Wisconsin Sales and Use Tax Information

Wisconsin Sales and Use Tax Information
State of Wisconsin
Department of Revenue
Wisconsin
Sales and Use
Tax Information
(Reflects the Streamlined Sales and Use Tax Provisions)
Includes information regarding —
•
•
•
•
5% state sales and use tax
0.5% county sales and use tax
0.1% baseball stadium sales and use tax
0.5% football stadium sales and use tax
Publication 201 (09/11)
1
Printed on
Recycled Paper
Table of Contents
Page
I.
INTRODUCTION.........................................3
II.
DIFFERENCE BETWEEN
WISCONSIN SALES TAX AND USE
TAX ................................................................3
VII.
A. Accounting Methods ...................................... 17
B. When a Sale “Occurs” .................................... 18
C. Where a Sale Takes Place - “General
Sourcing Rules” ............................................. 18
D. Where a Sale Takes Place - Direct Mail......... 19
E. Where a Sale Takes Place - Retail Florists ..... 22
A. Sales Tax ...........................................................3
B. Use Tax .............................................................4
III.
OBTAINING A SELLER’S PERMIT ........5
A. Who Must Obtain a Seller’s Permit? ................5
B. Disregarded Entities (effective July 1, 2009) ....5
C. Multi-Level Marketing Companies and
Their Distributors..............................................6
D. Caution: Buying a Business – Successor’s
Liability ............................................................6
E. When Should You Apply For a Seller’s
Permit? ..............................................................6
F. How Do You Apply for a Seller’s Permit? .......7
G. Security May Be Required ................................7
H. Issuance of the Seller’s Permit ..........................7
I. Notifying Department of Changes to Your
Account .............................................................7
J. Your Seller’s Permit Can Be Revoked..............8
K. Temporary Events .............................................9
L. Reporting Requirement for Operators of
Swap Meets, Flea Markets, Craft Fairs, or
Similar Events ...................................................9
M. Registering Through the Streamlined Web
Site ....................................................................9
N. Amnesty ............................................................9
IV.
REGISTERING FOR USE TAX ...............10
A. Out-of-State Retailers – Use Tax
Registration ..................................................... 10
B. Voluntary Registration .................................... 11
C. Consumer Use Tax Registration ..................... 11
D. Application...................................................... 12
V.
VI.
VIII.
Permits/Certificates Covered by BTR............. 12
Renewals ......................................................... 12
Expedited Fee ................................................. 12
Faxing the Application .................................... 12
COMPUTING THE AMOUNT OF
SALES AND USE TAX ..............................12
A.
B.
C.
D.
E.
F.
G.
Sales Tax Imposed on “Total Sales” ............... 12
Use Tax Imposed on “Purchase Price” ........... 13
Collecting Tax From Customers ..................... 14
Including Tax in the Price ............................... 15
Credit for Taxes Paid to Another State ........... 15
Credit for Taxes Paid to a Tribe ...................... 15
Products Given Away for Free........................ 16
FILING RETURNS AND PAYING THE
TAX ..............................................................23
A. How Often Must a Return Be Filed? .............. 23
B. Electronic Filing and Payment Options
Available for Sales and Use Tax Return
Filing .............................................................. 23
C. Business at More Than One Location ............ 24
D. Single-Owner Entity Disregarded as
Separate Entity ............................................... 24
E. Seasonal Retailers .......................................... 24
F. Due Date for Filing ........................................ 25
G. Obtaining an Extension of Time to File ......... 25
H. Payment of Tax .............................................. 25
I. Retailer’s Discount ......................................... 26
J. Correcting an Error – Underpayments ........... 26
K. Overpayments – Filing Claims for Refund .... 26
L. Refund of Tax From Seller to Buyer .............. 27
M. Failing to File or Pay or Filing Incorrect
Returns Is Costly ............................................ 28
IX.
RECORD KEEPING ..................................30
A. General Records to Keep................................ 30
B. Records to Keep – Exempt Sales,
Exemption Certificates ................................... 30
X.
WHAT IS TAXABLE? ...............................32
A. Tangible Personal Property, Items, Property,
and Goods ...................................................... 33
B. Services .......................................................... 33
C. Bundled Transactions ..................................... 40
D. Property May Only Be Taxed Once ............... 42
BUSINESS TAX REGISTRATION ..........12
A.
B.
C.
D.
ACCOUNTING METHODS, WHEN A
SALE OCCURS, AND WHERE A
SALE TAKES PLACE (“SOURCING”
RULES) ........................................................17
XI.
WHAT IS EXEMPT? .................................42
A. General ........................................................... 42
B. Exemptions That Do Not Require
Exemption Certificates ................................... 43
C. Exemptions That Require Exemption
Certificates ..................................................... 50
D. Exempt Organizations .................................... 61
E. Disaster Relief Bankcards and Vouchers
Issued by Exempt Organizations .................... 63
F. Other Exemptions........................................... 64
XII.
CONTRACTORS........................................67
A. How Contractors Are Taxed on Labor,
Materials, and Supplies ................................... 67
B. Contractor’s Tools and Equipment ................. 68
C. Contractors Constructing Buildings for
Governmental Units, Schools, Churches,
Hospitals, or Other Exempt Institutions.......... 68
D. Construction, Renovation, or Development
of Professional Sports and Entertainment
Home Stadiums ............................................... 68
XIII.
I. Audits, Appeals, Collections, Etc................... 82
XIX.
YOU MAY BE AUDITED .........................82
XX.
OTHER TAXES AND FEES TO BE
AWARE OF.................................................82
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
Individual Income Tax ................................... 82
Corporation Income or Franchise Tax............ 82
Withholding ................................................... 82
Estimated Tax for Individuals ........................ 83
Estimated Tax for Corporations ..................... 83
Unemployment and Worker’s Compensation 83
Motor Vehicle Alternate Fuel Tax ................. 83
Local Exposition Taxes .................................. 83
Dry Cleaner Fees ............................................ 83
Police and Fire Protection Fees (effective
September 1, 2009) ........................................ 83
K. Premier Resort Area Taxes ............................ 84
L. Rental Vehicle Fee ......................................... 84
M. Regional Transit Authority – Rental Vehicle
Fee terminated effective July 1, 2009 ............ 84
LEASES, LICENSES, AND RENTALS ...68
A. Sales Price From Leases, Licenses, and
Rentals ............................................................ 68
B. Purchases for Lease, License, or Rental.......... 69
C. Equipment Provided With an Operator ........... 69
D. Where a Lease, License, or Rental Takes
Place (i.e., Sourcing the Lease, License, or
Rental Payments) ............................................ 69
XIV.
MANUFACTURING AND
BIOTECHNOLOGY ..................................71
A. Manufacturers ................................................. 72
B. Nonmanufacturers ........................................... 72
C. Exemption for Manufacturing Machines and
Specific Processing Equipment....................... 72
D. Exemption for Ingredients, Component
Parts, and Consumable Items .......................... 72
E. Manufacturing and Biotechnology
Exemptions Effective January 1, 2012 ........... 73
XV.
SELLING A BUSINESS OR BUSINESS
ASSETS ........................................................74
XVI.
OCCASIONAL SALES ..............................74
A. Exempt Occasional Sales By Nonprofit
Organizations .................................................. 74
B. Sales by Auction ............................................. 75
C. Sales Which Are Not “Occasional Sales” ....... 75
D. Occasional Sales of Motor Vehicles, Boats,
Etc., Are Taxable ............................................ 76
XVII. DIRECT PAY ..............................................76
A. Who Is Eligible for Direct Pay? ...................... 76
B. How to Apply for a Direct Pay Permit ............ 76
C. Additional Information ................................... 77
XVIII. COUNTY AND STADIUM SALES AND
USE TAXES ................................................77
A. Introduction ..................................................... 77
B. What Types of Tangible Personal Property;
Items, Property, Goods Described in
Part X.A.2. to 4.; and Services Are Taxable? . 79
C. What Sales Are Subject to the County and
Stadium Sales Tax?......................................... 79
D. When Do the County and Stadium Use
Taxes Apply? .................................................. 79
E. Transitional Provisions ................................... 81
F. Collecting County and Stadium Tax From
Customers ....................................................... 81
G. Sales and Use Tax Return Requires County
and Stadium Tax Data .................................... 81
H. Seller’s Permits ............................................... 82
XXI.
KEEPING AWARE OF NEW SALES
AND USE TAX DEVELOPMENTS .........84
A.
B.
C.
D.
E.
F.
G.
Sales and Use Tax Report .............................. 84
Publications .................................................... 85
Forms ............................................................. 85
Wisconsin Tax Bulletin .................................. 86
Rules - Wisconsin Administrative Code ........ 86
Topical and Court Case Index ........................ 86
Electronic Mail Lists ...................................... 86
XXII. DO YOU HAVE QUESTIONS OR
NEED ASSISTANCE? ...............................86
XXIII. BUSINESS DEVELOPMENT
ASSISTANCE – DEPARTMENT OF
COMMERCE PERMIT
INFORMATION CENTER .......................86
APPENDIX A: Sales and Use Tax Forms.............87
APPENDIX B: Sales and Use Tax Rules ..............88
APPENDIX C: Section Tax 11.92 – Records
and Record Keeping ...................................89
APPENDIX D: Section Tax 11.14 – Exemption
Certificates ...................................................91
APPENDIX E: Wisconsin Sales and Use Tax
Exemption Certificate.................................95
APPENDIX F: Certificate of Exemption ..............97
APPENDIX G: Bracket System .............................99
APPENDIX H: Bundled Transaction Flowchart102
APPENDIX I: County Chart ...............................104
Publication 201
IMPORTANT CHANGES
(Changes added per September 1,
2011 Revision)
• Discounts Given by Retailers. The law that
limited the type of discounts given by retailers
was repealed, effective June 8, 2011. Page 15.
• Products Provided Free of Charge. The law
relating to the tax treatment of a retailer’s provision of an item free of charge with the
required purchase of another taxable product
changed, effective September 1, 2011.
Page 16.
• Electronic Buyer’s Claims for Refunds. Refund claims are now being accepted by the
department electronically. Page 27 and Appendix A on page 87.
• Exemption for Certain Manufactured and
Modular Homes. An exemption is created for
manufactured homes and modular homes that
are used in real property construction activities
outside Wisconsin, effective September 1,
2011. Pages 48 - 49.
• Exemption for Advertising and Promotional Direct Mail. An exemption is created for
advertising and promotional direct mail, effective July 1, 2013. Page 51.
• Exemption for Snowmaking and Snow-
Grooming Machines and Equipment. An
exemption is created for snowmaking and
snow-grooming machines and equipment, including accessories, attachments, and parts for
such machines and equipment, effective July 1, 2013. Page 59.
• Exemption for Certain Oil or Fat Converted to Fuel. An exemption is created for
vegetable oil or animal fat that is converted into motor vehicle fuel that is exempt from
Wisconsin excise taxes, effective September 1,
2011. Page 59.
• Exemption for Wisconsin Economic Devel-
opment Corporation. Exemption created for
the newly created Wisconsin Economic Development Corporation, effective February 24,
2011. Page 62.
• Repeal of Regional Transit Authorities. The
existing Dane County and Southeastern Re-
1
gional Transit Authorities are terminated and
the authorization to create the Chequamegon
Bay and Chippewa Valley Regional Transit
Authorities is repealed. Page 84.
• Taxes Due on Items Registered or Titled in
Wisconsin. The chart titled “State, County,
and Stadium Sales and Use Taxes Due on
Items Registered or Titled in Wisconsin” has
been updated as it relates to the sales and use
tax treatment for snowmobiles, trailers, semitrailers, and all-terrain vehicles. APPENDIX I
on page 104.
IMPORTANT CHANGES
(These changes were also included in the November 2010 revision) Many law changes
became effective October 1, 2009, when Wisconsin conformed its laws to the requirements of the
Streamlined Sales and Use Tax Agreement. The
version of Publication 201 that reflects the law
prior to October 1, 2009 will continue to be
available on the Department of Revenue’s web
site.
• Updates for streamlined sales tax. The Wisconsin Legislature has passed the legislation
necessary to conform Wisconsin's sales and
use tax laws to the requirements of the
Streamlined Sales and Use Tax Agreement
(SSUTA) as part of 2009 Wisconsin Act 2.
The conforming legislation, known as the
Main Street Equity Act, became effective in
Wisconsin on October 1, 2009. Changes include:
 What is subject to tax? Tangible personal property, items, property, goods, and
taxable services that are subject to tax are
explained. Part I. on page 3 and Part X.A.,
beginning on Page 33.
 “Gross receipts” replaced with “sales
price.” Sales tax is imposed on a seller’s
taxable “sales price” rather than “gross receipts.” Part II.A. on page 3 and
Part VI.A. on page 13.
 “Sales price” replaced with “purchase
price.” Use tax is imposed on a purchaser’s taxable “purchase price” rather than
Wisconsin Sales and Use Tax Information



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
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
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“sales price.” Part II.B. on page 4 and
Part VI.B. on page 13.
Products given away for free. Retailers
owe use tax on products provided free of
charge in conjunction with the required
purchase of another product. Part II.B. on
page 4 and Part VI.G. on page 16.
Information about registering through
the Streamlined web site. Retailers may
register to collect sales or use tax through
the web site of the Streamlined Sales Tax
Governing Board. Part III.M. on page 9.
Computing tax on items previously
purchased using an exemption certificate. Use tax is owed on the purchase
price of items previously purchased exempt from tax and later used in a taxable
manner. Part VI.B., Exception 2, on
page 14.
Collecting tax from customers. Additional information added to explain how to
determine the amount of sales tax that
may be collected from customers.
Part VI.C. on page 14.
Where a sale takes place. Information
added to explain where a sale takes place
(i.e., is “sourced to”). General Sourcing
Rules and exceptions are discussed in
Part VII.C., D., and E., beginning on
page 18, and Part XIII.D. on page 69.
Direct mail. Information about sales and
purchases of direct mail provided.
Part VII.D. on page 19.
Drop shipment sales. A vendor who
makes a sale to an unregistered out-ofstate retailer who directs the vendor to
drop ship the product to a Wisconsin address may now accept an exemption
certificate from the unregistered out-ofstate retailer. Part IX.B. on page 31.
Bundled transactions. The tax treatment
of bundled transactions is discussed.
Part X.C. on page 40.
Exempt sales. The section detailing exemptions and when an exemption
certificate is required has been updated.
Part XI., beginning on page 42.
 Food and food ingredients. Changes in
which food and food ingredients are exempt from tax is explained. Part XI.B.3.
on page 43.
 Durable medical equipment, mobilityenhancing equipment, and prosthetic
devices. Changes in exempt medical
equipment and devices are described.
Part XI.B.7. on page 46.
 Cloth diaper exemption repealed. The
exemption for the sale, lease, or rental of
cloth diapers was repealed, but laundry
services to cloth diapers continue to be
exempt. Part XI.B.14. on page 49.
 Exemption for items sold as digital
goods. Exemption created for digital
goods when such goods would be exempt
if sold in a tangible form. Part XI.C.30. on
page 61.
 Equipment provided with an operator.
The provision of equipment with an operator is generally a service, rather than a
lease. Part XIII.C. on page 69.
 County and stadium taxes. Information
about how county and stadium taxes are
imposed has been updated. Part XVIII.,
beginning on page 77.
 All registered retailers are subject to
sales and use taxes on sales made in all
Wisconsin counties and stadium districts. Information added to explain this
new requirement. Part XVIII.A. on pages
77 and 78.
 County and stadium tax transitional
provisions. Changes in local tax transitional provisions have been addressed.
Part XVIII.E. on page 81.
• Retailer’s discount. The retailer’s discount
will be limited to $1,000, first applicable to
the taxes payable on October 1, 2009.
Part VIII.I. on page 26.
• Offsets. The Department of Revenue will enter into agreements with the federal
Department of the Treasury to offset state
payments against federal nontax obligations,
effective August 1, 2010. Part VIII.L. on
page 28.
2
Publication 201
• Internet posting of revoked seller’s permits.
Information about the Department of Revenue’s requirement to post revoked seller’s
permit information has been included.
Part VIII.M. on page 30.
• New manufacturing and biotechnology exemptions. New exemptions were created for
certain products used in manufacturing and in
the biotechnology industry, effective January 1, 2012. Part XI.C.29. on page 60 and
Part XIV.E. on page 73.
I. INTRODUCTION
This publication provides information about Wisconsin
sales and use taxes. It explains who must have a seller’s
permit or use tax certificate, how sales tax is charged to
customers, and how use tax is paid by purchasers. It
also includes information on how to file returns, compute the amount of tax owed, and the importance of
keeping proper records, including exemption certificates.
Sales and use tax applies to sales of tangible personal
property, certain coins and stamps, certain leased property affixed to realty, certain digital goods, and
specified services, as explained in Part X.A. and B.
Part II. explains common situations involving sales and
use tax. Parts X. and XI. explain what types of products
and services are taxable or exempt.
The tax treatment of contractors, lessors, and manufacturers is described in Parts XII., XIII., and XIV.
Information about the 0.5% county and 0.1% and 0.5%
stadium sales and use taxes is found in Part XVIII.
The Department of Revenue has many resources available to assist you with your sales and use tax questions.
Part XXI. lists available aids to research tax issues and
to keep you informed of changes to the sales and use tax
laws. For questions that you are unable to find answers
to, refer to Part XXII. for information about how to contact the Department of Revenue.
Each of the sales and use tax publications and forms
that are referred to within this publication are listed in
Part XXI.B. and C. Links to the publications on the Department of Revenue’s web site are provided in
Part XXI. and throughout this publication.
3
CAUTION
The information in this publication reflects interpretations by the Wisconsin Department of Revenue of
laws enacted by the Wisconsin Legislature and in
effect as of September 1, 2011. Laws enacted and in
effect after that date, new administrative rules, and
court decisions may change the interpretations in
this publication.
The examples and lists of taxable and nontaxable
sales and purchases are not all-inclusive. They merely set forth common examples.
Effective October 1, 2009 (as part of 2009 Wis.
Acts 2 and 28), a number of changes were made to
Wisconsin’s sales and use tax laws which affect
Wisconsin retailers. These changes include (1) the
legislation necessary to conform Wisconsin's sales
and use tax laws to the requirements of the Streamlined Sales and Use Tax Agreement (SSUTA); and
(2) the imposition of Wisconsin sales and use taxes
on digital goods.
The version of Publication 201 that reflects the law
prior to October 1, 2009 will continue to be available on the Department of Revenue’s web site and
has been renamed as Publication 201-PS.
II. DIFFERENCE BETWEEN
WISCONSIN SALES TAX AND USE
TAX
A. Sales Tax: The Wisconsin sales tax is a 5% tax imposed on the sales price* of retailers making taxable
retail sales in Wisconsin. The sales tax applies to retail sales, but not sales for resale. See Part X.,
“What is Taxable?”
*Sales tax is imposed on a seller’s taxable
“sales price” rather than “gross receipts,” effective October 1, 2009.
Common examples of retail sales include the following:
•
A Wisconsin clothing store sells a dress to a
customer in Wisconsin. (The sale of the dress
by the clothing manufacturer to the retail clothing store is not a retail sale because the clothing
store is going to resell the dress.)
Wisconsin Sales and Use Tax Information
•
A Wisconsin car dealer sells a car to a customer
in Wisconsin for his or her use.
•
A Wisconsin lumber yard sells lumber to a carpenter in Wisconsin who uses the lumber to
construct a house or make other real property
improvements.
the difference between 5% and any lesser rate
of sales tax properly paid to its supplier.
•
A common situation is a Wisconsin contractor
who constructs buildings and also makes retail
sales of construction materials. The contractor
does not know how the materials will be used
(in buildings or resold to others). The contractor
may purchase such materials without payment
of sales tax by giving an exemption certificate
to the seller claiming resale. However, if the
materials are used by the contractor for purposes other than for resale, the contractor must
report the “purchase price” of such materials as
subject to use tax.
B. Use Tax: The Wisconsin use tax is a 5% tax imposed on the purchase price* of taxable products or
taxable services that are stored, used, or consumed
within Wisconsin, and upon which a Wisconsin
sales or use tax has not previously been paid. An
exception to computing use tax based on the purchase price of tangible personal property applies to
motor vehicles used by licensed motor vehicle dealers for any purpose in addition to retention,
demonstration, or display (refer to Publication 202,
Sales and Use Tax Information for Motor Vehicle
Sales, Leases, and Repairs).
Example: A contractor constructs buildings
and also makes retail sales of construction materials. He purchases lumber costing $12,000
without payment of the sales tax by giving an
exemption certificate claiming resale to the
seller. However, the contractor then uses
$10,000 of the lumber in constructing a building. The contractor owes $500 use tax
($10,000 x 5% = $500) on the lumber which is
used in constructing a building. The remaining
lumber which cost $2,000 is sold to a customer
for $3,000 (a retail sale). Sales tax of $150
($3,000 x 5% = $150) should be collected from
the customer on this retail sale of $3,000.
If Wisconsin did not have a use tax, persons could
buy items in another state and avoid paying Wisconsin sales tax on such purchases.
*Use tax is imposed on a purchaser’s taxable
“purchase price,” rather than “sales price,” effective October 1, 2009.
Common use tax situations include the following:
•
Property to be used in Wisconsin is purchased
outside the state and the property would have
been subject to sales tax if purchased in Wisconsin.
Example: A Wisconsin company purchases an
office machine for $10,000 from an Illinois
seller who has not charged the Wisconsin 5%
sales or use tax on the transaction. The machine
is used in Wisconsin. The buyer (Wisconsin
company) is liable for Wisconsin use tax of
$500 ($10,000 x 5% = $500) less any Illinois
sales tax the buyer properly paid to the seller.
•
Building materials are purchased by a nonresident contractor from a seller located in another
state and the seller either does not charge sales
tax or charges a tax at a rate less than 5%. The
nonresident contractor uses the materials in a
real property job in Wisconsin. The nonresident
contractor owes the 5% Wisconsin use tax on
its “purchase price” at either the full 5% rate or
Property is purchased for resale (to sell to others) or for an exempt use and then is used by
the purchaser in a taxable manner. Sales tax
was not paid when purchasing the property.
•
Property is purchased without payment of the
Wisconsin sales tax and is then given away
free.
Examples of such items which may have been
acquired without sales tax are:
a. A bank’s or savings and loan’s purchase of
coin savings banks, calendars, or other
items to be given free to the customer.
Checking account or savings account forms
furnished to customers free of charge are
also subject to use tax.
Example: A bank or savings and loan
company purchases clocks and blankets for
$10,000 which it gives to its customers if
they deposit a specified amount in an ac4
Publication 201
count. The bank or savings and loan owes
$500 use tax ($10,000 x 5% = $500) on
such items.
b. A retailer’s purchase of advertising materials, except catalogs, which the retailer
distributes free of charge to Wisconsin customers.
c. A retailer’s purchase of grand opening gifts
which are distributed free to customers.
d. A paint retailer’s purchase of color cards
which are distributed free to customers.
e. A retailer’s purchase of inventory items that
are later provided free of charge to a customer 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
(e.g., “buy one get one free”). (See
Part VI.G. for additional information about
“Items Given Away for Free.”)
Example: A furniture retailer provides a
recliner free of charge to every customer
that purchases a new couch. The price of
the couch does not vary depending on
whether the recliner is included in the
transaction. (Note: The retailer is required
to pay Wisconsin use tax on its purchases
of the recliners that are provided free with
the required purchase of a couch.)
•
•
5
Property is purchased from a supplier outside
Wisconsin without payment of the Wisconsin
sales tax and the supplier ships the property to
the purchaser’s Wisconsin locations at the direction of the purchaser.
Property (other than printed advertising material and raw materials incorporated into printed
materials) is purchased from a supplier outside
Wisconsin without payment of the Wisconsin
tax. The supplier ships the property to Wisconsin where it is stored by the purchaser until
subsequently shipped outside Wisconsin for use
solely outside Wisconsin.
Important: Failure to report Wisconsin use tax is
the most common error discovered in audits by the
Department of Revenue. Be sure to keep proper
records of purchases made which are subject to use
tax and report this information on your sales and
use tax return. Filing incorrect returns can result in
very costly penalties which are described in
Part VIII.M.
III. OBTAINING A SELLER’S PERMIT
A. Who Must Obtain a Seller’s Permit? Every individual, partnership, corporation, or other
organization making taxable sales in Wisconsin, regardless of whether its sales are mercantile in
nature, is required to have a seller’s permit, unless
all sales by the seller are exempt from sales or use
tax. See Part X. for “What is Taxable?”
B. Disregarded Entities (effective July 1, 2009): A
single-owner entity that is disregarded as a separate
entity (i.e., the single-owner entity and its owner are
treated as a single entity) for Wisconsin income and
franchise tax purposes under Chapter 71 of the
Wisconsin Statutes (“disregarded entity”) is disregarded as a separate entity for purposes of
Wisconsin sales and use taxes. Therefore, the owner
and the disregarded entity are treated as a single entity. For Wisconsin sales and use tax purposes, there
cannot be transactions between the owner and the
disregarded entity, because they are treated as a
single entity.
Prior to July 1, 2009, a single-owner entity that was
disregarded as a separate entity for Wisconsin income and franchise tax purposes was treated as an
entity separate from its owner for Wisconsin sales
and use tax purposes, except for reporting purposes.
Transitional Provisions: The law includes the following transitional provisions to ensure that, solely
due to the July 1, 2009 law change, the owner of a
single-owner entity that is disregarded as a separate
entity under Chapter 71, will not incur a use tax liability on purchases made prior to the effective date
of the law change or on real property contracts entered into prior to the effective date of the law
change:
•
A single-owner entity that is disregarded as a
separate entity for Wisconsin income and fran-
Wisconsin Sales and Use Tax Information
chise tax purposes on July 1, 2009 shall be
treated for Wisconsin sales and use tax purposes as an entity separate from its owner for
purposes of the sale, lease, or rental of and the
storage, use, or other consumption of tangible
personal property; and items, property, and
goods described in Part X.A.2. to 4.; purchased
by the single-owner entity or its owner prior to
July 1, 2009.
•
A single-owner entity that is disregarded as a
separate entity for Wisconsin income and franchise tax purposes on July 1, 2009 shall be
treated for Wisconsin sales and use tax purposes as an entity separate from its owner for
purchases of building materials, 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 July 1, 2009 or that
resulted from the acceptance of a formal written
bid accompanied by a bond or other performance guaranty that was irrevocably submitted
before July 1, 2009.
Filing Provisions: An owner that chooses to file
electronic returns for its disregarded entities separate from the owner’s return must separately
register each disregarded entity that makes taxable
sales in Wisconsin. See Part VIII.D. for additional
information.
For additional information, see the article on pages 38-39 of Wisconsin Tax Bulletin #162 (July
2009).
C. Multi-Level Marketing Companies and Their
Distributors: The Wisconsin Department of Revenue regards each multi-level marketing company as
a retailer required to remit Wisconsin sales tax on
sales to its distributors. In the absence of data showing the exact selling price, the retailer must assume
that their distributors will make the sale to the ultimate consumers at the suggested retail price and
collect the sales tax accordingly. Since the multilevel marketing company must register with the department, as well as collect and remit the tax, the
individual distributors are relieved of these responsibilities.
Note: If the multi-level marketing company does
not collect the tax from its distributor, the distributor is liable for Wisconsin sales or use tax on its
sales price of products sold and its purchase price of
products that it uses or gives away, rather than resells, in Wisconsin.
D. Caution: Buying a Business – Successor’s Liability: The purchaser of a business (the successor) is
liable for any unpaid sales and use taxes of the seller for that business. The purchaser should withhold
a sufficient amount from the purchase price to cover
any unpaid sales and use taxes of the seller. The
purchaser may write to the Department of Revenue
to request a Sales and Use Tax Clearance Certificate indicating that all Wisconsin sales and use tax
liabilities of the seller for that business are satisfied.
Requests for a clearance certificate must include the
following:
•
•
•
•
•
•
•
•
•
Legal name of the seller
Business name of seller
Seller’s tax account number
Seller’s current mailing address
Name of the purchaser
Purchaser’s tax account number
Purchaser’s mailing address
Date of sale
Sale price
Requests for clearance certificates may be mailed,
e-mailed, or faxed to the department by the purchaser as follows:
Special Procedures Unit
Wisconsin Department of Revenue
P.O. Box 8901
Madison, WI 53708-8901
E-Mail: [email protected]
FAX: (608) 267-1037
The clearance certificate request must be made
AFTER the sale has taken place.
E. When Should You Apply For a Seller’s Permit?
Apply for a seller’s permit at least three weeks before you open your business. If you buy an existing
business, the seller’s permit cannot be transferred to
you. You must apply for a new permit. If you applied for a seller’s permit before you opened your
business but did not receive the permit at the time
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Publication 201
of opening the business, you are allowed to make
retail sales. However, you are liable for the sales
and use taxes and for keeping proper records from
the date of opening the business.
F. How Do You Apply for a Seller’s Permit? Application for a seller’s permit may be made using one
of the following methods:
•
Use the Department of Revenue’s online Business Tax Registration Process to submit the
application electronically.
•
Register through the Streamlined Sales Tax
Governing Board’s web site. (See Part III.M.)
•
Complete Form BTR-101, Application for
Business Tax Registration, and mail it to the
Department of Revenue. Keep a copy of the
completed application for your records.
Note: It is important that you fill in all the requested information on the online application, on the
application on the Streamlined Sales Tax Governing
Board’s web site, or on Form BTR-101.
If two or more activities are conducted by you at the
same business location, only one permit is required.
For example, if you have a service station and a restaurant at the same location, but in different
buildings, only one seller’s permit is required for
both businesses.
If you have more than one business location where
you make retail sales, a separate seller’s permit is
needed for each location. You should, however, file
only one application for all locations.
"Location" is determined by the address. A different
street address means a separate location.
A seller’s permit is not transferable and is not valid
at any other location.
•
If you are applying on a Form BTR-101, complete a Schedule 1 of Form BTR-101 for each
separate business location.
•
If you are applying using the online registration
system, you will be directed to enter the information for each business location.
A business tax registration fee of $20 may be required. For more information, see Part V.
7
G. Security May Be Required: Before or after the
Department of Revenue issues you a seller’s permit,
it may require you to make a security deposit of up
to $15,000. If you do not make a security deposit as
requested, the department may refuse to issue you a
seller’s permit or may revoke your permit.
In determining whether or not security will be required and the amount of security, the department
may consider the applicant’s payment of all taxes
administered by the department and any other relevant facts. Security is most commonly required
when there has been a history of delinquent taxes
associated with the applicant.
If security is required, the department will send a
notice of the requirement and additional information about the calculation of the amount.
Included will be information about the types of security that can be deposited.
Return of Security Deposit: Any security deposit
will be returned to you if for 24 consecutive months
you complied with the sales and use tax law.
Refer to sec. Tax 11.925, Wis. Adm. Code, “Sales
and use tax security deposits,” for more information.
H. Issuance of the Seller’s Permit: After receiving
the application for business tax registration, and the
security deposit (if required), a seller’s permit will
be issued to you by the Department of Revenue.
You must display the seller’s permit in a prominent
location at your place of business. If that is not a
fixed location, it should be displayed at or carried to
the various events. A personal wallet copy will be
sent with your Business Tax Registration Certificate
to provide you with easy access to your permit
number.
I. Notifying Department of Changes to Your Account: You should notify the Department of
Revenue of changes in your address and/or ownership, or if you cease operating your business, in one
of the following ways:
1. Write to the department indicating the address
or ownership changes, or if you cease operating
your business. Be sure to include in the correspondence the following information:
Wisconsin Sales and Use Tax Information
•
Tax account number. Include the business
name and address if you have more than
one location.
Be sure to include the information listed in
III.I.1., above, in your correspondence to the
Department of Revenue.
•
Federal employer identification number
(FEIN).
•
Effective date of changes.
2. If you sell your business, your seller’s permit is
not transferable to the buyer. You should return
your seller’s permit to the department.
•
Explanation of changes to your legal name,
if applicable.
E-mail this information to DORSalesBusi-
[email protected]
or send to the Madison address given in
Part XXII.
If you change your form of ownership, such as
from a sole proprietorship to a partnership or to
a corporation, you must apply for a new seller’s
permit. Partnerships that add or drop partners
must notify the department in writing of the
change in partners involved.
Refer to Part XV. for additional information on
the sale of a business.
3. You may use the online registration system
when (1) adding an additional location(s) to
your existing seller’s permit tax account;
(2) changing an account mailing address; or
(3) changing a contact person for an account.
You may not use the online registration system
when changing a business location, changing a
legal name or business name, or closing or reopening an existing account.
If you have been granted a waiver which allows
you to file paper returns (see Part VIII.A.), your
Form ST-12, Wisconsin Sales and Use Tax Return, may be used to make changes to your
account. Check the box on page 1 of
Form ST-12 at the upper right and make changes to your name or mailing address. If your
business is discontinued, check the box on
page 1 of Form ST-12 and enter the date the
business ceased making sales of tangible personal property; items, property, or goods
described in Part X.A.2. to 4.; or taxable services.
If you change the legal form of your business
and a new FEIN is assigned, you must apply for
a new Wisconsin seller’s permit.
If you change the legal form of your business
entity (e.g., C corporation to limited liability
company) and the Internal Revenue Service
does not require a new FEIN, you must still notify the Department of Revenue of the change
in the legal form of your business. As a new legal entity, your business will be assigned a new
tax account number and the old account number
will be inactivated, with one exception.
Exception: A change from a sole proprietorship to a single member limited liability
company (LLC) that is disregarded for Wisconsin income tax purposes will result in no change
in the tax account number, unless the owner
elects to file a separate return for the disregarded entity. (See “Filing Provisions” in
Part III.B.) However, the LLC will be added to
the account of the sole proprietor for purposes
of issuing a seller’s permit or use tax registration certificate if the LLC makes sales of
tangible personal property; items, property, or
goods described in Part X.A.2. to 4.; or taxable
services.
4.
For other changes, check the “correspondence
included” box on page 1 of Form ST-12 and
enclose a letter of explanation with the
Form ST-12.
J. Your Seller’s Permit Can Be Revoked: Wisconsin law gives the Department of Revenue authority
to revoke your seller’s permit if you fail to file returns or pay taxes when due or if you do not deposit
security as required. In such a case, the department
will notify you of a hearing to show cause why your
seller’s permit should not be revoked.
If you make retail sales after your seller’s permit
has been revoked, you may be subject to criminal
prosecution.
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Publication 201
K. Temporary Events: You are required to have a
seller’s permit if you conduct business as a retailer
at a “temporary event.” A “temporary event” is an
activity at one place of operation (e.g., fair, carnival, festival, portable roadside stand) for a brief
duration where taxable sales are made.
For additional information, see Publication 228,
Temporary Events, which can be downloaded from
the department’s web site or from the department’s
“Temporary Events” web page.
L. Reporting Requirement for Operators of Swap
Meets, Flea Markets, Craft Fairs, or Similar
Events: An operator of a swap meet, flea market,
craft fair, or similar event must report to the Department of Revenue the name, address, and seller’s
permit number (social security number is required if
no Wisconsin seller’s permit number is listed) of
each vendor selling merchandise at the swap meet,
flea market, craft fair, or similar event. Form S-240,
Wisconsin Temporary Event Operator and Seller
Information, may be used to obtain the required information and forwarded to the department.
Form S-240 may be obtained from any Department
of Revenue office or online.
