Wisconsin – New Sales and Use Tax Laws and Exemptions

SALT Report 2694 – In the latest issue of Sales and Use Tax Report, the Wisconsin Department of Revenue provides guidance regarding changes to various tax laws and exemptions that became effective with the passage of Assembly Bill 40.

New Sales and Use Tax Exemptions

Effective July 1, 2013 advertising and promotional direct mail is exempt from sales and use tax.  For purposes of the exemption, “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 those on a mailing list provided by the purchaser so long as the cost of the printed material or any tangible personal property or other taxable items included with the printed material is not billed directly to the recipients of the printed material.

Direct mail also includes any tangible personal property or other taxable items provided 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. However, the exemption specifically excludes, multiple items of printed materials delivered to a single address.

Paper used to manufacture advertising and promotional direct mail that will be transported and used solely outside Wisconsin is exempt from sales and use taxes.  However, paper used to manufacture advertising and promotional direct mail that is not transported and used solely outside Wisconsin does not qualify for the exemption.

Finally, the services of producing, fabricating, processing, printing, or imprinting that results in advertising and promotional direct mail are not taxable.

Effective July 1, 2013 sales and purchases of snowmaking and snow grooming machines and equipment are exempt from sales and use tax.  The exemption also applies to accessories, attachments, and parts for the machines and equipment and to the fuel and electricity used to operate the machines and equipment so long as the machines and equipment are used exclusively and directly for snowmaking and snow grooming at ski hills, ski slopes, and ski trails.

New Sales and Use Tax Laws

Effective July 2, 2013, taxpayers who wish to appeal a sales and use tax decision of the Wisconsin Tax Appeals Commission must appeal to the circuit court for Dane County or to the circuit court for the county where the taxpayer’s commercial domicile is located, where the taxpayer owns other property, or where the taxpayer transacts business in Wisconsin.  Previously, all appeals were required to be made to the circuit court for Dane County.

Effective January 1, 2014, if a retailer reports more than $1,200 in any one calendar quarter, the retailer will be required to file its sales and use tax returns on a monthly basis. Previously, this threshold was $600.

Technical Corrections

The definition of prosthetic devices has been amended to clarify that an exempt device must be a “replacement, corrective, or supportive” device.

The exemption for certain items used in raising animals has been amended to replace “medicines” with “drugs” because the term “medicine” is not defined in the Wisconsin Statutes.

The regulation regarding “property transferred incidentally with a taxable service” has been amended to clarify that a service provider who transfers tangible personal property, or items, property, or goods incidentally with a taxable service is the consumer of such property, items, or goods, and may not purchase the property, items, or goods without tax for resale.

For Further Information

Wisconsin Department of Revenue – Sales and Use Tax Report No. 1-13