue Building
2135 Rimrock Road
Madison, WI 53713
Handicap access is available at the hearing location.
Appearances at the Hearing and Submittal of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below or to adminrules.wisconsin.gov no later than April 1, 2013, and will be given the same consideration as testimony presented at the hearing.
Dale Kleven
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Telephone: (608) 266-8253
Analysis by the Department of Revenue
Statutes interpreted
Statutory authority
Explanation of agency authority
Section
227.11 (2) (a), Stats., provides “[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute..."
In addition, under s.
71.80 (1) (c), Stats., the department may make such regulations as it shall deem necessary in order to carry out ch.
71, Stats., relating to income and franchise taxes. This authority pertains to all of the proposed changes in this rule, except those concerning ch.
Tax 11.
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
The proposed rule makes the following changes:
• Amends s. Tax 1.11 (4) (d) to reflect the Lottery Board no longer exists and the lottery is instead a division of the department.
• Amends s.
Tax 2.085 (1),
(2), and
(3) to reflect a change in the process used to claim a refund on behalf of a deceased taxpayer.
• Adds a note to s.
Tax 2.50 (1) explaining that a public utility that is a corporation may be in a combined group.
• Repeals s.
Tax 2.90 (6) to reflect retirement pay or pension are not part of the statutory definition of “wages" for withholding purposes.
• Repeals s.
Tax 2.97, which is out-of-date and thus obsolete.
• Amends s.
Tax 2.98 (1) (b) to update a reference to the Internal Revenue Code.
• Revises s.
Tax 2.98 (Note 2) to remove out-of-date statutory references and otherwise provide clarity.
Summary of, and comparison with, existing or proposed federal regulation
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states
The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies
2012 Executive Order 61 and
2011 Wisconsin Act 46 requires state agencies to work with the Small Business Regulatory Review Committee to review the agency's administrative rules that may be particularly onerous to small businesses in Wisconsin. In response, the department initiated a comprehensive review of all of its administrative rules. The changes described above were identified as part of that review. No other data was used in the preparation of this rule order or this analysis.
Analysis and supporting documents used to determine effect on small business
This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated costs incurred by private sector
This rule order does not have a fiscal effect on the private sector.
Effect on Small Business and Initial Regulatory Flexibility Analysis
This rule order does not affect small business.
Agency Contact Person
Text of Rule
SECTION 1. Tax 1.11 (4) (d) is amended to read:
Tax 1.11 (4) (d) Lottery board division. The executive director administrator of the lottery board may request examination of tax returns for the purpose of withholding delinquent Wisconsin taxes, child support, and other debts owing this state.
SECTION 2. Tax 2.085 (1), (2), and (3) are amended to read:
Tax 2.085 (1) If a refund of Wisconsin income taxes is due a deceased taxpayer and if the refund exceeds $100
claimant is unable to cash the refund check, the claimant shall file, with the income tax return, a completed form I-804
804, entitled "Claim for Decedent's Wisconsin Income Tax Refund".
(2) Form I-804 does not have to be filed if the
If a refund is claimed on a joint Wisconsin income tax return of the surviving spouse and the decedent. The, the surviving spouse shall write "filing as surviving spouse" in the signature area of the return. If someone other than the surviving spouse is the personal representative, the personal representative shall also sign the joint return.
(3) Forms required to be filed under sub. (1) shall be mailed to the Wisconsin Department of Revenue, Tax Operations Bureau – Mail Stop 3-164, P.O. Box 59
8903, Madison, WI 53785 53708-8903.
SECTION 3. Tax 2.50 (1) (Note) is created to read:
Tax 2.50 (1) (Note) A public utility that is a corporation may be in a combined group for taxable years beginning on or after January 1, 2009. See s.
Tax 2.61 (2) for a description of corporations required to use combined reporting.
SECTION 4. Tax 2.90 (6) is repealed.