For additional information, see Publication 228,
Temporary Events, and the department’s “Temporary Events” web page at
www.revenue.wi.gov/html/temevent.html.
M. Registering Through the Streamlined Web Site:
Retailers may register through the Streamlined
Sales Tax Governing Board’s (SSTGB) web site.
The use of this system will register a seller in each
of the member states and those associate member
states chosen by the seller.
Once registered, the seller must collect and remit
sales and use taxes for all taxable sales into the
member states and those chosen associate member
states. This requirement includes all the states that
become member states after the seller's registration.
A seller that has a legal obligation to collect a
state’s sales tax (and is not already registered in that
state) may be required to complete additional registration forms for that state. This registration system
has a web link, e-mail address, or telephone number
9
for each state for those sellers who need to complete additional registration forms.
A seller already registered in member or associate
states may still use the registration system. Choosing “already registered” on the registration form
will inform those states that a seller is “already registered.” States will not issue a duplicate
registration, but will just add the Streamlined Sales
Tax ID to the current registration.
IMPORTANT NOTE: Retailers are not required
to register through the Streamlined Sales Tax Governing Board’s web site. Only those sellers that
want the benefits of the Streamlined Sales and Use
Tax Agreement must register on this site. Benefits
include:
•
The ability to use certified sales tax administration software, the cost of which states may
subsidize for certain sellers.
•
One identification number to be used to file and
pay taxes for the registered member states.
•
The ability to update registration data with all
registered states at one time and in one place.
Note: Sellers that registered through the Streamlined Sales Tax Governing Board’s web site prior to
October 1, 2010 may also have qualified for amnesty. See Part III.N.
Additional information regarding the Streamlined
Sales Tax Project is provided at both of the following web pages:
The Department of Revenue’s Streamlined Sales
and Use Tax web page;
and
The Streamlined Sales Tax Governing Board’s
(SSTGB) web site.
N. Amnesty:
Wisconsin offered a sales tax amnesty program to
all businesses that were not registered to collect
Wisconsin sales tax, if certain eligibility requirements were met. Businesses participating in this
amnesty program must have voluntarily registered
between July 1, 2009 and September 30, 2010 to
Wisconsin Sales and Use Tax Information
collect and remit not only Wisconsin sales taxes,
but also any sales taxes due on the sales they make
in any of the states whose laws have been found to
be in compliance with the requirements of the
Streamlined Sales and Use Tax Agreement
(SSUTA). The Wisconsin amnesty period began July 1, 2009, the date Wisconsin became an associate
member of the Streamlined Sales Tax Governing
Board (SSTGB), and ended September 30, 2010.
Persons who met the eligibility requirements and
registered for amnesty between July 1, 2009 and
September 30, 2010 are not liable for any Wisconsin sales tax on sales made prior to registration.
Persons granted amnesty agreed to collect and remit
sales tax to Wisconsin and all of the other SSUTA
member states (including those states that join the
SSUTA after you register) for at least 36 months after the date of registration.
Note: The sales tax amnesty program does not apply to (1) any Wisconsin taxes that are owed in the
capacity as a purchaser (i.e., use tax due on purchases made) or (2) any Wisconsin sales taxes that
were previously collected from customers, regardless of whether or not such taxes have been remitted
Wisconsin.
If you have any questions regarding the Streamlined
Sales Tax Project, including questions about the
sales tax amnesty program required under the
SSUTA, please visit the Streamlined Sales Tax
Governing Board’s (SSTGB) web site. If you have
questions specific to Wisconsin's sales tax amnesty
program, please send an e-mail to [email protected]
IV. REGISTERING FOR USE TAX
A. Out-of-State Retailers – Use Tax Registration:
Although a retailer may have no location in Wisconsin from which retail sales are made, the retailer
is engaged in business in Wisconsin, for purposes
of the sales and use tax law, if one or more of the
following conditions exist:
•
The retailer owns any real property in Wisconsin.
•
The retailer leases or rents out any taxable
products located in Wisconsin.
•
The retailer maintains, occupies or uses, 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 Wisconsin. (See exception below for foreign corporation
publishers.)
•
The retailer has any 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 taxable products.
•
The retailer services, repairs, or installs products in Wisconsin.
•
The retailer delivers goods into Wisconsin in
company operated vehicles.
•
The retailer performs construction activities in
Wisconsin.
An out-of-state retailer with no Wisconsin location
from which sales are made, but who is engaged in
business in Wisconsin based on any of the above
conditions, must apply to the Department of Revenue for a use tax certificate. The retailer must report
Wisconsin use tax on sales that are sourced to Wisconsin. See Part VII.C through E.
The definition of “retailer engaged in business in
this state” was expanded, effective July 1, 2009, to
specifically include 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. 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 construc-
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Publication 201
tively 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.
Refer to sec. Tax 11.97, Wis. Adm. Code, “ ‘Engaged in business’ in Wisconsin,” for more
information about use tax obligations of out-of-state
retailers.
Exception: A publisher that is a foreign corporation
(i.e., a corporation that is not organized under Wisconsin law) is not considered to be a retailer
engaged in business in Wisconsin if its activities in
Wisconsin do not exceed:
1. The storage of the publisher’s raw materials for
any length of time in Wisconsin in or on property owned by a person other than the publisher
and the delivery of the publisher’s raw materials to another person in Wisconsin if that
storage and delivery are for printing by that
other person.
2. The purchase from a printer of a printing service or of printed materials in Wisconsin for the
publisher.
3. The storage of the printed materials for any
length of time in Wisconsin in or on property
owned by a person other than 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
materials.
11
Therefore, a publisher that is a foreign corporation is not required to collect Wisconsin use tax
on its sales or delivery of tangible personal
property; items, property, or goods described in
Part X.A.2. to 4.; or taxable services in Wisconsin if no more than the above activities occur in
Wisconsin.
B. Voluntary Registration: Out-of-state retailers who
are not engaged in business in Wisconsin, but who
desire to collect use tax for the convenience of their
Wisconsin customers, may also register for use tax
to relieve their customers from filing returns and
paying the taxes directly to the Department of Revenue. Such out-of-state retailers, if they voluntarily
register for use tax, must then collect use tax from
purchasers and pay the tax in the same manner as
other retailers engaged in business in Wisconsin.
For more information on such agreements, write to
Wisconsin Department of Revenue, Mail
Stop 5-144 P.O. Box 8906, Madison, WI 537088906, call (608) 266-3969, or e-mail [email protected]
C. Consumer Use Tax Registration: Every person
who regularly has use tax obligations because purchases are made without sales or use tax being
charged by the seller, should apply for a consumer’s
use tax certificate, unless the person is required to
have a seller’s permit or use tax certificate. Persons
who have a consumer’s use tax certificate are sent a
Form ST-12, Wisconsin Sales and Use Tax Return,
near the end of each reporting period.
Any person (whether in business or not) who does
not regularly purchase or lease taxable property or
services for storage, use, or other consumption in
Wisconsin without sales or use tax being charged
by the seller is not required to apply for a consumer’s use tax certificate. However, the person must
pay use tax to the Department of Revenue on those
purchases. The person, if not required to be registered for sales and use tax purposes, may report the
use tax on either: (1) the individual Wisconsin income tax return on the line titled “Sales and use tax
due on out-of-state purchases,” or (2) a Form UT-5,
Consumer’s Use Tax Return.
If the sale was also subject to sales or use tax in another state in which the purchase was made, the
Wisconsin Sales and Use Tax Information
amount of sales or use tax paid to the other state,
not to exceed the amount of Wisconsin tax, may be
credited against the Wisconsin use tax due.
D. Application: Application for a use tax certificate or
a consumer’s use tax certificate is made on
Form BTR-101, Application for Business Tax Registration or online. See Part III.E.
A business may also register through the web site of
the Streamlined Sales Tax Governing Board’s
(SSTGB) web site. (See Part III.M.)
A business tax registration (BTR) fee of $20 may
be required from persons applying for a use tax certificate. Persons applying for a consumer’s use tax
certificate are not required to pay a business tax
registration fee. For more information on business
tax registration, see Part V. below.
V. BUSINESS TAX REGISTRATION
Persons applying for certain permits or certificates issued by the Department of Revenue may be required to
pay a business tax registration (BTR) fee of $20, as explained below.
The $20 BTR fee applies only to the first permit or certificate a person applies for. Subsequent registrations
for other permits or certificates issued by the Department of Revenue do not require additional BTR fees.
Note: For sales and use tax purposes only, the BTR application and renewal fee is waived for persons who do
not have a legal requirement to register for sales and use
tax purposes (e.g., certain persons voluntarily registering through the Streamlined Sales Tax Governing
Board’s web site).
All types of entities, including state and local governmental agencies, are subject to the BTR fee. However,
United States governmental agencies are not subject to
the BTR fee.
A. Permits/Certificates Covered by BTR: The BTR
fee applies to most permits or certificates issued by
the Department of Revenue, including seller’s permits and use tax certificates. The $20 BTR fee is
not required for a Certificate of Exempt Status
(CES), consumer’s use tax certificate, or local exposition district tax registration.
The BTR fee is $20, regardless of the number of locations for which you need seller’s permits.
B. Renewals: The initial $20 BTR fee covers a period
of two years. At the end of that period, a $10 BTR
renewal fee applies. The renewal fee applies to all
persons holding permits or certificates subject to
BTR provisions, except certain retailers who voluntarily registered through the Streamlined Sales Tax
Governing Board’s web site.
The BTR renewal fee is $10 regardless of the number of locations for which you hold seller’s permits.
C. Expedited Fee: Persons may receive expedited service on their application for a seller’s permit or use
tax certificate (not a consumer’s use tax certificate).
This service is available only at the department office located at 2135 Rimrock Road, Madison or
may be done by faxing Form BTR-101, Application
for Business Tax Registration, as explained below
or by applying through the online registration system (as explained in Part III.).
A $10 “expedited fee” is charged for this service.
The fee is charged for each entity applying.
D. Faxing the Application: Form BTR-101 may be
faxed to the department at (608) 264-6884. The following steps should be taken when faxing the
application:
•
Include a cover sheet with the contact person’s
name and fax and telephone numbers.
•
Use black ink.
•
Indicate estimates in Part E., line 1 of the application.
•
Complete all pages of the application.
•
If you want the processing of your application
expedited as described above, write “Expedited” in the upper left-hand corner of the
application (there is an additional fee for this
service).
VI. COMPUTING THE AMOUNT OF
SALES AND USE TAX
A. Sales Tax Imposed on “Total Sales”: The 5%
sales tax is imposed on a retailer’s “sales price”
12
Publication 201
(“Total sales” on the sales and use tax return). “Total sales” is the total amount of the sale, license,
lease, or rental price from retail sales of tangible
personal property; items, property, and goods described in Part X.A.2. to 4.; and taxable services,
whether received in money or something other than
money. If the purchaser is charged by the seller for
the delivery of the tangible personal property; item,
property, or good described in Part X.A.2. to 4.; or
the service, the transportation charges must be included in “total sales.” “Total sales” also includes
charges made by a retailer which the retailer separately states as fuel surcharges, energy surcharges,
service calls, and mileage charges, rather than increasing its selling price of the products or services
sold.
Example: You sell furniture for $950 and charge an
additional $50 for delivering the furniture to the
customer. Your “total sales” subject to sales tax are
$1,000 ($950 + $50). The 5% sales tax on these total sales is $50 ($1,000 x 5% = $50 tax). See
Part X.B.13. for more information on transportation
charges.
The 5% sales tax is imposed on taxable “total sales,”
regardless of whether the tax is collected from the customer.
Note: If the total sales are subject to the 0.5% county
sales tax, the total tax rate is 5.5%. If the total sales are
subject to the 0.1% baseball stadium tax, the total tax
rate is 5.1% (5.6% if the county tax also applies). If the
total sales are subject to the 0.5% football stadium tax,
the total tax rate is 5.5%. See Part XVII. for information
about county and stadium taxes.
“Total sales” do not include:
•
Charges for interest, financing, or insurance, if such
charges are separately stated on the invoice given to
the purchaser.
•
Cash or term discounts taken on sales.
Example: You sell a refrigerator for $500 but gave
the customer a 2% discount of $10 because payment was made within ten days. The “total sales”
subject to tax are $490 ($500 less $10 discount) on
which the 5% sales tax is $24.50 ($490 x 5% =
$24.50 tax).
13
•
Any taxes legally imposed directly on the purchaser
that are separately stated on the invoice given to the
purchaser.
•
Delivery charges for “direct mail” that are separately stated on the invoice given to the purchaser.
“Direct mail” is defined in Part VII.D.
If an article of tangible personal property; or item,
property, or good described in Part X.A.2. to 4.; is
traded in, “total sales” is the difference between the
price of the item, property, or good purchased and
the amount allowed for the item, property, or good
traded in.
Example: If a customer receives a $4,000
trade-in allowance for an old car when purchasing a new car selling for $20,000, the “total
sales” subject to tax are $16,000 ($20,000 less
$4,000 trade-in) and the 5% sales tax on this
sale is $800 ($16,000 x 5% = $800).
For additional information about trade-ins, see the
tax release titled “Trade-ins,” which was published
on pages 30-33 of Wisconsin Tax Bulletin #124
(April 2001).
In cases where the tax has been collected from customers and they have been notified of that fact, the
amount of the tax so collected should not be included in the base to which the 5% applies in computing
the tax due to the state. (See Part VI.D.).
B. Use Tax Imposed on “Purchase Price”: The 5%
use tax is imposed on the “purchase price” of taxable products and services purchased from any
retailer. “Purchase price” is computed in the same
manner as “total sales,” that is, it is the total amount
of the sale, license, lease, or rental price from retail
sales of tangible personal property; items, property,
and goods described in Part X.A.2. to 4.; and taxable services, whether received in money or
something other than money.
Example 1: If you buy equipment with a purchase price of $10,000 from an out-of-state
retailer who does not charge the Wisconsin 5%
sales or use tax on the transaction, you are liable for a 5% use tax of $500 on the “purchase
price” of $10,000.
Wisconsin Sales and Use Tax Information
Example 2: You lease property from an out-ofstate lessor. You pick up the property from the
lessor’s out-of-state business location; therefore, the lease is sourced to that state. The other
state does not impose a tax on the lease of that
type of property. You bring the property to
Wisconsin for use in Wisconsin. Wisconsin imposes a sales or use tax on the lease of that type
of property. You are liable for a 5% Wisconsin
use tax on your “purchase price” of the lease of
the property that you use, store, or consume in
Wisconsin, even though the lease was originally
sourced to the other state.
Exceptions:
1. Wisconsin licensed motor vehicle dealers who
use motor vehicles for a purpose in addition to
retention, demonstration, or display while holding them for sale report use tax on a certain
dollar amount or lease value per month. For
more information, refer to Wisconsin Publication 202, Sales and Use Tax Information for
Motor Vehicle Sales, Leases, and Repairs.
2. If tangible personal property; or an item, property, or good described in Part X.A.2. to 4.; is
purchased without sales or use tax using a valid
exemption certificate, and the buyer later uses
that item in a taxable manner, use tax is owed
based on the original purchase price of the
product.
If the first taxable use was prior to October 1,
2009 and occurred more than six months after
the purchase, the purchaser was allowed to
measure the use tax due by (1) the fair market
value of the item at the time that first taxable
use occurred, or (2) the “sales price.”
Example 1: Computer Store A buys and sells
computers. A laptop computer was purchased
without tax for resale on January 1, 2008 for
$550. On November 1, 2009, Computer Store A
took the laptop out of inventory and gave it
away as a promotional item (i.e., taxable use).
The fair market value of the laptop at the time
that the first taxable use occurred was $300.
Since the first taxable use occurred after October 1, 2009, Company A’s use tax liability is
based on its purchase price of $550.
Example 2: Same as Example 1, except that
Computer Store A took the laptop out of inventory and gave it away as a promotional item
(i.e., taxable use) on September 1, 2009. The
fair market value of the laptop at the time that
the first taxable use occurred was $300. Since
the first taxable use occurred more than six
months after Company A purchased the laptop
and the first taxable use occurred before October 1, 2009, Company A may choose to
measure its use tax liability by its purchase
price of $550 or by the laptop’s fair market value of $300.
C. Collecting Tax from Customers: Although Wisconsin sales tax is imposed on the retailer’s sale,
Wisconsin law allows the retailer to pass the tax
along to the consumer (buyer). To separately state
the tax and pass the tax on to its customers, a retailer must use a straight mathematical computation.
As an alternative, bracket charts that represent the
straight mathematical computation may be used in
computing the amount of the tax which may be collected from customers.
The customer should be provided with a receipt that
separately itemizes the tax. The tax due to the Department of Revenue is based on a retailer’s total
taxable sales multiplied by the tax rate, regardless
of the amount of tax collected from customers.
Straight Mathematical Computation
A retailer must determine the tax due on a transaction either by multiplying the applicable tax rate by
the sales price of each taxable product individually
or by multiplying the applicable tax rate by the aggregate sales price of all taxable products sold in a
single transaction. The tax collectible from the customer should be rounded to the nearest cent as
follows:
a. For amounts less than $0.005, the amount
should be rounded down to the next lowest
penny.
b. For amounts equal to or greater than $0.005, the
amount should be rounded up to the next highest penny.
Example 1: Tax computed at $.085000 would
be rounded up to $.09.
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Example 2: Tax computed at $6.455001 would
be rounded up to $6.46.
Example 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 the selling price
of 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).
Bracket Charts
The Department of Revenue has prepared bracket
charts that may be used by retailers to determine the
amount of tax that may be collected from its customers.
The bracket charts in Appendix G represent a
straight mathematical computation using the rounding convention described above. Tables of the rate
combinations are in Publication 229, Brackets for
Collecting Wisconsin Sales or Use Tax on Retail
Sales.
Refer to sec. Tax 11.32, Wis. Adm. Code, “ ‘Sales
price’ and ‘purchase price’,” for more information.
D. Including Tax in the Price
A retailer may choose to include the tax in the price
of the product. 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:
1. Providing the customer a receipt which states
"Prices Include Sales Tax."
2. Conspicuously posting the bracket card,
Form S-213 or Form S-218, issued by the department.
3. Conspicuously posting a sign which states
"Prices Include Sales Tax."
15
Effective June 8, 2011, it is no longer illegal for retailers to advertise that they will absorb or pay the
sales tax for their customers. Prior to June 8, 2011,
retailers could not advertise or hold out that the tax
would not be added to the selling price of the property sold or that if added, the tax would be
refunded. Any person who violated this practice
was guilty of a misdemeanor. Examples of advertising phrases that violated Wisconsin law prior to
June 8, 2011 are as follows:
“Pay no sales tax!”
“We’ll pay your sales tax.”
“Receive a discount equal to the sales tax.”
E. Credit for Taxes Paid to Another State
Wisconsin sales and use tax law provides a credit
for sales or use taxes that are properly due and paid
to another state and/or local unit of government on
tangible personal property; items, property, or
goods described in Part X.A.2. to 4.; or services
purchased outside Wisconsin and subsequently
stored, used, or consumed in Wisconsin. The credit
is allowed against (but not in excess of) the total
Wisconsin state, county, and special district (baseball stadium and football stadium) use taxes
imposed on the same items, property, or goods., or
services purchased in the other state.
Examples of the credit are provided in the tax release titled “Credit for Sales and Use Taxes Paid to
Other States and Their Local Units of Government,” which was published on pages 28-49 of
Wisconsin Tax Bulletin #157 (July 2008).
F. Credit for Taxes Paid to a Tribe
A credit against Wisconsin use tax is provided in
certain circumstances for sales tax paid to a federally recognized American Indian tribe or band in
Wisconsin for purchases of tangible personal property; items, property, and goods described in
Part X.A.2. to 4.; and taxable services that occurred
on tribal lands.
If the purchase, license, rental, or lease of tangible
personal property; an item, property, or good described in Part X.A.2. to 4.; or service subject to
Wisconsin sales and use taxes occurred on tribal
Wisconsin Sales and Use Tax Information
lands and, prior to imposing the tax under this subchapter, was subject to a sales tax by a federally
recognized American Indian tribe or band in Wisconsin, the amount of sales tax paid to the tribe or
band may, as determined by an agreement between
the Department of Revenue and the tribal council
under sec. 73.03(65), Wis. Stats., be applied as a
credit against and deducted from the sales and use
tax. For purposes of this credit, “sales tax” includes
a use or excise tax imposed on the use of tangible
personal property or taxable service by the tribe or
band.
As of the date this publication was printed, no Wisconsin American Indian tribe or band has imposed a
sales tax.
G. Products Given Away for Free
Effective September 1, 2011, a retailer is the consumer of the products it provides free of charge in
conjunction with the required purchase of another
product and is required to pay Wisconsin sales or
use tax on its purchases of these free products if the
other product that is required to be purchased is exempt from or not subject to Wisconsin sales and use
tax (sec. 77.52(21), Wis. Stats. (2009-10), as affected by 2011 Wis. Act 32). However, if the other
product that is required to be purchased from the retailer is a “taxable product,” the retailer generally
may purchase the products provided free of charge
to customers who purchase the required taxable
product without paying Wisconsin sales and use tax
because they are for resale.
A product is provided free of charge with the required purchase of another product if the customer
does not have to pay an additional amount to receive the second product (i.e., the sales price of the
transaction does not vary depending upon whether
or not the second product is included in the transaction).
For the period of October 1, 2009 through August 31, 2011, a retailer was the consumer of the
products it provided free of charge in conjunction with
the required purchase of another product and was required to pay Wisconsin sales or use tax on its
purchases of these free products, as provided in
sec. 77.52(21), Wis. Stats. (See the following Exception.) This was true regardless of whether the customer
was required to purchase a separate taxable or nontaxable product before getting the free product.
Exception: Products that were purchased without tax for resale prior to October 1, 2009 that
were intended to be transferred to customers
who were required to purchase some other
product in order to receive the “free” product
did not become subject to use tax solely due to
the sec. 77.52(21), Wis. Stats., law change in
2009 Wis. Act 2 that was effective October 1,
2009. This included such products that were
transferred to customers October 1, 2009
through August 31, 2011. However, if a customer received a taxable “free” product when
purchasing a nontaxable product, the seller may
have used its purchase price of the “free” product to determine the amount that is subject to
sales tax.
Prior to October 1, 2009, retailers were considered to
have made a retail sale of the products they transferred
to customers who were required to purchase some other product in order to receive the “free” product. In
addition, retailers were allowed to purchase such
“free” products without tax for resale.
The following examples illustrate these changes.
Example 1: Taxable Product Given Away with Required Purchase of Nontaxable Product – Retailer
A provides a hat free of charge to any customer that
purchases a certain number of gallons of gasoline
subject to excise tax under ch. 78, Wis. Stats.
(2009-10) (i.e., a nontaxable product). The price of
the gasoline does not vary depending on whether
the hat is included in the transaction. The receipt
given by Retailer A to the customer indicates the
sales price of the gasoline but does not mention the
hat at all. Since Retailer A is giving a hat at no
charge to any customer that purchases the required
number of gallons of gasoline (i.e., a nontaxable
product), Retailer A is the consumer of these hats,
as provided in sec. 77.52(21)(a), Wis. Stats.
(2009-10), as renumbered and amended by 2011
Wis. Act 32, and is required to pay Wisconsin sales
or use tax on its purchases of the hats.
In Example 1, the Wisconsin sales and use tax
treatment of the hats for the period of October 1,
2009 through August 31, 2011 is the same as the
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Wisconsin sales and use tax treatment of the hats on
and after September 1, 2011. (Note: Hats that were
purchased without tax for resale prior to October 1,
2009 and that are “given away” between October 1,
2009 and August 31, 2011 do not become subject to
use tax solely due to the law change that was effective October 1, 2009.)
(i.e., the bicycle) were taxable products, no specific
allocation between the selling prices of the products
would have been made (i.e., Retailer B would have
charged sales tax on the entire selling price, regardless of any allocation of the selling price between
the two products). Retailer B could have purchased
the bicycles without tax for resale.
For sales made prior to October 1, 2009, Retailer A was required to allocate its selling price
between the taxable product (i.e., the hat) that was
“given away” and the nontaxable product (i.e., the
gasoline) that was sold. Retailer A was liable for the
sales tax on the portion of its selling price allocated
to the taxable product (i.e., the hat) that was “given
away.” Retailer A could have purchased the hats
without tax for resale and used the cost of the hats
to determine the amount that was subject to sales
tax.
Example 3: Retailer Advertises Fourth Tire Free
with Purchase of Three Other Tires – Retailer K
operates an automotive repair facility. Retailer K
offers a promotion in which a customer is provided
a free tire if the customer purchases three other tires
(i.e., taxable products). If the customer does not
want the free tire, the sales price of the other three
tires does not change. The receipt given by Retailer K to the customer indicates that the fourth tire is
given to the customer for no charge. Although Retailer K is providing a tire free of charge to every
customer that purchases three other tires (i.e., taxable products), Retailer K may still purchase the tires
provided free of charge for this promotion without
tax for resale since the customer is required to purchase the three other tires (i.e., taxable products) in
order to receive the free tire.
Example 2: Taxable Product Given Away with Required Purchase of a Different Taxable Product –
Retailer B provides a bicycle free of charge to every
customer that purchases a new couch (i.e., a taxable
product). The price of the couch does not vary depending on whether the bicycle is included in the
transaction. The receipt given by Retailer B to the
customer indicates that the bicycle is given to the
customer for no charge. Although Retailer B is
providing a bicycle free of charge, Retailer B may
purchase the bicycle without tax for resale since the
customer is required to purchase the couch (i.e., a
taxable product) in order to receive the bicycle.
For sales made during the period of October 1,
2009 through August 31, 2011, the retailer is the
consumer of the bicycles and is required to pay
Wisconsin sales or use tax on its purchases of these
bicycles. (Note: Bicycles that were purchased without tax for resale prior to October 1, 2009 and that
are “given away” between October 1, 2009 and August 31, 2011 do not become subject to use tax
solely due to the change in law effective October 1,
2009. In these situations, Retailer B is liable for
Wisconsin sales tax on its sale of the couch, but is
not liable for Wisconsin use tax on its purchase of
the bicycle.)
For sales made prior to October 1, 2009, since
both the product that was being purchased (i.e., the
couch) and the product that was being “given away”
17
For sales made during the period of October 1,
2009 through August 31, 2011, the sales tax treatment of the tire is the same as that described for the
bicycle in Example 2 for the period of October 1,
2009 through August 31, 2011.
For sales made prior to October 1, 2009, the Wisconsin sales tax treatment of the tire is the same as
that described for the bicycle in Example 2 for the
period prior to October 1, 2009.
VII.
ACCOUNTING METHODS, WHEN
A SALE OCCURS, AND WHERE A
SALE TAKES PLACE
(“SOURCING” RULES)
A. Accounting Methods
The accrual method of accounting must be used by
all retailers to determine and report their total sales,
with one exception. The Department of Revenue
may, if it is satisfied that an undue hardship would
result from using the accrual method, permit some
other method such as the cash method of account-
Wisconsin Sales and Use Tax Information
ing. Before using some other method, written approval must be obtained from the department.
Written approval is not required to use the accrual
method.
Under the accrual method of accounting, all cash,
credit, installment, and conditional sales are included in total sales on the return for the reporting
period in which the sale occurs, even though all or
part of the payments for such sales are not received
until a later reporting period. (See Part VIII.B.)
Example: If you are on a monthly reporting basis (file monthly returns) and a sale occurs in
January, the sales price of the sale must be reported on the January return, even though
payment is not received until February or a later
month.
If a retailer cannot reasonably separate and account
for individual sales of taxable products or services,
the Department of Revenue may authorize the use
of a formula method for determining taxable and
exempt sales. The retailer must request and receive
written approval from the Department of Revenue
before using a formula method. The formula must
be designed to approximate the correct tax liability.
In addition, the use of the formula is subject to review and redetermination by the Department of
Revenue at a later date.
B. When a Sale Occurs
A sale involving the transfer of ownership of tangible personal property; or items or property
described in Part X.A.2. and 3.; occurs at the time
when possession is transferred by the seller or the
seller’s agent to the purchaser or the purchaser’s
agent, regardless of when payment is made. For this
purpose, a common carrier or the United States
Postal Service is an agent of the seller.
A sale or purchase involving a digital good described in Part X.A.4. occurs when possession is
transferred by the seller or the seller’s agent to the
purchaser or the purchaser’s agent or when the digital good is first used, whichever comes first. A sale
or purchase of a product transferred electronically,
including a digital good, that is sold by “subscription,” occurs at the time when the payment for the
“subscription” is due to the seller.
“Subscription” means an agreement with a seller
that grants the consumer the right to obtain products
transferred electronically from within one or more
product categories having the same tax treatment, in
a fixed quantity or for a fixed period of time, or
both.
A sale of a taxable service is considered to occur
when the service is sold, furnished, or performed by
the seller.
C. Where a Sale Takes Place – “General Sourcing
Rules”
In order to determine where a sale takes place for
Wisconsin sales and use tax purposes (where a sale
is “sourced”), a specific hierarchy is used. The hierarchy is referred to as the “General Sourcing
Rules.” The “General Sourcing Rules” should be
used to determine the location of a sale, with the
following exceptions:
•
Leases, licenses, and rentals – Information
about how to determine the location where these transactions take place (i.e., where lease,
license, or rental payments are “sourced”) is
provided in Part XIII.D.
•
Direct mail – Information about how to determine the location where a sale of direct mail
takes place (i.e., where the sale is “sourced”), is
provided in Part VII.D.
•
Telecommunications services - Please refer to
sec. Tax 11.66, Wis. Adm. Code, “Telecommunication and telecommunications message
services,” for information explaining where
these services take place (i.e., where these services are “sourced”).
•
Retail florists – Information about how to determine where sales by retail florists take place
(i.e., where these sales are “sourced”) is provided in Part VII.E.
General Sourcing Rules (Where the Sale Takes
Place)
Except as provided above, the location where a sale
takes place is determined in Part VII.C., 1. through
5., below:
(Note: For purposes of determining where a sale
takes place, “receive” means taking possession of
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tangible personal property; or items or property described in Part X.A.2. and 3.; taking possession or
making first use of digital goods described in
Part X.A.4., whichever comes first; or making first
use of services. "Receive" does not include a shipping company taking possession of tangible personpersonal property; or items or property described in
Part X.A.2. and 3.; on a purchaser's behalf.)
1. If a purchaser receives the product at a seller’s
business location, the sale takes place at that
business location. If 1. does not apply, go to 2.
2. If 1. does not apply, the sale takes place at the
location where the purchaser, or the purchaser’s
designated donee receives the product. This includes the location indicated by instructions
known to the seller for delivery to the purchaser
or the purchaser’s designated donee. If 2. does
not apply, go to 3.
3. If 1. and 2. do not apply, the sale takes place at
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. If 3.
does not apply, go to 4.
4. If 1., 2., and 3. do not apply, the sale takes place
at 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. If 4. does not apply, go to 5.
5. When 1., 2., 3., and 4. do not apply, including
when there is not sufficient information to determine the location of the sale, the sale takes
place as follows:
19
•
If the item sold is tangible personal property; or an item or property described in
Part X.A.2. and 3.; the sale takes place at
the location from which the tangible personal property, item, or property is shipped.
•
If the item sold is a digital good described
in Part X.A.4., or computer software delivered electronically, the sale takes place at
the location from which the digital good or
computer software was first available for
transmission by the seller, not including
any location that merely provides the digital
transfer of the product sold.
•
If a service is sold, the sale takes place at
the location from which the service was
provided.
D. Where a Sale Takes Place - Direct Mail
There are special provisions in the law for determining where the sale of “direct mail” takes
place. "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 described in
Part X.A.2. to 4.; 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 described in Part X.A.2. to 4.; 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: Sales of catalogs and their mailing envelopes that are designed to advertise and promote
the sale of merchandise or to advertise the services of individual business firms are exempt
from tax. An exemption also applies to printing
or imprinting services that result in such catalogs and their mailing envelopes. “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. Printed materials
that are not bound, stitched, sewed, or stapled,
cannot meet the definition of “catalog.” For example, an advertising pamphlet that is printed
on a single sheet of paper and simply folded
Wisconsin Sales and Use Tax Information
one or more times, without being bound,
stitched, sewed or stapled, does not meet the
definition of “catalog,” and the exemption does
not apply.
The sales price of direct mail does not include
separately stated delivery charges. For purposes
of the sale of direct mail, “separately stated delivery charges” means charges by a seller to
prepare and deliver the direct mail to a location
designated by the purchaser of the direct mail,
including charges for transportation, shipping,
postage, handling, crating, and packing, that are
separately stated on the invoice, bill of sale, or
similar document that the seller gives to the
purchaser.
1. Sales from October 1, 2009 through
May 26, 2010
Parts a. through c., below, give the location of a
sale of direct mail. Part d., below, provides the
location of a sale of services (e.g., the customer
provides the paper and a printer provides the
printing and mailing services).
a. Purchaser does not provide a direct pay
permit, exemption certificate claiming
direct mail, or certain other information.
The sale of direct mail takes place at the location from which the direct mail is shipped
if the purchaser does not provide the seller
one of the following:
•
A direct pay permit,
•
An exemption certificate (Form S-211 or
Form S-211-SST) claiming direct mail, or
•
Other information that indicates the appropriate taxing jurisdiction to which the direct
mail is delivered to the ultimate recipients.
If the seller ships the direct mail from Wisconsin, the seller’s entire charge for the direct mail
is subject to tax, excluding separately stated delivery charges.
If the seller ships the direct mail from a location
outside of Wisconsin, the purchaser is liable for
the use tax on its purchase price of direct mail,
excluding any separately stated delivery charges, that relate to direct mail shipped to
addresses in Wisconsin. No credit for taxes paid
to another state is allowed as a credit against the
Wisconsin use tax due.
b. Purchaser provides direct pay permit or exemption certificate claiming direct mail. If
the purchaser provides an exemption certificate
claiming direct mail or a direct pay permit to
the seller, the purchaser shall pay or remit, as
appropriate, to the department the use tax on all
purchases for which the tax is due. The seller is
relieved from liability for collecting sales tax.
Wisconsin tax is due for charges by the seller
for the direct mail, excluding any separately
stated delivery charges, that relate to direct mail
shipped to addresses in Wisconsin.
c. Purchaser provides delivery information. If
the purchaser provides delivery information indicating the jurisdictions to which the direct
mail is to be delivered to the recipients, the sale
takes place in those jurisdictions. The seller
must collect and remit the tax according to the
delivery information provided by the purchaser
and, in the absence of bad faith, the seller is relieved of any further obligation to collect tax on
the sale of direct mail based on information
provided by the purchaser. Wisconsin tax is
based on charges by the seller for the direct
mail, but excluding any separately stated delivery charges, that relate to direct mail shipped to
addresses in Wisconsin.
d. Charges for the sale of taxable services. The
seller’s charges for the sale of taxable services
that result in the production of direct mail (e.g.,
printing services when the customer provides
the paper) are subject to Wisconsin tax to the
extent the direct mail is shipped to addresses in
Wisconsin. The portion of the charges for services relating to direct mail that is shipped to
addresses outside of Wisconsin is not subject to
Wisconsin sales tax. Note: For the period of
October 1, 2009 through May 26, 2010, the location of the sale of a taxable service relating to
direct mail is determined under the General
Sourcing Rules. See Part VII.C.
2. Sales occurring on and after May 27, 2010
Effective May 27, 2010, the law was amended to
adopt definitions of “advertising and promotional
direct mail” and “other direct mail.”
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“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.
