I 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 retailer's sales price of a new motor vehicle before subtracting the amount of a manufacturer's rebate.
How are contractors taxed on materials, labor and supplies?
The tax treatment of the work performed by contractors depends on whether the contractor is acting as a retailer or acting as a consumer.
When the contractor is acting as a consumer, no seller's permit is required. The contractor is a consumer when constructing, installing, repairing or servicing real property (e.g., installing windows, painting a house, installing a furnace). As a consumer, the contractor pays tax on materials purchased and used in performing the real property activity. The contractor's charge to the customer is not subject to tax.
When the contractor is acting as a retailer, a seller's permit is required. A contractor is a retailer when selling, installing, repairing or servicing tangible personal property (e.g., repairing a furnace) or providing a taxable service (e.g., landscaping).
A contractor must pay sales or use tax on all tools and equipment used in any construction, installation, repair, or service activity.
Sales and Use Tax Information for Contractors, contains additional information to help distinguish between real and personal property activities.
What food is taxable and what is exempt?
In general, the sale of food for human consumption is exempt, with the following exceptions as defined in sec. Tax
11.51(3), Wis. Adm. Code:
- Dietary supplements
- Prepared food
- Soft drinks
Note: Sales of alcoholic beverages are taxable. Alcoholic beverages are not considered "food" for purposes of Wisconsin sales tax laws. For further information see:
11.51(1), Wis. Adm. Code - Definition of "food and food ingredients."
11.51(2), Wis. Adm. Code - Examples of taxable and exempt "food and food ingredients."
11.87, Wis. Adm. Code - Examples relating to sales of food and food ingredients.
As a retailer, am I required to collect sales or use tax on sales made over the internet and shipped to Wisconsin addresses?
Wisconsin retailers must collect sales or use tax on sales made over the internet and shipped to Wisconsin addresses. The Internet Tax Freedom Act, originally enacted in October 1998, does not prohibit Wisconsin from taxing sales over the internet. There is no exemption for merely making sales over the internet, except where the sale occurs (i.e., is sourced to a location) outside of Wisconsin.
Prior to October 1, 2018 - Remote sellers must collect sales or use tax on sales made over the internet and shipped to Wisconsin addresses if they are 1) registered to collect Wisconsin sales or use tax, or 2)
engaged in business in Wisconsin (e.g., have a physical presence in Wisconsin).
October 1, 2018 and thereafter - Wisconsin requires remote sellers to collect and remit sales or use tax on sales of taxable products and services in Wisconsin. New standards for administering sales tax laws on remote sellers have been developed by rule. The rule is consistent with the Court's decision in
Wayfair, which approved a small seller exception for sellers who do not have annual sales of products and services into the state of (1) more than $100,000, or (2) 200 or more separate transactions. Effective December 16, 2018, Wisconsin sales and use tax statutes were amended (2017 Wis. Act 368) to provide the small seller exception by law, consistent with the Court's decision in
Wayfair and the rule.
Note: The small seller exception does not apply to sellers with a physical presence in Wisconsin.
For additional information, see the department's web page for
Remote Sellers –
Are transportation charges subject to sales tax?
When a retailer sells taxable products or taxable services, the retailer's total charge, including its charge for delivery, is taxable. This is the case whether delivery is made by the seller's vehicle, a common or contract carrier, or the United States Postal Service.
Exception: The sales price of direct mail does not include separately stated delivery charges. For further information, see
A Wisconsin purchaser who purchases taxable goods without tax for use in Wisconsin is subject to use tax based on the "purchase price" of the goods. "Purchase price" includes transportation or delivery charges paid by the Wisconsin purchaser to the seller for the shipment of taxable goods to the purchaser. "Purchase price" does not include transportation or delivery charges paid by the Wisconsin purchaser to a carrier which is independent of the seller.
Is a seller that drop ships product to a Wisconsin location liable for Wisconsin sales tax on that sale?
A manufacturer or other seller may accept an exemption certificate claiming resale from an out-of-state purchaser, even when the manufacturer or other seller is directed to ship the product to a consumer in Wisconsin and the out-of-state purchaser does not have a Wisconsin seller's permit or Wisconsin use tax registration certificate.
If the manufacturer or other seller does not receive an exemption certificate from the out-of-state purchaser, the manufacturer or seller is liable for Wisconsin sales or use tax on its sales shipped to Wisconsin locations.