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1 Mid-America Council Leadership Training Session April 2014 Presented by Wisconsin Department of Revenue.

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1 1 Mid-America Council Leadership Training Session April 2014 Presented by Wisconsin Department of Revenue

2 2 Agenda Streamlined Sales Tax Project Streamlined Sales Tax Project Wisconsin Sales and Use Tax Wisconsin Sales and Use Tax Sales and Use Tax Exemptions Sales and Use Tax Exemptions Law Changes and Updates Law Changes and Updates Miscellaneous and Resources Miscellaneous and Resources

3 Streamlined Sales Tax Project 3

4 Streamlined Sales Tax Governing Board began in March 2000 Streamlined Sales Tax Governing Board began in March full member states 23 full member states 1 associate member state 1 associate member state 4

5 Streamlined Sales Tax Project Quill Corp. – U.S. Supreme Court Quill Corp. – U.S. Supreme Court Physical presence Physical presence Existing system too complicated Existing system too complicated Congress has authority to require remote sellers to collect tax Congress has authority to require remote sellers to collect tax Simplify and modernize sales and use tax administration Simplify and modernize sales and use tax administration 5

6 Streamlined Sales Tax Project Wisconsin became full member on October 1, 2009 Wisconsin became full member on October 1, 2009 Legislation passed – 2009 Wisconsin Acts 2 and 28 Legislation passed – 2009 Wisconsin Acts 2 and 28 Streamlined Sales and Use Tax Agreement (SSUTA) Streamlined Sales and Use Tax Agreement (SSUTA) 6

7 Streamlined Sales Tax Project The key areas that are being made more uniform include: The key areas that are being made more uniform include: Rate simplification Rate simplification Limiting the frequency of tax rate changes Limiting the frequency of tax rate changes Simplifying registration systems Simplifying registration systems Simplifying filing and paying of sales tax Simplifying filing and paying of sales tax Uniform audit procedures Uniform audit procedures Uniform definitions within tax bases Uniform definitions within tax bases Uniform rounding rules Uniform rounding rules Uniform treatment of bad debts Uniform treatment of bad debts 7

8 Streamlined Sales Tax Project Annual state recertification Annual state recertification Certificate of compliance Certificate of compliance Taxability matrix Taxability matrix States certify software providers States certify software providers Wisconsin rate and boundary database file Wisconsin rate and boundary database file Sales tax rate look-up Sales tax rate look-up https://ww2.revenue.wi.gov/STRB/application https://ww2.revenue.wi.gov/STRB/application https://ww2.revenue.wi.gov/STRB/application 8

9 Streamlined Sales Tax Project Streamlined Sales Tax Registration System Streamlined Sales Tax Registration System Must register in all Member States Must register in all Member States Sellers can indicate they do not have sales in a particular state Sellers can indicate they do not have sales in a particular state Can indicate states where a seller is already registered Can indicate states where a seller is already registered All changes or updates to registration information made in one place and sent to all states All changes or updates to registration information made in one place and sent to all states Different technology models Different technology models 9

10 Streamlined Sales Tax Project Federal legislation Federal legislation Senate (S. 743) passes Marketplace Fairness Act of 2013 in May 2013 Senate (S. 743) passes Marketplace Fairness Act of 2013 in May 2013 Judiciary Committee hearing on alternatives on the internet sales tax issue Judiciary Committee hearing on alternatives on the internet sales tax issue Marketplace Fairness Act of 2013 Marketplace Fairness Act of 2013 Two different paths Two different paths Member States under the SSUTA Member States under the SSUTA Alternative path - minimum simplifications Alternative path - minimum simplifications 10

11 Streamlined Sales Tax Project Current Developments Current Developments Registration system Registration system More state disclosure More state disclosure Best Practices Matrix – Vouchers Best Practices Matrix – Vouchers Best Practices Matrix – Credits?? Best Practices Matrix – Credits?? Prepared food toggle Prepared food toggle Marketplace Fairness Act Marketplace Fairness Act Online taxability matrix Online taxability matrix 11