“Other direct mail” means any direct mail that is
not advertising and promotional direct mail, regardless of whether advertising and promotional direct
mail is included in the same mailing. “Other direct
mail” includes all of the following:
•
Transactional direct mail that contains personal
information specific to the addressee, including
invoices, bills, account statements, and payroll
advices.
•
Any legally required mailings, including privacy notices, tax reports, and stockholder reports.
•
Other nonpromotional direct mail, including
newsletters and informational pieces, that is delivered to existing or former shareholders,
customers, employees, or agents.
“Other direct mail” does not include printed materials that result from developing billing information
or providing any data processing service that is
more than incidental to producing the other direct
mail.
a. Charges for advertising and promotional direct mail or services that are an integral part
of the production and distribution of advertising and promotional direct mail
1. Purchaser does not provide a direct pay
permit, exemption certificate claiming direct
mail, or certain other information. The sale
of advertising and promotional direct mail, or
services that are an integral part of the production and distribution of advertising and
promotional direct mail, takes place at the location from which the advertising and
promotional direct mail is shipped if the purchaser does not provide to the seller one of the
following:
• A direct pay permit,
• An exemption certificate (Form S-211
or Form S-211-SST) claiming direct
mail, or
21
• Other information that indicates the appropriate taxing jurisdiction to which
the advertising and promotional direct
mail is delivered to the ultimate recipients.
If the seller ships the advertising and promotional direct mail from Wisconsin, the entire
charge for the advertising and promotional direct mail, or a service that is an integral part of
the production and distribution of advertising
and promotional direct mail, is subject to tax,
excluding any separately stated delivery charges.
If the seller ships the advertising and promotional direct mail from a location outside of
Wisconsin, the purchaser is liable for use tax on
its purchase price (excluding any separately
stated delivery charges) of the advertising and
promotional direct mail, or a service that is an
integral part of the production and distribution
of advertising and promotional direct mail, if
the advertising and promotional direct mail is
delivered to addresses in Wisconsin. No credit
for taxes paid to another state is allowed as a
credit against the Wisconsin use tax due.
2. Purchaser provides direct pay permit or exemption certificate claiming direct mail. If
the purchaser provides an exemption certificate
claiming direct mail or a direct pay permit to
the seller, the purchaser must pay or remit, as
appropriate, to the department the use tax on all
purchases of advertising and promotional direct
mail or services that are an integral part of the
production and distribution of advertising and
promotional direct mail delivered to Wisconsin,
excluding any separately stated delivery charges. The tax is calculated at the rate imposed by
the jurisdiction(s) where the advertising and
promotional direct mail is delivered to the recipients.
3. Purchaser provides delivery information. If
the purchaser provides delivery information indicating the jurisdictions to which the
advertising and promotional direct mail is to be
delivered to the recipients, the seller must collect and remit the tax according to the delivery
information provided by the purchaser on all
sales of advertising and promotional direct mail
or services that are an integral part of the pro-
Wisconsin Sales and Use Tax Information
duction and distribution of advertising and
promotional direct mail delivered to Wisconsin,
excluding any separately stated delivery charges. The tax is calculated at the rate imposed by
the jurisdiction(s) where the advertising and
promotional direct mail is delivered to the recipients.
4. Bundled transactions. If a transaction is a
bundled transaction that includes advertising
and promotional direct mail, a.1. to 3., above,
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.
b. Charges for other direct mail or services that
are an integral part of the production and
distribution of other direct mail
1. Purchaser does not provide a direct pay
permit, exemption certificate claiming
direct mail, or certain other information.
The sale of other direct mail or services that
are an integral part of the production and
distribution of other direct mail takes place
at the purchaser's address as indicated by
the seller's business records, if using that
address to establish the location of the sale
is not in bad faith. If that address is a Wisconsin address, Wisconsin tax is due on the
entire charge by the Wisconsin seller for
the other direct mail or the services that are
an integral part of the production and distribution of the other direct mail, but
excluding any separately stated delivery
charges.
2. Purchaser provides direct pay permit or
exemption certificate claiming direct
mail. If the purchaser provides an exemption certificate claiming direct mail or a
direct pay permit to the seller, the purchaser
must pay or remit, as appropriate, to the department the use tax (excluding any
separately stated delivery charges) on all
purchases of other direct mail or services
that are an integral part of the production
and distribution of other direct mail if the
advertising and promotional direct mail is
delivered to addresses in Wisconsin. The
tax is calculated at the rate imposed by the
jurisdiction(s) where the other direct mail is
delivered to the recipients.
c. Single mailing including both advertising
and promotional direct mail and other direct
mail. If advertising and promotional direct mail
and other direct mail are included in a single
mailing, the location of the sale of that mailing
is determined in same manner as a sale of other
direct mail.
E. Where a Sale Takes Place – Retail Florists
Generally, sales by a retail florist follow the General Sourcing Rules in Part VII.C.
Example: Retail Florist A located in Dane
County receives an order from a customer who
wants a floral arrangement delivered to a location in Jefferson County. Retail Florist A
delivers the floral arrangement to Jefferson
County. The sale takes place in Jefferson County.
However, when a 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, the sale takes
place at the location where the first 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 B located in Wisconsin
receives an order from a customer who wants
the flowers delivered to a location in Kentucky.
Retail Florist B contacts Retail Florist C, located in Kentucky, and has Retail Florist C prepare
the order and deliver it to the location in Kentucky. The sale takes place at Retail Florist B’s
location in Wisconsin.
A “retail florist” is 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. A person who sells
cut flowers, floral arrangements, and potted plants
primarily by mail or via the Internet is not a “retail
florist.”
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Publication 201
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 follow the
General Sourcing Rules.
VIII. FILING RETURNS AND PAYING
THE TAX
A. How Often Must a Return Be Filed? If you have
a seller’s permit, use tax registration certificate, or
consumer use tax registration certificate, you must
file a return for each “reporting period,” even if no
tax is due for that period.* Your “reporting period”
will be either monthly, quarterly, or annually. For
example, if your reporting period is monthly, you
must file a return for each month of the year, regardless of whether any tax is due for the month.
Generally, your reporting period will be quarterly
unless the Department of Revenue notifies you in
writing that your returns must be filed monthly or
annually.
*Certain retailers who registered voluntarily
through the Streamlined Sales Tax Governing
Board’s web site who indicate at the time of registration that they do anticipate making taxable sales
in Wisconsin are not required to file returns in Wisconsin until such time that the retailer makes a
taxable sale in Wisconsin.
Wisconsin sales and use tax returns must be filed
using one of the electronic filing methods listed in
Part VIII.B. A seller that is unable to file electronically may request a waiver from the Department of
Revenue. A waiver will be granted if the requirement to file electronically causes an undue
hardship. An example of an undue hardship is the
onset of a disabling illness or injury.
Your request for a waiver must be in writing. The
request should indicate the business name, tax account number, and the reason why your sales and
use tax returns cannot be electronically filed. Requests
can
be
made
by
e-mail
at
[email protected]; faxed to
(608) 267-1030; or mailed to Wisconsin Department of Revenue, Mandate Waiver Request, Mail
23
Stop 5-77, P.O. Box 8949, Madison, WI 537088949.
Additional
information
is
available
at
www.revenue.wi.gov/eserv/rule.html#sales or you
may contact the department by mail or e-mail at
[email protected]
or
by
telephone
at
(608) 261-6261.
If you have been granted a waiver, a return will be
mailed to you shortly before the end of each reporting period. If you do not receive your return within
15 days after the end of the reporting period, phone
the Department of Revenue at (608) 266-2776.
B. Electronic Filing and Payment Options Available for Sales and Use Tax Return Filing
1. My Tax Account
My Tax Account is a free, secure online application that allows you to file and pay your sales
and use taxes electronically. It performs the
necessary computations of tax based on information that you enter and allows you to make
your tax payment via electronic funds transfer,
credit card or paper check. My Tax Account also
allows you to:
•
•
•
•
View business tax filing and payment history and identify any tax periods that need
attention.
Change your address, obtain an extension
to file a return or inactivate your account.
File a buyer’s claim for refund of sales tax
paid to a seller in error.
Appeal adjustment notices.
To use My Tax Account, you must obtain a logon ID and password from the Department of
Revenue. Go to the My Tax Account FAQs on
the Department of Revenue’s web site for more
information, including how to obtain your logon ID and password.
2. Sales TeleFile
You can file your Wisconsin sales and use tax
return with any touch-tone telephone. This program accepts four payment types: Direct
withdrawal (only available during the call in
Wisconsin Sales and Use Tax Information
which you file your return), credit card, check,
or money order. To use TeleFile, obtain a Sales
TeleFile Worksheet & Payment Voucher. When
you have completed the worksheet, call
(608) 261-5340 to actually file your return.
3. eFile Transmission
This program is a service for taxpayers using
approved private vendors’ software or who
have the technical expertise to create a file in
XML format. eFile transmission places return
data into a file format that can be directly processed into the Department of Revenue system.
Using secure transmission over the Internet you
can submit a payment at the same time that you
file your return using ACH debit or ACH credit.
You will receive an e-mail acknowledgement to
confirm receipt of a successful file transmission. Information about file transmission can be
found on the Department of Revenue’s web site at
www.revenue.wi.gov/eserv/eftgen.html.
4. Questions?
More information on all of the above services
can be found under the “Businesses” or “Online
Services” sections of the Department of Revenue web site. If you have questions about
electronic filing or payments, contact the department by writing to Wisconsin Department
of Revenue, Electronic Funds Transfer Assistance,
Mail
Stop 3-80,
P.O. Box 8902,
Madison,
WI
53708-8902;
calling
(608) 266-2776; or e-mailing at [email protected]
C. Business at More Than One Location: If you are
one legal entity engaged in business at more than
one location, even though you hold a separate seller’s permit for each location, you must file one
consolidated return which includes the information
and figures for all of your business locations.
Example: If you operate ten restaurants at ten different locations in Wisconsin, only one return
should be filed for each reporting period. That return should include the total sales, deductions, use
tax, etc., for all ten restaurants.
D. Single-Owner Entity Disregarded as Separate
Entity: Effective September 1, 2009, the owner of a
single-owner entity that is disregarded as a separate
entity for purposes of Chapter 71 (“disregarded entity”) has the option to (1) include the information
from the disregarded entity on the owner's return, or
(2) file a separate electronic sales and use tax return
for the disregarded entity. If an owner that owns
more than one disregarded entity elects to file a
separate return for one if its disregarded entities, the
owner is required to file separate returns for all of
its disregarded entities. Such 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.
Prior to September 1, 2009, if a single-owner entity
was disregarded as a separate entity under sec. 7701
of the Internal Revenue Code, the owner was required to include the information from the entity on
the owner’s sales and use tax returns.
See the Disregarded Entities FAQ on the Department of Revenue’s web site for additional
information.
E. Seasonal Retailers: If you are open for business
only part of the year, you may be allowed to file returns on a seasonal basis. If you are in this situation
and have not yet registered for a seller’s permit, the
Form BTR-101, Application for Business Tax Registration, you file with the Department of Revenue
should indicate the beginning and ending months of
your business season. If you are already registered
for a seller’s permit, you may submit a written request to the Department of Revenue, Mail
Stop 3-80, P.O. Box 8902, Madison, WI 537088902, to file on a seasonal basis. This written request should include your Wisconsin tax account
number, the beginning month of operation, and the
closing month of operation. After a review of your
account, a letter will be sent to you verifying your
filing responsibility.
Note: Seasonal retailers are required to file returns
monthly. If you receive approval to file on a seasonal basis, monthly returns will be mailed to you
for a full year at the end of the month your season
begins. During the months you are open for business, returns must be filed by the due date shown on
the returns. If there is no change in your season, you
are not required to file returns covering the periods
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Publication 201
in which you will not operate. You must notify the
department of any change in your months of business operations.
F. Due Date for Filing: Each return you receive from
the Department of Revenue will have printed on it
the due date by which the return must be filed. Returns must be filed by the last day of the month folfollowing the end of the reporting period. However,
if the sales and use tax liability is more than $3,600
per quarter, returns may be due by the 20th day of
the month following the end of the reporting period.
Persons required to file by the 20th of the month
will receive a written notice from the Department of
Revenue indicating their due date for filing returns.
Example: You file returns on a monthly basis
and the returns are due by the last day of the
month following the end of the reporting period. Your return for the month of January must
be filed by February 28. However, if you were
notified by the Department of Revenue to file
by the 20th of the month because your tax liability is more than $3,600 per quarter, the
January return must be filed by February 20.
Note: When the due date falls on a weekend or legal holiday, the due date is extended to the next
business day immediately following the weekend or
holiday.
To be considered timely, a return filed electronically with ACH Debit method of payment, must be
filed prior to 4:00 pm (CST) one business day before the due date in order for the payment to
transfer on the due date. A return filed electronically is considered timely if e-filed on or before the
due date.
If mailed, a return is considered filed by the due
date if (1) the return is mailed in a properly addressed envelope with the postage duly prepaid,
(2) the envelope containing the return is postmarked
on or before the due date, and (3) the return is received by the department within five days of the
due date.
“Mailed” includes delivery by a delivery service
designated under sec. 7502(f) of the Internal Revenue Code.
25
If you close your business or cancel your seller’s
permit because you no longer make sales or purchases that are subject to tax, you are required to
file a final return within 30 days after closing your
business or cancelling your permit, regardless of
your filing frequency. The department will accept
the final return as timely-filed as long as it is filed
by the end of the month following the month in
which the sales and use tax account was closed
(20th day of the month for early monthly filers).
Example: If an account is closed effective
June 15, the final sales and use tax return
should be filed within 30 days, but no later than
July 31.
G. Obtaining an Extension of Time to File: If you
cannot file your return by the due date, you should
write to the Department of Revenue, Mail
Stop 5-77, P.O. Box 8949, Madison, WI 537088949, before the due date of the return and request
an extension of time to file. The department may
grant you an additional month from the due date of
the original return to file the return. However, if the
tax is not paid by the original due date, the tax will
be subject to 1% interest per month during the extension period. You will not lose the retailer’s
discount or be subject to a late filing fee if you pay
the total tax due within the extension period.
H. Payment of Tax: The tax may be paid by check,
money order, or electronically. Do not use cash or
postage stamps.
If you choose to pay electronically, the payment options available are the Automated Clearing House
(ACH) debit and ACH credit.
•
ACH Debit - The ACH debit method allows
you to transfer funds by instructing the state to
electronically debit a bank account you control
by making a payment request at the time of filing your return electronically. If you choose to
file your return electronically using My Tax Account, Sales Telefile or XML File Transmission
you are given an option to instruct the state to
debit your bank account for the amount owed
on the return. You instruct the state (grant the
state permission) to debit your bank account by
supplying your Routing Transit Number (RTN),
bank account number, requested payment date
and payment amount at the time of filing the re-
Wisconsin Sales and Use Tax Information
turn. There is no cost for this type of payment
transaction. This option is recommended because of the simplicity and cost savings to you.
•
ACH Credit - The ACH credit method allows
you to transfer funds by instructing your financial institution to debit your account and credit
the state’s bank account. Financial institutions
may charge a fee for making ACH credit payments.
I. Retailer’s Discount: As partial compensation for
collecting, accounting for, and reporting the tax, retailers may take a credit, which is called the
“retailer’s discount.” The discount is not allowed on
any tax paid after the due date (or extended, in the
case of an extension, after the due date) of the sales
and use tax return.
The retailer’s discount is 0.5% of a retailer’s sales
and use tax payable, with the exception listed below. 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.
Exception: If multiplying the sales and use tax
payable by 0.5% results in $10 or less, the retailer’s
discount is the lesser of (1) $10 or (2) the sales and
use tax payable.
“Sales and use tax payable” includes the following
amounts:
1. The amount of the 5% state (Wisconsin) sales
and use tax payable on retail sales.
2. The amount of the 0.5% county sales and use
tax payable on retail sales.
3. The amount of the 0.1% or 0.5% stadium sales
and use tax payable on retail sales.
Note: The retailer’s discount does not apply to use tax
payable on purchases of tangible personal property;
items, property, and goods described in Part X.A.2. to
4.; and taxable services.
Tax Account, the Department of Revenue’s Internet-based tax service. See Part VIII.B.1. for
additional information about how to use My Tax
Account..
In lieu of using My Tax Account, you may file correct your error by filing an amended paper
Form ST-12, Wisconsin Sales and Use Tax Return.
Refer to the instructions for Form ST-12 for more
information.
K. Overpayments – Filing Claims for Refund: If
you determine that you overpaid Wisconsin sales or
use tax to the Department of Revenue or a seller, a
claim for refund of the overpaid tax may be filed as
explained below. Who may file the claim for refund
depends on whether you are a seller or a buyer.
Sellers:
If you overpaid Wisconsin sales or use tax on the
sale of tangible personal property or taxable services to a buyer, you may file a claim for refund. It
is suggested that you file the refund claim using
Form ST-12, Wisconsin Sales and Use Tax Return,
as an amended return. In lieu of Form ST-12, you
may file a claim for refund in letter form, including
your tax account number, the reporting period, and
a statement giving the specific reasons for claiming
the refund, as well as the amount requested.
Refer to the instructions for Form ST-12 for more
information on how to use Form ST-12 as an
amended return.
Claims for refund should be sent to Wisconsin Department of Revenue, Mail Stop 5-144,
P.O. Box 8906, Madison, WI 53708-8906.
Caution: If you collected sales or use tax from
buyers, you must return to the buyer the tax and interest refunded to you by the Department of
Revenue as a result of your claim for refund. If you
are unable to return the tax and interest to the buyer,
you must return the refund to the Department of
Revenue. Failure to return the refund may result in
a penalty being imposed.
J. Correcting an Error – Underpayments: If you
file your return and then later become aware that
you made an error on the return by underreporting
the tax due, you should correct your error using My
26
Publication 201
Buyers:
A buyer may file a claim for refund with the Department of Revenue for sales or use tax paid in
error to a seller if the claim for refund is $50 or
more of tax.
If the tax paid in error is less than $50, a buyer may
still file a claim for refund with the department for
tax paid in error to a seller if (1) the seller is out-ofbusiness, (2) the buyer is being field audited, or
(3) the period covered in the claim for refund is
within the statute of limitations for the buyer, but is
closed to the seller. If none of these conditions are
met by the buyer and the claim for refund is under
$50, the buyer may not file a claim for refund with
the department, but may request the seller who paid
the tax to the department to file a claim for refund.
A buyer may file a claim for refund with the Department of Revenue for sales or use tax paid in
error to a seller if the claim for refund is $50 or
more of tax.
If the tax paid in error is less than $50, a buyer may
still file a claim for refund with the department for
tax paid in error to a seller if (1) the seller is out-ofbusiness, (2) the buyer is being field audited, or
(3) the period covered in the claim for refund is
within the statute of limitations for the buyer, but is
closed to the seller. If none of these conditions are
met by the buyer and the claim for refund is under
$50, the buyer may not file a claim for refund with
the department, but may request the seller who paid
the tax to the department to file a claim for refund.
Buyers that overpaid sales or use tax to a seller can
file a claim for refund using one of the following
two methods:
27
•
File an electronic Buyer’s Claim for Refund; or
•
File a paper Form S-220, Buyer’s Claim for Refund of Wisconsin State, County, and Stadium
Sales Taxes (also known as Form BCR).
Form S-220a, Attachment to Form BCR, Buyer’s Claim for Refund of Wisconsin State,
County, and Stadium Sales Taxes (also know as
Schedule P), must be completed and attached to
Form S-220 for each seller to whom the buyer
paid sales or use tax in error.
Whether you are a seller or a buyer, a claim for refund may generally be filed within four years after
the unextended due date of your Wisconsin income
or franchise tax return. If you are not required to
file a Wisconsin income or franchise tax return, a
claim for refund may be filed within four years of
the 15th day of the 4th month of the year following
the close of the taxable year. However, if you have
been audited by the Department of Revenue, different time limits may apply.
For more information on claims for refund, including when a claim must be filed, obtain
Publication 216, Filing Claims for Refund of Sales
or Use Tax.
L. Refund of Tax From Seller to Buyer: A seller is
required to refund taxes and related interest to the
buyers from whom the taxes were collected, in the
following situations:
Situation 1: The seller files a claim for refund
with the Wisconsin Department of Revenue, for
taxes that the seller has collected from buyers,
and receives such refund.
Situation 2: The seller files a claim for refund
with the Wisconsin Department of Revenue, for
taxes that the seller has collected from buyers,
and the seller is entitled to a refund of such taxes, but the refund is offset against deficiencies
of the seller due and owing on the books of the
Wisconsin Department of Revenue.
Situation 3: The seller collects amounts as taxes
erroneously from buyers, but the seller does not
remit such amounts to the state.
For Situations 2 and 3, the requirement to refund
the tax to buyers first applies to notices of refunds
or notices of amounts due dated, offsets taken, and
the discovery of amounts collected erroneously as
taxes on October 28, 2005, even if the notices, offsets, and amounts relating to sales that occurred as
far back as September 1, 1994.
If the seller cannot locate the buyers, the seller must
return the taxes and related interest to the Wisconsin Department of Revenue within 90 days after the
date of the refund, within 90 days after the date of
the offset, or within 90 days after discovering that
Wisconsin Sales and Use Tax Information
the seller has collected taxes erroneously from the
buyers.
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 of Revenue under this
provision 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; or item, property, or
good described in Part X.A.2. to 4.; that is used by
the person in that activity or service and transferred
to the buyer.
The department may offset the amount of any refund for a period, together with interest on the
refund, against deficiencies for another period, and
against penalties and interest on the deficiencies, or
against any amount of whatever kind, due and owing on the books of the department from the person
who is entitled to the refund.
Note: Effective August 1, 2010, the Department of
Revenue is directed to enter into agreements with
the federal Department of the Treasury that provide
for offsetting state payments against federal nontax
obligations. The Department of Revenue may
charge a fee up to $25 per transaction for such offsets, offset federal payments against state tax and
nontax obligations, and collect the offset cost from
the debtor, if the agreements provide that setoffs
under sec. 73.03(52)(a), Wis. Stats., and secs. 71.93
and 71.935, Wis. Stats., occur before the setoffs under this provision. The agreement shall provide that
the federal Department of the Treasury may deduct
a fee from each administrative offset and state payment offset. “Administrative offset” is any offset of
federal payments to collect state debts and “state
payment offset” is any offset of state payments to
collect federal nontax debts.
M. Failing to File or Pay or Filing Incorrect Returns
Is Costly: If you do not file returns or pay the tax
by the due date or file incorrect returns, you can be
assessed late filing fees, penalties, and interest. In
addition, a lien can be filed against your property,
your seller’s permit can be revoked, and criminal
charges can be filed against you. Listed below are
some of the penalties, interest, and other actions
that can take place if you fail to file or pay by the
due date or file incorrect returns. (Also see the
“Note” in Part VIII.I., above.)
Failure to File or Pay By the Due Date:
•
Negligence penalty of 5% of the tax due for
each month (or part of a month) the return is
filed after the due date. The maximum negligence penalty for late filing is 25% of the tax
due.
•
$20 late filing fee for not filing a return by the
due date because of neglect, unless the return
was filed late because of the death of the person
required to file the return.
•
Interest of 18% per year on any unpaid taxes
that are delinquent.
•
Retailer’s discount is not allowed if taxes are
paid after the due date or extended due date.
•
A lien is filed against your property. This lien is
filed with the county clerk of court and is a
public record. After the lien is filed, your property cannot be sold without the delinquent
taxes, interest, penalties, and fees being paid to
the Department of Revenue.
•
Seller’s permit may be revoked if you fail to
file returns or pay taxes by the due date. Criminal charges may be brought against a person
who operates without a seller’s permit or after a
permit is revoked.
•
Estimated assessment may be issued which includes penalty of 25% of estimated tax.
Filing Incorrect Returns or Claims for Refund:
•
Negligence penalty of 25% of the additional
taxes due if there is negligence in filing the return.
•
Negligence penalty of 25% of the difference between the amount of a refund claimed and the
amount that should have been claimed if there
is negligence in filing a claim for refund.
•
Fraud penalty of 100% of the difference between the amount of a refund claimed and the
amount that should have been claimed if there
is fraud in filing a claim for refund.
28
Publication 201
•
Fraud penalty of 50% of the additional taxes
due if there was intent to defeat or evade the
taxes in filing the return.
•
Negligence penalty of 50% of tax finally determined if, due to neglect, an incorrect return
is filed to report the purchase of a motor vehicle, boat, snowmobile, recreational vehicle,
trailer, semitrailer, all-terrain vehicle, or aircraft.
Criminal Charges:
In addition to the civil penalties and other actions described above, criminal charges may be
brought against a person for the following violations:
•
Failing or refusing to furnish a sales and use tax
return or data required by the Department of
Revenue.
•
Filing a false or fraudulent sales and use tax return or failing to file by the due date with the
intent to defeat or evade the tax.
•
Aiding, abetting, or assisting another person in
filing or making a false or fraudulent sales and
use tax return with intent to defeat or evade the
tax.
•
Refusing or failing to keep records, receipts, invoices, or other documents in such form as the
Department of Revenue requires.
•
29
Giving a resale certificate or other exemption
certificate to the seller when the purchaser
knows at the time of purchase that the item is
not to be resold or the property is not exempt
and such resale certificate or exemption certificate is given for the purpose of evading
payment of the tax to the seller.
•
Operating as a seller of taxable property or services without a permit or after a permit has
been suspended or revoked.
•
Advertising or holding out to the public or any
customer, directly or indirectly, that the tax or
any part thereof will be assumed or absorbed by
the retailer, or that it will not be added to the
selling price or, if added, will be refunded.
•
Intentionally failing or refusing to pay state and
county sales and use tax money collected from
a consumer, user, or purchaser to the Department of Revenue by the due date for payment,
or fraudulently withholding, appropriating, or
using these tax moneys, regardless of the person’s interest in the tax moneys. Payments to
creditors in preference to payment of the tax
moneys to the Department of Revenue by any
person is prima facie evidence of an intent to
fraudulently use these tax moneys.
Penalties for Failing to Provide Records:
Effective July 1, 2009, a person who fails to produce records or documents, as provided by law, that
support amounts or other information required to be
shown on a return may be subject to any of the following penalties, as determined by the Department
of Revenue, except that the Department of Revenue
may not impose a penalty under this subsection if
the person shows that under all facts and circumstances the person’s response, or failure to respond,
to the Department of Revenue’s request was reasonable or justified by factors beyond the person’s
control:
(a) The disallowance of deductions, credits, exemptions, or inclusions of additional taxable
sales or additional taxable purchases to which
the requested records relate.
(b) A penalty for each violation of this subsection
that is equal to the greater of $500 or 25% of
the amount of the additional tax on any adjustment made by the Department of Revenue that
results from the person’s failure to produce the
records.
(c) The Department of Revenue shall promulgate
rules to administer this subsection and the rules
shall include a standard response time, a standard for noncompliance, and penalty waiver
provisions.
See sec. Tax 11.90, “Penalty for failure to produce
records under s. 77.61(19), Stats.,” Wis. Adm. Code
(June 2010 Register), for additional information
about this penalty.
Wisconsin Sales and Use Tax Information
Internet Posting of Seller’s Permits that Have
Been Revoked:
not kept, the tax may be imposed upon the total
sales from all of your business operations.
Effective October 1, 2009, the Department of Revenue is required by law to post on the Internet a list
of every person who has had a seller’s permit revoked. The Internet site lists the real name, business
name, address, revocation date, type of tax due, and
amount due, including interests, penalties, fees, and
costs, for each person who has had a seller’s permit
revoked. The department is required to update the
Internet site periodically to add revoked permits and
to remove permits that are no longer revoked or for
which the permit holder has made sufficient arrangements with the department so that the permit
holder may be issued a monthly seller’s permit. The
department will update the Internet site quarterly to
remove revoked permits for entities that have been
out of business for at least one year.
B. Records to Keep – Exempt Sales, Exemption
Certificates: If you claim that part or all of your retail sales of tangible personal property; items,
property, or goods described in Part X.A.2. to 4.; or
taxable services are exempt from sales and use tax,
you are required to keep a record of the name and
address of the person to whom the exempt sale was
made, the date of sale, the article sold, the amount
of exemption, and the reason that the sale was exempt from tax. This record must be signed by the
purchaser.
Exceptions: This information is not required for:
•
Sales, as described in Part XI.B.
•
Sales of commodities, as defined in
7 U.S.C. §2, that are consigned for sale in a
warehouse in or from which the commodity is
deliverable on a contract for future delivery
subject to rules of a commodity market regulated by the U.S. Commodity Futures Trading
Commission if upon the sale the commodity is
not removed from the warehouse.
•
Sales of cattle, sheep, goats, and pigs that are
sold at a livestock market, as defined in
sec. 95.68(1)(e),
Wis.
Stats.
Section 95.68(1)(e), Wis. Stats., defines livestock
market as any premises which are open to the
public for the purpose of trading in livestock
and on which facilities are maintained for their
yarding, feeding and watering prior to sale.
Personal Liability:
A person required to collect, account for, or pay
sales or use taxes, who willfully fails to collect, account for, or pay those taxes to the Department of
Revenue, is personally liable for such taxes, including interest and penalties, if that person’s principal
is unable to pay such amounts to the department.
IX. RECORD KEEPING
A. General Records to Keep: If you are required to
file sales and use tax returns or consumer use tax returns, you must keep adequate records of business
transactions to enable you and the Department of
Revenue to determine the correct tax due. The required records include complete and accurate
records of beginning and ending inventories, purchases, sales, canceled checks, receipts, invoices,
bills of lading, and all other documents and books
of account pertaining to the business.
See sec. Tax 11.92, Wis. Adm. Code, “Records and
record keeping,” in Appendix C for more information.
If you make retail sales and at the same time are
engaged in some other nontaxable business, occupation, or profession, you must keep records to
show separately the transactions used in determining the sales and use tax due. If separate records are
The reason for keeping such records is that the sales
and use tax law provides that the sales price from
all sales of tangible personal property; items, property, and goods described in Part X.A.2. to 4.; and
taxable services is subject to the tax until the contrary is established. (See “Penalties for Failing to
Provide Records,” in Part VIII.M.) The seller has
the burden of proving that a sale of tangible personal property; items, property, or goods described in
Part X.A.2. to 4.; or taxable services is exempt, unless the seller takes a fully completed exemption
certificate (or other information as described in
Number 3, below) from the purchaser which indicates that the property, item, good, or service being
purchased is for resale or is otherwise exempt.
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Publication 201
A seller or lessor who accepts a fully completed exemption certificate from the purchaser within
90 days of the sale is relieved of any liability for
payment of tax upon transactions covered by the
certificate.
The seller should obtain a completed
Form S-211, Wisconsin Sales and Use Tax Exemption Certificate, or Form S-211-SST,
Streamlined Sales and Use Tax Exemption Certificate, from the purchaser.
If a retailer regularly sells the same kind of item to
the same customer, a certificate known as a “continuous certificate,” which is good indefinitely, may
also be used for future transactions. Although continuous exemption certificates do not expire and are
not required to be renewed at any prescribed interval, such certificates 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.
Drop Shipments – Sales for Resale
Effective October 1, 2009, a manufacturer or
other seller may accept an exemption certificate
claiming resale from an out-of-state purchaser
even when the manufacturer or other seller is
directed to ship the product to a consumer in
Wisconsin (“drop shipment”) and the out-ofstate purchaser does not have a Wisconsin seller’s permit or Wisconsin use tax registration
certificate.
If a purchaser 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
is liable for payment of the applicable sales or use
tax. 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 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.
Three common reasons that sales of tangible personal property; items, property, or goods described
in Part X.A.2. to 4.; or taxable services may be exempt are as follows:
1. The use to be made of the item purchased is exempt or the item is to be resold. For example,
the machine is going to be used exclusively and
directly in manufacturing or the tractor is going
to be used exclusively and directly in farming
and is, therefore, exempt.
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Prior to October 1, 2009, a manufacturer or
other seller could not have accepted an exemption certificate claiming resale from an out-ofstate business not holding a Wisconsin seller’s
permit or use tax certificate, if the manufacturer
or other seller delivered the product to a consumer in Wisconsin.
2. The purchasing organization is an exempt entity, such as a Wisconsin public school,
Wisconsin municipality, or a federal governmental unit. Note: All invoices and billings
must be made in the name of the exempt organization.
•
Sales to a federal or Wisconsin governmental unit, federally recognized American
Indian tribe or band in Wisconsin, Wisconsin municipality, or Wisconsin public
school should be supported by one of the
following:
a. A purchase order or similar written
document identifying the governmental
unit, tribe, or band as the purchaser.
b. Form S-211 or Form S-211-SST.
c. Recording the federal or Wisconsin
governmental unit’s or Tribe’s Certificate of Exempt Status (CES) number
on the invoice.
Wisconsin Sales and Use Tax Information
•
Sales to nonprofit organizations organized
and operated exclusively for religious, charitable, scientific or educational purposes, or
for the prevention of cruelty to children or
should be supported by one of the following:
a. Form S-211 or Form S-211-SST.
b. Recording the organization’s Certificate of Exempt Status (CES) number
on the invoice.
Nonprofit organizations organized and operated
exclusively for religious, charitable, scientific
or educational purposes, or for the prevention
of cruelty to children or animals, may apply on
Form S-103 Application for Wisconsin Sales
and Use Tax Certificate of Exempt Status
(CES), to the Department of Revenue for a Certificate of Exempt Status (CES) and, if
approved, will be issued a CES number by the
department.
Note
regarding
U.S.
Government
Bankcards: A retailer that is making an exempt
sale to a person holding an approved U.S. Government Bankcard must support the exempt sale
with one of the items listed above. Sales to persons holding debit cards issued by the Federal
Emergency Management Agency (FEMA) for
disaster relief do not qualify for exemption.
Please refer to Part XI.D.4. for additional information about sales to persons holding U.S.
Government Bankcards or receiving disaster relief payments, respectively.
Note regarding disaster relief vouchers and
bankcards issued by organizations holding a
CES number: A retailer that is making an exempt sale to a person holding a qualifying
voucher or bankcard issued by an exempt organization must support the exempt sale by
retaining a copy of the voucher or bank card
and receipt, and indicating the exempt organization’s CES number on the receipt to prove that
the sale qualifies for exemption from Wisconsin
sales and use tax. Please refer to Part XI.E. for
additional information about specific vouchers
and cards and whether sales to persons holding
such vouchers or cards qualify for exemption.
3. The purchaser furnishes the seller (a) a copy of
its direct pay permit or (b) a statement that the
buyer holds a direct pay permit, the permit
number, and the date the permit was issued. See
Part XVII. for more information on direct pay.
Note: If exemptions are claimed for any of the
above three reasons, you must keep as part of your
records the completed certificates, purchase orders,
or invoices to prove that the sales are exempt. If the
Department of Revenue conducts an audit of your
records, and you do not have the required exemption certificates or other required documents to
prove that the sales are exempt, the sales will be
presumed to be taxable and subject to the sales tax.
See sec. Tax 11.14, Wis. Adm. Code, “Exemption
certificates” for more information about exemption
certificates.
X. WHAT IS TAXABLE?
A retailer’s sales price from the sale, license, lease, or
rental of tangible personal property; or an item, property, or good described in Part X.A.2. to 4.; or the selling,
performing, or furnishing of taxable services is subject
to Wisconsin sales tax. The storage, use, or other consumption in Wisconsin of tangible personal property;
items, property, or goods described in Part X.A.2. to 4.;
or taxable services is subject to Wisconsin use tax, unless Wisconsin sales tax was paid by the buyer when
purchasing the property, item, good, or service.
