Municipal Treasurers Association of Wisconsin Wisconsin Sales Tax Requirements Thursday, April 21, 2016

Introduction Russ Bredeson Russ Bredeson Field Auditor – WI Department of Revenue Field Auditor – WI Department of Revenue 2

Discussion Topics Sales and use tax law Sales and use tax law Construction for a governmental unit Construction for a governmental unit Occasional sale exemption Occasional sale exemption Sales by Wisconsin governmental units Sales by Wisconsin governmental units Special situations Special situations Purchases by governmental units Purchases by governmental units References References 3

Sales and Use Tax Law

Sales Tax: Sales Tax: –5% tax imposed on the sales price of taxable sales, leases, licenses, and rentals in Wisconsin Use Tax: Use Tax: –5% tax imposed on the purchase price of taxable sales, leases, licenses, and rentals that are stored, used, or consumed in Wisconsin upon which a Wisconsin sales or use tax has not previously been paid 5

Sales and Use Tax Law Sales Price and Purchase Price Sales Price and Purchase Price –Total consideration with no deduction for:  Seller’s cost of property  Cost of materials used, labor or service cost, transportation to seller  All taxes imposed on the seller  Services necessary to complete the sale  Delivery charges (allocation allowed)  Installation charges 6

Sales and Use Tax Law Sales Price and Purchase Price –Does not include:  Discounts and coupons not reimbursed by 3 rd parties  Separately stated interest and financing charges  Separately stated taxes legally imposed directly on the purchaser  Separately stated delivery charges for direct mail 7

Sales and Use Tax Law Why is use tax necessary? Wisconsin retailers could be at a competitive disadvantage if WI persons could purchase taxable tangible personal property or taxable services from sources outside WI without paying sales tax. 8

Sales and Use Tax Law Wisconsin governmental units are exempt from Wisconsin sales and use tax on all purchases. Other states’ governmental units are not exempt. 9

Sales and Use Tax Law 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% Premier resort area tax - 0.5% or 1.0% Premier resort area tax - 0.5% or 1.0% 10

Sales and Use Tax Law What sales are subject to sales tax? Tangible personal property Tangible personal property Certain coins or stamps Certain coins or stamps Certain leased tangible personal property affixed to real property Certain leased tangible personal property affixed to real property Certain digital goods (Publication 240) Certain digital goods (Publication 240) Specified services Specified services 11

ANY QUESTIONS ????????

Construction for Governmental Unit

14 Construction Contractors Special Situations Contracts with Exempt Entities Contracts with Exempt Entities Real property jobs Real property jobs –Contractor still pays tax on its purchase of materials –Unless the exempt entity purchases the materials directly from supplier

15 Construction Contractors Special Situations Contracts with Exempt Entities Contracts with Exempt Entities Real Property Jobs Real Property Jobs –Exempt Entity purchases materials only from third party supplier Contractor can coordinate, but Contractor cannot be owner or former owner of materialsContractor can coordinate, but Contractor cannot be owner or former owner of materials –Exempt Entity must make payment to third-party supplier

16 Construction Contractors Special Situations Contracts with Exempt Entities Contracts with Exempt Entities Real Property Jobs Real Property Jobs –Contractor cannot sell materials to the exempt entity and then install them –Contractor can use two separate legal entities (not disregarded); one sells and the other installs

17 Construction Contractors Special Situations Contracts with Exempt Entities Contracts with Exempt Entities Personal Property Jobs Personal Property Jobs –Contractor does not charge sales tax (if exemption certificate is obtained) –Contractor purchases materials transferred to exempt entity without tax

18 Construction Contractors Special Situations New Law: Contracts with Exempt Entities sec (9m), Wis. Stats. (As of January 1, 2016) New Law: Contracts with Exempt Entities sec (9m), Wis. Stats. (As of January 1, 2016) Sales & use tax exemption created for the sale of building materials sold to a construction contractor who, in fulfillment of a real property construction activity, transfers the building materials to exempt entities described on next slides, if the building materials become part of a facility in WI owned by the exempt entity. Sales & use tax exemption created for the sale of building materials sold to a construction contractor who, in fulfillment of a real property construction activity, transfers the building materials to exempt entities described on next slides, if the building materials become part of a facility in WI owned by the exempt entity.