12 Wisconsin Sales and Use Tax 12

13 Seller's Permit A retailer located outside Wisconsin who has “nexus” in Wisconsin and who makes taxable sales in Wisconsin is required to register. A retailer located outside Wisconsin who has “nexus” in Wisconsin and who makes taxable sales in Wisconsin is required to register. A retailer without “nexus” may voluntarily register. A retailer without “nexus” may voluntarily register. "Nexus" or "engaged in business" is defined in Tax of the Wis. Adm. Code "Nexus" or "engaged in business" is defined in Tax of the Wis. Adm. Code 13

14 14 What is nexus? What creates nexus? Nexus is a connection or a link to Wisconsin (i.e., a physical presence). Nexus is a connection or a link to Wisconsin (i.e., a physical presence). For sales and use tax purposes, common situations that create nexus for a business are: For sales and use tax purposes, common situations that create nexus for a business are: Having any portion of your business physically located in Wisconsin Having any portion of your business physically located in Wisconsin Leasing or renting tangible personal property located in Wisconsin Leasing or renting tangible personal property located in Wisconsin Repairing or installing tangible personal property in Wisconsin Repairing or installing tangible personal property in Wisconsin

15 What creates nexus? (continued) Performing construction work in Wisconsin Performing construction work in Wisconsin Performing taxable services in Wisconsin Performing taxable services in Wisconsin Delivering tangible personal property into Wisconsin in your own vehicle Delivering tangible personal property into Wisconsin in your own vehicle Having agents, salespeople, etc. in the state selling, taking orders, or making deliveries Having agents, salespeople, etc. in the state selling, taking orders, or making deliveries Participating in conventions and/or trade shows in Wisconsin Participating in conventions and/or trade shows in Wisconsin Note: Keep in mind that nexus requirements vary for different tax types. 15

16 What creates nexus? (continued) Activities that by themselves do not create nexus: Activities that by themselves do not create nexus: Advertising in newspapers and telephone books Advertising in newspapers and telephone books Sending catalogs into the state from outside the state Sending catalogs into the state from outside the state Receiving mail or telephone orders and having the orders shipped into the state using mail or common carrier Receiving mail or telephone orders and having the orders shipped into the state using mail or common carrier Attending educational seminars Attending educational seminars 16

17 Where does the sale take place? Sourcing is the term used to indicate where the sale takes place and which taxing jurisdictions (state and local) are entitled to impose a tax on the sale. Sourcing is the term used to indicate where the sale takes place and which taxing jurisdictions (state and local) are entitled to impose a tax on the sale. A sourcing hierarchy was developed and must be followed to determine the proper state and local jurisdiction to which a sale is sourced. A sourcing hierarchy was developed and must be followed to determine the proper state and local jurisdiction to which a sale is sourced. 17

18 Sourcing hierarchy 1. Seller’s Address – Tax is charged based on the taxing jurisdiction of seller’s location, if that’s where possession transfers. 2. Delivery Address – Tax is charged based on where the product is shipped to or the service is provided. 3. Billing Address – Tax is charged based on the address that the seller has in their records for the customer. 18

19 Sourcing hierarchy 4. Other Address – 4. Other Address – Purchaser’s address obtained during the consummation of the sale (possibly on the payment instrument) Purchaser’s address obtained during the consummation of the sale (possibly on the payment instrument) 5. Location from which the item is shipped - This is a catch-all provision … so seller always has a definite place to source a sale Wisconsin Statutes Wisconsin Statutes

20 Special Sourcing Rules Leases, licenses, and rentals of TPP Leases, licenses, and rentals of TPP sec (3)(a), Wis. Stats. sec (3)(a), Wis. Stats. Leases, licenses, and rentals of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment Leases, licenses, and rentals of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment sec (3)(b), Wis. Stats. sec (3)(b), Wis. Stats. 20

21 Sales and Use Taxes Rates State tax – 5.0% State tax – 5.0% County tax - 0.5% County tax - 0.5% Baseball stadium district tax - 0.1% Baseball stadium district tax - 0.1% Football stadium district tax - 0.5% Football stadium district tax - 0.5% Local food and beverage tax - 0.5% Local food and beverage tax - 0.5% Local expo basic room tax – 2.0% (7% additional room tax for City of Milwaukee only) Local expo basic room tax – 2.0% (7% additional room tax for City of Milwaukee only) Premier resort area tax - 0.5% or 1.0% (Effective July 1, 2014, Lake Delton and City of Wisconsin Dells increase to 1.25%) Premier resort area tax - 0.5% or 1.0% (Effective July 1, 2014, Lake Delton and City of Wisconsin Dells increase to 1.25%) 21

