SALT Report 2982 – The Wisconsin Department of Revenue has replaced a fact sheet that discusses the sales and use tax exemption for machinery and equipment used in qualified biotechnology or manufacturing research with two separate fact sheets. The first fact sheet discusses the exemption as it applies to purchases prior to July 1, 2013, and the second address purchases after that date.
Fact Sheet 2101-1
From January 1, 2012 through July 1, 2013, a sales and use tax exemption was available for purchases of property used exclusively and directly in qualified research. The fact sheet states that property that was purchased from January 1, 2012 through July 1, 2013 and used in qualified research in an exempt manner will continue to be used in an exempt manner on and after July 2, 2013 if the property meets the requirements in this Fact Sheet, or in Fact Sheet 2101-2.
Fact Sheet 2101-2
This Fact Sheet addresses the sales and use tax exemption as amended by Assembly Bill 40, Laws 2013. It provides a general overview of the exemption as it relates to property purchased on and after July 2, 2013 and used in qualified research.
The legislation provides that effective July 2, 2013 the exemption available to manufacturing and biotechnology businesses for purchases of machinery, equipment, and other property used in qualified research is replaced by an exemption for “persons engaged in manufacturing or biotechnology in Wisconsin and certain combined group members who are conducting qualified research in Wisconsin.”
To qualify for the exemption, the person must be engaged in manufacturing in the State, in a building that is assessed as manufacturing property, or engaged in biotechnology in the State. The exemption applies to a combined group member only if they are conducting qualified research for another combined group member who is engaged in manufacturing or biotechnology and meets all other requirements.
Fact Sheet 2101-2 provides additional guidance on how to claim the exemption; who qualifies as primarily engaged in manufacturing or biotechnology; exempt purchases; qualified research; prototypes; recordkeeping; the difference between manufacturing and biotechnology; and the differences between the sales and use tax qualified research exemption and the income and franchise tax research credit.
For Further Information