19 New Law: Contracts with Exempt Entities (As of January 1, 2016) In order for the exemption to apply, the following criteria must be met: In order for the exemption to apply, the following criteria must be met: 1. The construction must be for a qualifying exempt entity; 2. The property must become part of a facility in WI that is owned by the exempt entity; and 3. The property must be transferred to the qualifying exempt entity.

20 New Law: Contracts with Exempt Entities (As of January 1, 2016) A Qualifying Exempt Entity is: A Qualifying Exempt Entity is: 1.Any county, city, village, town within Wisconsin 2.Any public school district within Wisconsin 3.A county-city hospital established under sec , Wis. Stats. 4.A sewerage commission organized under sec (4), Wis. Stats., or 5.A metropolitan sewerage district organized under secs to or to Wis. Stats. 6.Any joint local water authority created under sec , Wis. Stats.

21 New Law: Contracts with Exempt Entities (As of January 1, 2016) A Qualifying Exempt Entity is (Cont.): A Qualifying Exempt Entity is (Cont.): 7.Any nonprofit organization that holds a WI Certificate of Exempt Status (CES) number* 8.A non-Wisconsin nonprofit organization if it is organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, (except hospital service insurance corporations) and no part of the net income inures to the benefit of any private stockholder, shareholder, member or corporation

22 New Law: Contracts with Exempt Entities (As of January 1, 2016) A Qualifying Exempt Entity is (Cont.): A Qualifying Exempt Entity is (Cont.): * A qualifying non-Wisconsin nonprofit organization is not required to obtain a Wisconsin CES number to be a qualifying exempt entity.

23 New Law: Contracts with Exempt Entities (As of January 1, 2016) –REMINDER: –A contractor's purchase of building materials used in a construction activity for any federally recognized American Indian tribe or band within WI is also exempt from sales & use tax if the following conditions are met: 1.Activity occurs on the tribal reservation; and 2.The construction project will benefit the Tribe.

24 New Law: Contracts with Exempt Entities (As of January 1, 2016) –CAUTION!!! Not all nonprofit organizations that are exempt from federal income & franchise taxes are qualifying exempt entities for this exemption. Not all nonprofit organizations that are exempt from federal income & franchise taxes are qualifying exempt entities for this exemption.

25 New Law: Contracts with Exempt Entities (As of January 1, 2016) –CAUTION!!! Examples of non-qualifying entities: Examples of non-qualifying entities: Chambers of Commerce Chambers of Commerce Volunteer Fire Departments Volunteer Fire Departments Professional Organizations Professional Organizations Labor Organizations Labor Organizations Contractor should request the WI nonprofit organization's CES number and retain this number in its records to verify that the organization is a qualifying exempt entity. Contractor should request the WI nonprofit organization's CES number and retain this number in its records to verify that the organization is a qualifying exempt entity.

26 New Law: Contracts with Exempt Entities (As of January 1, 2016) –CAUTION!!! This exemption also does not apply to facilities constructed for the following entities, even if the entity holds a WI CES number: This exemption also does not apply to facilities constructed for the following entities, even if the entity holds a WI CES number: A non-WI county, city, village or town A non-WI county, city, village or town A non-WI public school district A non-WI public school district A public college, university or technical college (WI or non- WI) A public college, university or technical college (WI or non- WI) A federal governmental unit A federal governmental unit A WI nonprofit organization that does not hold a WI CES number A WI nonprofit organization that does not hold a WI CES number Individual Native American Tribe members Individual Native American Tribe members

27 New Law: Contracts with Exempt Entities (As of January 1, 2016) What is a "Facility"? What is a "Facility"? Building or Shelter Building or Shelter Parking Lot or Parking Garage Parking Lot or Parking Garage Athletic Field or Athletic Park Athletic Field or Athletic Park Storm Sewer, Water Supply System, or Sewerage & Waste Water Treatment Facility Storm Sewer, Water Supply System, or Sewerage & Waste Water Treatment Facility

28 New Law: Contracts with Exempt Entities (As of January 1, 2016) What is NOT a "Facility"? What is NOT a "Facility"? Highway, Street, or Road Highway, Street, or Road

29 New Law: Contracts with Exempt Entities (As of January 1, 2016) The property must be transferred to the qualifying exempt entity. The property must be transferred to the qualifying exempt entity. –- Property must become part of a facility located in Wisconsin owned by a qualifying exempt entity.