No sales or use tax is payable on a sale or purchase of
tangible personal property; an item, property, or good
described in Part X.A.2. to 4.; or a service if the property, item, good, or service is resold or if an exemption
applies.
Refer to Part XI. for more information on exemptions.
A description of the types of tangible personal property,
items, property, and goods, and services which are subject to sales and use tax follows:
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Publication 201
A. Tangible Personal Property, Items, Property,
and Goods
Sales, licenses, leases, and rentals of the following
tangible personal property, items, property, and
goods are subject to the Wisconsin sales tax:
1. Tangible personal property. "Tangible personal
property" means personal property that can be
seen, weighed, measured, felt, or touched, or
that is in any other manner perceptible to the
senses, and includes electricity, gas, steam, water, and prewritten computer software,*
regardless of how it is delivered to the purchaser.
2. Coins or stamps of the United States that are
sold, licensed, leased, rented, or traded as collector’s items above their face value.
3. Leased tangible personal 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. (See Part IV.B.3.c.)
4. Specified digital goods, additional digital
goods, and digital codes. These digital goods
are characterized by the fact that they are transferred electronically to the purchaser (i.e.,
accessed or obtained by the purchaser by means
other than tangible storage media). “Specified
digital goods” means “digital audio works,”
“digital audiovisual works,” and “digital
books.” “Additional digital goods” means
greeting cards, finished artwork, periodicals,
video or electronic games, and newspapers or
other news or information products. See Publication 240 for a detailed description of which
digital goods are taxable.
*Prior to March 6, 2009, tangible personal property
included “computer programs except custom computer programs.”
March 6, 2009 and thereafter, tangible personal
property includes “prewritten computer software,
regardless of how it is delivered to the purchaser.”
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The changes relating to computer software are
explained on pages 14-15 of Wisconsin Tax Bulletin #160 (March 2009).
The products in 2. to 4., above, are subject to tax
under sec. 77.52(1)(b), (c), and (d), Wis. Stats., and
will be referred to collectively in this publication as
“items, property, and goods described in
Part X.A.2. to 4.”
B. Services
Certain specified services which are sold, licensed,
performed, or furnished at retail in Wisconsin are
subject to Wisconsin sales or use tax, unless the
service provider or the buyer is exempt from tax on
the particular transaction. Total sales from the selling, licensing, performing, or furnishing of the
following services are taxable, including any charges for tangible personal property; or items, property,
or goods described in Part X.A.2. to 4.; transferred
in conjunction with the service:
1. Admissions and Access Privileges
•
Admissions to amusement, athletic, entertainment, or recreational events or places,
such as admissions to movies, plays, ballets, musical and dance performances, fairs,
ball games, campgrounds, circuses, carnivals, hockey games, ice shows, races,
festivals, and other spectator events.
•
The privilege of access to or the use of
amusement, entertainment, athletic, or recreational facilities for dues, fees, or other
considerations, such as charges by country
clubs, golf clubs, athletic clubs, swimming
clubs, yachting clubs, tennis clubs, and flying clubs, or charges for the use of
gymnasiums, auditoriums, theaters, and
other facilities to be used for entertainment,
amusement, athletic, or recreational purposes.
•
Admissions to customer participation
events, such as swimming, skiing, bowling,
skating, golfing, curling, dancing, and
horseback riding.
•
Entry fees to runs, walks, and races.
Wisconsin Sales and Use Tax Information
•
Sales of bingo cards of all kinds to players,
including admission charges. Bingo event
sponsors are required to report and pay the
sales tax directly to the Department of Revenue.
Exceptions:
 Admissions to county fairs are not subject
to Wisconsin sales or use tax.
 The sale of admissions by any baseball
team affiliated with the Wisconsin Department of American Legion baseball
are not subject to Wisconsin sales or use
tax.
 The sale of admissions by a gun club, including the sale of a gun club membership,
is not subject to Wisconsin sales or use tax
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 (effective July 1, 2007).
 Entry fees for contests if the primary motive of the majority of the persons entering
the contest is “business,” and not “recreation” (e.g., professional golfers entering a
major tournament).
 Admissions, such as league entry fees, sold
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 are not subject to Wisconsin
sales tax (effective July 1, 2009).
 The sale or furnishing of recreational facilities on a periodic basis or other recreational
rights in connection with the sale or use of
time-share property are not taxable if the
facilities are not available to persons who
have not purchased the time-share property
(other than guests). For example, if the facilities or rights are available to the general
public for a fee, the sale or furnishing of
such facilities or rights is taxable, even if
they are sold or furnished in connection
with the sale of time-share property.
 Charges for lessons or classes of study are
not subject to Wisconsin sales or use tax.
 Sales of a one-time license or similar right
to purchase admissions to professional
football games at a football stadium, as defined in sec. 229.821(6), Wis. Stats., are not
subject to tax with the following conditions:
 The license or right to purchase must be
granted by a municipality, a local professional football stadium district, or a
professional football team or related
party, as defined in sec. 229.821(12),
Wis. Stats.
 The person who purchases the license
or right must be entitled, at the time of
license or right transfer, to purchase
admission to at least three professional
football games in Wisconsin during one
football season.
 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.
 Admission fees, admission stickers, and
campground fees to Wisconsin state
parks.
Refer to sec. Tax 11.54, Wis. Adm. Code,
“Temporary amusement, entertainment or recreational events or places,” and sec. Tax 11.65,
Wis. Adm. Code, “Admissions,” for more information.
2. Amusement Devices
The privilege of access to or the use of jukeboxes, pinball machines, arcades, mechanical
rides, and mechanical games. Payments (i.e.,
commissions) by vending machine owners or
operators to the owner or operator of the establishment in which a machine is placed do not
reduce taxable sales.
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Publication 201
Refer to sec. Tax 11.52, Wis. Adm. Code,
“Coin-operated vending machines and amusement devices,” for more information.
Information about the tax treatment of receipts
from video gambling machines can be found on
pages 4-6 of Wisconsin Tax Bulletin #140 (October 2004) and pages 14-15 of Wisconsin Tax
Bulletin #146 (February 2006).
3. Cable Television
Cable television system services provided to
customers located in Wisconsin, including installation charges.
Wis. Adm. Code, “Aircraft,” for more information.
•
Refer to sec. Tax 11.48, Wis. Adm. Code,
“Landlords, hotels and motels,” and
sec. Tax 11.85, Wis. Adm. Code, “Boats, vessels and barges,” for more information.
7. Photographic
•
Photographic services, including the processing, printing, and enlarging of film.
•
Services of photographers for the taking,
reproducing, and sale of photographs, including those sold to students through
schools.
•
Videotaping services.
4. Landscaping and Lawn Maintenance
Landscaping and lawn maintenance services,
including landscape planning and counseling,
lawn and garden services such as planting,
mowing, spraying, and fertilizing and shrub and
tree services.
Refer to Wisconsin Publication 210, Sales and
Use Tax Treatment of Landscaping, for more
information.
5. Laundry and Dry Cleaning
Laundry, dry cleaning, pressing, and dyeing
services and the rental of linens, uniforms, and
towels.
Note: This type of service performed on cloth
diapers by a diaper service, raw materials or
goods in process destined for sale, and receipts
from coin-operated laundry and dry cleaning
units when the service is performed by the customer are not taxable.
Refer to sec. Tax 11.72, Wis. Adm. Code,
“Laundries, dry cleaners, and linen and clothing
suppliers,” for more information.
6. Parking
•
Providing parking space for motor vehicles
and aircraft.
Refer to sec. Tax 11.49, “Service stations
and fuel oil dealers,” and sec. Tax 11.84,
35
Providing docking or storage space for
boats.
Refer to sec. Tax 11.47, Wis. Adm. Code,
“Commercial photographers and photographic
services,” for more information.
8. Producing, Fabricating, and Printing
The producing, fabricating, processing, printing, or
imprinting of tangible personal property; or an item,
property, and good described in Part X.A.2. to 4.;
for a consideration for consumers who furnish directly or indirectly the materials used in producing,
fabricating, processing, printing, or imprinting. For
example, the making of a custom tailored suit for a
customer who furnished the material is taxable.
Exception: Tax does not apply to the printing or
imprinting of tangible personal property; or an item,
property, or good described in Part X.A.2. to 4.;
that results in:
1. Printed advertising materials transported
outside Wisconsin by the purchaser for use
solely outside Wisconsin (sec. 77.54(25),
Wis. Stats.), or
2. Certain catalogs and their mailing envelopes (sec. 77.54(25m), Wis. Stats.).
Prior to April 1, 2009, the printing or imprinting of
catalogs was taxable, except for the printing or im-
Wisconsin Sales and Use Tax Information
printing of printed advertising materials transported
outside Wisconsin by the purchaser for use solely
outside Wisconsin.
See Part XI.C.4. and 17. for information about the
exemptions for printed advertising materials and
catalogs.
Refer to sec. Tax 11.38, Wis. Adm. Code, “Fabricating and processing,” and sec. Tax 11.56, Wis.
Adm. Code, “Printing industry,” for more information.
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9. Repair and Service of Tangible Personal Property, Items, Property, or Goods
The repair, service, alteration, fitting, cleaning,
painting, coating, towing, inspection, and maintenance of all items of tangible personal property; or
items, property, or goods described in Part X.A.2.
to 4. Mileage and delivery charges associated with
these taxable repairs and services are also taxable.
The items listed below are deemed to retain their
character as tangible personal property for purposes
of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance,
regardless of whether the repair, service, alteration,
etc., of the item is an addition to or a capital improvement of real property.
The original installation or the complete replacement of an item listed below continues to be
nontaxable if such installation or replacement is a
real property construction activity under
sec. 77.51(2), Wis. Stats.:
*Retailers who registered voluntarily through the
Streamlined Sales Tax Governing Board’s web site
who do not make taxable sales in Wisconsin, as indicated by their application, are not required to file
returns in Wisconsin indicating that no tax is due.
•
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air conditioners
awnings
bar equipment
bathroom fixtures
blinds
boilers
burglar alarm and fire alarm fixtures
carpeting and rugs
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clothes dryers
clothes washers
coolers
dehumidifiers
dishwashers
electric clocks
electronic dust collectors
electric signs
equipment in offices, business facilities,
schools, and hospitals, but not in residential facilities
including
personal
residences,
apartments, long-term care facilities as defined
under sec. 16.009(1)(em), Wis. Stats., prisons,
mental health institutes, as defined in
sec. 51.01(12), Wis. Stats., centers for the developmentally disabled, as defined in
sec. 51.01(3), Wis. Stats., Type 1 juvenile correctional facilities as defined in sec. 938.02(19),
Wis. Stats., or similar facilities including, by
way of illustration but not of limitation, all of
the following:
− beverage making equipment
− canvas awnings
− chandeliers
− compressors
− condensing units
− evaporative condensers
− fans
− ice and milk dispensers
− lamps
− office and business machines
− pneumatic conveying systems
− soda fountains
− steam warmers and tables
− vending machines
− venetian blinds
freezers
furnaces
furniture and furnishings
intercoms
jukeboxes
garbage disposal units
gas and electric logs
grills and rotisseries
heat lamps
heaters
humidifiers
incinerators
intercoms
laundry, dry cleaning, and pressing machines
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Publication 201
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•
ovens (including associated hoods and exhaust
systems)
power tools
radios and radio antennas
record players
recreational, sporting, gymnasium, and athletic
goods and equipment including by way of illustration but not of limitation:
− bowling alleys
− golf practice equipment
− pool tables
− punching bags
− ski tows
− swimming pools
refrigerators
sinks
stoves
tape players
television receivers and antennas
vacuum cleaners
water conditioners and softeners
water heaters
water pumps
Note: Some items above are also tangible personal
property when installed.
Refer to sec. Tax 11.68, Wis. Adm. Code, “Construction contractors,” Part XII of this publication,
and Publication 207 Sales and Use Tax Information
for Contractors, for more information.
10. Contracts for Future Performance of Services (effective October 1, 2009)
Sales 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 described
in Part X.A.2. to 4.; 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 sales and use tax. Mileage and delivery
charges associated with these contracts are also
taxable.
37
11. Rooms and Lodging for Less Than One
Month
Furnishing of rooms or lodging to a person for a
continuous period of less than one month by
hotelkeepers, motel operators, and other persons furnishing accommodations that are
available to the public, regardless of whether
membership is required for use of the accommodations.
“One month” means a calendar month or
30 days, whichever is less, counting the first
day of the rental, but not counting the last day
of the rental.
“Hotel” or “motel” includes inns, tourist homes,
tourist houses or courts, lodging houses, rooming houses, summer camps, apartment hotels,
resort lodges, and cabins.
Exceptions:
•
The furnishing of rooms or lodging through
the sale of any kind of time-share property
is not taxable.
•
The furnishing of accommodations by hospitals, sanatoriums, nursing homes, and
corporations or associations organized or
operated exclusively for religious, charitable, or educational purposes, such as public
schools, colleges, and universities, for any
period of time is not taxable.
Refer to sec. Tax 11.46, Wis. Adm. Code,
“Summer camps,” sec. Tax 11.48, Wis. Adm.
Code, “Landlords, hotels and motels,” and Publication 219, Hotels, Motels and Other Lodging
Providers, for more information.
12. Internet Access, Prepaid Calling, Telecommunications, and Ancillary Services
Sales of the following services, if the service
takes place in Wisconsin:
Wisconsin Sales and Use Tax Information
Internet Access Services.
Prepaid Calling Services.
Telecommunications Services, including the
following:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Intrastate telecommunications services.
Interstate telecommunications services.
International telecommunications services.
Private communication services.
800 services, except interstate 800 services.
900 services.
Fixed wireless services.
Mobile wireless services.
Stationary two-way radio services.
Paging services.
Facsimile, or FAX, transmission services.
Prepaid wireless calling services.
Value-added non-voice data services.
Residential communications services.
Coin-operated telephone services
Ancillary Services, including the following:
•
•
•
•
•
•
Conference bridging services.
Directory assistance services.
Call forwarding services.
Voice mail services.
Caller ID services.
Call waiting services.
Exceptions: The following are not taxable:
•
•
•
Interstate 800 services.
Interstate or international telecommunications service if the service occurs at a
location outside Wisconsin.
Revenues collected under sec. 256.35(3),
Wis. Stats., the surcharge established by the
public
service
commission
under
s. 256.35(3m)(f), Stats., for customers of
wireless
providers
as defined in
sec. 256.35(3m)(a)6., Wis. Stats., and the
police and fire protection fees under
sec. 196.025(6), Wis. Stats.
“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.
“Prepaid calling services” 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.
“Telecommunications services” 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” do not include ancillary services or Internet access services.
“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.
Note: Receipts from “911” charges, including wireless surcharges, and police and fire protection fees
are not taxable.
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Publication 201
Where does the sale take place?
There are special provisions that apply to where the
sale of a telecommunications service (and certain
related services) takes place (i.e., where the sale is
“sourced”). Please refer to sec. Tax 11.66, Wis.
Adm. Code, “Telecommunication and telecommunications message services,” for more information.
13. Telecommunications Message Services
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 as telecommunications services, ancillary services, or
Internet access services or services that are incidental to another service that is not taxable
and sold to the purchaser of the incidental service. Telecommunications message services
include the following:
•
Nonmechanical telephone answering services.
•
Security monitoring services that consist of
recording a telecommunications message
and notifying the customer or local authorities of the message.
•
Electronic mail services.
•
Mechanical or electronic voice messaging
and telephone answering services, except
ancillary services.
The location where a telecommunications message service takes place is determined by the
General Sourcing Rules, as provided in
Part VII.C. This will generally result in the location of the sale being where the customer, or
someone at the direction of the customer, receives the message.
“Incidental” is defined in Part XI.C.19 of this
publication.
Please refer to sec. Tax 11.66, Wis. Adm. Code,
“Telecommunication and telecommunications
message services,” for more information.
39
14. Towing and Hauling of Motor Vehicles by a
Tow Truck
Towing and hauling of motor vehicles by a tow
truck, as defined in sec. 340.01(67n), Wis.
Stats., unless at the time of towing or hauling a
sale in this state of the motor vehicle to the purchaser would be exempt from sales and use
taxes, not including the exempt sale of a motor
vehicle to a nonresident under sec. 77.54(5)(a),
Wis. Stats., and nontaxable sales described in
sec. 77.51(14r), Wis. Stats.
“Tow truck” is defined in sec. 340.01(67n),
Wis. Stats., to mean “a motor vehicle that is
equipped with mechanical or hydraulic lifting
devices or winches capable of, and used for, the
recovery or transport or both of wrecked, disabled, abandoned, used or replacement
vehicles.”
Note: Prior to July 1, 2009, and continuing on
and after July 1, 2009, sales and use tax applied
to the towing of tangible personal property (see
Part X.B.9.), including the towing of motor vehicles, unless, at the time of the towing, a sale
in Wisconsin of the type of property towed
would have been exempt to the customer from
sales tax, other than the exempt sale of a motor
vehicle or truck body to a nonresident under
sec. 77.54(5)(a), Wis. Stats., and other than
nontaxable sales under sec. 77.51(14r), Wis.
Stats.
15. Delivery Charges
When a retailer sells tangible personal property;
an item, property, or good described in
Part X.A.2. to 4.; or taxable services which are
subject to tax and the retailer charges the purchaser for the delivery, the retailer’s total
charge, including the delivery charge, is taxable. It is immaterial whether delivery is made
by the seller’s vehicle, a common or contract
carrier, or the United States Postal Service.
The correct state tax computation to be shown
on an invoice when the retailer charges the purchaser for delivery of the product is shown in
the following example:
Wisconsin Sales and Use Tax Information
Merchandise
Delivery Charge
Subtotal
Tax ($110 x 5%)
Total
$ 100.00
10.00
$ 110.00
5.50
$ 115.50
When a retailer charges a purchaser for the delivery of nontaxable or exempt tangible
personal property; an item, property, or good
described in Part X.A.2. to 4.; or services, the
retailer’s total charge, including any delivery
charge, is not subject to the sales or use tax.
If a shipment includes both taxable and nontaxable products, the retailer shall determine and
set forth on the invoice the portion of the delivery charge reasonably allocable to the taxable
products. The portion allocated to nontaxable
products is not taxable. If no allocation is made,
the total delivery charge is taxable.
A Wisconsin consumer who purchases taxable
property; an item, property, or good described
in Part X.A.2. to 4.; or taxable services for use
in Wisconsin without tax is subject to the sales
or use tax based on the “purchase price.” The
“purchase price” includes delivery charges paid
by the Wisconsin consumer to the supplier for
shipment of the product. The “purchase price”
does not include delivery charges paid by the
Wisconsin consumer directly to the carrier.
Delivery charges for direct mail, including 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. See Part VII.D.
for additional information about direct mail, including the definition of “direct mail.”
Refer to sec. Tax 11.94, Wis. Adm. Code, “Delivery charges.” Also see pages 31-33 of
Wisconsin Tax Bulletin #111 (October 1998)
for more information.
C. Bundled Transactions
A “bundled transaction” is the retail sale of two or
more products, not including real property and services to real property, if the products are distinct
and identifiable and sold for one nonitemized
price.* “Products” includes tangible personal property; items, property, and goods as described in
Part X.A.2. to 4.; and services.
*Certain exceptions apply. These exceptions are
listed in sec. Tax 11.985, Wis. Adm. Code, “Bundled transactions,” along with definitions of
“distinct and identifiable product” and “one nonitemized price.”
The entire sales price of a bundled transaction is
subject to Wisconsin sales or use tax, except as follows:
Retailer may identify the nontaxable portion of
sales price: When a retailer is able to identify (by
reasonable and verifiable standards from the retailer’s books and records that are kept in the ordinary
course of its business) the portion of the sales price
that is attributable to products that are not subject to
the tax, the retailer may choose to tax only the portion attributable to the taxable products. Exception:
This option does not apply to a bundled transaction
that contains food and food ingredients, drugs, durable medical equipment, mobility-enhancing
equipment, prosthetic devices, or medical supplies.
A “bundled transaction” does not include the following:
1. 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.
In this case, the sales and use tax treatment of
the transaction follows the tax treatment of the
individual product(s) being sold.
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 Cus-
40
Publication 201
tomer B, the transaction is not a bundled
transaction.
2. The retail sale of a service and tangible personal property; or items, property, or goods,
described in Part X.A.2, to 4.; if all of the following apply:
a. The tangible personal property; or item,
property, or good described in Part X.A.2.
to 4.; is essential to the use of the service.
b. The tangible personal property; or item,
property, or good described in Part X.A.2.
to 4.; is provided exclusively in connection
with the service.
c. The true object of the transaction is the service.
In this case, the sales and use tax treatment of
the transaction follows the tax treatment of the
service provided.
3. The retail sale of services, if both of the following apply:
a. One of the services is essential to the use or
receipt of a second service, and is provided
exclusively in connection with the second
service.
b. The true object of the transaction is the second service.
In this case, the sales and use tax treatment of
this transaction follows the tax treatment of the
second service provided.
4. A transaction that includes taxable and nontaxable products, if the seller’s total purchase price
or the sales price of the taxable products is no
greater than 10% of the seller’s total purchase
price or sales price of all the bundled products.
The seller must determine this percentage 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.
In this case, the transaction is not subject to
sales or use tax. However, the first person com41
bining the products is required to pay the applicable Wisconsin sales or use tax on its purchase
price of the taxable products included in the
transaction.
5. The retail sale of tangible personal property; or
items, property, or goods described in
Part X.A.2. to 4.; if all of the following apply:
a. The transaction includes both taxable and
exempt tangible personal property; and/or
items, property, and/or goods described in
Part X.A.2. to 4.; but not services.
b. The transaction includes food and food ingredients,
drugs,
durable
medical
equipment, mobility-enhancing equipment,
prosthetic devices, or medical supplies.
c. The seller’s purchase price or the sales price
of the taxable products is no greater than
50% of the seller’s total purchase price or
sales price of all the products included in
what would otherwise be a bundled transaction. The seller must determine this
percentage using either the seller’s purchase
price or sales price, but not a combination
of both.
In this case, the transaction is not subject to
sales or use tax. The person combining the
products is not required to pay Wisconsin sales
or use tax on its purchase price of the taxable
products included in the transaction.
6. A transaction that includes real property or service to real property.
The tax treatment is explained in Part X.II.
Bundled Transaction Flowchart
A flowchart to aid in determining whether a transaction is a bundled transaction has been included in
Appendix H.
The following example illustrates how to use the
Bundled Transaction Flowchart: in Appendix H:
Example: Retailer A sells an 8-foot sectional “flag
kit” consisting of a two-piece pole with an eagle affixed to the top, a cord, an attaching bracket and
Wisconsin Sales and Use Tax Information
screws, and a U.S. flag, all enclosed in a package
with a single Universal Product Code (UPC). Retailer A sells the “flag kit” to its customer, without
installation, for a single nonitemized price of
$50.00. Of the products that make up the “flag kit,”
the flag is exempt from Wisconsin sales and use
tax, and the accessories are taxable.
Flag Kit
Retailer A’s Purchase Price
Flag
$10.00
Pole with eagle
8.00
Cord
1.00
Bracket
1.50
Screws
.50
Total Purchase Price
$21.00
Taxable Portion
Taxable Percentage
$11.00
52.38%
Using the Bundled Transaction Flowchart in Appendix H:
1. Does the transaction include the retail sale of 2
or more products? Yes
2. Does the transaction include real property or a
service to real property? No
3. Are the products distinct and identifiable? Yes
4. Are the products sold for one nonitemized
price? Yes
5. Does the price vary or is the price negotiable
based on products selected? No
6. Does the transaction include a service? No
7. Does the transaction include food and food ingredients, drugs, durable medical equipment,
mobility-enhancing equipment, prosthetic devices, or medical supplies? No
8. Are the taxable products more than 10% of the
total price? Yes
The transaction is a bundled transaction and Retailer A is liable for sales tax on its entire sales price of
the flag kit (i.e., $50.00). Retailer A may, at its option, collect and remit tax only on the taxable
portion of the sale if Retailer A can identify by reasonable and verifiable standards from its books and
records that are kept in the ordinary course of its
business, the portion of the sales price that is attributable to products that are not subject to tax
(e.g., selling price of $50.00 x 52.38 = $26.19 subject to tax).
D. Property May Only Be Taxed Once
A sale, license, lease, or rental of a product may be
taxed only once under the sales and use tax law, regardless of whether that sale, license, lease, or
rental is subject to taxation under more than one
imposition provision under the sales and use tax
law. This is provided in sec. 77.61(20), Wis. Stats.,
which was created in 2009 Wis. Act 28, and merely
clarifies the law, but does not change the tax treatment of any transaction.
Example 1: Individual A brings his clothing to
Laundry B. Laundry B cleans the clothing for
Individual A for a fee. The provision of laundry
service is taxable under sec. 77.52(2)(a)6., Wis.
Stats. Additionally, the cleaning of tangible
personal property (e.g., clothing) is taxable under sec. 77.52(2)(a)10., Wis. Stats. Although
the tax is imposed under two separate provisions of the sales and use tax law, the service
may only be taxed once.
Example 2: Individual C purchases a new automobile for $20,000 plus tax. Three years
later, Individual C sells the automobile to Individual D. Individual D pays the tax upon
registering the automobile with the Department
of Transportation. Individual D later sells the
automobile to Individual E, who also pays the
tax upon registering the automobile with the
Department of Transportation. Tax was correctly paid on each of these separate transactions.
The taxation of these transactions is not affected by the creation of sec. 77.61(20), Wis. Stats.,
in 2009 Wis. Act 28.
XI. WHAT IS EXEMPT?
A. General
The retail sale or purchase of tangible personal
property; items, property, and goods described in
Part X.A.2. to 4.; and selected services are subject
to Wisconsin sales or use tax, unless an exemption
applies. The exemptions that may apply depend on:
1. Whether the product itself is exempt from the
tax. (Exemption certificate is not required. Refer to Part B.)
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Publication 201
2. How the product is used or other specific criteria. (Exemption certificate is required. Refer to
Part C.)
3. Whether the buyer or seller is exempt from the
tax. (Refer to Part D.)
Normally, to purchase tangible personal property;
an item, property, or good described in Part X.A.2.
to 4.; or taxable services in Wisconsin without tax,
an exemption certificate must be given to the seller
as described in Part IX. However, for retail sales of
certain property (e.g., exempt food and food ingredients sold by grocery stores), certificates are not
required to be given to the seller.
B. Exemptions That Do Not Require Exemption
Certificates
Retail sales of the following products may be made
without sales tax, even though an exemption certificate is not received by the seller. However, if the
product is not used for the exempt purpose, the purchaser must pay use tax based on the product’s
purchase price.
1. Insurance
The charge for insurance that is separately stated on the invoice given by the seller to the
purchaser. “Insurance” does not include contracts as described in Part X.B.10. of this
publication.
2. Caskets and Burial Vaults
Caskets and burial vaults sold for use in burying human remains. Caskets and burial vaults
for animals are taxable.
3. Food and Food Ingredients
•
Food and food ingredients, except for candy, soft drinks, dietary supplements, and
prepared food.
Candy is 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 in-
43
clude a preparation that contains flour or
that requires refrigeration.
Soft drink is a beverage that contains less
than 0.5 percent of alcohol and that contains natural or artificial sweeteners. Soft
drinks do not include beverages that contain
milk or milk products; soy, rice, or similar
milk substitutes; or more than 50% vegetable or fruit juice by volume. Soft drinks are
beverages that are in liquid form and do not
include items that are not in liquid form,
such as powdered drink mixes.
Dietary supplement is a product, other
than tobacco, that meets all of the following:
 Contains a vitamin, mineral, herb, botanical, amino acid or other dietary
substance to supplement the diet.
 Intended for ingestion in tablet, powder, capsule, soft-gel, gel-cap, or liquid
form, or, if not in such forms, is not
represented as conventional food and is
not represented for use as the sole item
of a meal or diet.
 Required to be labeled as a dietary supplement (21 C.F.R. 101.36).
Prepared food includes any of the following:
 Food and food ingredients sold in a
heated state.
 Food and food ingredients heated by
the retailer, except if any of the following apply:
o
Two or more food ingredients are
mixed or combined by a retailer for
sale as a single item, and the retailer’s primary classification in the
North American Industry Classification
System
(NAICS)
is
manufacturing under subsector 311,
but not including bakeries and tor-
Wisconsin Sales and Use Tax Information
tilla manufacturing under industry
group number 3118.
o
Bakery items made by a retailer.
o
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.
o
 Two or more food ingredients mixed or
combined by the retailer for sale as a
single item, except if any of the following apply:
o
The retailer’s primary NAICS classification is manufacturing under
subsector 311, but not including
bakeries and tortilla manufacturing
under industry group number 31182.
o
The item is sold unheated and by
volume or weight.
o
The item is a bakery item made by
the retailer.
o
The food and food ingredients are
only sliced, repackaged, or pasteurized by the retailer.
o
The item contains eggs, fish, meat,
or poultry in raw form that requires
cooking by the consumer, as recommended by the FDA.
 Food and food ingredients sold with
eating utensils, such as napkins, plates,
forks, straws, etc., that are provided by
the retailer if:
o
It is the retailer’s customary practice to physically give or hand the
utensils to the purchaser, except
that plates, bowls, glasses, or cups
that are necessary to receive the
food or food ingredients need only
be made available to the purchaser,
or
The eating utensils are available to
the purchasers and the retailer’s
sales of certain prepared foods are
more than 75% of the retailer’s total sales of all food and food ingreingredients at that establishment.
Exception: An item sold by the retailer that contains four 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, but is
prepared food if the retailer physically gives or hands utensils to the
purchaser of the item.
Refer to the following for more information, including how to apply the 75%
test: Publication 220, Grocers - How Do
Wisconsin Sales and Use Taxes Affect Your
Operations; sec. Tax 11.51, Wis. Adm.
Code, “Grocers’ guidelist;” and sec. Tax
11.87, Wis. Adm. Code, “Prepared food,
food and food ingredients, and soft drinks.”
•
A restaurant’s purchase of candy, soft
drinks, dietary supplements, and prepared
foods, and disposable products that are
transferred with such items, furnished for
no consideration by a restaurant to the restaurant's employee during the employee's
work hours. Note: The restaurant’s sales of
such items are subject to tax, even if sold to
employees during the employee’s work
hours.
Prior to October 1, 2009, certain food,
food products, and beverages and disposable products that were transferred with such
items were exempt from Wisconsin sales
and use tax if the items were provided by a
restaurant to the restaurant’s employees
during the employee’s work hours, regardless of whether the restaurant sold the items
to the employee or furnished the items to
the employee for no consideration.
Caution: This exemption does not apply to
the above items consumed by employees of
grocery stores, convenience stores, and oth-
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Publication 201
er businesses that do not operate restaurants.
•
Sales of food and food ingredients, except
soft drinks, by hospitals, sanatoriums, nursing homes, retirement homes, communitybased residential facilities as defined in
sec. 50.01(lg), Wis. Stats., and any facility
certified or licensed under Chapter 48,
Wis. Stats., are exempt. Also exempt are
“mobile meals on wheels” sold to the elderly and handicapped. Note: This exemption
does not apply to alcoholic beverages.
Facilities certified or licensed under
Chapter 48, Wis. Stats., include licensed
day care centers, child placement agencies, residential care centers, foster
homes, treatment foster homes, group
homes, and shelter care facilities. Note:
The law change that became effective on
May 6, 2010 expanded the exemption to
include such sales made by all facilities
certified or licensed under Chapter 48,
Wis. Stats., rather than only day care centers.
45
residential facility, or day care center.
Note: This exemption did not apply to
soft drinks and alcoholic beverages.
Refer to sec. Tax 11.87, Wis. Adm. Code,
“Prepared food, food and food ingredients, and
soft drinks,” for more information.
4. Fuel and Electricity
•
Fuel oil, propane, coal, steam, peat, fuel
cubes produced from solid waste, or wood
used for fuel which is sold for residential
use. “Residential use” means use in a structure which is a person’s permanent
principal residence.
•
Electricity and natural gas sold for residential use during the months of November
through April.
•
Fuel and electricity sold for use in farming,
including agriculture, dairy farming, floriculture, and horticulture.
•
Biomass sold for fuel for residential use
(effective December 1, 2007).
From October 1, 2009 through May 5,
2010, food and food ingredients, except
soft drinks, sold by hospitals, sanatoriums, nursing homes, retirement homes,
community-based residential facilities, as
defined in sec. 50.01(1g), Wis. Stats., and
day care centers registered under Chapter 48, Wis. Stats., were exempt from
Wisconsin sales and use taxes. These
sales continue to be exempt under current
law. Note: This exemption does not apply
to alcoholic beverages.
Note 1: If fuel or electricity sold to a consumer
is for both exempt and non-exempt use, the
seller must obtain an exemption certificate to
substantiate the exempt sales.
Prior to October 1, 2009, the exemption
applied to meals, food, food products, and
beverages that were sold by a hospital,
sanatorium, nursing homes, retirement
home, community-based residential facility as defined in sec. 50.01(lg), Wis.
Stats., or day care center licensed under
Chapter 48, Wis. Stats., and served at a
hospital, sanatorium, nursing home, retirement
home,
community-based
5. Home Exchange Service Sales (effective December 1, 2007)
Note 2: Wood residue and wood pellets used as
fuel in a business activity may also be exempt.
See Part XI.C.28.
Note 3: See Part XI.C.7. for information relating to the exemption for fuel and electricity
consumed in manufacturing.
Sales by a home exchange service that receives
moneys from the appropriation account under
sec. 20.485(1)(g), Wis. Stats., and is operated
by the Department of Veterans Affairs.
Wisconsin Sales and Use Tax Information
“Durable medical equipment”:
6. Drugs
•
•
Drugs furnished by a hospital for treatment
of any person pursuant to the order of a licensed physician, surgeon, podiatrist, or
dentist.
•
Drugs sold to a licensed physician, surgeon,
podiatrist, dentist, or hospital for the treatment of a human being.
•
 Is not generally useful to a person who
is not ill or injured and
 Is not placed in or worn on the body.
“Durable medical equipment” does not include mobility-enhancing equipment.
•
Drugs furnished without charge to a physician, surgeon, nurse anesthetist, advanced
practice nurse, osteopath, dentist who is licensed under ch. 447, Wis. Stats., podiatrist
who is licensed under ch. 448, Wis. Stats.,
or optometrist who is licensed under
ch. 449, Wis. Stats., if the drug may not be
dispensed without a prescription.
7. Durable Medical Equipment, MobilityEnhancing Equipment, and Prosthetic Devices
Durable medical equipment that is for use
in a person’s home, including repair parts,
replacement parts, and accessories for that
equipment, if the equipment is used for a
human being.
Mobility-enhancing equipment, including
repair parts, replacement parts, and accessories for that equipment, if the equipment
is used for a human being.
“Mobility-enhancing equipment”:
 Is primarily and customarily used to
provide or increase the ability of a person to move from one place to another;
Drugs furnished for the treatment of a human being by a medical facility or clinic
maintained by the State of Wisconsin or
any political subdivision or municipal corporation of the State of Wisconsin.
Refer to sec. Tax 11.09, Wis. Adm. Code,
“Drugs,” and sec. Tax 11.45, Wis. Adm.
Code, “Sales by pharmacies and drug
stores,” for more information.
•
 Can withstand repeated use;
Drugs furnished by a licensed physician,
surgeon, podiatrist, or dentist to a patient
who is a human being for treatment of the
patient.
