January 21, 2020
To: Municipal Clerks
Since 2019 Wis. Act 10 was signed into law and took effect on January 1, 2020, the Wisconsin Department of Revenue (DOR) has received many questions on how the Act affects municipal room taxes. This message provides information to help answer questions you may receive from businesses, property owners, or marketplaces that sell or facilitate lodging sales in your municipality.
The Act created sec. 66.0615(1m)(g), Wis. Stats., that provides the general sales tax provisions in secs. 77.52 (3m) and 77.523, Wis. Stats., relating to marketplace providers (marketplaces) and marketplace sellers (sellers), apply to municipal room taxes. Under this state law, marketplaces facilitating lodging sales on behalf of sellers must collect municipal room taxes and send these taxes to municipalities in Wisconsin. Marketplaces must collect municipal room taxes regardless of the property type where the lodging occurs (hotels or residential dwellings).
The law also provides that, effective January 1, 2020, sellers are no longer liable for municipal room taxes on sales facilitated by a marketplace, even if the marketplace does not collect the tax. Only the marketplace may be audited and held liable for the tax on the sale (sec. 77.523, Wis. Stats.). As a result, a seller is liable only for municipal room taxes on sales not made through a marketplace.
In November 2019, DOR sent informational letters to known marketplaces asking them to contact each Wisconsin municipality where they sell lodging to determine if additional registration is required, the applicable room tax rate, and how to file and pay the room taxes.
For more information, see our web page Marketplace Providers and Sellers.
If you have questions, contact us at DORSalesandUse@wisconsin.gov or 608-266-2776.