30 New Law: Contracts with Exempt Entities (As of January 1, 2016) How to Claim the Exemption How to Claim the Exemption -Contractor must provide a fully completed exemption certificate to the seller. -Check: "Other Purchases Exempted by Law" -Enter: "Exempt Under sec (9m) Wis. Stats."

31 New Law: Contracts with Exempt Entities (As of January 1, 2016) Documentation to Retain: Documentation to Retain: -Retailers: -Obtain fully completed exemption certificate within 90 days of the sale. -Contractors: -Request & document WI CES# or 501C(3) determination letter -Maintain contracts & invoices showing work was for this qualifying exempt entity and location of property

32 New Law: Contracts with Exempt Entities (As of January 1, 2016) –Subcontractors The same treatment applies to subcontractors as it does to contractors. The same treatment applies to subcontractors as it does to contractors. However, a subcontractor may not have a contract indicating the real property construction activity is for the qualifying exempt entity. However, a subcontractor may not have a contract indicating the real property construction activity is for the qualifying exempt entity.

33 New Law: Contracts with Exempt Entities (As of January 1, 2016) –Subcontractors (Cont.) Documentation: Documentation: Identify the WI location of real property construction activity Identify the WI location of real property construction activity On bill of sale or invoice to general contractor On bill of sale or invoice to general contractor Verify that the property became part of a facility in WI owned by a qualifying exempt entity Verify that the property became part of a facility in WI owned by a qualifying exempt entity Document CES # on invoice Document CES # on invoice

34 New Law: Contracts with Exempt Entities (As of January 1, 2016) Transitional Provisions: Transitional Provisions: This law applies to contracts entered into on January 1, 2016 and thereafter. This law applies to contracts entered into on January 1, 2016 and thereafter. The exemption does not apply if the contractor purchases property after January 1, 2016 for a contract that was entered into prior to January 1, The exemption does not apply if the contractor purchases property after January 1, 2016 for a contract that was entered into prior to January 1, 2016.

35 New Law: Contracts with Exempt Entities (As of January 1, 2016) Transitional Provisions (cont.): Transitional Provisions (cont.): A change order to a contract amends the original contract, but does not nullify the original contract or change the date that the contract was entered into. A change order to a contract amends the original contract, but does not nullify the original contract or change the date that the contract was entered into. Therefore, if a contract between the contractor and the exempt entity was irrevocably entered into prior to January 1, 2016, the exemption does not apply to property purchased to fulfill the contract. Therefore, if a contract between the contractor and the exempt entity was irrevocably entered into prior to January 1, 2016, the exemption does not apply to property purchased to fulfill the contract.

36 New Law: Contracts with Exempt Entities (As of January 1, 2016) Transitional Provisions (cont.): Transitional Provisions (cont.): If a contract was not irrevocable and the original contract is cancelled and a new contract is entered into on January 1, 2016 or thereafter, the property used to fulfill the new contract may qualify for the exemption. If a contract was not irrevocable and the original contract is cancelled and a new contract is entered into on January 1, 2016 or thereafter, the property used to fulfill the new contract may qualify for the exemption.

