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Wisconsin Department of Revenue

 Manufacturing Assessment

  1. What are the advantages of being classified manufacturing for property tax purposes?
  2. How do I go about getting my business classified manufacturing for property tax purposes?
  3. Are there differences between property tax law and sales and use tax law regarding manufacturing classification?
  4. What kind of manufacturing machinery and equipment is considered exempt?
  5. What manufacturing property is taxable?
  1. What are the advantages of being classified manufacturing for property tax purposes?

    Machinery and equipment (M and E) used in the production process is exempt from property taxes.

  2. How do I go about getting my business classified manufacturing for property tax purposes?

    A business must contact the Department in writing by March 1 of the assessment year. The Department does not grant retroactive exemptions for taxes paid in prior years.

  3. Are there differences between property tax law and sales and use tax law regarding manufacturing classification?

    Property tax law uses the Standard Industrial Classification (SIC) Manual printed by the federal government as a basis for classification. For the most part, businesses categorized in the SIC Manual as manufacturing qualify as manufacturing for property tax purposes. Sales and use tax law does not emphasize the SIC Manual definitions.

  4. What kind of manufacturing machinery and equipment is considered exempt?

    The exempt production process starts with the conveyance of raw material to the production line. Equipment used to move the raw material is exempt. The production process ends with conveyance of the finished product to storage. Exempt M and E includes the following equipment:

    repair parts and replacement machines; machine foundations and power wiring to M and E; motors,compressors and computers that power or operate M and E; and equipment used in quality control of the manufactured product. M and E used for both taxable and exempt functions must have 95% use in the exempt function to qualify.

  5. What manufacturing property is taxable?

    A manufacturer's land, buildings, office furniture and fixtures, office equipment such as photocopiers and supplies used for the office and factory are taxable. Beginning with the 1999 assessment, Section 70.11(39), Wis. Stats. exempts computers, software and electronic peripheral equipment from personal property taxation. Activities of a manufacturer that are taxable include the following:

    storage; machine repair and maintenance; research and development; plant communication; providing electricity for any purpose (except power wiring); equipment used to check specifications of raw material; maintenance of buildings and grounds; providing hot water or steam for heat, power or manufacturing; and providing gas for lighting or fuel. M and E used for both taxable and exempt activities is taxable if more than 5% of the use is in the taxable function.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Division of State & Local Finance
Bureau of Property Tax
Manufacturing and Utility Section
William Wardwell, Chief
Mail Stop 6-97
P.O. Box 8971
Madison, WI 53708-8971
Phone: (608) 266-3845
Fax: (608) 264-6897
E-Mail Additional Questions

Last updated December 18, 2006