22 What is included in the sales price? “Sales price” includes the following charges: “Sales price” includes the following charges: Retail price of the product or service Retail price of the product or service Delivery charges Delivery charges Installation charges Installation charges Taxes that are the obligation of the seller Taxes that are the obligation of the seller Tips or service charges added to the bill by the seller Tips or service charges added to the bill by the seller Services necessary to complete the sale (e.g. trip charges, fuel surcharge, reimbursed expenses, etc.) Services necessary to complete the sale (e.g. trip charges, fuel surcharge, reimbursed expenses, etc.) All items as required as a condition of the sale All items as required as a condition of the sale 22

23 What is not included in the sales price? “Sales price” does not include the following charges: “Sales price” does not include the following charges: Credit allowed for TPP taken in trade (i.e. trade-in allowance) Credit allowed for TPP taken in trade (i.e. trade-in allowance) Interest Interest Finance charges from the extension of credit Finance charges from the extension of credit Taxes legally imposed on the purchaser, if separately stated on the invoice Taxes legally imposed on the purchaser, if separately stated on the invoice Delivery charges for direct mail (if separately stated on the invoice to the purchaser) Delivery charges for direct mail (if separately stated on the invoice to the purchaser) Discounts or coupons, unless reimbursed by a third party (e.g., manufacturer’s coupon) Discounts or coupons, unless reimbursed by a third party (e.g., manufacturer’s coupon) 23

24 Sales and Use Taxes Taxable Products: Tangible personal property (sec (1)(a), Stats.) Tangible personal property (sec (1)(a), Stats.) Certain coins or stamps (sec (1)(b), Stats.) Certain coins or stamps (sec (1)(b), Stats.) Certain leased tangible personal property affixed to real property (sec (1)(c), Stats.) Certain leased tangible personal property affixed to real property (sec (1)(c), Stats.) Digital goods (sec (1)(d), Stats.) Digital goods (sec (1)(d), Stats.) The four products, above, are referred to collectively as tangible personal property, and items, property, and goods. Specified services Specified services 24

25 Sales made over the Internet Sellers who are registered or required to be registered to collect tax in Wisconsin and who make sales over the Internet, must charge sales tax on sales sourced to Wisconsin. Sellers who are registered or required to be registered to collect tax in Wisconsin and who make sales over the Internet, must charge sales tax on sales sourced to Wisconsin. Wisconsin also imposes sales tax on internet access services. Wisconsin also imposes sales tax on internet access services. 25

26 Sales and Use Taxes Taxable Services (not all-inclusive): Repair or other service to tangible personal property Repair or other service to tangible personal property Parking (for motor vehicles and aircraft) Parking (for motor vehicles and aircraft) Admissions to amusement, athletic, recreational, and entertainment events or facilities Admissions to amusement, athletic, recreational, and entertainment events or facilities Landscaping Landscaping Cable television Cable television 26

27 Sales and Use Taxes More Taxable Services (not all-inclusive): Boat docking and storage Boat docking and storage Providing rooms and lodging Providing rooms and lodging Photographic services, including videographic services Photographic services, including videographic services Laundry and dry cleaning services Laundry and dry cleaning services Telecommunications services Telecommunications services Printing or imprinting services Printing or imprinting services 27

28 When is labor taxed? Repair labor – taxable Repair labor – taxable Fabrication labor – taxable Fabrication labor – taxable Installation Labor – taxable Installation Labor – taxable Construction labor – not taxable if the labor is used to make a real property improvement (exceptions apply) Construction labor – not taxable if the labor is used to make a real property improvement (exceptions apply) 28

29 Nontaxable Service Providers Many service providers provide services that are typically not subject to tax. Many service providers provide services that are typically not subject to tax. Examples include: Examples include: banks banks accountants accountants attorneys attorneys consulting firms consulting firms health care providers health care providers 29

