SALT Report 2286 – The Wisconsin Department of Revenue revised a sales tax bulletin regarding motor vehicle leases. The update states that a previously issued deadline that requires retailers to make programming changes if they have been incorrectly collecting sales tax on insurance charges, guaranteed auto protection (GAP) waiver charges, trade-ins, and discounts has been extended from April 1, 2013 to July 1, 2013.
The programming changes are the result of an amendment to section 77.54(8), Wisconsin Statutes. The statute provides an exemption from sales and use taxes for “charges for insurance…where such charges are separately set forth upon the invoice given by the seller to the purchaser.” For example, when a lease agreement includes a separate charge for insurance, the insurance charge is not taxable. The amended language in the statute extends the exemption to GAP insurance and GAP waiver charges.
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