Occasional Sale Exemption

3 standards must be met: 1.Organization is not engaged in a “trade or business,” 2.Entertainment is not involved 3.Organization does not have or is not required to hold a sellers permit –except for conducting bingo events 38

Occasional Sale Exemption 1) A nonprofit organization is considered to be engaged in a “trade or business” if: Sales of otherwise taxable tangible personal property or services or its events occur on more than 20 days during the calendar year AND Sales of otherwise taxable tangible personal property or services or its events occur on more than 20 days during the calendar year AND Its receipts for the calendar year exceed $25,000 Its receipts for the calendar year exceed $25,000 Receipts means gross receipts from all sales in Wisconsin of otherwise taxable tangible personal property and taxable services after subtracting allowable exemptions Receipts means gross receipts from all sales in Wisconsin of otherwise taxable tangible personal property and taxable services after subtracting allowable exemptions Both standards must be exceeded before a nonprofit organization is considered to be engaged in a trade or business Both standards must be exceeded before a nonprofit organization is considered to be engaged in a trade or business 39

Occasional Sale Exemption 2) Entertainment is not involved at an event for which charges constitute admissions –“entertainment” means entertainment provided at an admission event by all persons or groups who are paid more than $500 per event by all persons performing, for reimbursement of expense, or prize money 40

Occasional Sale Exemption Entertainment example: Four different bands are paid $200 each to perform at various times during a 3-day event Four different bands are paid $200 each to perform at various times during a 3-day event There is an admission charge for access to the event There is an admission charge for access to the event Since the total payment for entertainment ($800) exceeds $500, entertainment is deemed to be involved Since the total payment for entertainment ($800) exceeds $500, entertainment is deemed to be involved As a result, receipts from the event are taxable. As a result, receipts from the event are taxable. 41

Occasional Sale Exemption 2) Entertainment is not involved at an event for which charges constitute admissions (cont.): Exception: a nonprofit that would otherwise qualify for exempt occasional sales, except for the involvement of entertainment, may do the following: Exception: a nonprofit that would otherwise qualify for exempt occasional sales, except for the involvement of entertainment, may do the following: –Obtain a seller’s permit for the day or days of the event involving entertainment, –Pay the sales tax on the sales of tpp and taxable services on these days, and –Request inactivation of the seller’s permit after the event by contacting DOR CAUTION!!!! CAUTION!!!! 42

Occasional Sale Exemption 3)The organization does not have and is not required to hold a seller’s permit –A nonprofit organization is not required to hold a seller’s permit if its sales are exempt from sales and use tax (i.e., it meets standards 1 and 2) 43

ANY QUESTIONS ????????

Special Situations – Admissions

Special Situations – Taxable Admissions Taxable Admissions – access to events, places, and facilities Taxable Admissions – access to events, places, and facilities –Admissions to amusement, entertainment, athletic, or recreational activities –Season tickets for amusement, athletic, entertainment, or recreational activities –Boat launch fees –Entry fees for individuals and teams for participation in leagues for sports activities – with exemption –Camping permits or identification cards permitting admission to amusement, entertainment, athletic, or recreational facilities 46

Special Situations – Nontaxable Admissions Nontaxable admissions : Nontaxable admissions :  Fees for instruction  Admissions to museums of history, art, or science  Admissions to county fairs  Youth sports league entry fees where more than 50% of the participants are 19 years or younger 47

Special Situations – Multipurpose Facility Rentals

Taxable admissions includes fees or admission charges to permit access to multipurpose facilities, such as: Taxable admissions includes fees or admission charges to permit access to multipurpose facilities, such as: –Parks –Pavilions –Athletic fields –Gymnasiums –Auditoriums 49

Special Situations – Multipurpose Facility Rentals The following are exceptions to the taxable multipurpose facility rentals: The following are exceptions to the taxable multipurpose facility rentals: –The organization paying for the facility use is an exempt entity (e.g., a church) –The person renting the facility will sell an admission to the event (i.e., resale) –The person uses the facility for a non-recreational type of event 50

Special Situations – Multipurpose Facility Rentals Resale exception: Resale exception: –The charge for the facility rental is not taxable if the facility is rented and the renter will: 1.Convert it to a place of recreation, amusement, or entertainment AND 2.Sell admissions to the public Records to keep: The governmental unit must obtain an exemption certificate claiming resale from the person renting the facility to verify the charge is exempt from tax Records to keep: The governmental unit must obtain an exemption certificate claiming resale from the person renting the facility to verify the charge is exempt from tax 51