30 Nontaxable Service Providers If they provide any taxable products or services, they are required to register and collect the applicable taxes like any other business. If they provide any taxable products or services, they are required to register and collect the applicable taxes like any other business. Examples include: Examples include: Accountants who sell computer software and install it on their client’s computer Accountants who sell computer software and install it on their client’s computer Banks that sell collector coin sets Banks that sell collector coin sets Hospitals that sell photocopies of medical records Hospitals that sell photocopies of medical records Purchases of business assets and office supplies are taxable (unless an exemption applies). Purchases of business assets and office supplies are taxable (unless an exemption applies). 30

31 Tangible Personal Property Defined in sec (20), Stats. Defined in sec (20), Stats. "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. "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. 31

32 32 Digital Goods Items/products that may be transferred by: Items/products that may be transferred by: Uploading using the internet Uploading using the internet Streaming over the internet Streaming over the internet ing to the purchaser ing to the purchaser

33 33 Digital Goods If tangible form was exempt or not subject to tax, digital form is also not subject to tax If tangible form was exempt or not subject to tax, digital form is also not subject to tax Sec (50), Stats. Sec (50), Stats. Example: Example: Finished artwork consumed in manufacturing brochures Finished artwork consumed in manufacturing brochures

34 34 Online Training or Webinar Live event Live event Digital audiovisual work Digital audiovisual work Tangible form is not taxable Tangible form is not taxable Previously recorded Previously recorded Digital audiovisual work Digital audiovisual work Tangible form subject to tax Tangible form subject to tax

35 35 Digital Goods Taxable digital goods include: Taxable digital goods include: Specified Digital Goods Specified Digital Goods Digital Codes Digital Codes Additional Digital Goods Additional Digital Goods

36 36 Specified Digital Goods include Digital audio works Digital audio works Recorded or live songs, reading of books, ringtones Recorded or live songs, reading of books, ringtones Digital audiovisual works Digital audiovisual works Movies, motion pictures, music videos, live or recorded events Movies, motion pictures, music videos, live or recorded events Digital books Digital books Novels, autobiographies, dictionaries, cookbooks, textbooks Novels, autobiographies, dictionaries, cookbooks, textbooks

37 37 Digital Codes Codes used to access or obtain any specified digital good, or any additional digital goods that have been previously purchased & promotion cards/codes purchased by retailer or other business entity Codes used to access or obtain any specified digital good, or any additional digital goods that have been previously purchased & promotion cards/codes purchased by retailer or other business entity

38 38 Additional Digital Goods Greeting Cards Greeting Cards Finished Artwork Finished Artwork Periodicals Periodicals Video or Electronic Games Video or Electronic Games Newspaper or other news or information products Newspaper or other news or information products

39 39 Finished Artwork Drawings Drawings Paintings Paintings Designs Designs Photographs Photographs Lettering Lettering

40 40 Digital Goods Examples of generally taxable digital goods (i.e., they are one of the specific digital goods that are subject to tax) Examples of generally taxable digital goods (i.e., they are one of the specific digital goods that are subject to tax) PowerPoint presentation PowerPoint presentation Brochure designs Brochure designs Copies of construction plans and specifications Copies of construction plans and specifications Designing, creating, and distributing e-newsletters Designing, creating, and distributing e-newsletters

41 41 Digital Goods Examples of nontaxable digital goods (i.e., they are not one of the specific digital goods that are subject to tax) Examples of nontaxable digital goods (i.e., they are not one of the specific digital goods that are subject to tax) Blank legal forms Blank legal forms Viewing a live educational seminar via webinar Viewing a live educational seminar via webinar Access to a web site that allows the user to search a database that returns personal information about a person Access to a web site that allows the user to search a database that returns personal information about a person Web hosting services Web hosting services

42 42 Digital Goods References: References: Publication 235: Advertising Companies Publication 235: Advertising Companies Publication 240: Digital Goods Publication 240: Digital Goods Common Questions – Computer, Hardware, and Software Common Questions – Computer, Hardware, and Software

43 What is use tax? Self-assessed and paid directly to the state. Self-assessed and paid directly to the state. Applies when you purchase taxable items or services for your own use without paying sales tax. Applies when you purchase taxable items or services for your own use without paying sales tax. Is the complement to sales tax - it reduces unfair competition for all businesses. Is the complement to sales tax - it reduces unfair competition for all businesses. Most audit assessments are for use tax!! Most audit assessments are for use tax!!

