Sales and Use Tax Treatment
- I have visited a car dealer recently and he told me that I am required to pay sales tax on the car manufacturer's rebate. Is that correct?
- How are contractors taxed on materials, labor and supplies?
- What food is taxable and what is exempt?
- As a retailer, am I required to collect sales tax on sales made over the Internet and shipped to Wisconsin addresses?
- Are transportation charges subject to sales tax?
- I have visited a car dealer recently and he told me that I am required to pay sales tax on the car manufacturer's rebate. Is that correct?
Yes. Wisconsin sales tax is computed on the price of a new motor vehicle prior to reduction for the amount of a manufacturer's rebate or other third party payments that apply toward the selling price of the new motor vehicle.
- How are contractors taxed on materials, labor and supplies?
A contractor may be deemed to be a retailer or may be deemed to be a consumer. The tax treatment of the work performed by contractors depends upon whether the contractor is acting as a retailer or acting as a consumer.
A contractor is a consumer when constructing, installing, repairing, or servicing real property such as buildings. As a consumer, the contractor must pay sales or use tax on materials and supplies used in such activities. A contractor may not charge sales tax on materials or supplies used in such work. However, a contractor's selling price may reflect all costs incurred.
A contractor is a retailer when selling, installing, repairing or servicing tangible personal property or performing landscaping services. When selling, installing, repairing, or servicing tangible personal property, or performing landscaping services, a contractor is liable for sales tax on all gross receipts from labor, material, and other charges for such sales or activities (unless an exemption applies to the customer). A contractor acting as a retailer that makes taxable sales is required to obtain a seller's permit. A contractor acting as a retailer may purchase the following property without tax, for resale: property sold or transferred to the customer in the installation, repair, or service of personal property and property that is transferred to the customer as part of performing landscaping services.
A contractor must pay sales or use tax on all tools and equipment used in any construction, installation, repair, or service activity.
Contractors should obtain Publication 207. Publication 207 contains additional information to help a contractor distinguish between real and personal property activities.
- What food is taxable and what is exempt?
Sales of food and beverages for consumption on the seller's premises are subject to Wisconsin sales tax.
Sales of food and beverages for consumption off the seller's premises are exempt from Wisconsin sales or use tax, except for sales of the following:
- Fermented malt beverages (e.g., beer) and intoxicating liquors
- Soda water beverages, soft drinks, fruit drinks, and ades that are not pure fruit juices
- Meals and sandwiches
- Heated food and heated beverages
- Soda fountain items such as sundaes, milk shakes, malts, ice cream cones, and sodas
- Candy, chewing gum, lozenges, popcorn, and confections
- Medicines, tonics, vitamins, and medicinal preparations in any form
For more information see Wisconsin Sales and Use Tax Information (Pub 201).
- As a retailer, am I required to collect sales tax on sales made over the Internet and shipped to Wisconsin addresses?
Wisconsin state and county sales and use tax is imposed on the sale of tangible personal property or taxable services in Wisconsin, including sales over the Internet, unless an exemption applies. The general provisions of the Wisconsin sales tax that apply to every other business, also apply to a business conducted over the Internet. The Internet Tax Freedom Act, enacted in October 1998, does not prohibit Wisconsin from taxing sales over the Internet. There is no exemption merely for making sales over the Internet, except where the customer takes possession of the goods outside Wisconsin.
If you make sales to persons in other states, who take possession of your product(s) in those other states (for example, you mail the product to an address outside Wisconsin), those sales are not taxable for Wisconsin because they are made in interstate commerce.
For more information see Wisconsin Sales and Use Tax Information (Pub 201).
- Are transportation charges subject to sales tax?
When a retailer sells tangible personal property or taxable services that are subject to tax and the retailer charges the purchaser for the delivery, the retailer's total charge, including the transportation charge, is taxable. It is immaterial whether delivery is made by the seller's vehicle, a common or contract carrier, or the United States Postal Service. Additional information relating to the taxability of transportation charges is contained in sec. Tax 11.94 Wis. Adm. Code, "Wisconsin sales and taxable transportation charges."
A Wisconsin purchaser who purchases taxable goods without tax for use in Wisconsin is subject to use tax based on the "sales price" of the goods to the purchaser. The "sales price" shall include transportation charges paid by the Wisconsin purchaser to the seller for the shipment of the goods to the purchaser. The "sales price" does not include transportation charges paid by the Wisconsin purchaser to a carrier which is independent from the seller when the PURCHASER ARRANGES FOR THE TRANSPORTATION and pays the transportation fees to that carrier.
FOR MORE INFORMATION PLEASE CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Customer Service and Education Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608)
261-6261
Fax: (608) 267-1030
E-Mail Additional Questions
Last updated January 23, 2009