Special Situations – Multipurpose Facility Rentals Resale examples (assuming conditions 1 and 2 are met), the following receipts would not be taxable: Resale examples (assuming conditions 1 and 2 are met), the following receipts would not be taxable: –A city’s arena is rented on a daily basis to a professional basketball team or the operator of an ice show –A dance hall or ballroom is rented to a popular band for the night –A field is rented by a promoter of a rock fest 52

Special Situations – Multipurpose Facility Rentals Non-recreational types of events: Non-recreational types of events: –The charge for the facility is not taxable when the facility is rented to someone who will conduct an event that is not recreational in nature Records to keep: the governmental unit should keep records showing the amount it received for this purpose and the name and address of the person or organization who paid for the use of the facility Records to keep: the governmental unit should keep records showing the amount it received for this purpose and the name and address of the person or organization who paid for the use of the facility 53

Special Situations – Multipurpose Facility Rentals Non-recreational examples: Non-recreational examples: –A county rents a coliseum to a corporation for a training seminar –A city rents a pavilion to an individual for dance lessons –A city rents a facility for an athletic banquet 54

Special Situations – Multipurpose Facility Rentals + Property or services Property included in facility rental fee: Property included in facility rental fee: –If there is not an additional charge for the property and does not give a reduction in the fee if the customer does not use the included property, the charge for the property is considered part of the rental fee  If the rental fee is taxable, the entire charge, including the any charge for the property is taxable 55

Special Situations – Multipurpose Facility Rentals + Property or services Property rental is optional: Property rental is optional: –If the charge for the property is optional to the customer, the rental is a separate sale from the rental of the facility  The charge for the rental of the other property is taxable 56

Special Situations – Multipurpose Facility Rentals + Property or services Rental of property that is affixed to realty (e.g., stove or dishwasher): Rental of property that is affixed to realty (e.g., stove or dishwasher): –Charges for affixed property that is optional to the customer or the customer may rent the facility without the affixed property for a lower amount, are not subject to tax  This assumes the governmental unit owns both the facility and the affixed property 57

Special Situations – Multipurpose Facility Rentals + Property or services Cleaning fees: Cleaning fees: –If the cleaning fee is mandatory, the fee is part of the rental fee –Taxability follows the facility rental 58

Sales by Governmental Units

Taxable Sales by Governmental Units Tangible personal property: sale, license, lease, or rental: Tangible personal property: sale, license, lease, or rental: –Clothing –Equipment –Landscaping materials 60

Taxable Sales by Governmental Units Tangible personal property: sale, license, lease, or rental: Tangible personal property: sale, license, lease, or rental: –Motor vehicles and similar property  Now have the requirement to charge sales tax on sales of motor vehicles and similar property –Printed material –Utilities –Miscellaneous 61

62 Taxable Sales by Governmental Units Responsibility to collect tax: –Sales of motor vehicles, boats, snowmobiles, recreational vehicles, trailers, semi-trailers, ATV’s, and aircraft –If purchased from a “retailer” - pay tax to the retailer –If not purchased from a “retailer” – pay tax when registering or titling –Provide invoice showing tax to the purchaser

Taxable Sales by Governmental Units Digital Goods: Digital Goods: –Includes products that have been transferred as tangible personal property but are now transferred electronically –May be transferred by:  Uploading using the internet  Streaming over the internet  ing to the purchaser 63

Taxable Sales by Governmental Units Taxable digital goods include: Taxable digital goods include: –“Specified Digital Goods” –“Digital Codes” –“Additional Digital Goods” 64

Taxable Sales by Governmental Units “Specified Digital Goods” include: “Specified Digital Goods” include: –Digital audio works  Recorded or live songs  Recorded or live book readings –Digital audiovisual works  Movies  Musical videos –Digital books  Novels or autobiographies  Cookbooks  Repair manuals 65

Taxable Sales by Governmental Units “Digital code” means a code that provides the person who holds the code a right to obtain an additional digital good, a digital audiovisual work, digital audio work, or digital book and that may be obtained by any means, including tangible forms and electronic mail “Digital code” means a code that provides the person who holds the code a right to obtain an additional digital good, a digital audiovisual work, digital audio work, or digital book and that may be obtained by any means, including tangible forms and electronic mail –A code purchased and used to download a certain number of songs –A code purchased and used to view a movie online 66