•
•
 Is primarily and customarily used for a
medical purpose related to a person;
Drugs prescribed for the treatment of a human being by a person authorized to
prescribe the drugs, and dispensed on prescription filled by a registered pharmacist in
accordance with law.
 May be used in a home or motor vehicle; and
 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” also does
not include durable medical equipment.
•
Prosthetic devices, including repair parts,
replacement parts, and accessories for such
devices, if the devices are used for a human
being.
A “prosthetic device” is a 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.
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Publication 201
Refer to the following regulations for additional information:
–
Section Tax 11.08, “Durable medical
equipment, mobility-enhancing equipment, and prosthetic devices”
–
Section Tax 11.17, “Hospitals, clinics
and medical professions”
–
Section Tax 11.18, “Dentists and their
suppliers”
10. Occasional Sales
•
Refer to Part XVI. of this publication and to
secs. Tax 11.33, Wis. Adm. Code, “Occasional sales;” Tax 11.34, Wis. Adm. Code,
“Occasional sales exemption for sale of a
business or business assets;” and Tax 11.35
Wis. Adm. Code, and “Occasional sales by
nonprofit organizations” for more information. Also see pages 30-37 of Wisconsin
Tax Bulletin #122 (October 2000).
8. Motor Vehicle and Alternate Fuel
Motor vehicle fuel (gasoline and diesel), alternate fuel (CNG and LPG), or general aviation
fuel which is subject to the excise tax under
ch. 78, Wis. Stats., except when the excise tax
paid under ch. 78, Wis. Stats., is later refunded
to the vendor, or to a buyer under sec. 78.75,
Wis. Stats., because the buyer does not use the
fuel in operating a motor vehicle upon public
highways.
•
9. Printed Publications
•
Newspapers.
•
Periodicals, if sold by subscription and regularly issued at average intervals not
exceeding three months.
Note: All over-the-counter sales of periodicals not made by subscription are taxable.
•
Periodicals sold by subscription issued at
average intervals not exceeding six months
if the seller is an educational association or
corporation, as described in Part XI.D.1,
that is exempt from sales or use tax on its
purchases.
•
Shoppers guides which distribute no less
than 48 issues in a 12-month period.
•
Controlled circulation publications sold to
commercial publishers for distribution
without charge.
Refer to sec. Tax 11.19, Wis. Adm. Code,
“Printed material exemptions.”
47
Sales of tangible personal property; items,
property, or goods described in Part X.A.2.
to 4.; or taxable services by persons who do
not hold and are not required to hold a seller’s permit.
Sales to the seller’s spouse, parent, stepparent, father-in-law, mother-in-law, child,
stepchild, daughter-in-law, or son-in-law of
motor vehicles, boats, snowmobiles, recreational
vehicle
as
defined
in
sec. 340.01(48r), Wis. Stats., trailers, semitrailers, all-terrain vehicles, or aircraft, but
such sales are exempt only if the seller is
not engaged in the business of selling this
type of property and only if the property
has been previously registered or titled in
Wisconsin, or in the case of boats, registered or titled under the laws of Wisconsin
or the United States, in the name of the
seller.
11. Water Delivered Through Mains
Utilities, governmental agencies, and others delivering water to consumers through mains.
12. Manufactured Homes
•
35% of the total amount for which a new
manufactured home is sold, if the manufactured home is used as a dwelling and is
certified by the federal Department of
Housing and Urban Development (HUD) as
complying with the standards under
42 USC 5401 to 5425.
Prior to January 1, 2008, a “manufactured
home” was referred to as a “mobile home,”
and the 35% exemption applied to mobile
Wisconsin Sales and Use Tax Information
homes that were primary housing units, as
defined in sec. 340.01(29), Wis. Stats., or
that were transported in two unattached sections if the total size of the combined
sections, not including additions and attachments, was at least 984 square feet
measured when the sections were ready for
transportation.
No credit is allowed for trade-ins.
This 35% exemption only applies to sales,
not to leases and rentals.
•
The full amount for which a used mobile
home (manufactured before June 15, 1976)
is sold, if the home is a primary housing
unit as defined under sec. 340.01(29), Wis.
Stats.
•
The full amount for which a used manufactured home is sold, if the home is used as a
dwelling and is certified by the federal Department of Housing and Urban
Development (HUD) as complying with the
standards under 42 USC 5401 to 5425.
•
•
The sales price from the rental, for a continuous period of one month or more, of a
mobile home or a manufactured home that
is used as a residence. “One month” means
a calendar month or 30 days, whichever is
less, counting the first day of the rental and
not counting the last day of the rental.
The sales price from the sales of and the
storage, use, or other consumption of a
manufactured home that is used in a real
property construction activity outside Wisconsin (effective September 1, 2011).
The changes relating to "mobile homes" versus
"manufactured homes" are explained on pages 30-33 of Wisconsin Tax Bulletin #154
(December 2007).
13. Modular Homes
•
For a “modular home,” as defined in
sec. 101.71(6), Wis. Stats. (see definition
below), that is tangible personal property
when sold, a retailer may claim exemption
on one of the following:
Option A: 35% of the sales price.
Option B: An amount equal to the sales
price minus the cost of the materials that
become an ingredient or component part of
the modular home.
No credit is allowed for trade-ins.
Note: Once a retailer chooses Option A or
Option B, the retailer must continue to use
that option for all subsequent sales of modular homes, that are tangible personal
property when sold, until such time as the
Department of Revenue approves in writing
the use of the other option.
Prior to January 1, 2008, a “modular home”
was referred to as a “manufactured building.”
“Modular home” under sec. 101.71(6), Wis.
Stats., means any structure or component
thereof which is intended for use as a
dwelling and:
a. is of closed construction and fabricated
or assembled on-site or off-site in manufacturing facilities for installation,
connection, or assembly and installation, at the building site; or
b. is a building of open construction
which is made or assembled in manufacturing facilities away from the
building site for installation, connection, or assembly and installation on the
building site and for which certification
is sought by the manufacturer.
“Modular home” does not mean a manufactured home or mobile home under
sec. 101.91, Wis. Stats., or any building of
open construction which is not subject to b.
above.
48
Publication 201
Refer to pages 23-28 of Wisconsin Tax Bulletin #104 (November 1997) for additional
information.
•
The sales price from the sales of and the
storage, use, or other consumption of a
modular home that is used in a real property
construction activity outside Wisconsin (effective September 1, 2011).
14. Diaper Services
18. Public Benefit Fees (Low-Income Assistance
Fees)
The sales price from the collection of public
benefit fees (low-income assistance fees) that
are charged under sec. 16.957(4)(a) or (5)(a),
Wis. Stats.
19. United States and Wisconsin Flags
•
Laundry, dry cleaning, pressing, and dyeing
services performed on cloth diapers by a diaper
service.
Example: Retailer A sells hand-held U.S.
flags permanently mounted with staples to a
wood or plastic staff. The sale of the flag
(i.e., the fabric and staff to which the fabric
is mounted) is exempt from Wisconsin
sales or use tax.
“Cloth diaper” means a cloth diaper used for
sanitary purposes.
“Diaper service” means a business primarily
engaged in the lease or rental, delivery, and
laundering of cloth diapers.
Note: The exemption for the sale, lease, or
rental of cloth diapers was repealed, effective
October 1, 2009.
15. Copies of Certain Records
Copies of a public record that a person may examine and use under sec. 16.61(12), Wis. Stats.,
and copies of records under sec. 19.35(1), Wis.
Stats.
16. Animal Identification Tags
Sales of animal identification tags by the Wisconsin Department of Agriculture, Trade, and
Consumer Protection to persons required or authorized to use those identification tags.
17. Standard Samples
Sales of standard samples representing product
or commodity grades by the Wisconsin Department of Agriculture, Trade, and Consumer
Protection.
The United States flag or the Wisconsin
state flag. A flag, for purposes of this exemption, is considered to include the staff
to which the flag is permanently mounted
when sold by the retailer.
•
A “flag kit” sold as a single unit, which includes a United States flag or Wisconsin
state flag and related accessories, such as a
mounting bracket, a flagpole, a cord, and
instructions on the display of the flag, only
if the taxable products included in the “flag
kit” (i.e., mounting bracket, flagpole, cord,
and instructions on the display of the flag)
are 10% or less of the seller’s purchase
price or sales price, but not a combination
of both.
Note: The sale of the “flag kit” is a “bundled transaction” if the taxable products
included in the “flag kit” are more than
10% of the seller’s purchase price or sales
price, but not a combination of both. The
entire sales price of a bundled transaction is
subject to tax, with certain exceptions explained in Part X.C. A Bundled Transaction
Flowchart is included in Appendix H. At
the end of Part X.C., an example using a
“flag kit” is included to illustrate how to
use the Bundled Transaction Flowchart.
Prior to October 1, 2009, a “flag kit,” sold
as a single unit, was exempt from tax if the
“flag kit” included a United States flag or
Wisconsin state flag and related accesso-
49
Wisconsin Sales and Use Tax Information
ries, such as a mounting bracket, a flagpole,
a cord, and instructions on the display of
the flag and was sold as one product (e.g.,
all items were enclosed in a package with a
single Universal Product Code (UPC)). A
“flag kit” did not include flag-related accessories that are available for sale
individually, even if such items were sold
in a single transaction along with a U.S.
flag or Wisconsin state flag.
seller is not relieved from liability for the tax, interest, or penalties.
A seller accepts an exemption certificate in “good
faith” if all of the following apply:
•
The exemption claimed was authorized by law
on the date of the transaction in the jurisdiction
where the sale takes place (i.e., is sourced).
•
Flag accessories, except as described
above.
The exemption could apply to the tangible personal property; item, property, or good
described in Part X.A.2. to 4.; or service being
purchased.
•
Example 1: Retailer C sells an 8-foot sectional flagpole. The sale of the flagpole is
not exempt from Wisconsin sales or use tax
under sec. 77.54(46), Wis. Stats.
The exemption being claimed is reasonable for
the purchaser’s type of business.
See Appendices E and F for a copy of the following
exemption certificates:
This exemption does not apply to:
•
Example 2: Retailer D sells 40-foot sectional flagpoles, hardware for flags, U.S.
flags, and Wisconsin state flags. All are for
sale individually. The sale of the flagpoles
and hardware are taxable, even if Retailer D
sells these items in a single transaction
along with the sale of a U.S. flag or a Wisconsin state flag.
•
A representation of the United States flag
or Wisconsin state flag (e.g., stickers, magnets, lapel pins, photographs, and clothing).
C. Exemptions That Require Exemption Certificates
A seller will be subject to sales tax on the sales
price from the sale of the following products unless
a fully completed exemption certificate is received
from the purchaser prior to the sale or no later than
90 days after the sale.
Note: If a seller does not obtain an exemption certificate prior to the sale or within 90 days after the
date of the sale, 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
•
Form S-211, Wisconsin Sales and Use Tax
Exemption Certificate
•
Form S-211-SST, Streamlined Sales and
Use Tax Exemption Certificate
Caution: It is not uncommon for a purchaser to buy
a product without tax (e.g., purchasing a product
without tax for resale by presenting the vendor with
a fully completed exemption certificate) and then
later use that item in a taxable manner. Effective
October 1, 2009, when a taxable use is made of
such a product, use tax is owed based on the original purchase price of the product.
Prior to October 1, 2009, if the first taxable use
occurred more than six months after the purchase,
the purchaser was allowed to measure use tax by
(1) the fair market value of the item at the time that
first taxable use occurred, or (2) the purchase price.
Example 1: Computer Store A buys and sells computers. A laptop computer was purchased without
tax for resale on January 1, 2008 for $550. On November 1, 2009, Computer Store A took the laptop
out of inventory and gave it away as a promotional
item (i.e., taxable use). The fair market value of the
laptop at the time that the first taxable use occurred
was $300. Since the first taxable use occurred after
October 1, 2009, Company A’s use tax liability is
based on its purchase price of $550.
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Example 2: Same as Example 1, except that Computer Store A took the laptop out of inventory and
gave it away as a promotional item (i.e., taxable
use) on September 1, 2009. The fair market value of
the laptop at the time that the first taxable use occurred was $300. Since the first taxable use
occurred more than six months after Company A
purchased the laptop and the first taxable use occurred before October 1, 2009, Company A may
choose to measure its use tax liability by its purchase price of $550 or by the laptop’s fair market
value of $300.
2. Affiliated Businesses - Certain Sales By (effective September 1, 2005)
If the seller and the purchaser are members of
the same affiliated group under sec. 1504 of the
Internal Revenue Code and are eligible to file a
single consolidated return for federal income
tax purposes, an exemption applies for sales of
the following:
•
Taxable services.
•
Tangible personal property; or items or
property described in Part X.A.2. and 3.;
that is physically transferred to the purchaser as a necessary part of services that are
subject to the taxes imposed under
sec. 77.52(2)(a)7, Wis. Stats. (photographic
services), sec. 77.52(2)(a)10, Wis. Stats.
(repair, service, alteration, fitting, cleaning,
painting, coating, towing, inspection, or
maintenance of tangible personal property;
or items or property described in
Part X.A.2. and 3.), sec. 77.52(2)(a)11.,
Wis. Stats. (producing, fabricating, processing, printing, or imprinting of tangible
personal property; or items or property described in Part X.A.2. and 3.), and
sec. 77.52(2)(a)20., Wis. Stats. (landscaping and lawn maintenance services).
1. Advertising and Promotional Direct Mail (effective July 1, 2013)
Advertising and promotional direct mail. “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.
"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 described in Part X.A.2. to 4. 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 described in
Part X.A.2. to 4. 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.
See the exemptions for “Catalogs and their
Mailing Envelopes” and Printed Advertising
Materials” for related exemptions (in
Part XI.C.4. and 17, respectively).
51
If a seller purchases a taxable service; tangible
personal property; or an item or property described in Part X.A.2. and 3.; that is
subsequently sold to a member of the seller’s
affiliated group and the sale is exempt as described above, the original purchase of the
taxable service; tangible personal property; or
item or property described in Part X.A.2. and
3.; by the seller is not considered a sale for resale or exempt as described above and the seller
must pay the applicable tax on its purchase.
3. Carriers of Property or Passengers
•
Buses, motor trucks, truck tractors, road
tractors, trailers, and semitrailers (and accessories, attachments, supplies, parts, and
repair services therefor) sold to persons
who use the vehicles exclusively as common or contract carriers.
Wisconsin Sales and Use Tax Information
Refer to sec. Tax 11.16, Wis. Adm. Code,
“Common or contract carriers.” Also see
pages 31-37 of Wisconsin Tax Bulletin #110 (July 1998).
•
Railway rolling stock used in railroad operations and accessories, attachments, parts,
and fuel for the railway rolling stock.
Refer to sec. Tax 11.16, Wis. Adm. Code.
•
•
See the exemption for “Advertising and Promotional Direct Mail” and “Printed Advertising
Materials” for related exemptions (in
Part XI.C.1. and 17., respectively).
5. Clay Pigeons and Live Game Birds
Commercial vessels and barges of 50-ton
burden or over primarily engaged in interstate commerce or commercial fishing.
•
Refer to sec. Tax 11.16, Wis. Adm. Code,
and sec. Tax 11.85, Wis. Adm. Code,
“Boats, vessels and barges.”
Clay pigeons and live game birds sold to
bird hunting preserves that are licensed under sec. 169.19, Wis. Stats.
•
Clay pigeons that are sold to a shooting facility, if any of the following applies:
Aircraft, and accessories, attachments, fuel,
and parts for aircraft, sold to persons who
use the aircraft as certified or licensed carriers of persons or property in interstate or
foreign commerce.
Refer to sec. Tax 11.84, Wis. Adm. Code,
“Aircraft.”
•
not meet the definition of a "catalog," and the
exemption does not apply.
All types of tangible personal property; or
items or property described in Part X.A.2.
and 3.; sold to a common or contract carrier
and shipped by the seller via the purchasing
carrier under a bill of lading to a point outside Wisconsin for use outside Wisconsin
by the carrier in the conduct of its business.
4. Catalogs and Their Mailing Envelopes (effective April 1, 2009)
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.
“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.
Printed materials that are not bound, stitched,
sewed or stapled, do not meet the definition of a
"catalog.” For example, an advertising pamphlet that is printed on a single sheet of paper
and simply folded one or more times without
being bound, stitched, sewed or stapled, does
a. The shooting facility is required to pay
the tax imposed under sec. 77.52, Wis.
Stats., on the sales price from charges
for shooting at the facility.
b. The shooting facility is a nonprofit organization that charges for shooting at
the facility, but is not required to pay the
tax imposed under sec. 77.52, Wis.
Stats., on its sales price from such
charges because the charges are for occasional sales, as provided under
sec. 77.54(7m), Wis. Stats.
Effective July 1, 2007, the sales and use tax
exemption for sales of clay pigeons applies
if:
(1) The clay pigeons are sold to a nonprofit gun club that charges for
shooting at the facility, and
(2) The charges for shooting at the facility qualify for exemption because
the gun club is a nonprofit organization that provides safety classes to at
least 25 individuals in the calendar
year.
6. Farmers
Tangible personal property; and items and
property described in Part X.A.2. and 3.; as explained below, sold to persons engaged in
“farming.” Farming includes agriculture, horti52
Publication 201
culture, or floriculture when engaged in as a
business enterprise. Effective July 1, 2007, the
definition of “farming” was expanded to include “silviculture.”
“Silviculture” is 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.
See the tax release titled “Sales and Use Tax
Exemption for Silviculture” on pages 19-31 of
Wisconsin Tax Bulletin #152 (July 2007).
Refer to sec. Tax 11.12, Wis. Adm. Code,
“Farming, including dairy farming, agriculture,
horticulture, floriculture, silviculture, and custom farming services,” and Publication 221,
Farmers and Farm Suppliers, for more information.
•
Tractors and machines, including accessories, attachments, and parts therefor, used
exclusively and directly in the business of
farming.
Effective July 1, 2007, lubricants, nonpowered equipment, and other tangible personal
property that are used exclusively and directly, or are consumed or lose their
identities, in the business of farming are also exempt from Wisconsin sales and use
taxes. For additional information about these changes, see Publication 221, Farmers
and Farm Suppliers. Note: Effective October 1, 2009, this exemption also includes
items and property described in Part X.A.2.
and 3.
This exemption does not include:
a. Automobiles, trucks, and other motor
vehicles for highway use,
b. Personal property that is attached to,
fastened to, connected to, or built into
real property or that becomes an addi-
53
tion to, component of, or capital improvement of real property, or
c. Tangible personal property; and items
and property described in Part X.A.2.
and 3.; 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 item, or property
makes to the production process in that
building or real property and regardless
of the extent to which that personal
property, item, or property functions as
a machine.
For purposes of this sales and use tax exemption, the following items retain their
character as tangible personal property, regardless of the extent to which they are
fastened to, connected to, or built into real
property:
a. Auxiliary power generators
b. Bale loaders
c. Barn cleaners and elevators
d. Conveyors
e. Feed elevators and augers
f.
Grain dryers and grinders
g. Irrigation implements
h. Milk coolers
i.
Milking machines; including piping,
pipeline washers, and compressors
j.
Powered feeders, but not including
platforms or troughs constructed from
ordinary building materials
k. Silo unloaders (top and bottom)
For purposes of this sales and use tax exemption, the following definitions apply.
“Building” means any structure that is intended to be a permanent accession to real
property; that is designed or used for sheltering people, animals, or plants, for storing
property or for working, office, parking,
sales, or display space, regardless of any
Wisconsin Sales and Use Tax Information
contribution that the structure makes to the
production process in it; that in physical
appearance is annexed to that real property;
that, except for a few structures, is covered
by a roof or encloses space; that is not readily moved or disassembled; and that is
commonly known to be a building because
of its appearance and because of the materials of which it is constructed.
“Machine” means an assemblage of parts
that transmit force, motion, and energy
from one part to another in a predetermined
manner.
“Used exclusively” means used to the exclusion of all other uses except for other
uses not exceeding 5% of total use.
•
Animal bedding and farm livestock medicine.
•
The following property used exclusively in
the business of farming: seeds for planting,
plants, feed, fertilizer, soil conditioners,
sprays, pesticides, fungicides, baling twine
and baling wire, breeding and other livestock, poultry, farm work stock, containers
for fruits, vegetables, grain, hay, silage, and
animal wastes, and plastic bags, plastic
sleeves, and plastic sheeting used to store
and cover hay or silage.
•
Electricity and fuel used in farming. See
Part XI.B.4.
7. Fuel and Electricity Consumed in Manufacturing Tangible Personal Property; and
Items and Property Described in Part X.A.2.
and 3.; in Wisconsin
Fuel and electricity “consumed in manufacturing” means fuel and electricity used to operate
machines and equipment used directly in the
step-by-step manufacturing process. Fuel and
electricity are not “consumed in manufacturing”
if they are used in providing plant heating, cooling, air conditioning, communications, lighting,
safety and fire prevention, research and product
development, receiving, storage, sales, distribution, warehousing, shipping, advertising, or
administrative department activities. However,
fuel and electricity used directly in manufacturing steam which is used by the manufacturer in
further manufacturing or in heating a facility, or
both, is “consumed in manufacturing.”
For additional information about the exemption
for fuel and electricity used in manufacturing,
see the Exemption for Fuel and Electricity Consumed in Manufacturing FAQ on the
Department of Revenue’s web site.
Prior to January 1, 2006, sales of fuel and electricity consumed, destroyed, or losing its
identity in the manufacture of tangible personal
property generally were not exempt from sales
or use tax. Instead, a business may have
claimed a franchise or income tax credit for the
sales and use taxes paid on fuel and electricity
consumed in manufacturing tangible personal
property in Wisconsin. Unused credits may be
carried forward for 20 taxable years. The manufacturer’s sales tax credit may not be claimed
for taxable years that begin after December 31,
2005.
For additional information about how the sales
and use tax exemption for fuel and electricity
used in manufacturing replaced the sales tax income and franchise tax credit, see the article
titled “Sales Tax Exemption Replaces Manufacturer’s Sales Tax Credit.” This article was
published on pages 15-16 of Wisconsin Tax
Bulletin #145 (November 2005).
8. Fuel Sold for Use in Charter Fishing Boats
(effective July 1, 2009)
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 sec. 29.001(63), Wis. Stats., and the
rivers
and
tributaries
specified
in
sec. 29.2285(2)(a)1. and 2., Wis. Stats., if the
owner and all operators are licensed under
sec. 29.514, Wis. Stats., to operate the boat for
that purpose.
"Outlying
waters,"
as
defined
in
sec. 29.001(63), Wis. Stats., means Lake Superior, Lake Michigan, Green Bay, Sturgeon Bay,
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Sawyer's Harbor and the Fox River from its
mouth up to the dam at De Pere.
“Rivers and tributaries” specified in
sec. 29.2285(2)(a)1. and 2., Wis. Stats., include
any river or stream tributary of Lake Michigan
or Green Bay from its mouth upstream to the
first dam or lake and any other river or stream
tributary of Lake Michigan or Green Bay that is
designated by the department.
Section 29.514, Wis. Stats., details the requirement for obtaining and holding an outlying
water sport trolling license. No person may be
engaged or be employed for any compensation
to guide any other person in sport trolling for
trout or salmon in and upon the outlying waters
unless the person is issued a sport trolling license by the Department of Natural Resources.
9. Fire Fighting Equipment
Fire trucks and fire fighting equipment including accessories, attachments, parts, and supplies
for the trucks and equipment sold to a volunteer
fire department.
10. Heavy Logging Equipment
Off-highway heavy mechanical equipment such
as feller bunchers, slashers, delimbers, chippers,
hydraulic loaders, loaders, skidder-forwarders,
skidders, timber wagons, and tractors used exclusively and directly in the harvesting or
processing of raw timber products in the field
by a person in the logging business. “Heavy
mechanical equipment” does not include hand
tools such as axes, chains, chain saws, and
wedges.
11. Diabetes Supplies
Supplies used to determine blood sugar level
sold to the ultimate consumer. Note: Apparatus
or equipment used for the injection of insulin or
the treatment of diabetes may be exempt as durable medical equipment. See Part XI.B.7.
55
Prior to October 1, 2009, the exemption also
included (1) apparatus or equipment for the injection of insulin sold to the ultimate consumer;
and (2) apparatus or equipment for the treatment of diabetes sold to the ultimate consumer.
12. Internet Equipment Used in the Broadband
Market (effective July 1, 2007)
Internet equipment used in the broadband market, if the purchaser certifies to the Department
of Commerce, in the manner prescribed by the
Department of Commerce, that the purchaser
will, within 24 months after the effective date
of this exemption (July 1, 2007), make an investment that is reasonably calculated to
increase broadband Internet availability in Wisconsin.
“Internet equipment used in the broadband
market” is defined to mean equipment that is
capable of transmitting data packets or Internet
signals at speeds of at least 200 kilobits per second in either direction.
Every person who is required to make an investment that qualifies for this exemption and is
reasonably calculated to increase broadband Internet availability in Wisconsin, shall, within
60 days after the end of the year in which the
investment is made, file a report with the Department of Commerce that provides a detailed
description of the investment, including the
amount invested. The Department of Commerce shall provide copies of the report to the
Department of Administration, the Department
of Revenue, and the Public Service Commission.
For additional information see pages 14-16 of
Wisconsin Tax Bulletin #148 (July 2006).
13. Manufacturing Machinery, Equipment, and
Materials
•
Machines and specific processing equipment and repair parts or replacements and
safety attachments for such machines and
equipment which are exclusively and directly used by a manufacturer in manufacturing
Wisconsin Sales and Use Tax Information
•
tangible personal property; or items or
property described in Part X.A. 2. and 3.
use requirements did not apply for this exemption.
Tangible personal property; or an item described in Part X.A.2.; which is used
exclusively and directly by a manufacturer
in manufacturing an article of tangible personal property; or an item or property
described in Part X.A.2. and 3.; if either of
the following apply:
Refer to Part XIV. for additional information
about manufacturers and the exemptions for
persons engaged in manufacturing.
 It becomes an ingredient or component
part of the article of tangible personal
property; or item or property described
in Part X.A.2. and 3.; that is destined
for sale.
 It is consumed, destroyed, or loses its
identity in manufacturing the article of
tangible personal property; or item or
property described in Part X.A.2. and
3.; that is destined for sale. Note: See
Part XI.C.7. for information relating to
the exemption for fuel and electricity
consumed in manufacturing.
Note 1: Prior to August 1, 2009, the exemption was for tangible personal property
which became an ingredient or component
part of an article of tangible personal property or which was consumed, destroyed, or
lost its identity in the manufacture of tangible personal property in any form destined
for sale.
Note 2: Creating a digital good does not
meet the definition of “manufacturing” (i.e.,
for Wisconsin sales and use tax purposes,
you cannot manufacture a digital good).
•
Sales of tangible personal property (e.g.,
paper) or services (e.g., printing) that are
used exclusively and directly and that become an ingredient or component of, or that
are consumed or lose their identity in, the
manufacture of shoppers guides, newspapers, or periodicals. The exemption applies
whether the shoppers guides, newspapers,
or periodicals are sold or transferred without charge to the recipient. Note: Prior to
August 1, 2009, the exclusive and direct
14. Maple Syrup Equipment
Equipment sold for use in the production of
maple syrup.
15. Motion Pictures
Motion picture film or tape, and motion pictures or radio or television programs for
listening, viewing, or broadcasts, and advertising material related to such film or tape or
programs, which are sold, leased, or rented to a
motion picture theater or to a radio or television
station.
Prior to October 27, 2007, the exemption only
applied to motion picture film or tape, and advertising materials related to such film or tape,
which are sold, leased, or rented to a motion
picture theater or to a radio or television station.
16. Packaging and Shipping Materials
•
Containers, labels, sacks, cans, boxes,
drums, bags, or other packaging and shipping materials sold for use in packing,
packaging, or shipping tangible personal
property; or items or property described in
Part X.A.2. and 3.; if used by the purchaser
to transfer merchandise to customers.
•
Meat casing, wrapping paper, tape, containers, labels, sacks, cans, boxes, drums, bags,
or other packaging and shipping materials
sold for use in packing, packaging, or shipping meat or meat products, regardless of
whether used to transfer merchandise to
customers.
17. Printed Advertising Materials
Printed advertising materials, including catalogs
and their envelopes, purchased and stored for
the purpose of subsequently transporting them
56
Publication 201
outside Wisconsin by the purchaser for use
solely outside Wisconsin.
Effective April 1, 2009, this exemption no
longer applies to catalogs and the envelopes in
which they are mailed. See the exemption for
“Catalogs and Their Mailing Envelopes” in
Part XI.C.4.
•
Repair, service, alteration, fitting,
cleaning, painting, coating, towing, inspection, and maintenance of tangible
personal property; or items, property, or
goods described in Part X.A.2. to 4.
(sec. 77.52 (2)(a)10., Wis. Stats.)
•
Producing, fabricating, processing,
printing, or imprinting of tangible personal property; or items, property, or
goods described in Part X.A.2. to 4.
(sec. 77.52(2)(a)11., Wis. Stats.)
•
Landscaping and lawn maintenance
services (sec. 77.52(2)(a)20., Wis.
Stats.)
Also see the exemption for “Advertising and
Promotional Direct Mail” in Part XI.C.1. for a
related exemption.
18. Raw Materials for Printed Materials
Raw materials used for the processing, fabricating, or manufacturing of, or the attaching to or
incorporating into, printed materials that are
transported and used solely outside Wisconsin,
even if the printed materials are not sold.
19. Purchases for Resale
Caution: If a person purchases a product for
resale and makes any use of the product other
retention, demonstration, or display while holding the product for sale, lease, or rental in the
regular course of the purchaser’s operations,
this exemption does not apply.
a. Tangible personal property; an item, property, or good described in Part X.A.2. to 4.;
or a service, sold to a person who will resell
it.
Example: A retailer purchases property
from a wholesaler or from another retailer
and the retailer intends to resell the property to consumers.
b. Tangible personal property; or an item,
property, or good described in Part X.A.2.
to 4.; physically transferred, or transferred
electronically, by a service provider to a
customer in conjunction with the selling,
performing, or furnishing of the following
taxable services is considered to be resold
by the service provider:
•
57
Photographic services
(sec. 77.52(2)(a)7., Wis. Stats.)
Examples of services in which the service
provider may purchase the property, item,
or good transferred without tax for resale
follow:
Example 1: Person X repairs a furnace for
Person Y for $50, which includes the replacement of a furnace part. Person X may
purchase the furnace part tax-free by giving
an exemption certificate claiming resale to
the seller of the part because the part is
physically transferred to the customer.
Example 2: A photographer purchases
mounts, frames, and paper for use in finishing photographs which are transferred to
customers. Such mounts, frames, and paper
may be purchased without tax for resale by
the photographer.
Example 3: A person who delivers and installs sod for a customer is providing a
taxable landscaping service. This person
may purchase the sod without tax for resale.
c. Tangible personal property; or an item,
property, or good described in Part X.A.2.
to 4.; which is sold to a service provider
who resells the property, item, or good
which is physically transferred, or electronically transferred, to a customer in
conjunction with the selling, performing, or
furnishing of nontaxable services or taxable
services not listed in 18.b., is considered to
be resold by the service provider if the
Wisconsin Sales and Use Tax Information
property, item, or good transferred to the
customer is not incidental to the selling,
performing, or furnishing of the service.
“Incidental” means depending upon or appertaining to something else as primary;
something necessary, appertaining to, or
depending upon another which is termed
the principal; or something incidental to the
main purpose of the service.
Tangible personal property; or an item,
property, or good described in Part X.A.2.
to 4.; transferred by a service provider is
incidental to the service if the purchaser’s
main purpose or objective is to obtain the
service rather than the property, item, or
good, even though the property, item, or
good may be necessary or essential to
providing the service. Also see “Bundled
Transactions,” in Part X.C.
The “incidental” test does not apply to contractors. Contractors should refer to
Part XII. for information about their purchases.
Note 1: Tangible personal property; or an
item, property, or good described in
Part X.A.2. to 4.; which is sold to a service
provider who transfers the property, item,
or good to the customer in conjunction with
the selling, performing, or furnishing of
nontaxable services or taxable services not
listed in Part XI.C.19.b., is subject to sales
and use tax if the transfer of the property,
item, or good is incidental to providing the
service.
Note 2: Tangible personal property that is
purchased to sell in a different format, such
as a digital good, may not be purchased
without tax for resale. The purchaser is the
consumer of the tangible personal property
and is liable for sales or use tax on its purchase of the tangible personal property.
Example: Company A purchases a
stock photograph that it receives on a
disk. Company A uploads the image of
the stock photograph to its web site and
sells digital reproductions of the stock
photograph to its customers. Company A’s purchase of the stock
photograph on a disk is subject to Wisconsin sales or use tax.
Following are examples of tangible personal property; and items, property, and goods
described in Part X.A.2. to 4.; transfers that
are incidental to the service and, therefore,
the service provider must pay the tax upon
the purchase of the property:
Example 1: The operator of a motel or
hotel is subject to tax on its purchases
of beds, dressers, tables, linens, soap,
and other items purchased for use in
rooms provided to transients since the
customers’ main purpose is to obtain
access to the room.
Example 2: A lawyer purchases paper
which it uses to prepare legal documents that are provided to its
customers. The purchase of the paper
by the lawyer is subject to the tax since
the customers’ main purpose is to obtain the legal service.
Example 3: A baseball team purchases
tickets to admit its customers to games
and promotional items to be given to
certain ticketholders for specific games.
The tax applies to these purchases of
tickets and promotional items because
the ticketholders’ main purpose is to attend the ball game.
Example 4: A person providing accounting services transfers documents,
reports, forms, and binders to its clients
in the course of setting up an accounting system for the clients. Purchases of
paper, forms, and binders by the service
provider are taxable since the clients’
main purpose is to obtain the accounting service.
Example 5: An engineer’s purchase of
specialized paper, which is used to create drawings transferred to customers,
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is subject to the tax because the customers’ main purpose is to obtain the
engineer’s design services.
24. Vegetable Oil or Animal Fat Converted to
Motor Vehicle Fuel (effective September 1,
2011)
Example 6: A physician purchases tape
which is used in providing medical service. Such tape purchases are subject to
the tax because the patients’ main purpose is to obtain the medical service.
Vegetable oil or animal fat that is converted into motor vehicle fuel that is exempt from motor
vehicles fuel taxes under sec. 78.01(2n), Wis.
Stats.
Example 7: A mover’s purchases of
corrugated boxes, containers, and related packing materials used in providing
household goods moving services are
subject to the tax because the customers’ main purpose is to obtain the
moving service.
25. Waste Treatment Facilities
A sales and use tax exemption applies for the
following:
•
Tangible personal property; or an item or
property described in Part X.A.2. and 3.;
becoming a component part of an industrial
waste treatment facility that is exempt from
Wisconsin property tax. Department of
Revenue approval is not required.
•
Tangible personal property; or an item or
property described in Part X.A.2. and 3.;
becoming a component part of the treatment plant of a utility waste treatment
facility approved by the Department of
Revenue as exempt from property tax. Requests for approvals should be sent to the
Bureau of Utility Tax, 2135 Rimrock Rd.,
Mail Stop 6-97, P.O. Box 8971, Madison,
WI 53708-8971.
•
Tangible personal property; or an item or
property described in Part X.A.2. and 3.;
becoming a component part of a Wisconsin
governmental unit waste treatment facility.
Department of Revenue approval of Wisconsin governmental waste treatment
facilities is not required.