44 What is the basis for use tax? Use tax is based on: Use tax is based on:  your purchase price of taxable purchases,  including any taxable miscellaneous charges. This is true whether you buy items: This is true whether you buy items:  for your own business use without paying sales tax,  take them out of inventory and use them in a taxable manner or  donate them to a charitable organization. 44

45 Consumer Use Tax A business that does not make retail sales subject to Wisconsin sales or use tax is required to register for a consumer’s use tax certificate if it regularly makes purchases that are subject to Wisconsin use tax. (Examples: materials consumed by contractors). A business that does not make retail sales subject to Wisconsin sales or use tax is required to register for a consumer’s use tax certificate if it regularly makes purchases that are subject to Wisconsin use tax. (Examples: materials consumed by contractors). 45

46 Credit for Taxes Paid to Other States Wisconsin allows a credit for the amount of sales tax owed in another state (tax must be legally due and owed), up to the amount of tax due in Wisconsin on that same purchase. Wisconsin allows a credit for the amount of sales tax owed in another state (tax must be legally due and owed), up to the amount of tax due in Wisconsin on that same purchase. Example - A Janesville business buys and picks up office supplies in Rockford. The office supply store charges the appropriate 8.25% Illinois sales tax. The business brings the supplies back to Janesville for use. A credit is given for the 8.25% IL tax paid to offset the 5.5% WI tax. Thus no Wisconsin or Rock county use tax is due. Example - A Janesville business buys and picks up office supplies in Rockford. The office supply store charges the appropriate 8.25% Illinois sales tax. The business brings the supplies back to Janesville for use. A credit is given for the 8.25% IL tax paid to offset the 5.5% WI tax. Thus no Wisconsin or Rock county use tax is due. Note: Wisconsin business CANNOT get a refund on the additional 1.375% IL tax. 46

47 Sales and Use Tax Exemptions 47

48 Sales and Use Tax Exemptions Product based exemption The product itself is exempt (e.g., most food purchased from a grocery store, such as milk, eggs, fresh fruit). No exemption certificate required No exemption certificate required 48

49 Sales and Use Tax Exemptions Use based exemption The product is used in an exempt manner (e.g., farm machinery). An exemption certificate is required An exemption certificate is required 49

50 Sales and Use Tax Exemptions Entity based exemption The buyer or seller is exempt from tax (e.g., sale by the federal government, or sale to a nonprofit organization holding a CES number). An exemption certificate or copy of their Wisconsin CES number An exemption certificate or copy of their Wisconsin CES number 50

51 Government Agencies Wisconsin state and local governmental agencies do not have to pay sales or use tax on their purchases of taxable goods and services. Wisconsin state and local governmental agencies do not have to pay sales or use tax on their purchases of taxable goods and services. Examples of exempt governmental units in Wisconsin: Examples of exempt governmental units in Wisconsin: Federal governmental agencies Federal governmental agencies Federally recognized American Indian Tribe or Band in Wisconsin Federally recognized American Indian Tribe or Band in Wisconsin Wisconsin governmental agencies Wisconsin governmental agencies Local governmental agencies from Wisconsin Local governmental agencies from Wisconsin Note: State and local government agencies from other states are taxable in Wisconsin. 51

52 Non-profit Organizations Non-profit organizations that can obtain exempt status for sales and use tax are: Non-profit organizations that can obtain exempt status for sales and use tax are: Charitable organizations (e.g. hospitals, nursing homes, ambulance services and outpatient surgical centers organized under 501(c)(3) ) Charitable organizations (e.g. hospitals, nursing homes, ambulance services and outpatient surgical centers organized under 501(c)(3) ) Religious organizations (e.g. churches, synagogues, mosques, etc.) Religious organizations (e.g. churches, synagogues, mosques, etc.) Educational organizations (e.g. scouts and youth groups) Educational organizations (e.g. scouts and youth groups) Note: Many people assume that if an organization has obtained federal nonprofit status that they automatically qualify for a sales tax exemption. This is not the case – it is not an automatic exemption. 52