Taxable Sales by Governmental Units “Additional digital good” includes all of the following if transferred electronically: “Additional digital good” includes all of the following if transferred electronically: –Greeting cards –Finished artwork –Periodicals –Video or electronic games –Newspapers or other news or information products 67

Taxable Sales by Governmental Units If tangible form was exempt or not subject to tax, digital form is also not subject to tax Example: Digital design for a brochure transferred electronically to the printer and brochures are destined for sale 68

Taxable Sales by Governmental Units Certain Services Certain Services –Cable TV and telecommunication  Police & Fire Protection Fee –Landscaping (Pub. 210) –Laundry –Lodging (Pub. 219) –Parking and Docking –Towing and hauling 69

Nontaxable Sales by Governmental Units Exemption certificate not required for: Exemption certificate not required for: –Fees and licenses –Out-of-state –Copies of Records –Storage –Utilities 70

Nontaxable Sales by Governmental Units Exemption certificate or other documentation required for : Exemption certificate or other documentation required for : –Sales for resale –Fuel sold for use in farming –Sales to nonprofit organizations –Sales to other Wisconsin governmental units, school districts or the federal government 71

72 Reminders Exemption Certificates Must get within 90 days of sale or before being contacted for audit Must get within 90 days of sale or before being contacted for audit No good faith requirement No good faith requirement Relieves seller of requirement collect tax unless: Relieves seller of requirement collect tax unless: –Seller fraudulently fails to collect –Solicits purchaser to claim unlawful exemption

73 Reminders Exemption Certificates Penalty for Misuse of Exemption Certificate or Direct Pay Permit Penalty for Misuse of Exemption Certificate or Direct Pay Permit –Provides incorrect exemption to seller –$250 for each invoice or bill of sale

Special Situations – Food and Food Ingredients

Special Situations Food & Food Ingredients Sales of food and food ingredients are exempt from sales and use tax, with the exception of: Sales of food and food ingredients are exempt from sales and use tax, with the exception of:  Candy  Soft drinks  Dietary Supplement  Prepared Food 75

Special Situations - Taxable Food & Food Ingredients What is “Candy?” What is “Candy?” –Preparation of sugar, honey, or other natural or artificial sweeteners –Combined with other ingredients or flavorings –In form of bars, drops, or pieces  Not “candy” if it contains flour or requires refrigeration 76

Special Situations - Taxable Food & Food Ingredients What is a “Soft Drink?” What is a “Soft Drink?” –Beverage that contains a sweetener –Alcohol content, if any, less than 0.5%  Not “soft drink” if it contains milk or milk products; soy, rice, or similar milk substitutes; or more than 50% vegetable or fruit juice 77

Special Situations - Taxable Food & Food Ingredients What is a “Dietary Supplement?” What is a “Dietary Supplement?” Must meet all of the following: 1.Contain vitamin, mineral, herb, botanical, amino acid or other dietary substance to supplement the diet. 2.Intended for ingestion in tablet, powder, capsule, gel-cap or if not in such forms, not represented as conventional food or intended to be sole item of a meal or diet. 3.Labeled as a dietary supplement (21 C.F.R ). 78

Supplemental Facts vs. Nutritional Facts Supplemental Facts vs. Nutritional Facts 79

Special Situations - Taxable Food & Food Ingredients “Prepared Food” includes any of the following: “Prepared Food” includes any of the following: –Food and food ingredients sold in a heated state –Food and food ingredients heated by the retailer – with exceptions –Two or more food ingredients mixed or combined by the retailer for sales as a single item – with exceptions –Food and food ingredients sold with eating utensils, such as napkins, plates, forks, straws, etc., that are provided by the retailer – with certain requirements 80

Special Situations - Taxable Food & Food Ingredients “Prepared Food” includes any of the following (cont.): “Prepared Food” includes any of the following (cont.): –Food and food ingredients sold in a heated state  Example: A concession stand sells a heated slice of pizza to a customer. The heated slice of pizza is a prepared food. 81