•
Replacement parts and chemicals and supplies (including fuel and electricity) used or
consumed in operating a governmental unit,
approved utility, or industrial waste treatment facility.
20. Semen
Semen used in the artificial insemination of
livestock.
21. Snowmaking and Snow-Grooming Machines
and Equipment (effective July 1, 2013)
Snowmaking and snow-grooming machines and
equipment, including accessories, attachments,
and parts for the machines and equipment and
the fuel and electricity used to operate such machines and equipment, that are used exclusively
and directly for snowmaking and snow grooming at ski hills, ski slopes, and ski trails.
22. Snowmobile Trail Groomers
Snowmobile trail groomers and attachments
that are purchased, stored, used, or consumed
by a snowmobile club that (a) meets at least
three times a year, (b) has at least ten members,
(c) promotes snowmobiling, and (d) participates
in the Department of Natural Resources snowmobile program under sec. 350.12(4)(b), Wis.
Stats.
23. Utilities’ Fuel
Fuel sold to utilities for conversion to electric
energy, gas, or steam by the utility, and the portion of fuel converted to steam for purposes of
resale by persons other than utilities.
59
Effective October 1, 2007, the sales and use tax
exemption was amended to reflect the change to
the property tax exemption, which was effective
January 1, 2007. With this change, the property
tax exemption applies to all property and items
purchased or constructed as a qualifying utility
or industrial waste treatment facility used ex-
Wisconsin Sales and Use Tax Information
clusively 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 and, if the property’s owner is
taxed under Chapter 76, if the property is approved by the Department of Revenue.
The exemption is explained in detail on pages 33-34 of Wisconsin Tax Bulletin #154
(December 2007).
Contractors should give their suppliers an exemption
certificate
(e.g., Form S-211,
Form S-211-SST) claiming this exemption.
More
information
is
contained
in
sec. Tax 11.11, Wis. Adm. Code, “Utility, industrial and governmental waste treatment
facilities.”
26. Waste Reduction or Recycling
Waste reduction or recycling machinery and
equipment, including parts therefore, exclusively and directly used for waste reduction or
recycling activities, and motor vehicles not required to be licensed for highway use which are
used in such activities. Equipment used to remove impurities from lubricating oil used in
manufacturing machines and equipment used to
produce fuel cubes from shredded paper qualify
for this exemption.
Note: Dumpsters, compactors, and other collection containers do not qualify for this
exemption.
For additional information, see pages 30-36 of
Wisconsin Tax Bulletin #123 (January 2001).
27. Wind, Solar, and Gas from Anaerobic Digestions of Agricultural Waste (effective July 1,
2011)
•
Products whose power source is wind energy, direct radiant energy received from the
sun, or gas generated from anaerobic digestion of animal manure and other
agricultural waste, if the product produces
at least 200 watts of alternating current or
600 British thermal units per day, except
that this exemption does not apply to an uninterruptible power source that is designed
primarily for computers.
•
Electricity or energy produced by a product
described in the paragraph above, except
for the sale of electricity or energy that is
exempt from taxation under sec. 77.54(30),
Wis. Stats.
An Emergency Rule was published on June 29,
2011. The text of the rule has been posted to the
Department
of
Revenue’s
web
site:
“Emergency Rule for Wind, Solar, and Certain
Gas-Powered Products’ Exemption.”
28. Wood Residue
Wood 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, edgings,
slabs, leaves, wood chips, and bark. Also, wood
pellets manufactured primarily from wood or
wood residue and used as a fuel in a business
activity are exempt.
29. Manufacturing and Biotechnology (Effective
January 1, 2012)
Exemptions were created for certain machinery
and equipment sold to persons who are engaged
primarily in manufacturing or biotechnology in
Wisconsin and are used exclusively and directly
in qualified research. This exemption also applies to such person’s purchases of tangible
personal property; or an item or property described in Part X.A.2. and 3.; that is consumed
or destroyed or loses its identity while being
used exclusively and directly in qualified research.
Machines and specific processing equipment
used exclusively and directly in raising animals
may also qualify for exemption when sold primarily to a biotechnology business, a public or
private institution of higher education, or a
governmental unit for exclusive and direct use
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Publication 201
by any such entity in qualified research or manufacturing.
Refer to Part XIV.E. for more specific information about the biotechnology exemptions
available.
30. Digital Goods When Tangible Form Exempt
(Effective October 1, 2009)
Specified digital goods or additional digital
goods, if the sale of and the storage, use, or other consumption of such goods sold in a tangible
form is exempt from, or not subject to, sales or
use tax. See Part X.A.4. for additional information about digital goods.
D. Exempt Organizations
Certain organizations, described below, are exempt
from Wisconsin sales and use taxes on their purchases. However, most sales by these organizations
of taxable property and services are subject to sales
tax unless the occasional sale exemption applies
(see Part XVI.). Thus, if such an organization has
taxable sales it must obtain a seller’s permit and
remit sales tax to the Department of Revenue.
The following material describes exemptions available to various organizations.
1. Nonprofit Organizations
All tangible personal property; items, property,
and goods described in Part X.A.2. to 4.; and
taxable services sold to nonprofit organizations
operated exclusively for religious, charitable,
scientific, or educational purposes or for the
prevention of cruelty to children or animals, are
exempt if the organization provides its Certificate of Exempt Status (CES) number to the
seller.
To qualify for this exemption, an organization
must obtain a CES number from the Wisconsin
Department of Revenue and provide the number to the seller when purchasing tangible
personal property; items, property, or goods described in Part X.A.2. to 4.; or taxable services.
However, a similar out-of-state organization
may use this exemption to purchase tangible
61
personal property; items, property, and goods
described in Part X.A.2. to 4.; and taxable services without tax even though it has not been
issued a Wisconsin CES number.
Refer to Part IX. for information about obtaining a CES number.
2. Wisconsin Governmental Units, Agencies,
and Instrumentalities
•
Sales of tangible personal property; items,
property, and goods described in Part X.A.
2. to 4.; and taxable services sold to the following Wisconsin governmental units,
agencies, or instrumentalities are exempt.
 The State of Wisconsin or any of its
agencies.
 Any unit of Wisconsin government or
an agency or instrumentality of one or
more units of Wisconsin government.
This exemption includes any municipality, public school, or public school
district in Wisconsin.
 A county-city hospital established under sec. 66.0927, Wis. Stats.
 An uptown business improvement district organized under sec. 66.1109, Wis.
Stats.
 A sewerage commission organized under sec. 281.43(4), Wis. Stats., or a
metropolitan sewerage district organized under secs. 200.01 to 200.15 or
200.21 to 200.65, Wis. Stats.
 A joint local water authority created
under sec. 66.0823, Wis. Stats.
 Any transit authority created under
sec. 59.58(7) or 66.1039 (effective July 1, 2009).
 A local exposition district or professional baseball park or football stadium
district under subchs. II, III, and IV of
ch. 229, Wis. Stats.
 The University of Wisconsin Hospitals
and Clinics Authority.
Wisconsin Sales and Use Tax Information
 A local cultural arts district created under subch. V of ch. 229, Wis. Stats.
 The Fox River Navigational System
Authority.
•
 The Health Insurance Risk-Sharing
Plan Authority (effective January 7,
2006).
Refer to sec. Tax 11.05, Wis. Adm. Code,
“Governmental units,” for additional information about exempt sales by governmental
units.
 The Wisconsin Aerospace Authority
(effective April 29, 2006).
3. Wisconsin American Indian Tribes and
Bands (effective August 1, 2009)
 The Wisconsin Quality Home Care Authority (effective July 1, 2009).
Sales to any federally recognized American Indian tribe or band in Wisconsin are exempt
from Wisconsin sales and use taxes.
 The Wisconsin Economic Development
Corporation (effective February 24,
2011).
 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 (effective July 1, 2009).
4. Elementary or Secondary Schools
•
Sales of tangible personal property; or
items, property, or goods described in
Part X.A. 2. to 4.; by any non-profit public
or private elementary or secondary school,
including the school district, are exempt.
However, sales by colleges and universities
are generally taxable.
•
Sales of admissions to public and private
elementary and secondary school activities
are exempt if the entire net proceeds are
expended for educational, religious, or
charitable purposes.
Sales to foreign countries, other states, or
municipalities in other states or foreign
countries are taxable.
The governmental unit, agency, or instrumentality must give the seller one of the
following:
a. An
exemption
certificate
Form S-211, Form S-211-SST).
•
A governmental unit’s charges for copying
public records or confidential records are
exempt.
(e.g.,
More information about sales and purchases by
elementary and secondary schools is contained
in sec. Tax 11.03, Wis. Adm. Code, “Schools
and related organizations.”
5. United States Government
b. A completed purchase order or similar
document clearly identifying the purchaser.
•
Sales by or to the United States government
or any of its agencies or instrumentalities
are exempt.
c. The Certificate of Exempt Status number issued to the governmental unit to
be recorded by the seller on the invoice
it keeps.
•
Sales tax applies to the receipts of nongovernmental operators of vending machines located on army, navy, or air force
installations, hospitals, or other facilities of
the United States government.
•
United States Government Bankcards The federal government issues certain U.S.
Government Bankcards (e.g., “GSA
Sales by the State of Wisconsin of admission fees or stickers permitting access to
state parks are exempt.
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Publication 201
SmartPay” cards) to some of its employees
for use when traveling. Such cards state that
payment of all purchases will be made directly by the federal government. The cards
may also list property and services which
may not be purchased using such cards.
Sales to employees of the federal government
holding such cards are exempt from Wisconsin
sales or use tax, because they are considered
sales to the federal government, provided the
retailer makes the billing or invoice out in the
name of the federal government agency and the
retailer receives a purchase order or similar
written documentation from the federal government agency or the federal governmental
unit’s Certificate of Exempt Status (CES) number.
6. Colleges,
Schools
•
Universities,
and
Vocational
The sales price from student tuition are
nontaxable because such receipts are from
educational services. If a single billing for
tuition includes mandatory charges for materials (which are incidental to the
educational services) or mandatory charges
for otherwise taxable services, the entire
billing for these mandatory charges and tuition is not taxable. This is the case whether
such mandatory charges are or are not separately stated on such single billing issued to
the student.
Note: Non-mandatory charges for these
items included in such single billing are
taxable if the price varies if the nonmandatory items are not purchased.
•
Sales of food and food ingredients furnished in accordance with any contract or
agreement by a public or private institution
of higher education, are exempt 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
63
 The items are furnished to a National
Football League team.
For additional information, see Publication 204,
Sales and Use Tax Information for Colleges,
Universities, and Technical Colleges.
E. Disaster Relief Bankcards and Vouchers Issued
by Exempt Organizations
Organizations, such as the Federal Emergency
Management Agency (FEMA) and the American
Red Cross (ARC), provide relief to disaster victims
by distributing funds to those in need. The funds are
distributed to disaster victims using various methods including: (1) making electronic transfers
directly into a disaster victim’s bank account;
(2) issuing U.S. Treasury checks to a disaster victim; (3) issuing FEMA debit cards to a disaster
victim; (4) providing the disaster victim with an
ARC
Disbursing
Order
(ARCDO);
and
(5) providing the disaster victim with a Client Assistance Card (CAC). The Wisconsin sales and use
tax treatment of purchases made using each of these
payment methods is described below.
FEMA Electronic Funds Transfer and U. S.
Treasury Checks
Purchases made by disaster victims with funds from
FEMA that have been electronically transferred into
an individual’s bank account or received by the individual in the form of a U.S. Treasury check are
subject to Wisconsin sales or use tax in the same
manner as any other purchase made by that individual.
Example: Individual A is a victim of Hurricane
Katrina and receives funds from FEMA through an
electronic funds transfer directly into Individual A’s
bank account. Individual A uses these funds to purchase gasoline for his automobile and a meal at a
restaurant. Individual A’s purchase of the gasoline
for his automobile is not subject to Wisconsin sales
tax since gasoline for automobiles is generally not
subject to Wisconsin sales tax. Individual A’s purchase of the meal is subject to Wisconsin sales tax.
The fact that these purchases are made with funds
that were provided to Individual A by FEMA does
not affect the taxability of the transactions.
Wisconsin Sales and Use Tax Information
FEMA Issued Debit Cards
In addition to providing funds to disaster victims
using electronic funds transfer and U.S. Treasury
checks, FEMA also had a pilot program in which it
provided approximately 8,500 debit cards to some
of the victims. The debit cards were set up in the
victim’s name and “pre-loaded” with $2,000 in
spending authority. Purchases made by persons using the FEMA provided debit cards that have been
set up in the victim’s name are subject to Wisconsin
sales or use tax in the same manner as any other
purchase made by that individual.
American Red Cross Disbursing Orders (ARCDO)
An ARCDO is a voucher that the American Red
Cross (ARC) provides to a disaster victim for a specific vendor and is good up to a specified dollar
amount. Although ARCDOs are mainly issued for
lodging for the victims, the ARC also issues
ARCDOs for items such as groceries and clothing.
A vendor that accepts an ARCDO submits a copy
of the invoice or receipt showing what was purchased by the victim, along with a copy of the
ARCDO, to the ARC. (Note: If the purchase was
for less than $25 or was for groceries, a copy of the
invoice or receipt is not required to be sent along
with the ARCDO.) The ARC then sends a check to
the vendor to pay for the purchase. Purchases made
using ARCDOs, as described above, are not subject
to Wisconsin sales or use tax since these purchases
are made by the ARC. The vendor should keep a
copy of the ARCDO and receipt and indicate the
ARC’s Certificate of Exempt Status (CES) number
on the receipt to prove that the sale qualifies for exemption from Wisconsin sales and use tax. The
CES number for the ARC is contained in the merchant instructions for the ARCDO.
American Red Cross Client Assistance Cards
(CAC)
American Red Cross Client Assistance Cards
(CACs) are prepaid credit cards which the ARC issues to some victims. Generally, CACs can be used
anywhere that a MasterCard is accepted and may be
used to purchase any items other than alcohol, tobacco and firearms.
When a CAC account is set up by the ARC for a
victim, the financial institution through which the
CAC has been issued will remove the specified
amount of funds from the ARC’s bank account and
transfer the funds to the CAC account. The victim
will then select a personal identification number
(PIN) for the account and have approximately
15 days to spend the balance on the card. The ARC
reserves the right to deactivate or suspend the card
at any time if misuse is suspected. In addition, any
funds left on the card after a specified period of
time are returned to the ARC’s bank account.
Purchases made using CACs are not subject to Wisconsin sales or use tax, provided the invoice for the
purchase is made out in the name of the ARC and
the purchaser pays for the purchase using the CAC.
The retailer should keep a copy of the CAC and receipt and indicate the ARC’s CES number on the
receipt to prove that the sale qualifies for exemption
from Wisconsin sales and use tax.
F. Other Exemptions
1. Auto Dealers
The loan by an automobile dealer of a motor
vehicle to any school or school district for a
driver training educational program conducted
by the school or school district is exempt. If the
dealer makes any other use of the vehicle except retention, demonstration, or display while
holding it for sale in the regular course of business, the use is taxable as described in
sec. 77.53(1m), Wis. Stats.
2. Interest, Financing, or Insurance
Charges for insurance are exempt if such charges are separately set forth upon the invoice
given by the seller to the purchaser. Charges for
interest, financing, and carrying charges that are
extended on a sale of tangible personal property; items, property, or goods described in
Part X.A. 2. to 4.; and services are not included
in the sales price.
Prior to October 1, 2009, charges for interest
and financing separately set forth on the invoice
were exempt from tax. This results in the same
tax treatment as the current deduction from
sales price.
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Publication 201
3. Interstate Commerce Sales
•
Sales of tangible personal property; items,
property, or goods described in Part X.A. 2.
to 4.; and services, by retailers are exempt
from sales tax if the sale takes place at a location outside Wisconsin. See Part VII.C.,
for information about where a sale takes
place (i.e., where a sale is sourced).
Example: A dry cleaner located in Beloit,
Wisconsin has a pick-up route including
territory in Illinois. The receipts from dry
cleaning or laundry services of clothing
picked up in Illinois and returned to Illinois
by the dry cleaner are not subject to the
Wisconsin tax, even though the actual service is performed in Wisconsin. In the
opposite situation (i.e., Illinois dry cleaner
selling in Wisconsin), the charges made to
Wisconsin customers for dry cleaning are
taxable.
Caution: If the tangible personal property;
or item or property described in Part X.A.2.
and 3.; sold or serviced outside Wisconsin
is later brought into Wisconsin, the purchaser may be subject to Wisconsin use tax
on the storage, use, or consumption of the
property or item or service in Wisconsin,
unless an exemption applies. The storage,
use, or other consumption of a taxable digital good described in Part X.A.4., sold
outside Wisconsin, may be subject to use
tax if the purchaser later has the right to use
the goods on a permanent or less than permanent basis in Wisconsin.
•
65
Sales of tangible personal property; or
items or property described in Part X.A.2.
and 3.; purchased for use solely outside
Wisconsin 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 of the property or items
are exempt.
4. Nonresidents
•
Aircraft, motor vehicles, or truck bodies
(including semitrailers) sold in Wisconsin
to nonresidents of Wisconsin who do not
use such property in Wisconsin other than
to remove it from Wisconsin, are exempt.
Note: This exemption is limited to aircraft,
motor vehicles, and truck bodies. Wisconsin sales of other products to nonresidents
are taxable.
•
An aircraft is exempt from Wisconsin use
tax when all of the following requirements
are met:
a. It is purchased in another state. See
Part VII.C. for information about where
a sale or purchase takes place (i.e.,
where a sale or purchase is sourced).
b. Its owner or lessee has paid all of the
sales and use taxes imposed in respect
to it by the state where it was purchased.
c. If the owner or lessee is a corporation,
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 such property
as
hangars,
accessories,
attachments, fuel, and parts required for
operation of aircraft, in Wisconsin at
the time the aircraft is registered in
Wisconsin.
d. If the owner or lessee is a partnership,
all of the corporate partners fulfill the
requirements in c. above and none of
the general partners or limited partners
who have management or control responsibilities is domiciled in Wisconsin
and the partnership has no other tangible personal property and no real
property, except aircraft and such property
as
hangars,
accessories,
attachments, fuel, and parts required for
operation of aircraft, in Wisconsin at
Wisconsin Sales and Use Tax Information
sale or purchase takes place (i.e., where a
sale or purchase is sourced).
the time the aircraft is registered in
Wisconsin.
e. If the owner or lessee is a limited liability company, all of the corporate
members fulfill the requirements under
c. above, and none of the managers and
none of the members who has management control responsibilities is
domiciled in Wisconsin and the limited
liability company has no other tangible
personal property and no real property,
except aircraft and such property as
hangars, accessories, attachments, fuel,
and parts required for operation of aircraft, in Wisconsin at the time the
aircraft is registered in Wisconsin.
•
Household goods, tangible personal property; items, property, or goods described in
Part X.A.2. to 4.; or aircraft, motor vehicles, boats, snowmobiles, mobile homes,
manufactured homes, recreational vehicles,
trailers, semitrailers, and all-terrain vehicles, for personal use, purchased by a
nonresident outside Wisconsin 90 days or
more before bringing the goods, items, or
property into Wisconsin in connection with
a change of domicile to Wisconsin.
•
Repair work (labor and materials) performed in Wisconsin on a nonresident’s
motor vehicle or truck body is taxable.
f.
•
Repair work (labor and materials) performed in Wisconsin on a nonresident’s
aircraft is taxable.
If the owner or lessee is an individual,
the owner or lessee is not domiciled in
Wisconsin.
g. If the owner or lessee is an estate, trust,
a cooperative, or an unincorporated cooperative
association
(effective
May 26, 2006), 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 such property as
hangars, accessories, attachments, fuel,
and parts required for operation of aircraft, in Wisconsin at the time the
aircraft is registered in Wisconsin.
h. The Department of Revenue has not determined that the owner, if the owner is
a corporation, trust, partnership, or limited liability company, was formed to
qualify for the exemption from Wisconsin use tax.
•
A boat is exempt from Wisconsin use tax if
purchased in a state contiguous to Wisconsin by a person domiciled in that state if the
boat is berthed in Wisconsin’s boundary
waters adjacent to the purchaser’s state of
domicile, if the transaction was an exempt
occasional sale under the laws of the state
in which the purchase was made. See
Part VII.C. for information about where a
Exception: Repair services for aircraft
never used in Wisconsin other than to be
removed from the state when purchased and
subsequently brought into Wisconsin solely
to be repaired are not taxable. However any
sales of parts are taxable.
5. Non-Sales
The following transactions are not considered
to be sales under the Wisconsin sales and use
tax law, and, therefore, are not subject to Wisconsin sales or use tax:
•
The transfer of tangible personal property;
or items, property, or goods described in
Part X.A. 2. to 4.; to a corporation upon its
organization solely in consideration for the
issuance of its stock.
•
The contribution of tangible personal property; or items, property, or goods described
in Part X.A. 2. to 4.; to a newly formed
partnership solely in consideration for a
partnership interest therein.
•
The contribution of tangible personal property; or items, property, or goods described
in Part X.A. 2. to 4.; to a limited liability
company upon its organization solely in
consideration for a membership interest.
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•
The transfer of tangible personal property;
or items, property, or goods described in
Part X.A. 2. to 4.; to a corporation, solely in
consideration for the issuance of its stock,
pursuant to a merger or consolidation.
•
The transfer of tangible personal property;
or items, property, or goods described in
Part X.A. 2. to 4.; to a limited liability
company solely in consideration for a
membership interest, pursuant to a merger.
•
The distribution of tangible personal property; or items, property, or goods described
in Part X.A. 2. to 4.; by a corporation to its
stockholders as a dividend or in whole or
partial liquidation.
•
The distribution of tangible personal property; or items, property, or goods described
in Part X.A. 2. to 4.; by a partnership to its
partners in whole or partial liquidation.
•
The distribution of tangible personal property; or items, property, or goods described
in Part X.A. 2. to 4.; by a limited liability
company to its members in whole or partial
liquidation.
•
•
67
erty, or goods described in Part X.A. 2. to
4.; held or used by a person in the course of
an activity requiring the holding of a seller’s permit, if after the transfer the real or
ultimate ownership of the property, items,
or goods is substantially similar to that
which existed before the transfer. In this
context, stockholders, bondholders, partners, members, or other persons holding an
interest in a corporation or other entity are
regarded as having the real or ultimate
ownership of the property, items, or goods
of the corporation or other entity. “Substantially similar” means 80% or more of
ownership.
A business entity that converts to another business entity under sec. 179.76, 180.1161,
181.1161, or 183.1207, Wis. Stats., is subject to
the sales and use tax provisions applicable to
liquidations, reorganizations, and business entity formations in ch. 77, subch. III, Wis. Stats.
6. Donation of Certain Property
The donation, to an entity specified in
sec. 77.54(9a), Wis. Stats., of property that the
donating person has purchased tax-free for resale or with a valid exemption certificate is
exempt from use tax.
Repossession of tangible personal property;
or items, property, or goods described in
Part X.A. 2. to 4.; by the seller from the
purchaser when the only consideration is
cancellation of the purchaser’s obligation to
pay the remaining balance of the purchase
price.
The transfer of transmission facilities, as
defined in sec. 196.485(1)(h), Wis. Stats.,
to a transmission company, as defined in
sec. 196.485(1)(ge), Wis. Stats., after the
organizational start-up date, as defined in
sec. 196.485(1)(dv), Wis. Stats., of such
company in exchange for securities, as defined in sec. 196.485(1)(fe), Wis. Stats.
•
The transfer of tangible personal property;
or items, property, or goods described in
Part X.A. 2. to 4.; in a reorganization as defined in sec. 368 of the Internal Revenue
Code in which no gain or loss is recognized
for franchise or income tax purposes.
•
Any transfer of all or substantially all the
tangible personal property; or items, prop-
Exempt entities specified in sec. 77.54(9a),
Wis. Stats., are discussed in Part XI.D.1 and 2
of this publication.
XII.
CONTRACTORS
A. How Contractors Are Taxed on Labor, Materials, and Supplies: The tax owed by contractors
depends upon whether they are acting as retailers or
as consumers in conducting their business.
A contractor is a consumer when constructing, installing, repairing, or servicing real property such as
buildings. As a consumer, the contractor must pay
sales or use tax on materials and supplies used in
such activities. A contractor may not charge sales
tax on the labor or materials used in such work.
However, the contractor’s selling price may reflect
all costs incurred.
Wisconsin Sales and Use Tax Information
A contractor is a retailer when selling, installing,
repairing, or servicing tangible personal property;
or items, property, or goods described in Part X.A.
2. to 4. When selling, installing, repairing, or servicing tangible personal property; or items,
property, or goods described in Part X.A. 2. to 4.;
the contractor is liable for sales tax on all gross receipts from labor, material, and other charges for
such sales or activities (unless an exemption applies
as described in Part XI.).
Important: Obtain Publication 207, Sales and Use
Tax Information for Contractors, for more information about what is real and personal property and
a contractor’s activities involving such property for
purposes of the sales and use tax.
Contractors and other persons providing taxable
landscaping and lawn maintenance services may
purchase without tax for resale, tangible personal
property; items, property, and goods described in
Part X.A.2. to 4.; physically transferred to the customer in conjunction with providing the taxable
service, even though the service results in a realty
improvement.
Example: A landscaper installs sod and plants
trees for a customer in providing a taxable landscaping service. The landscaper may purchase
the sod and trees without tax for resale. The
landscaper should give a completed exemption
certificate indicating resale to the person from
whom it purchased the sod and trees.
B. Contractor’s Tools and Equipment: A contractor
must pay sales or use tax on its purchases of all
tools and equipment used in any construction, installation, repair, or service activity.
C. Contractors Constructing Buildings for Governmental Units, Schools, Churches, Hospitals,
or Other Exempt Institutions: Even though a contractor is constructing a building for a governmental
unit, school, church, hospital, or other exempt entity, the sales of building materials to the contractor
are taxable. The reason for this treatment is that the
contractor is the consumer of the building materials
used in constructing the building. Consequently, the
sale to the contractor is a retail sale and is subject to
tax.
Refer to Publication 207, Sales and Use Tax Information for Contractors, Part IV.A. Also, see the tax
release titled “Purchases of Building Materials by
Exempt Entities for Use by Contractor in Real
Property Construction,” published on pages 27-34
of Wisconsin Tax Bulletin #115 (October 1999).
D. Construction, Renovation, or Development of
Professional Sports and Entertainment Home
Stadiums: The sale of and the storage, use, and
consumption of building materials, supplies, and
equipment to or by owners, contractors, subcontractors, or builders acquired solely for or used solely in
the construction, renovation, or development of
sports and entertainment home stadiums are exempt
from Wisconsin sales and use tax. For more information, contact any Department of Revenue office.
XIII. LEASES, LICENSES, AND
RENTALS
A. Sales Price From Leases, Licenses, and Rentals
The sales price from the lease, license, or rental of
tangible personal property; or items, property, or
goods described in Part X.A. 2. to 4.; is 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, and a lessor or licensor shall pay tax on the lease, license, or rental
payments sourced to Wisconsin, even though the
property, item, or good may have previously been
acquired, used, or both by the lessee or licensee in
another state. See Part XIII.D. to determine where a
lease, license, or rental takes place (i.e., where the
lease, license, or rental payments are sourced).
The following charges related to the lease, license,
or rental of tangible personal property; or items,
property, or goods described in Part X.A. 2. to 4.;
are also included in the “sales price” or “purchase
price”:
1. Personal property taxes, including any personal
property tax administration fee, imposed on the
lessor or licensor that are passed on to the lessee or licensee.
2. Contract documentation or administration fees.
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3. Disposal and return fees.
4. Service contract charges, warranty charges, and
maintenance agreement charges.
The following charges related to the lease, license,
or rental of tangible personal property; or items,
property, or goods described in Part X.A. 2. to 4.;
are not included in the “sales price” or “purchase
price” if they are separately stated on the invoice,
bill of sale, or similar document provided to the lessee or licensee:
tangible personal property; or items, property, or
goods described in Part X.A. 2. to 4.; are taxable.
C. Equipment Provided With an Operator
When equipment is provided with an operator, the
tax treatment of the transaction depends on whether
the operator is necessary for the equipment to perform in the manner for which it is designed and
whether the operator does more than maintain, inspect, or set up the equipment.
•
Leases and Rentals of Equipment: Leases and
rentals of equipment with an operator that only
maintains, inspects, or sets up the equipment
are subject to sales or use tax. A lessor may
purchase equipment without tax for resale if the
lessor uses the equipment solely for leasing or
renting. A lessor may also purchase lubricants,
repair parts, and repair services for equipment
used solely for leasing or renting, without tax
for resale.
•
Equipment Used to Provide a Service: If
equipment is provided along with an operator
who is necessary for the equipment to perform
in the manner for which it is designed, and the
operator does more than maintain, inspect, or
set up the equipment, the person providing the
equipment is considered to be providing a service, rather than leasing or renting the
equipment. The service may or may not be a
taxable service. A service provider is liable for
sales or use tax on its purchases of equipment
that it uses to provide services. A service provider is also liable for sales or use tax on its
purchases of repair parts and repair services for
such equipment.
1. Personal property taxes imposed directly on the
lessee or licensee.
2. Title and registration fees.
3. Late payment fees that do not extend the term
of the lease, license, or rental.
4. Returned check fees.
5. Insurance charges, including credit life and accident, casualty, theft, and loss, and gap
insurance.
The retailer may exclude interest and financing
charges from the sales price charges if the interest
and financing charges are separately stated on the
invoice, bill of sale, or similar document that the retailer gives to the purchaser.
B. Purchases for Lease, License, or Rental
A lessor or licensor may purchase without tax, for
resale, tangible personal property; or items, property, or goods described in Part X.A. 2. to 4.; that will
be used solely for lease, license, or rental. A lessor’s or licensor’s purchase of lubricants, repair
parts, and repair services for tangible personal
property; or items, property, and goods described in
Part X.A. 2. to 4.; used solely in leasing, licensing,
or renting may also be purchased without tax for resale. However, if the same property, items, or goods
are purchased by a lessee, licensee, or renter, the
purchases are taxable.
Charges by a lessor or licensor to a lessee, licensee,
or renter under a maintenance contract on leased
69
D. Where a Lease, License, or Rental Takes
Place (i.e., Sourcing the Lease, License, or
Rental Payments)
There are special provisions that apply in determining where a lease, license, or rental takes place (i.e.,
where the lease, license, or rental payments are
sourced). Note: Where the lease, license, or rental
payments are sourced is not altered by any intermittent use of the property, item, or good described in
Part X.A., at different locations.
Wisconsin Sales and Use Tax Information
–
–
–
“General Rules for Sourcing of Leases, Licenses, and Rentals” explains where to source
the payments for leases, licenses, or rentals, except for transportation equipment (as defined
below) and motor vehicles, trailers, semitrailers, and aircraft that are not transportation
equipment.
“Sourcing of Leases, Licenses, and Rentals of
Motor Vehicles, Trailers, Semitrailers, and
Aircraft That are Not Transportation
Equipment” explains where to source the
payments for leases, licenses, or rentals of motor vehicles, trailers, semitrailers, and aircraft
that are not transportation equipment.
“Sourcing of Leases, Licenses, and Rentals of
Transportation Equipment” explains where
to source the payments for leases, licenses, or
rentals of transportation equipment, as defined
below.
1. General Rules for Sourcing of Leases, Licenses, and Rentals
Except for the lease, license, or rental of transportation equipment (as defined below) and
motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment, the
payments for the leases, licenses, or rentals are
sourced as follows:
Only one payment. If there is only one payment, the payment for the lease, license, or
rental is sourced to the location determined by
the General Sourcing Rules, as provided in
Part VII.C.
More than one payment. If there is more than
one payment, the first payment for the lease, license, or rental is sourced to the location
determined by the General Sourcing Rules, as
provided in Part VII.C. Subsequent periodic
payments are sourced to the primary location of
the tangible personal property; or items, property, or goods described in Part X.A. 2. to 4. 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.
2. Sourcing of Leases, Licenses, and Rentals of
Motor Vehicles, Trailers, Semitrailers, and
Aircraft That are Not Transportation
Equipment
Payments for a lease, license, or rental of a motor vehicle, trailer, semitrailer, or aircraft that is
not transportation equipment (as defined below)
are sourced as follows:
Only one payment. If there is only one payment, the payment for the lease, license, or
rental is sourced to the location determined by
the General Sourcing Rules, as provided in
Part VII.C.
More than one payment. If there is more than
one payment, the lease, license, or rental is
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.
3. Sourcing of Leases, Licenses, and Rentals of
Transportation Equipment
Payments for a lease, license, or rental of transportation equipment are sourced using the
General Sourcing Rules, as provided in
Part VII.C.
“Transportation equipment” 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, Stats., and operated under the
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d. Containers that are designed for use on the
vehicles described in a. through c., and
component parts attached to or secured on
such vehicles.
ble personal property; or item or property described in Part X.A.2. and 3.; that is being
manufactured; storing work in progress in the
same plant where the manufacturing occurs; assembling finished units of tangible personal
property; and packaging a new article of tangible personal property; item or property
described in Part X.A.2. and 3.; 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.
Note: Refer to sec. Tax 11.29, Wis. Adm. Code, “Leases, licenses and rentals of tangible personal property
and items, property and goods under s. 77.52(1) (b), (c),
and (d), Stats.,” for additional information on specific
lease transactions.
“Manufacturing” does not include storing raw materials
or finished units of tangible personal property; or items
or property described in Part X.A.2. and 3.; research or
development, delivery to or from the plant, or repairing
or maintaining plant facilities.
XIV. MANUFACTURING AND
BIOTECHNOLOGY
“Manufacturing” also does not include the process of
creating a digital good. Digital goods are further explained in Part X.A.4. Also see Publication 240 for a
detailed description of which digital goods are taxable.
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.
Specific exemptions are contained in the sales and use
tax law for persons engaged in manufacturing. Manufacturing means the production by machinery of a new
article of tangible personal property; or item or property
described in Part X.A.2. and 3.; with a different form,
use, and name from existing materials, by a process
popularly regarded as manufacturing. The process 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, items, or property to the
point of first storage in the same plant.
“Manufacturing” includes:
Prior to August 1, 2009, the law defined “manufacturing” as “the production by machinery of a new article
with a different form, use and name from existing materials by a process popularly regarded as manufacturing.
‘Manufacturing’ includes but is not limited to:
1. Crushing, washing, grading and blending sand,
rock, gravel and other minerals.
(a) Crushing, washing, grading and blending sand,
rock, gravel and other minerals.
2. Ore dressing, including the mechanical preparation, by crushing and other processes, and the
concentration, by flotation and other processes,
of ore, and beneficiation, including the preparation of ore for smelting.
(b) Ore dressing, including the mechanical preparation, by crushing and other processes, and the
concentration, by flotation and other processes, of
ore, and beneficiation, including but not limited to
the preparation of ore for smelting.”
3. Conveying work in process directly from one
manufacturing process to another in the same
plant; testing or inspecting, throughout the
manufacturing process, the new article of tangi71
For purposes of the definition above, “plant” means a
parcel of property or adjoining parcels of property, including parcels that are separated 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; and “plant inventory” does not include
unsevered mineral deposits.