53 Sales and Use Tax Exemptions Sec (5)(a), Stats. Sec (5)(a), Stats. Motor vehicles purchased by non-residents Motor vehicles purchased by non-residents Only use is to remove from this state Only use is to remove from this state Includes: aircraft, truck bodies Includes: aircraft, truck bodies 53

54 Sales and Use Tax Exemptions Sec (17), Stats. Sec (17), Stats. Excluded from use tax Excluded from use tax Personal property brought into WI by a non- resident while temporarily in WI Personal property brought into WI by a non- resident while temporarily in WI Does not include property used in a trade or business Does not include property used in a trade or business Examples: Camping supplies, snowmobiles, strollers, cameras, cell phones Examples: Camping supplies, snowmobiles, strollers, cameras, cell phones 54

55 Sales and Use Tax Exemptions Sec (18), Stats. Sec (18), Stats. Excluded from use tax if changing domicile Excluded from use tax if changing domicile Household goods when moving to WI Household goods when moving to WI Must be purchased 90 days or more prior to bringing property into WI Must be purchased 90 days or more prior to bringing property into WI Includes (personal use): aircraft, motor vehicles, boats, snowmobiles, mobile and manufactured homes, RVs, trailers, semitrailers, and ATVs Includes (personal use): aircraft, motor vehicles, boats, snowmobiles, mobile and manufactured homes, RVs, trailers, semitrailers, and ATVs 55

56 Exemption Certificates All sales of taxable products are considered taxable, until the contrary is established. All sales of taxable products are considered taxable, until the contrary is established. Authorized exemption certificates Authorized exemption certificates Form S-211 Form S-211 Form S-211-SST Form S-211-SST Certificate of Exempt Status Certificate of Exempt Status Direct Pay Permit issued by Wisconsin Direct Pay Permit issued by Wisconsin Uniform Sales and Use Tax Certificate (Multi- jurisdictional Tax Certificate) Uniform Sales and Use Tax Certificate (Multi- jurisdictional Tax Certificate) 56

57 Exemption Certificates Seller is relieved of liability for the tax if the seller obtains and retains: Seller is relieved of liability for the tax if the seller obtains and retains: Fully completed exemption certificate Fully completed exemption certificate Prior to or within 90 days after the date of the sale Prior to or within 90 days after the date of the sale Indicating that the purchaser will use the property or service in a manner that is exempt from Wisconsin sales and use tax. Indicating that the purchaser will use the property or service in a manner that is exempt from Wisconsin sales and use tax. 57

58 Exemption Certificates In the case of an audit: In the case of an audit: Allow 120 days once requested by WI DOR to substantiate a claimed exemption Allow 120 days once requested by WI DOR to substantiate a claimed exemption Seller must accept exemption certificate in good faith Seller must accept exemption certificate in good faith Is the business still operating? Is the business still operating? 58

59 Law Changes and Updates 59

60 2013 & 2014 Sales and Use Tax Law Changes Advertising and promotion direct mail exemption (eff. 7/1/13) Advertising and promotion direct mail exemption (eff. 7/1/13) Services that result in advertising and promotional direct mail (eff. 7/1/13) Services that result in advertising and promotional direct mail (eff. 7/1/13) Laundry, dry cleaning, pressing, and dyeing services through self-service machines exemption (eff. 10/1/13) Laundry, dry cleaning, pressing, and dyeing services through self-service machines exemption (eff. 10/1/13) Lump sum contracts (eff. 10/1/13) Lump sum contracts (eff. 10/1/13) Other recent law changes – articles to be published Other recent law changes – articles to be published 60

61 2013 & 2014 Sales and Use Tax Law Changes Exemption certificate received after sales tax paid Exemption certificate received after sales tax paid Effective July 2, 2013 Effective July 2, 2013 Retailer receiving fully completed exemption certificate from purchaser after reporting sale as taxable may claim deduction on sales tax return for items covered by exemption certificate Retailer receiving fully completed exemption certificate from purchaser after reporting sale as taxable may claim deduction on sales tax return for items covered by exemption certificate Previously had to file amended return Previously had to file amended return 61