Special Situations - Taxable Food & Food Ingredients “Prepared Food” includes any of the following (cont.): “Prepared Food” includes any of the following (cont.): –Food and food ingredients heated by the retailer – with exceptions  Example: A concession stand pops popcorn and then sells the unheated popcorn to a customer. The popcorn that was heated by the retailer is prepared food. 82

Special Situations - Taxable Food & Food Ingredients “Prepared Food” includes any of the following (cont.): “Prepared Food” includes any of the following (cont.): –Two or more food ingredients mixed or combined by the retailer for sales as a single item – with exceptions  Example: A concession stand prepares and sells a cold sandwich to the customer. The sandwich is prepared by spreading mayonnaise on two slices of bread and putting meat, cheese, and lettuce between the two slices of bread. The sandwich that was prepared by the retailer is prepared food. 83

Special Situations - Taxable Food & Food Ingredients “Prepared Food” includes any of the following (cont.): “Prepared Food” includes any of the following (cont.): –Food and food ingredients sold with eating utensils, such as napkins, plates, forks, straws, etc., that are provided by the retailer – with certain requirements  Example: A concession stand sells a cup of ice cream to its customer. The concession stand worker hands the customer the cup of ice cream and a spoon. The ice cream is prepared food. 84

Special Situations - Taxable Food & Food Ingredients Alcoholic beverages Alcoholic beverages Other - donations and fund-raising Other - donations and fund-raising –When a charge to a customer for taxable food, food ingredients, and beverages bears little or no relation to the actual value of the taxable food, food ingredients, and beverages provided, the actual value of taxable food, food ingredients, and beverages provided are subject to tax 85

Special Situations - Nontaxable Food & Food Ingredients Sales by Institutions of Higher Education Sales by Institutions of Higher Education –NOTE: sales of alcoholic beverages are taxable Sales by Hospitals, Sanatoriums, Nursing Homes and Other Institutions Sales by Hospitals, Sanatoriums, Nursing Homes and Other Institutions –NOTE: sales of alcoholic beverages and soft drinks are taxable Mobile Meals on Wheels Mobile Meals on Wheels –NOTE: sales of alcoholic beverages and soft drinks are taxable 86

ANY QUESTIONS ????????

Purchases by Governmental Units

To claim an exemption, the governmental unit must give the seller one of the following : To claim an exemption, the governmental unit must give the seller one of the following : –Completed purchase order or similar document identifying the governmental unit as the purchaser –A fully completed exemption certificate (Form S- 211 or S-211-SST) –Certificate of Exempt Status (CES) number 89

Purchases by Governmental Units Purchases for welfare recipients Purchases for welfare recipients Employee purchases of Prepared Foods and Lodging Employee purchases of Prepared Foods and Lodging 90

Construction for a Governmental Unit General General –Tangible personal property vs. Real property Buying materials tax free Buying materials tax free –Supplier of materials cannot be the installer of the same materials 91

????????????????? ANY QUESTIONS

References DOR Website: DOR Website: –  Forms  Publications  Sales Tax Reports  Wisconsin Tax Bulletins  Frequently Asked Questions  ***Electronic Mailing List***  Tax News/Updates 93

References Sales and Use Tax Publications (not all inclusive) : Sales and Use Tax Publications (not all inclusive) : –Publication 206: Nonprofit Organizations –Publication 209: Counties & Municipalities –Publication 210: Landscaping –Publication 220: Grocers –Publication 240: Digital Goods –Publication 245: Schools Wisconsin Tax Bulletins (WTB) Wisconsin Tax Bulletins (WTB) Sales and Use Tax Reports Sales and Use Tax Reports 94

References Tax Law: Tax Law:  Wisconsin Statues  Wisconsin Administrative Code Electronic Mailing Lists Electronic Mailing Lists  SIGN-UP!!!!!! 

References Technical Assistance for sales and use tax Technical Assistance for sales and use tax –Write: P.O. Box 8902 Mail Stop 5-77 Madison, WI – –Telephone: (608)