Wisconsin Sales and Use Tax Information
A. Manufacturers
Types of businesses which are usually considered to
be manufacturers include (this list is not allinclusive):
Asphalt plants, bakeries, battery makers, breweries (including micro-breweries in brew-pubs)
and soda water bottling plants, candy factories,
cement and concrete plants, cheese cutting and
repackaging plants, chemical processing plants,
persons engaged in chemically treating wood,
concrete block and tile producers, creameries
and instant milk producers, dairies and cheese
plants, dental labs, ductwork fabrication shops,
electric generating companies, fertilizer plants,
flour and feed mills including mobile units,
food processing plants (canning and freezing),
foundries and glass making plants, grain dryers,
hide curers, persons engaged in duplicating
keys, limestone calcination plants, machine and
equipment producers, malting plants, meat
packing and processing plants, manufactured
home and modular home factories (when not
engaged in real property construction activities), motor vehicle and aircraft factories, oil
refineries, paint factories, paper making plants,
persons engaged in snowmaking for a ski hill,
photofinishers, printers, sawmills, scrap processors, shoe and clothing factories, smelting and
steel mills, tanneries, tool and die making
plants, tire retreaders, persons engaged in
crushing, washing, grading and blending sand,
rock, gravel and other minerals, persons engaged in ore dressing, including the mechanical
preparation, by crushing and other processes,
and the concentration, by flotation and other
processes, of ore, and the beneficiation, including but not limited to the preparation of ore for
smelting, persons engaged in editing and duplicating video tapes, and persons engaged in heat
treating and metal plating semi-finished products furnished by manufacturers.
B. Nonmanufacturers
Businesses which are not considered manufacturers
include (this list is not all-inclusive):
Contractors (when engaged in real property
construction activities and installing or repair-
ing tangible personal property), farmers, fish
hatcheries, freezer and locker plants, highway
truckers, hotels, laundries and dry cleaners, repair persons, restaurants, television and radio
stations, and persons engaged in: corn shelling,
experimental and development activities, logging and forestry operations, mining, paper
recycling, photography, popping corn, the business of raising and breeding animals, real
property construction activities, custom slaughtering of animals and vending machine
operations.
C. Exemption for Manufacturing Machines and
Specific Processing Equipment:
Machines and specific processing equipment and
repair parts or replacements thereof and safety attachments for such machines and equipment may be
purchased exempt from tax if such items are used
exclusively and directly by a manufacturer in manufacturing tangible personal property; or items or
property described in Part X.A.2. and 3.
D. Exemption for Ingredients, Component Parts,
and Consumable Items:
Effective August 1, 2009, items are exempt from
Wisconsin sales and use tax if the items are used
exclusively and directly by a manufacturer in manufacturing an article of tangible personal property; or
item or property described in Part X.A.2. and 3.;
that is destined for sale and that become an ingredient or component part of the article of tangible
personal property, or item or property or which are
consumed, destroyed, or lose their identity in manufacturing the article of tangible personal property,
or item, or property destined for sale, except for
fuel and electricity consumed in manufacturing tangible personal property; or item or property
described in Part X.A.2. and 3.
Note: Prior to August 1, 2009, the exemption
was for items which became an ingredient or
component part of an article of tangible personal property or which were consumed, destroyed,
or lost their identity in the manufacture of tangible personal property in any form destined for
sale, except for fuel and electricity consumed in
manufacturing tangible personal property.
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The exemption does not apply to fuel and electricity
(currently as well as prior to August 1, 2009), except that the following are exempt:
Welding rods which become a component part of
the product manufactured may also be purchased
exempt from tax.
1. Tangible personal property, including fuel and
electricity, that becomes an ingredient or component part of, or is consumed, destroyed, or
loses its identity in the manufacture of shoppers
guides, newspapers, or periodicals is exempt,
regardless of whether or not the shoppers
guides, newspapers, or periodicals are destined
for sale.
Examples of items which are consumed, destroyed
or lose their identity are acids, chemicals, cleaning
compounds, and solvents for maintaining manufacturing machinery, cutting or lubricating oils,
greases, lapping and grinding compounds, sandpaper, and gases and wood used to smoke products.
2. Effective January 1, 2006, fuel and electricity
consumed in manufacturing tangible personal
property; or items or property described in
Part X.A.2. and 3.; in Wisconsin, regardless of
whether the tangible personal property, item, or
property manufactured is destined for sale.
Note: Although most manufacturers could not purchase fuel or electricity exempt from sales and use
tax prior or January 1, 2006, they could reduce their
Wisconsin franchise or income taxes by claiming a
credit for sales and use tax paid on fuel and electricity consumed in manufacturing tangible personal
property in Wisconsin. Unused credits may be carried forward for 20 taxable years. The
manufacturer’s sales tax credit may not be claimed
for taxable years that begin after December 31,
2005. See pages 24-30 of Wisconsin Tax Bulletin
#138 (April 2004) for additional information.
Caution: Fuel and electricity “consumed in manufacturing” means fuel and electricity used to operate
machines and equipment used directly in the stepby-step manufacturing process. Fuel and electricity
are not “consumed in manufacturing” if they are
used in providing plant heating, cooling, air conditioning, communications, lighting, safety and fire
prevention, research and product development, receiving, storage, sales, distribution, warehousing,
shipping, advertising or administrative department
activities. However, fuel and electricity used directly in manufacturing steam which is used by the
manufacturer in further manufacturing or in heating
a facility, or both, is “consumed in manufacturing.”
Examples of ingredients or component parts qualifying for the exemption are neon or argon gases
used as a filler in the production of light bulbs.
73
The exemption does not apply to purchases of employee wearing apparel and gloves worn for the
comfort or welfare of the employee. However,
wearing apparel consumed during the manufacturing process which prevents contamination of the
product produced is exempt from tax.
E. Manufacturing and Biotechnology Exemptions
Effective January 1, 2012
Effective January 1, 2012, exemptions from Wisconsin sales and use taxes were created for
purchases of the following:
•
Machinery and equipment, including attachments, parts, and accessories, that are sold to
persons who are engaged primarily in manufacturing or biotechnology in Wisconsin and are
used exclusively and directly in qualified research.
•
Tangible personal property; and items, property, and goods described in Part X.A2. to 4.; sold
to persons who are engaged primarily in manufacturing or biotechnology in Wisconsin, if the
property, item, or good is consumed or destroyed or loses its identity while being used
exclusively and directly in qualified research.
•
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.
•
The items listed in sec. 77.54(3m)(a) to (m),
Wis. Stats., medicines, semen for artificial insemination, fuel, and electricity that are used
Wisconsin Sales and Use Tax Information
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.
The biotechnology exemptions are further explained on pages 37-38 of Wisconsin Tax
Bulletin #162.
For more information about how the sales and use
tax law applies to manufacturers, obtain Publication 203, Sales and Use Tax Information for
Manufacturers.
Additionally, rules which may be of interest to
manufacturers include secs. Tax 11.15, Wis. Adm.
Code, “Containers and other packaging and shipping materials,” Tax 11.38, Wis. Adm. Code
“Fabricating and processing,” Tax 11.39, Wis.
Adm. Code “Manufacturing,” Tax 11.40, Wis.
Adm. Code “Exemption of machines and processing equipment,” and Tax 11.41, Wis. Adm.
Code “Exemption of property consumed or destroyed in manufacturing.”
XV. SELLING A BUSINESS OR
BUSINESS ASSETS
The sale of business assets consisting of tangible personal property; and items, property, or goods described
in Part X.A.2. to 4.; by a person who holds or is required to hold a seller’s permit at the time of sale, is
subject to sales tax, except that the sale is exempt if
both of the following conditions are met:
a. The sale is of tangible personal property; or items,
property, or goods described in Part X.A. 2. to 4.
(other than inventory held for sale); previously used
by the seller to conduct its trade or business at a location.
b. The sale occurs after the seller ceased operating the
business at that location.
A sale meeting the above two conditions is exempt from
sales and use taxes even though the seller holds a seller’s permit for one or more other locations.
Situations involving the sale of business assets which
are subject to tax include:
•
Selling inventory of a continuing business. (The
purchaser may be able to purchase the inventory
without tax for resale.)
•
Sales of motor vehicles, boats, snowmobiles, recreational vehicles, trailers, semitrailers, all-terrain
vehicles, or aircraft. Note: If the seller holds or is
required to hold a seller’s permit, the seller is liable
for the sales tax on its sale of such property. If the
seller has inactivated its seller’s permit and is not
required to hold a seller’s permit (including a seller’s permit for any other business activities), the
seller is not required to collect tax on its sale of
such property; the purchaser will pay tax upon registration of the property.
Refer to sec. Tax 11.34, Wis. Adm. Code, “Occasional
sales exemption for sale of a business or business assets,” for more information.
XVI. OCCASIONAL SALES
The “occasional sales” of property, items, goods, and
services may be taxable or exempt as described below.
A. Exempt Occasional Sales By Nonprofit Organizations: Sales by neighborhood associations,
churches, social clubs, civic groups, garden clubs,
and other nonprofit organizations which conduct
one or more fund raising events during the year are
exempt occasional sales if certain conditions are
met.
The sales of tangible personal property; items,
property, or goods described in Part X.A. 2. to 4.;
and services, including admissions or tickets to an
event, conducted by a nonprofit organization are
exempt occasional sales if: (1) the aggregate payments for entertainment does not exceed $500* at
an event for which an admission is charged, (2) the
organization is not engaged in a trade or business,
and (3) the organization does not have and is not
required to have a seller’s permit.
An organization is deemed to be engaged in a trade
or business if its sales of tangible personal property;
items, property, or goods described in Part X.A. 2.
to 4.; and services and its events occur on more than
20 days during the year. For events involving the
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sale of tickets, only the actual days of the events are
counted for the 20-day standard (not the days of
ticket sales). However, if an organization’s taxable
sales price for tangible personal property; items,
property, and goods described in Part X.A.2. to 4.;
and taxable services do not exceed $25,000* for the
calendar year, it is not considered to be engaged in
a trade or business even if its sales and/or events
exceed 20 days.
*The standards (1) relating to the payment for entertainment at an admission event, and (2) relating
to a nonprofit organization’s receipts were increased to $500 and $25,000, respectively, effective
January 1, 2006. Under prior law, the entertainment
standard was $300, and the standard relating to a
nonprofit organization’s receipts was $15,000.
A nonprofit organization whose receipts have become taxable because it has exceeded the above
standards must obtain a seller’s permit and pay taxes on all taxable receipts received after it is required
to obtain that permit.
If an organization later becomes eligible for the occasional sale exemption except for its possession of
a seller’s permit, it may inactivate its permit. Sales
of tangible personal property; items, property, or
goods described in Part X.A. 2. to 4.; and taxable
services are subject to Wisconsin sales or use tax
until the permit is inactivated. An organization may
inactivate its seller’s permit by sending an e-mail
message stating that the permit should be inactivated. The e-mail should include the reason for
inactivation, the organization’s tax account number,
and the day on which the inactivation will be effective. This e-mail should be sent to
[email protected]
IMPORTANT: An organization is liable for Wisconsin sales or use tax on all of its Wisconsin sales
of tangible personal property; items, property, or
goods described in Part X.A. 2. to 4.; and taxable
services if the organization holds or is required to
hold a seller’s permit, unless an exemption applies
(e.g., sale to a federal governmental agency).
For additional information on exempt occasional
sales by nonprofit organizations, see Publication 206, Sales Tax Exemption for Nonprofit
75
Organizations. Also refer to sec. Tax 11.35, Wis.
Adm., Code, “Occasional sales by nonprofit organization, for more information.”
B. Sales by Auction: Sales by an auctioneer of personal household goods and personal farm property
if the auctioneer has five or fewer auctions at that
location during the year are exempt occasional
sales. For indoor locations, “location” means a
building, except that in the case of a shopping center or shopping mall, “location” means a store.
Refer to Publication 217, Auctioneers – How Do
Wisconsin Sales and Use Taxes Affect your Operations?, for more information.
C. Sales Which Are Not “Occasional Sales”: The
following transactions are not exempt occasional
sales, but rather are taxable sales:
•
Sales by a person who holds or is required to
hold a seller’s permit. For example, sales of
used equipment by a retail store or vending machine operator are taxable.
•
The sale of a business or the assets of a business when the seller holds or is required to hold
a seller’s permit and does not qualify for the
occasional sale exemption (see Part XV.). The
tax applies to the portion of the sales price attributable to the personal property, such as
equipment, furniture, and fixtures.
•
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 such property.
Exception: Sales of tangible personal property;
items, property, or goods described in Part X.A.
2. to 4.; or taxable services by a person not otherwise required to hold a seller’s permit, if the
total taxable sales price from sales of tangible
personal property; items, property, or goods described in Part X.A. 2. to 4.; and taxable
services are less than $1,000 during the calendar year, are occasional sales.
Additional information regarding the occasional
sale exemption can also be found in a tax re-
Wisconsin Sales and Use Tax Information
lease published in Wisconsin Tax Bulletin #122
(October 2000), pages 30-37.
•
Sales of bingo supplies and cards by persons
conducting bingo games.
•
Sales by persons engaged primarily in the business of making nontaxable sales of tangible
personal property; or items, property, or goods
described in Part X.A. 2. to 4.; such as manufacturers, wholesalers, and grocers. Since these
persons are in the business of selling tangible
personal property; or items, property, or goods
described in Part X.A. 2. to 4.; the fact that only
a small fraction of their total sales are taxable
retail sales does not make these sales exempt
occasional sales.
D. Occasional Sales of Motor Vehicles, Boats, Etc.,
Are Taxable: Occasional sales of motor vehicles,
boats, snowmobiles, recreational vehicles, trailers,
semitrailers, all-terrain vehicles, and aircraft are
taxable unless sold to the spouse, parent, stepparent,
father-in-law, mother-in-law, child, stepchild,
daughter-in-law or son-in-law, of the seller, and
then only when the unit was previously registered
or titled in Wisconsin in the name of the seller.
The purchaser must pay any tax due at the time the
unit is registered or titled for use in Wisconsin. The
purchaser of a motor vehicle, recreational vehicle,
trailer, or semitrailer files Form MV-1, “Application for Title/Registration,” with the Department of
Transportation and pays any tax due. The purchaser
of an aircraft pays any tax due to the Department of
Transportation with the “Application for Aircraft
Registration or Exemption.” The purchaser of a
boat, snowmobile, or all-terrain vehicle pays the tax
to the Department of Natural Resources (or Lac du
Flambeau Band for snowmobiles or all-terrain vehicles registered with the Lac du Flambeau Band) at
the time the boat, snowmobile, or all-terrain vehicle
is registered with that department.
Filing an incorrect return due to neglect may result
in a penalty of 50% of the tax finally determined.
XVII. DIRECT PAY
Eligible persons may purchase certain tangible personal
property; items, property, or goods described in
Part X.A. 2. to 4.; or taxable services without Wisconsin
sales or use tax using a direct pay permit. If the tangible
personal property; items, property, or goods described
in Part X.A. 2. to 4.; or taxable services are stored, used,
or consumed in Wisconsin in a taxable manner, the purchaser must report Wisconsin use tax on the purchase
price of the property, item, good, or service.
A. Who Is Eligible for Direct Pay? The Department
of Revenue will issue a direct pay permit to an applicant at the beginning of the applicant’s taxable
year, if the following seven requirements are met:
1. Because the nature of the applicant’s business,
issuing the permit will significantly reduce the
work of administering the sales and use taxes;
2. The applicant’s accounting system will clearly
indicate the amount of tax the applicant owes;
3. The applicant makes enough taxable purchases
to justify the expense of regular audits by the
Department of Revenue;
4. The applicant is not liable under ch. 71, 72, 76,
77, 78, or 139, Wis. Stats., for delinquent taxes
(including costs, penalties, surcharges, and interest) of $400 or more if any part of the tax is
delinquent for at least five months;
5. It is in the state’s best interests to issue the
permit;
6. The applicant purchases enough tangible personal property; items, property, and goods
described in Part X.A.2. to 4.; under circumstances that make it difficult to determine
whether the tangible personal property, items,
property, and goods will be subject to sales or
use tax; and
7. The applicant holds a valid business tax registration certificate under sec. 73.03(50), Wis.
Stats.
B. How to Apply for a Direct Pay Permit:
Form S-101, Application For Direct Pay Permit,
may be obtained by writing to or calling Wisconsin
Department of Revenue, P.O. Box 8949, Madison,
WI 53708-8949 (telephone (608) 266-2776).
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Publication 201
C. Additional Information: Obtain a copy of
sec. Tax 11.13, Wis. Adm. Code, “Direct pay,” for
more information about direct pay.
There is no county sales and use tax in the following 10 Wisconsin counties.
XVIII. COUNTY AND STADIUM SALES
AND USE TAXES
Brown (05)
Calumet (08)
Kewaunee (31)
Manitowoc (36)
A. Introduction
1. County Sales and Use Taxes
There is a 0.5% county sales and use tax in 62
counties. Listed below are the 62 counties and
the effective date for each county’s tax. (Note:
The county code assigned by the department for
each county is in parenthesis following the
county name. This may be helpful to retailers
for computer programming purposes.)
Counties With County Tax
77
County
Effective
Date
County
Effective
Date
Adams (01)
Ashland (02)
Barron (03)
Bayfield (04)
Buffalo (06)
Burnett (07)
Chippewa (09)
Clark (10)
Columbia (11)
Crawford (12)
Dane (13)
Dodge (14)
Door (15)
Douglas (16)
Dunn (17)
Eau Claire (18)
Florence (19)
Fond du Lac (20)
Forest (21)
Grant (22)
Green (23)
Green Lake (24)
Iowa (25)
Iron (26)
Jackson (27)
Jefferson (28)
Juneau (29)
Kenosha (30)
La Crosse (32)
Lafayette (33)
Langlade (34)
1/1/94
4/1/88
4/1/86
4/1/91
4/1/87
4/1/89
4/1/91
1/1/09
4/1/89
4/1/91
4/1/91
4/1/94
4/1/88
4/1/91
4/1/86
1/1/99
7/1/06
4/1/10
4/1/95
4/1/02
1/1/03
7/1/99
4/1/87
4/1/91
4/1/87
4/1/91
4/1/92
4/1/91
4/1/90
4/1/01
4/1/88
Lincoln (35)
Marathon (37)
Marinette (38)
Marquette (39)
Milwaukee (40)
Monroe (41)
Oconto (42)
Oneida (43)
Ozaukee (45)
Pepin (46)
Pierce (47)
Polk (48)
Portage (49)
Price (50)
Richland (52)
Rock (53)
Rusk (54)
St. Croix (55)
Sauk (56)
Sawyer (57)
Shawano (58)
Taylor (60)
Trempealeau (61)
Vernon (62)
Vilas (63)
Walworth (64)
Washburn (65)
Washington (66)
Waupaca (68)
Waushara (69)
Wood (71)
4/1/87
4/1/87
10/1/01
4/1/89
4/1/91
4/1/90
7/1/94
4/1/87
4/1/91
4/1/91
4/1/88
4/1/88
4/1/89
1/1/93
4/1/89
4/1/07
4/1/87
4/1/87
4/1/92
4/1/87
4/1/90
7/1/99
10/1/95
1/1/97
4/1/88
4/1/87
4/1/91
1/1/99
4/1/89
4/1/90
1/1/04
Counties Without County Tax
Menominee (72)
Outagamie (44)
Racine (51)
Sheboygan (59)
Waukesha (67)
Winnebago (70)
The Wisconsin Department of Revenue administers the county tax. Retailers who make sales
subject to the 0.5% county tax must collect
5.5% sales tax on their retail sales (5% state
sales tax and 0.5% county sales tax).
Both the state tax and county tax are reported
by retailers on their Form ST-12, Wisconsin
Sales and Use Tax Return, filed with the Department of Revenue.
Retailers who report sales and purchases subject to county sales and use tax in more than
four counties must complete and submit a separate Schedule CT with the Form ST-12 they
file. Schedule CT lists all counties that have
adopted the county tax.
The department, after receiving the county tax
from retailers, then makes monthly distributions
of the county tax revenues to the counties
which adopted the tax.
Caution: Effective October 1, 2009, all retailers that are registered in Wisconsin to collect
and remit the 5% Wisconsin state sales and use
tax are also required to collect and remit the applicable county and stadium sales and use taxes
for any sales that occur in a county or stadium
district that has adopted the applicable county
or stadium sales or use tax. This provision applies regardless of whether the retailer is
"engaged in business" in the county or stadium
district to which the sale takes place.
2. Stadium Sales and Use Taxes
a. Baseball Stadium Tax
A 0.1% baseball stadium tax is imposed on
the sale of and the storage, use, or consumption of tangible personal property;
items, property, and goods described in
Wisconsin Sales and Use Tax Information
Part X.A. 2. to 4., and taxable services in
the following five Wisconsin counties
which make up the “baseball stadium district:”
•
•
•
Milwaukee
Ozaukee
Racine
•
•
Washington
Waukesha
The baseball stadium tax was created for
the purpose of assisting in the development
of a professional baseball park in Wisconsin.
Retailers who make sales subject to the
baseball stadium tax in Milwaukee, Ozaukee, and Washington counties will collect
5.6% sales tax on such retail sales (5% state
sales tax, 0.5% county sales tax, and 0.1%
baseball stadium sales tax).
Retailers who make sales subject to the
baseball stadium tax in Racine and
Waukesha counties will collect 5.1% sales
tax on such retail sales (5% state sales tax
and 0.1% baseball stadium sales tax).
Note: Beginning January 1, 2010, the Department of Transportation has the
authority to issue special license plates to
persons interested in expressing their support of a major league professional baseball
team that uses as its home field baseball
park facilities that are constructed under the
local professional baseball park district.
Any money distributed to the baseball park
district from the sale of such plates must be
used exclusively to retire the district’s debt.
b. Football Stadium Tax
A 0.5% football stadium tax is imposed on
the sale of and the storage, use, or consumption of tangible personal property;
items, property, and goods described in
Part X.A. 2. to 4.; and taxable services in
Brown County.
Retailers who make sales subject to the
football stadium tax in Brown County will
collect 5.5% sales tax on such retail sales
(5% state sales tax and 0.5% football stadium sales tax).
Stadium taxes are reported with state and county sales and use taxes on Form ST-12.
Caution: Effective October 1, 2009, all retailers that are registered in Wisconsin to collect
and remit the 5% Wisconsin state sales and use
tax are also required to collect and remit the applicable county and stadium sales and use taxes
for any sales that are sourced to a county or stadium district that has adopted the applicable
county or stadium sales or use tax. This provision applies regardless of whether the retailer is
"engaged in business" in the county or stadium
district to which the sale is sourced.
Note 1: The Department of Revenue currently
has a sales tax rate locator that may be used to
determine the proper Wisconsin state, county
and stadium district (baseball and football)
sales tax rate(s) that apply to a transaction that
takes place at a specific location, as determined
by that location's 9-digit zip code. This rate
locator does not identify any other taxes that
may also apply to a transaction such as the local
exposition district taxes, the premier resort area
taxes, the rental vehicle fees, etc.
You may search for the appropriate Wisconsin
State, County and Stadium sales tax rate(s) by
entering either a 5-digit or 9-digit zip code.
Note 2: Effective July 1, 2009, the creation of
the following regional transit authorities was
authorized: the Chequamegon Bay Regional
Transit Authority, the Chippewa Valley Regional Transit Authority, and the Dane County
Regional Transit Authority. Once one of these
regional transit authorities is created, that authority may impose a sales and use tax up to
0.5%, which will apply within the transit authority’s jurisdictional area. See Part XX.N.
The football stadium tax was created for the
purpose of assisting the development of
professional football stadium facilities in
Wisconsin.
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Publication 201
B. What Types of Tangible Personal Property;
Items, Property, Goods Described in Part X.A.2.
to 4.; and Services Are Taxable?
The types of tangible personal property; items,
property, and goods described in Part X.A. 2. to 4.;
and services that are subject to the 5% state sales
and use tax are also subject to the 0.5% county or
0.1% or 0.5% stadium sales and use taxes.
The county and stadium taxes may not be imposed
on any types of tangible personal property; items,
property, or goods described in Part X.A. 2. to 4.; or
services that are not subject to the 5% state tax. If
tangible personal property; items, property, or
goods described in Part X.A. 2. to 4.; or services are
exempt from the 5% state tax, they are also exempt
from the 0.5% county and 0.1% or 0.5% stadium
taxes.
C. What Sales Are Subject to the County and Stadium Sales Tax?
The 0.5% county, 0.1% baseball stadium, and 0.5%
football stadium sales taxes are imposed on the
sales price from retail sales, licenses, leases, or
rentals of tangible personal property; items, property, or goods described in Part X.A. 2. to 4.; and
taxable services in a county with a county tax or in
a stadium district. For purposes of county and stadium sales tax, the location where a sale, license,
lease, or rental takes place is provided in Part VII.C.
Note: Effective October 1, 2009, any retailer that is
registered to collect and remit Wisconsin sales and
use taxes must also collect and remit the applicable
state, county, and/or stadium sales and use tax on its
sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in sec. 340.01(48r), Wis.
Stats., trailers, semitrailers, all-terrain vehicles, and
aircraft, even if they are not "dealers" or "registered
dealers" of the item sold. The sales price from the
sale of such property should be reported on the retailer’s sales and use tax return that it files with the
Department of Revenue.
79
Prior to October 1, 2009, a person who was not a
"dealer" or "licensed dealer" was not required to
collect and remit the applicable Wisconsin state,
county, and/or stadium sales and/or use tax on their
sales of used motor vehicles, boats, snowmobiles,
recreational vehicles as defined in sec. 340.01(48r),
Wis. Stats., trailers, semitrailers, all-terrain vehicles, and aircraft.
D. When Do the County and Stadium Use Taxes
Apply?
1. General
A 0.5 % county use tax, a 0.1% baseball stadium use tax or 0.5% football stadium use tax is
imposed on the sales price of tangible personal
property; items, property, and goods described
in Part X.A. 2. to 4.; and taxable services
stored, used, or consumed in a county with a
county tax or a stadium district. Exceptions to
this tax treatment and special situations are explained in Part XVIII.D.2. through 5., below.
2. Exceptions
•
No county or stadium use tax will be imposed if a receipt indicates that a county or
stadium sales tax has been paid, except as
provided in the parts titled “Contractors,”
“Motor Vehicles, Recreational Vehicles,
and Aircraft,” “Snowmobiles, Trailers,
Semitrailers, and All-Terrain Vehicles,”
that follow.
•
No county or stadium use tax will be imposed if the buyer purchased tangible
personal property; or items, property, or
goods described in Part X.A. 2. to 4.; in a
sale consummated in a Wisconsin county
that does not have such tax and the property, item, or good is later brought by the
buyer into a county with a county and/or
stadium tax, except as provided in the parts
titled “Contractors,” “Motor Vehicles, Recreational
Vehicles,
and
Aircraft,”
“Snowmobiles, Trailers, Semitrailers, and
All-Terrain Vehicles,” that follow.
•
If the buyer properly paid sales or use taxes
in another state on the purchase of the tan-
Wisconsin Sales and Use Tax Information
gible personal property; items, property, or
goods described in Part X.A. 2. to 4.; or
services, that tax may be credited against
the state, county, and stadium use taxes due
on the property, items, goods, or services.
For additional information about credit for
taxes paid to another state, see the tax release titled “Credit for Sales and Use Taxes
Paid to Other States and Their Local Units
of Government,” which was published on
pages 28-49 of Wisconsin Tax Bulletin #157 (July 2008).
3. Contractors
County use taxes are imposed upon a contractor
engaged in construction activities in a county
with a county tax. Stadium use taxes are imposed upon a contractor engaged in
construction activities in a stadium district. In
both cases, the tax is imposed on the sales price
of tangible personal property; or items, property, or goods described in Part X.A. 2. to 4.; that
is used in constructing, altering, repairing, or
improving real property and that becomes a
component part of real property within the
county and/or stadium district.
Sales and use tax paid in another state may be
allowed as a credit in computing the Wisconsin
county and stadium use taxes. For additional information about credit for taxes paid to another
state, see the tax release titled “ Credit for Sales
and Use Taxes Paid to Other States and Their
Local Units of Government,” which was published on pages 28-49 of Wisconsin Tax
Bulletin #157 (July 2008).
If a contractor properly paid a county or stadium tax on the purchase of tangible personal
property; or items, property, or goods described
in Part X.A. 2. to 4.; the tax that was paid may
be used as a credit against any additional Wisconsin county or stadium use tax owed on the
purchase (e.g., county tax may be credited
against football stadium tax).
4. Motor Vehicles, Boats, Recreational Vehicles,
and Aircraft
County and stadium use tax is imposed upon
every motor vehicle, boat, recreational vehicle
as defined in sec. 340.01(48r), Wis. Stats., and
aircraft, if (a) that property must be registered
or titled with the State of Wisconsin, and
(b) that property is to be customarily kept in a
county with a county tax and/or a stadium district.
Prior to October 1, 2009, this tax treatment
also applied to snowmobiles, trailers, semitrailers, and all-terrain vehicles.
5. Snowmobiles, Trailers, Semitrailers, and AllTerrain Vehicles
County and stadium sales tax is imposed upon
every sale of a snowmobile, trailer, semitrailer,
or all-terrain vehicle that takes place in a county
or stadium district that imposes the county
and/or stadium tax, as explained in
Part XVIII.C. County and/or stadium use tax is
due if no county or stadium sales tax was paid
on the purchase of the snowmobile, trailer, semitrailer, or all-terrain vehicle and the item is
stored, used, or consumed in a county that imposes the county tax or in a stadium district. No
county or stadium use tax is due if the purchaser has a receipt indicating that a county or
stadium sales tax has been paid on the purchase
of the item.
Prior to October 1, 2009, county and stadium
use tax was imposed upon every snowmobile,
trailer, semitrailer, and all-terrain vehicle, if
(a) that property was required to be registered
or titled with the State of Wisconsin, and
(b) that property was customarily kept in a
county with a county tax and/or a stadium district.
The chart in Appendix I shows the sales and use tax
treatment of motor vehicles, boats, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats.,
aircraft, snowmobiles, trailers, semitrailers, and allterrain vehicles.
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Publication 201
E. Transitional Provisions
1. Services and Leases, Rentals, and Licenses
In the event of an increase in the rate of a county or stadium tax, the sales price from the lease,
rental, or license of tangible personal property;
items, property, and goods described in
Part X.A. 2. to 4.; and taxable services is subject to the increase beginning with the first
billing period starting on or after the effective
date of the county ordinance or special district
resolution, or rate increase, regardless of
whether the service is furnished or the property,
item, or good is leased, rented, or licensed to
the customer before or after that date.
In the event of a decrease in the rate of a county
or stadium tax, the sales price from the lease,
rental, or license of tangible personal property;
items, property, and goods described in
Part X.A. 2. to 4.; and taxable services is subject to the increase beginning with bills
rendered on or after the effective date of the repeal or sunset of a county ordinance or special
district resolution imposing the tax or other rate
decrease, regardless of whether the service is
furnished or the property, item, or good is
leased, rented, or licensed to the customer before or after that date.
2. Sales of Tangible Personal Property; And
Items, Property, and Goods Described in
Part X.A.2. to 4. (except construction materials
used in real property construction – see 3. below)
Sales of tangible personal property; and items,
property, and goods described in Part X.A.2. to
4.; before the effective date of the county or
stadium tax are not subject to the county or stadium sales or use tax.
A sale takes place when the seller or the seller’s
agent transfers possession of the tangible personal property to the buyer or the buyer’s agent,
regardless of when the tangible personal property was paid for or ordered.
Example: On December 20, 2008, Individual A
places an order for an automobile with Dealer-
81
ship B. The automobile is not available for delivery until January 15, 2009. Individual A
picks up the vehicle from Dealership B on January 16, 2009. If County C (where Individual A
will customarily keep the automobile) adopts
the county tax effective January 1, 2009, the
sale of the automobile to Individual A is subject
to the County C tax. The sale of the automobile
took place on January 16, 2009 when Individual
A received possession, which is after the effective date of the County C tax (January 1, 2009).
3. Construction Materials
Sales of building materials to contractors engaged in the business of constructing, altering,
repairing, or improving real estate for others are
not subject to the county or stadium taxes if
(1) the materials are affixed and made a structural part of real estate, and (2) 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 or stadium
tax, or that resulted from the acceptance of a
formal written bid accompanied by a bond or
other performance guaranty that was irrevocably submitted before the effective date of the
county or stadium tax.
F. Collecting County and Stadium Tax From Customers
Part VI. explains how the 5% state tax, 0.5% county
tax, and 0.1% and 0.5% stadium taxes are collected
from customers.
G. Sales and Use Tax Return Requires County and
Stadium Tax Data
Retailers engaged in business in a county with a
county tax or a stadium district must keep records
showing the amount of their taxable receipts subject
to sales tax and purchases subject to use tax for a
stadium district and each county that has a county
tax.
Retailers who report sales and purchases subject to
county sales and use tax for four or less counties
should fill in the first five letters of the counties and
county codes with the appropriate sales and pur-
Wisconsin Sales and Use Tax Information
chases for those counties on Form ST-12. Exception: Enter GLAKE for Green Lake County.
XX. OTHER TAXES AND FEES TO BE
AWARE OF
Retailers who report sales and purchases subject to
county sales and use tax for more than four counties
must complete and submit a separate Schedule CT
with the Form ST-12 they file. Schedule CT lists all
counties that have adopted the county tax.
If you have business activities or earn income in Wisconsin, you also may be subject to Wisconsin taxes
other than sales and use taxes. Although the information
below is not intended to be all-inclusive, it may help
you in obtaining information about other Wisconsin
taxes.
H. Seller’s Permits
No additional seller’s permit is required by a retailer for the county and stadium taxes.
I. Audits, Appeals, Collections, Etc.
The Wisconsin Department of Revenue has authority to audit persons to determine if they reported and
paid the correct county and stadium taxes, to impose interest and penalties related to such taxes, and
to collect any unpaid county and stadium taxes. Interest rates on refunds and unpaid county and
stadium taxes are the same as the rates that apply to
the 5% state sales and use taxes. A county and stadium district may not intervene in any matter
related to the audit, appeal, or collection of any
county and stadium sales and use taxes.
XIX. YOU MAY BE AUDITED
If you are in business, an auditor from the Department
of Revenue may visit you. Don’t be alarmed, as many
taxpayers are audited to determine if they paid the correct amount of income, corporate, withholding, and
sales and use taxes.
You will be notified prior to any audit so that a convenient time can be arranged to examine your records. As a
taxpayer, you are required to make available your records for sales and use tax as well as your records for
other taxes. To perform the audit, it will be necessary
for the auditor to examine these records. Don’t hesitate
to ask any questions of the auditor.
If the audit results show that you have not paid the
proper amount of tax, the department will issue you a
written notice indicating the amount of tax you owe or
overpaid. As a taxpayer you have the right to appeal if
you disagree with the audit. The notice from the department will explain the procedures for appealing.
A. Individual Income Tax: Every person who is a
resident of Wisconsin and who has gross income of
more than a certain amount is subject to Wisconsin
income taxes, regardless of where the income is
earned.
A person who is a nonresident of Wisconsin is subject to Wisconsin income taxes if he or she has
gross income of $2,000 or more from personal services performed in Wisconsin or from business or
property in Wisconsin.
For more information, write to: Wisconsin Department of Revenue, P.O. Box 8949, Madison, WI
53708-8949.
B. Corporation Income or Franchise Tax: Every
corporation organized under the laws of Wisconsin
or licensed to do business in Wisconsin (except certain organizations exempt under sec. 71.26(1), Wis.