62 2013 & 2014 Sales and Use Tax Law Changes Exemption certificate deduction - cont’d Exemption certificate deduction - cont’d Requirements: Requirements: Retailer paid tax to DOR Retailer paid tax to DOR Exemption certificate received by retailer in same taxable year as sale covered by exemption certificate, and Exemption certificate received by retailer in same taxable year as sale covered by exemption certificate, and Retailer returned tax to buyer Retailer returned tax to buyer 62

63 2013 & 2014 Sales and Use Tax Law Changes Exemption certificate deduction - cont’d Exemption certificate deduction - cont’d The deduction is claimed on return filed for period in which retailer receives exemption certificate. The deduction is claimed on return filed for period in which retailer receives exemption certificate. May result in negative “taxable sales” on sales tax return May result in negative “taxable sales” on sales tax return 63

64 2013 & 2014 Sales and Use Tax Law Changes Sales/Use Filing Frequency Changes Sales/Use Filing Frequency Changes Tax years beginning on or after January 1, 2014 Tax years beginning on or after January 1, 2014 Monthly – tax due in calendar quarter is more than $1,200 (previously $600) Monthly – tax due in calendar quarter is more than $1,200 (previously $600) Quarterly – tax due annually more than $600 but less than $1,200 quarterly Quarterly – tax due annually more than $600 but less than $1,200 quarterly Annual – tax due $600 or less annually (rule change pending) Annual – tax due $600 or less annually (rule change pending) 64

65 2013 & 2014 Sales and Use Tax Law Changes Sales/Use Filing Frequency Changes Sales/Use Filing Frequency Changes Letters notifying affected taxpayers went out in November Letters notifying affected taxpayers went out in November Taxpayers can elect to keep more frequent filing frequency through My Tax Account after receiving letter Taxpayers can elect to keep more frequent filing frequency through My Tax Account after receiving letter 65

66 2013 & 2014 Sales and Use Tax Law Updates Take and bake pizza (March Sales and Use Tax Report) Take and bake pizza (March Sales and Use Tax Report) Motor vehicles sales by Wisconsin retailers that hold a Wisconsin seller's permit Motor vehicles sales by Wisconsin retailers that hold a Wisconsin seller's permit No exemption for nonresidents for non- motorized campers No exemption for nonresidents for non- motorized campers Revenue from federal law to reduce Wisconsin individual income tax Revenue from federal law to reduce Wisconsin individual income tax 66

67 Miscellaneous and Resources 67

68 Refund Interest Reduction All DOR-paid refund interest amounts shifted from 9% to 3% on July 2, 2013, regardless of tax type, filing date or taxable period All DOR-paid refund interest amounts shifted from 9% to 3% on July 2, 2013, regardless of tax type, filing date or taxable period 12% interest rate on assessments (18% if delinquent) is unchanged 12% interest rate on assessments (18% if delinquent) is unchanged 68

69 My Tax Account (MTA) MTA is an online filing and payment system that allows you to: File and amend returns File and amend returns Make payments Make payments Receive payment and return confirmations Receive payment and return confirmations Monitor your business tax accounts at any time Monitor your business tax accounts at any time 69

70 My Tax Account Webinars Watch for announcements on: Watch for announcements on: Regular monthly MTA webinars for new businesses Regular monthly MTA webinars for new businesses Webinars for persons with third-party access Webinars for persons with third-party access 70

71 71 Delinquent Tax Issues File Returns Even if Tax Can’t Be Paid File Returns Even if Tax Can’t Be Paid My Tax Account can be used to file past due returns My Tax Account can be used to file past due returns

72 Sales and Use Tax Resources Keep on top of changes! Go to DOR web site at Sales and Use Tax Reports (quarterly) Sales and Use Tax Reports (quarterly) Wisconsin Tax Bulletins Wisconsin Tax Bulletins Publications Publications Publication 201 for general sales and use tax info Publication 201 for general sales and use tax info 72

73 73 DOR Resources Electronic Mailing Lists List Servs List Servs Sales & Use Tax Sales & Use Tax Tax Professionals Tax Professionals Wisconsin Economic Outlook Wisconsin Economic Outlook Withholding Tax Withholding Tax Subscribe at: Subscribe at:

74 74 DOR Resources Practitioner Assistance Phone: Phone: **Do Not Share This Information**

75 75 DOR Resources Speaker Information David Steines


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