Stats.) is required to file a Wisconsin corporate
franchise or income tax return, regardless of whether or not business was transacted. Unlicensed
corporations are also required to file returns for
each year they do business or have certain business
activities in Wisconsin.
For more information, write to: Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI
53708-8906.
C. Withholding: If an employer has employees in
Wisconsin, the employer may be required to withhold Wisconsin income taxes from the employees’
wages. An employer required to withhold must apply for a withholding registration certificate from
the department.
For more information, write to: Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI
53708-8902.
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D. Estimated Tax for Individuals: Estimated income
tax payments are required if you expect to owe
$200 or more of income tax with your income tax
return. The estimated tax requirement applies to
full-year residents, part-year residents, and nonresidents. An interest charge may be imposed if you fail
to make these payments.
For more information, write Wisconsin Department
of Revenue, Mail Stop 3-164, P.O. Box 8903, Madison, WI 53708-8903 or call any department office.
The Madison office telephone number is
(608) 266-9940.
E. Estimated Tax for Corporations: Corporations
must make estimated income or franchise tax payments if their current year tax liability will be $500
or more, unless they owed no tax for the previous
twelve-month tax year.
For more information, write Wisconsin Department
of Revenue, Mail Stop 3-138, P.O. Box 8906, Madison, WI 53708-8906 or call any department office.
The Madison office telephone number is
(608) 266-0800.
F. Unemployment and Worker’s Compensation:
For more information on these taxes write to: Wisconsin Department of Workforce Development,
P.O. Box 7901, Madison, WI 53708-7901.
G. Motor Vehicle Alternate Fuel Tax: An alternate
fuel tax is imposed on all compressed natural gas
(CNG) fuel or liquid propane (LPG) placed into the
supply tank of a motor vehicle. If you purchase
CNG or LPG for heating and use this fuel in your
truck or automobile, you must obtain an Alternate
Fuel Users License and pay the tax directly to the
Department of Revenue.
If you sell or purchase alternate fuel and have questions about the alternate fuel tax, write to:
Wisconsin Department of Revenue, Mail
Stop 5-107, P.O. Box 8906, Madison, Wisconsin
53708-8900.
H. Local Exposition Taxes: Persons selling lodging,
food, or beverages or renting automobiles in municipalities located wholly or partially in Milwaukee
County are subject to local exposition taxes. For
more information, obtain Wisconsin Publica-
83
tion 410, Local Exposition Taxes, from any Department of Revenue office.
I. Dry Cleaner Fees: Any person operating a dry
cleaning facility in Wisconsin is subject to dry
cleaning fees. Dry cleaner fees are due in installments payable on or before April 25, July 25,
October 25, and January 25. The amounts must be
equal to 2.8%* of the previous three months’ gross
receipts from dry cleaning apparel and household
fabrics, but not from formal wear that the facility
rents to the general public. In addition, a fee of $5
per gallon of perchloroethylene sold, and $0.75 per
gallon of any other dry cleaning product sold, is
imposed.
*Prior to the quarterly payment due April 25, 2008,
the dry cleaning fee was 1.8% (rather than 2.8%).
For more information, contact the Department of
Revenue in Madison as provided in Part XXII. of
this publication.
J. Police and Fire Protection Fees (effective September 1, 2009): Every communications provider
and retailer required to impose the police and fire
protection fee must register with the Department of
Revenue to report and remit the fees.
Communications providers are required to impose a
monthly fee of $0.75 on each communications service connection with an assigned telephone number,
including a communication service provided via a
Voice over Internet Protocol connection. Communications providers and other retailers who sell
prepaid wireless telecommunications plans, such as
a $15 card for a prepaid wireless account, are subject to the $0.38 fee on each retail transaction for
prepaid wireless telecommunications plans.
The fees will be reported to the Department of Revenue on an electronic return on a monthly basis
through the Department of Revenue’s My Tax Account System. Returns will be due and payable on
the last day of the month following the month in
which the fees were collected.
For additional information, see the Department of
Revenue’s web page for the Police and Fire Protection Fee .
Wisconsin Sales and Use Tax Information
K. Premier Resort Area Taxes: Persons selling tangible personal property; items, property, or goods as
described in Part X.A.2. to 4.; or taxable services in
the Village of Lake Delton, the City of Wisconsin
Dells, the City of Bayfield, and the City of Eagle
River (effective October 1, 2006) are subject to the
premier resort area tax on such sales if the persons
are classified in the Standard Industrial Classification manual (1987 Edition) under certain numbers.
subject to a $2 fee for each transaction within the
region of Kenosha, Racine, and Milwaukee counties
on the rental of Type 1 automobiles for periods of
30 days or less. The fee, which was effective
June 1, 2006, is to be collected from the person to
whom the passenger car is rented. The retailer that
collects this fee is required to separately state the
fee on the receipt that it provides to the rental customer.
The rate of the premier resort area tax for the City
of Bayfield and the City of Eagle River is 0.5%, and
the rate of the premier resort area tax for the City of
Wisconsin Dells and the Village of Lake Delton is
1.0%.
For additional information about the $2 Regional
Transit Authority Fee, see pages 18-20 of Wisconsin Tax Bulletin #144 (September 2005).
Prior to January 1, 2010, the premier resort area
tax rate for the City of Wisconsin Dells and the Village of Lake Delton was 0.5%.
For more information, obtain Publication 403,
Premier Resort Area Taxes, from any Department
of Revenue office.
L. Rental Vehicle Fee: Persons primarily engaged in
the business of short-term rentals of vehicles without drivers are subject to a 5% rental vehicle fee on
rentals in Wisconsin of Type 1 automobiles, recreational vehicles, motor homes, and camping trailers
for periods of 30 days or less.
Persons providing limousines with drivers in Wisconsin are subject to a 5% limousine fee.
Refer to Wisconsin Publication 202, Sales and Use
Tax Information for Motor Vehicle Sales, Leases,
and Repairs, for more information. If you have
questions about the rental vehicle fee or limousine
fee, write or call the Wisconsin Department of Revenue, P.O. Box 8949, Madison, WI 53708-8949
(telephone (608) 261-6261).
M. Regional Transit Authority – Rental Vehicle Fee
terminated effective July 1, 2009: The $2 per
transaction regional transit authority fee on the
short-term rental of vehicles in Kenosha, Racine,
and Milwaukee was terminated, effective July 1,
2009.
Note: The existing Dane County and Southeastern
Regional Transit Authorities are terminated. The
authorization to create the Chequamegon Bay and
Chippewa Valley Regional Transit Authorities has
also been repealed. The Southeastern Regional
Transit Authority was created under 2009 Wis.
Act 28. The authorization to create the Dane County, Chequamegon Bay, and Chippewa Valley
Regional Transit Authorities was also provided in
2009 Wis. Act 28; however, only the Dane County
Regional Transit Authority was created. No taxes or
fees were imposed by either the Dane County or
Southeastern Regional Transit Authority.
XXI. KEEPING AWARE OF NEW
SALES AND USE TAX
DEVELOPMENTS
If you are required to file sales and use tax returns, you
should be aware of changes in the tax laws, new interpretations, and court cases which may affect how you
file returns and compute the tax. Informational type aids
available to you include:
A. Sales and Use Tax Report
The Sales and Use Tax Report is published one or
more times each year by the Department of Revenue. It includes general information about sales and
use tax, including new tax laws enacted by the legislature. These reports are available on the
department’s web site at
www.revenue.wi.gov/ise/sales/index.html.
Prior to July 1, 2009, persons primarily engaged in
the short-term rental of vehicles without drivers are
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Notification of new reports will be sent to subscribers of the sales and use tax electronic mail list. See
Part XXI.G.
B. Publications
You may obtain the following sales and use and
other local tax publications from the Department of
Revenue’s under the “Publications” tab:
85
No.
Title
200
Electrical Contractors
202
Sales and Use Tax Information for Motor
Vehicle Sales, Leases, and Repairs
203
Sales and Use Tax Information for Manufacturers
204
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges
205
Use Tax Information for Individuals
206
Sales Tax Exemptions for Nonprofit Organizations
207
224
Veterinarians
225
Beauty and Barber Shops
226
Golf Courses
228
Temporary Events
229
Brackets for Collecting Wisconsin Sales or
Use Tax Paid on Retail Sales
230
Sales and Use Tax Information for Sellers
of Antiques, Crafts, and Artwork
240
Digital Goods
403
Premier Resort Area Tax
405
Wisconsin Taxation of Native Americans
410
Local Exposition Taxes
C. Forms
You may obtain the following sales and use tax and
other forms from any Department of Revenue office
or at www.revenue.wi.gov/html/formpub.html.
No.
Title
Sales and Use Tax Information for Contractors
BTR-101
209
Sales and use Tax Information for Wisconsin Counties and Municipalities
Application for Business Tax Registration and Instructions
Schedule CT County Sales and Use Tax Schedule
210
Sales and Use Tax Treatment of Landscaping
ST-12
Wisconsin Sales and Use Tax Return
211
Cemetery Monument Dealers
S-240
212
Do You Owe Use Tax on Imported Goods?
(Businesses)
Wisconsin Temporary Event Operator and Seller Information
UT-5
Consumer’s Use Tax Return
S-213
Sales and Use Tax Bracket System
S-218
Sales & Use Tax Bracket Chart
S-220
Form BCR, Buyer’s Claim for Refund
S-211
Wisconsin Sales and Use Tax Exemption Certificate
214
Do You Owe Use Tax? (Businesses)
216
Filing Claims for Refund of Sales or Use
Tax
217
Auctioneers
219
Hotels, Motels, and Other Lodging Providers
220
Grocers
221
Farm Suppliers and Farmers
222
Motor Vehicle Fuel Users: Do You Owe
Use Tax?
S-103
Application for Wisconsin Sales and
Use Tax Certificate of Exempt Status
223
Bakeries
S-101
Application for Direct Pay
Wisconsin Sales and Use Tax Information
Additional information about certain forms, including detailed descriptions, can be found in
Appendix A.
D. Wisconsin Tax Bulletin
The Wisconsin Tax Bulletin is a quarterly publication of the Department of Revenue, which is
available on the department’s web site under the
“Publications” tab. The Bulletin includes information on most taxes administered by the
Department of Revenue, including sales and use,
income, franchise, and excise taxes. It includes upto-date information on new tax laws, interpretations
of existing laws, and information on filing returns.
It also gives brief excerpts of major Wisconsin tax
cases decided by the Wisconsin Tax Appeals
Commission and the courts.
Notification of new bulletins will be sent to subscribers of the sales and use tax electronic mail list.
See Part XXI.G.
G. Electronic Mail Lists
The Department of Revenue has several electronic
mailing lists available to the public. The goal is to
provide communication from the department to list
members on information and news specific to the
respective list they have signed up for.
XXII. DO YOU HAVE QUESTIONS OR
NEED ASSISTANCE?
If you are unable to find an answer to your question
about sales and use taxes, e-mail, write, or call the department.
Visit our web site . . . www.revenue.wi.gov
E-Mail . . .
[email protected]
Write . . .
Wisconsin Department of Revenue
P.O. Box 8949, Mail Stop 5-77
Madison, WI 53708-8949
E. Rules - Wisconsin Administrative Code
The Wisconsin Administrative Code includes administrative rules that interpret the Wisconsin
Statutes. Rules have the force and effect of law. The
Department of Revenue has adopted a number of
rules pertaining to sales and use tax. A list of sales
and use tax rules is found in Appendix B.
A subscription and update service, which provides
all new Department of Revenue rules and changes
to existing rules, may be purchased from Department of Administration Document Sales.
F. Topical and Court Case Index
The Topical and Court Case Index is a two-part index. The first part (a Topical Index) will help you
find the particular Wisconsin statute, administrative
rule, Wisconsin Tax Bulletin tax release, publication, private letter ruling, or Attorney General
opinion that deals with your particular tax question.
The second part of the index (a Court Case Index)
lists Wisconsin Tax Appeals Commission, Circuit
Court, Court of Appeals, and Wisconsin Supreme
Court decisions relating to your question
Telephone. . . (608) 266-2776
Fax . . .
(608) 267-1030
You may also contact any of the Department of Revenue offices. For a listing of offices and their current
hours, please see the department’s web site at
www.revenue.wi.gov/faqs/ise/address.html.
XXIII. BUSINESS DEVELOPMENT
ASSISTANCE – DEPARTMENT
OF COMMERCE PERMIT
INFORMATION CENTER
If you have questions about what other permits may be
needed for your business, or need assistance in obtaining a permit, call the Permit Information Center at
1-800-HELPBUS (435-7287).
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Publication 201
SALES AND USE TAX FORMS
The forms and certificates listed below pertain to Wisconsin sales and use taxes. The number in parenthesis after the
title is the form number. Copies of these forms may be obtained from any Department of Revenue office, by calling
(608) 266-1961, from the Department of Revenue’s web
site or by writing Wisconsin Department of Revenue,
P.O. Box 8949, Madison, WI 53708-8949.
I.
SALES/USE TAX RETURNS FILED WITH
DEPARTMENT OF REVENUE OR ANOTHER
STATE AGENCY
• Wisconsin Sales and Use Tax Return – Form ST-12
(S-012) - filed by a person who has a seller’s permit, use
tax certificate or consumer’s use tax certificate and has
received a waiver from filing an electronic return (see
Part VIII.A.). Also used as an amended return to correct
an error on a Form ST-12 previously filed with the Department of Revenue.
• Consumer Use Tax Return – Form UT-5 (SU-050) filed with Department of Revenue by a person who is not
required to be registered for consumer’s use tax.
• Buyer’s Claim for Refund of Wisconsin State, County
and Stadium Sales Taxes (Form BCR) - filed with the
Department of Revenue by a person who paid sales or
use tax in error to a seller. A Buyer’s Claim for Refund
may also be filed electronically on the department’s web
site.
• Aircraft Registration Application (DT-1556) - filed
with Department of Transportation by a Wisconsin aircraft dealer and by a person who purchases an airplane
from someone who is not a dealer or from a seller located
outside Wisconsin.
• Application For Title/Registration (MV-1) - filed with
Department of Transportation by a Wisconsin motor vehicle dealer, and by a person who purchases a motor
vehicle, mobile home, trailer, or semitrailer from a person who is not a Wisconsin dealer, as evidence that state
and/or county sales tax has been paid or that the vehicle
is exempt from tax.
• Application for Title/Registration (9400-193, 9400-210
and 9400-376) - filed with Department of Natural Resources by a person who purchases a boat, snowmobile,
or all-terrain vehicle from someone who is not a dealer,
or from a seller located outside Wisconsin.
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APPENDIX A
II. EXEMPTION CERTIFICATES GIVEN TO
SELLER BY BUYER
• Wisconsin Sales and Use Tax Exemption Certificates
Form S-211 and Form S-211-SST are used by buyers
when purchasing property or services which are for resale or for which an exemption applies.
Note: Form S-211 is an expanded exemption certificate
that replaces Forms S-016, S-017, S-205, S-206, S-207,
S-207m, and S-209. Although these forms are no longer
printed and distributed by the department, they are still
valid as proof of exempt sales if properly completed and
taken in good faith.
• Construction Contract Entered Into Before Effective
Date of County Tax (Form S-207CT) - used by buyer
(contractor) when purchasing materials under a written
contract entered into prior to the date the county tax went
into effect, allowing the buyer to purchase the materials
without the 0.5% county sales tax.
III. OTHER FORMS
• Application
for
Business
Tax
Registration
(BTR-101) - filed by a person applying for a seller’s
permit, use tax certificate, consumer’s use tax certificate
or employer’s withholding registration.
• Application for Certificate of Exempt Status
(Form S-103) - filed by a federal or Wisconsin governmental unit or a nonprofit religious, charitable, scientific,
or educational organization which qualifies to purchase
items exempt from tax.
• Seller’s Permit - issued by Department of Revenue to a
person who has been approved as a seller of tangible personal property or taxable services.
• Sales and Use Tax Clearance Certificate - issued by
Department of Revenue to a purchaser (successor) of a
business certifying that the seller of the business owes no
sales and use tax.
Wisconsin Sales and Use Tax Information
SALES AND USE TAX RULES - WISCONSIN ADMINISTRATIVE CODE
APPENDIX B
Listed below are sales and use tax rules in effect as of September 1, 2011. The Wisconsin Administrative Code of the Department of
Revenue and a subscription update service may be purchased by writing to: Wisconsin Department of Administration, Document
Sales, Box 7840, 202 South Thornton Avenue, Madison, WI 53707-7840, telephone (608) 266-3358. The rules are also available for
viewing on the Revisor of Statutes web site at www.legis.wi.gov/rsb/code/tax/tax011.pdf.
An Emergency Rule for Wind, Solar, and Certain Gas-Powered Products’ Exemption is also available on the Department of Revenue’s web site.
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Publication 201
SECTION TAX 11.92 - RECORDS AND RECORD KEEPING
Tax 11.92 Records and record keeping. (1)
GENERAL. 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 sales price from sales of tangible personal
property, items, property, and goods under s. 77.52 (1)
(b), (c), and (d),Stats., 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 area part of the sale,
license, lease, 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
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 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. Except as provided in this paragraph and
ss. 77.52 (13) and 77.53 (10), Stats., exempt sales shall
be supported by an exemption certificate signed by the
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APPENDIX C
purchaser and retained by the seller. 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., and taxable services purchased for
sale, license, lease, rental, storage, use, or other consumption in Wisconsin.
(d) Every person subject to the county, stadium, or
regional transit authority sales and use tax shall keep a
record of sales that the person makes that are sourced
under s. 77.522, Stats., to each:
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.
(2) MICROFILM RECORDS. Microfilm, including
microfiche, reproductions of general books of account,
such as cash books, journals, voucher registers and ledgers, and supporting records of detail shall be acceptable
if the following conditions are met:
(a) Appropriate facilities are provided for preservation
of the films for periods required.
(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.
(c) Transcriptions are provided for any information
contained on microfilm which may be required for purposes of verification of tax liability.
Wisconsin Sales and Use Tax Information
(d) Proper facilities are provided for the ready inspection and location of the particular records, including
adequate projectors for viewing and copying the records.
(3) RECORDS PREPARED BY AUTOMATED
DATA PROCESSING (ADP) SYSTEMS. An automatic
data processing, ADP, tax accounting system shall have
the capability of producing visible and legible records
which will provide the following necessary information
for verification of the taxpayer’s tax liability:
(a) Recorded or reconstructible data. ADP records
shall provide an opportunity to trace any transaction
back to the original source or forward to a final total. If
detailed printouts are not made of transactions at the
time they are processed, then the system must have the
ability to readily reconstruct these transactions.
(b) General and subsidiary books of account. A general ledger, with source references, shall be written out
to coincide with financial reports for tax reporting periods. Where subsidiary ledgers are used to support the
general ledger accounts, the subsidiary ledgers shall also
be written out periodically.
(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.
(d) Program documentation. A written description of
the ADP portion of the accounting system shall be available. Important changes, together with their effective
dates, shall be noted in order to preserve an accurate
chronological record. The statements and illustrations as
to the scope of operations shall be sufficiently detailed to
indicate:
1. The application being performed.
2. The procedures employed in each application.
3. The controls used to ensure accurate and reliable
processing.
(4) RECORDS RETENTION. The records shall be
preserved and retained for the 4−year period open to au-
dit under s. 77.59 (3), Stats. If any agreement is entered
into to extend the 4−year audit period, the records shall
be preserved for that extended period. If a notice of tax
determination has been issued to the taxpayer by the department and if the taxpayer files a petition for
redetermination, the records for the period covered by
the notice of the tax determination shall be preserved and
retained until the tax redetermination has been finally
resolved.
(5) EXAMINATION OF RECORDS. All records described in this section shall be made available for
examination by the department at its request.
(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.
(7) PENALTIES. If the department has given notice
to a person to keep certain sales and use tax records, and
thereafter additional sales or use taxes are assessed on
the basis of information not contained in the records, the
department shall impose a penalty equal to 25% of the
amount of sales or use tax assessed. This is in addition to
all other penalties provided by law.
Note: Section Tax 11.92 interprets ss. 77.52 (13), 77.58 (6m), 77.60 (8),
77.61 (4)(a) and (9), and 77.75, Stats.
Note: The interpretations in this s. Tax 11.92 are effective under the
general sales and use tax law on and after September 1, 1969, except: (a) The
25% penalty in sub.(7) became effective July 20, 1985, pursuant to 1985 Wis.
Act 29; and (b) 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.
History: Cr. Register, July, 1977, No. 259, eff. 8−1−77; emerg. cr. (1)
(d), eff.3−24−86; cr. (1) (d), Register, October, 1986, No. 370, eff. 11−1−86;
am. (1) (intro.), (a), (b) and (c), (2) (intro.), (3) (intro.) and (c) and (4), cr. (7),
Register, June, 1991, No. 426, eff. 7−1−91; EmR0924: emerg. am. (1) (intro.)
to (c), (2) (b), (3) (c) and (6), renum. (1) (d) to be (1) (d) (intro.) and am., cr.
(1) (d) 1. to 3. and (e) eff. 10−1−09; CR09−090: am. (1) (intro.) to (c), (2) (b),
(3) (c) and (6), renum. (1) (d) to be (1) (d) (intro.) and am., cr. (1) (d) 1. to 3.
and (e) Register May 2010 No. 653, eff. 6−1−10.
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Publication 201
SECTION TAX 11.14 - EXEMPTION CERTIFICATES
Tax 11.14 Exemption certificates. (1) STATUTES. The
sales tax status of exemption certificates is contained in s.
77.52 (13) to (17), Stats., and the use tax status of exemption
certificates is contained in s. 77.53 (10) to (13), Stats.
(2) GENERAL. (a) Exemption certificates 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 sales price
those transactions for which they have accepted a valid exemption certificate from the purchaser. The following 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.
2. Construction contract entered into before the effective
date of county/stadium tax, form S−207CT−1. This is a certificate which may be used by a contractor to purchase building
materials without a county or stadium tax under the circumstances described in sub. (13).
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.
(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. Paper exemption certificates must be signed by
and bear the name and address of the purchaser, the name and
address of the seller, a general description of the purchaser’s
business and the 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 provides an exemption certificate indicating that the property, item, good, or service purchased will
be used for activities or under circumstances which make the
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APPENDIX D
purchase of the property, item, good, or service exempt from
the sales tax or for resale, and the property, item, good, or service is subsequently used by the purchaser in a manner that
makes the property, item, good, or service ineligible for exemption from tax, the purchaser is liable for payment of the
applicable sales or use tax.
(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, prior to the
date of the sale or 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:
tax.
1. The seller fraudulently fails to collect the sales or use
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.
Wisconsin Sales and Use Tax Information
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) 1. A seller accepts an exemption certificate as provided in sub. (4) (b) in good faith if all of the following apply:
a. The exemption claimed was authorized by law on the
date of the transaction in the jurisdiction to which the transaction is sourced.
b. The exemption could be applicable to the property,
item, good, or service being purchased.
c. The exemption being claimed is reasonable for the purchaser’s type of business.
2. If a seller obtains the information in subd. 1., the seller
is relieved of its liability for the tax unless it is discovered
through the audit process that the seller had knowledge or reason to know at the time the information relating to the
exemption was provided that the information was materially
false or the seller otherwise knowingly participated in an activity intended to purposefully evade the tax that is properly
due on the transaction.
(5) CONTINUOUS CERTIFICATES. (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.
(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.
(6) RESALE. (a) Effect of obtaining exemption certificate
claiming resale. 1. The burden of proving that a sale of proper-
ty, items, goods, or services is not at retail is upon the seller
unless the seller accepts 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) that indicate the
property, item, good, or service is purchased for resale. Obtaining the certificate or capturing and maintaining the data
elements that indicate the property, item, good, or service 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, item, good, or service acquired and then makes any storage or use of the
property, item, good, or service other than retention, demonstration, or display while holding it for sale, lease, license, or
rental in the regular course of business, the storage or use is
taxable to the purchaser as of the time the property, item,
good, or service 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, item, good, or service is first so
stored or used.
(b) Contents of exemption certificates claiming resale. An
exemption certificate claiming resale shall contain the following information for the seller to be relieved from the burden of
proving the sale of property or services was not a taxable sale:
er.
1. The name and address and the signature of the purchas2. A general description of the purchaser’s business.
3. The basis for the claimed exemption including the seller’s permit number of the purchaser, except that:
a. A wholesaler who sells only to other sellers for resale
may insert “wholesale only” in the space for a seller’s permit
number.
b. A person registered as a seller in another state, who
makes no retail sales in Wisconsin, may insert the name of the
state in which registered and the permit number issued to the
person by that state.
c. A person who makes exempt sales only in the regular
course of business may insert the words “exempt sales only”
in the space for a seller’s permit number.
(7) MANUFACTURING EXEMPTION. (a) A supplier
who accepts a fully completed exemption certificate claiming
a manufacturing exemption marked for “continuous” use may
make sales to the manufacturer without collecting the tax if
the nature of the property, items, 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.
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(b) If the manufacturer uses “single purchase” certificates,
it may print these as an integral part of its purchase orders, as
long as the essential information on the approved form is retained.
(8) FARMER’S EXEMPTION. A retailer shall have a
signed exemption certificate for every exempt sale made to a
farmer.
Note: Section Tax 11.12 describes the types of property, items, goods,
and services which may be sold to farmers without tax, and the use of the
exemption certificate to claim farming exemptions.
(9) EXEMPTION FOR FUEL OIL, PROPANE, COAL,
STEAM, AND WOOD FOR FUEL FOR RESIDENTIAL OR
FARM USE. A retailer shall have a signed exemption certificate if the sale of fuel oil, propane, coal, steam, or wood for
residential or farm use is partially exempt from sales or use
tax. If the sale is 100% exempt, an exemption certificate is not
required.
(10) EXEMPTION FOR ELECTRICITY AND
NATURAL GAS SOLD FOR RESIDENTIAL OR FARM
USE. A retailer of electricity or natural gas shall have a signed
exemption certificate for all sales of electricity or natural gas
for residential or farm use which are exempt from sales or use
tax unless any, or all, of the following apply:
use.
(a) 100% of the electricity or natural gas is for exempt
(b) The sale is to an account which is properly classified
as residential or farm pursuant to schedules which are filed for
rate tariff with the Wisconsin public service commission
which are in force at the time of the sale.
(c) The sale is to an account which is properly classified
as residential or farm for classification purposes as directed by
the federal rural electrification administration.
(11) GOVERNMENT SALES AND USE TAX
EXEMPTION. (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,
93
which the retailer shall record on the copy of the invoice it
retains.
(12) OTHER EXEMPTIONS. 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 to claim any other sales and use tax
exemption provided by law, including the following:
(a) Containers and other packaging, packing, and shipping
materials used to transfer merchandise to customers of the
purchaser.
(b) 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 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 of 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 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) CONSTRUCTION CONTRACTS ENTERED INTO
BEFORE THE EFFECTIVE DATE OF A COUNTY OR
STADIUM TAX. (a) The certificate for a construction contract entered into before the effective date of a county tax, or a
stadium tax as defined in s. Tax 11.001 (2) (d), form
S−207CT−1, is used by contractors to purchase building materials without the county or stadium tax. The certificate shall be
Wisconsin Sales and Use Tax Information
used by a contractor only if the following 3 conditions are
met:
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.
2. The written contract is for a fixed price that cannot be
changed or the formal written bid cannot be altered or withdrawn.
3. The building materials purchased on or after the effective date of the county or stadium tax are affixed and made a
part of real estate in fulfilling the written contract or formal
written bid.
(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.
(14) DIRECT PAY PERMITS. The use of direct pay
permits in Wisconsin is authorized under s. 77.52 (17m), Stats.
A person may apply to the department for a direct pay permit.
Note: For information on who qualifies for a direct pay permit and how
to use direct pay, refer to s. Tax 11.13.
(15) IMPROPER USE OF CERTIFICATES. (a) A purchaser who gives an exemption certificate knowing at the time
that the transaction is not exempt may be guilty of a misdemeanor under s. 77.52 (16), Stats. The purchaser may also be
liable for other penalties provided by law for filing incorrect
returns.
(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.
(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.
Note: Section Tax 11.14 interprets ss. 77.52 (13) to (17), 77.53 (10) to
(13), 77.60 (13), and 77.77 (3), Stats.
Note: The interpretations in s. Tax 11.14 are effective under the general
sales and use tax law on and after September 1, 1969, except: (a) The exemption for railroad lubricants became effective July 1, 1978, pursuant to Chapter
418, Laws of 1977; (b) The use of direct pay permits in Wisconsin became
effective for taxable years beginning on or after January 1, 1995, pursuant to
1993 Wis. Act 437; (c) The elimination of the exemption certificate requirement for sales of certain consigned commodities became effective December
1, 1997 as it relates to sales taxes on commodities consigned for resale, pursuant to 1997 Wis. Act 27, and June 17, 1998 as it relates to sales and use taxes
on commodities consigned for sale, pursuant to 1997 Wis. Act 237; (d) The
multipurpose exemption certificate, form S−211, was created in November
1998 to replace various types of exemption certificates; (e) The removal of the
good faith requirement if a fully completed exemption certificate is obtained
by the seller from the purchaser within 90 days of the date of sale became
effective October 1, 2009, pursuant to 2009 Wis. Act 2; (f) The requirement
that a seller is allowed 120 days after the Department of Revenue requests that
they obtain an exemption certificate or otherwise prove that a transaction is
exempt became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (g)
The exemption from sales and use tax for federally recognized American
Indian bands or tribes in Wisconsin became effective July 1, 2009, pursuant to
2009 Wis. Act 28; (h) The acceptance of the Streamlined Sales and Use Tax
Exemption Certificate to prove a transaction is exempt became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (i) The penalty for prohibited or
inconsistent use of an exemption certificate or direct pay permit became effective October 1, 2009 pursuant to 2009 Wis. Act 2; (j) The identification of the
specific exemptions for which an exemption certificate is not required became
effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (k) 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.
History: Cr. Register, November, 1978, No. 275, eff. 12−1−78; am. (7)
(a)., Register, June, 1983, No. 330, eff. 7−1−83; cr. (2) (c) and am. (10), Register, July, 1987, No. 379, eff. 8−1−87; cr. (2) (a) 5. and 6., (10), (11) and
(14), am. (2) (a), (5) (b), (6) (b) (intro.) and 5., (7) (a) (intro.) and 4. and 5., (8)
(a) and (9), renum. (10) and (11) to be (12) and (13) and am., Register, March,
1991, No. 423, eff. 4−1−91; am. (2) (c), (3) (b) and (c), (6) (b) 4., r. and recr.
(12), Register, June, 1995, No. 474, eff. 7−1−95; renum. (12), (13) and (14) to
be (13), (14) and (15), am. (2) (a) (intro.), cr. (2) (a) 7. and (12), Register,
October, 1997, No. 502, eff. 11−1−97;am. (1) (c), (3) (a) and (b), (5) (b), (6)
(a) 2., (b), 3., r. and recr. (2) (a) 1. and 2., cr. (6) (b) 4. c. and (16), r. (2) (a) 3.
to 7., (7) (b), (10) (b), (11) (b) and (12) (b) 1., renum. (7) (a) 1. to 6. to be (12)
(a) to (f) and am. (12) (d), renum. (8) to (10) (a) to be (7) to (9) and am. (7)
(a), (8) and (9), renum. (11) (a) 1. to 3. to be (10) (a) to (c), renum. (12) (a) to
be (11) (a) and am., renum. (12) (b) 2. and 3., (13), (14) and (15) to be (11) (b)
1. and 2., (13), (14) and (15) and am. (13) (a), 1. and 3. and (b), Register,
August, 1999, No. 524, eff. 9−1−99; CR 02−128: am. (6) (a) 2., and (13) (a)
(intro.) and (b), Register July 2003 No. 571, eff. 8−1−03; EmR0924: emerg.
am. (2) (a) (intro.), 1., (b), (c), (5) (a), (6) (a) 1., 2., (b) 2., (7) (a), (11), (12)
(intro.), (b) to (f), (13) (a) 1. and (b), cr. (2) (a) 3. and (15) (b), r. and recr. (3),
(4), (5) (b) and (16), r. (6) (b) 3. and 5., renum. (6) (b) 4. and (15) to be (6) (b)
3. and (15) (a) and am. (6) (b) 3. (intro.), eff. 10−1−09; CR 09−090: am. (2)
(a) (intro.), 1., (b), (c), (5) (a), (6) (a) 1., 2., (b) 2., (7) (a), (11), (12) (intro.),
(b) to (f), (13) (a) 1. and (b), cr. (2) (a) 3. and (15) (b), r. and recr. (3), (4), (5)
(b) and (16), r. (6) (b) 3. and 5., renum. (6) (b) 4. and (15) to be (6) (b) 3. and
(15) (a) and am. (6) (b) 3. (intro.) Register May 2010 No. 653, eff. 6−1−10;
CR 10−094: am. (2) (c), (3) (a), (4) (b), (5) (a), (6) (a), (7) (a), (9), (12) (a),
r. and recr. (4) (c) Register November 2010 No. 659, eff. 12−1−10.
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APPENDIX E
Page 1 of 2
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Wisconsin Sales and Use Tax Information
APPENDIX E
Page 2 of 2
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APPENDIX F
Page 1 of 2
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Wisconsin Sales and Use Tax Information
APPENDIX F
Page 2 of 2
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APPENDIX G
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Wisconsin Sales and Use Tax Information
APPENDIX G (cont’d)
100
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APPENDIX G (cont’d)
101
Wisconsin Sales and Use Tax Information
APPENDIX H
102
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APPENDIX H (cont’d)
103
Wisconsin Sales and Use Tax Information
APPENDIX I
State, County, and Stadium Sales and Use Taxes Due on Items Registered or Titled in Wisconsin
Description of Transaction
•
•
•
•
•
•
•
•
104
Motor vehicle, boat, recreational vehicle as defined in
sec. 340.01(48r), Wis. Stats.,
and aircraft
Snowmobile, trailer, semitrailer, and
all-terrain vehicle
Sale in a Wisconsin county
with a county tax and the county is not part of a stadium
district
Buyer brings back to and keeps
at a Wisconsin location outside
of the county where the purchase occurred.
Sale in a Wisconsin county
with a county tax that is also
within the baseball stadium district.
Buyer brings back to and keeps
at a Wisconsin location outside
of the county where the purchase occurred.
Seller owes 5% state use tax and
any applicable local (i.e., county
and/or stadium) use taxes in effect for the location where the
item is customarily kept.
Seller owes 5% state tax and 0.5% county tax for county in which the sale
occurred.
Same tax treatment as above.
Seller owes 5% state tax, the 0.5% county tax for county where sale occurred,
and the 0.1% baseball stadium sales tax.
Sale in a Wisconsin county
without a county tax and that is
not part of a stadium district
Buyer brings back to and keeps
at a Wisconsin location outside
of the county where the purchase occurred.
Same tax treatment as above.
Sale in Wisconsin county
without a county tax and that is
within a stadium district.
Buyer brings back to and keeps
at a Wisconsin location outside
of the county where the purchase occurred.
Same tax treatment as above.
No additional county or stadium use tax
is due.
No additional county or stadium use tax
is due.
Seller owes 5% state tax.
Note: If a buyer stores, uses, or otherwise consumes the item in a taxable
county and/or stadium district, the buyer
owes the applicable county and/or stadium tax for the location where the item is
first stored, used, or otherwise consumed. The seller may choose to collect
this tax for the convenience of the buyer.
Seller owes 5% state tax and the applicable stadium tax (i.e., baseball or football)
based on where sale occurred.
No additional county or stadium use tax
is due.
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