Reporting Sales Tax on Sales of Used Motor Vehicles, Boats, Snowmobiles, Recreational Vehicles, Trailers, Semitrailers, All-Terrain Vehicles, and Aircraft
Effective October 1, 2009, all retailers that are registered to collect and remit Wisconsin sales and use taxes must also collect and remit the applicable state, county, and/or stadium sales and use tax on its sales of the following items:
- Motor vehicles
- Boats
- Snowmobiles
- Recreational vehicles as defined in sec. 340.01(48r), Wis. Stats.
- Trailers
- Semitrailers
- All-terrain vehicles
- Aircraft
The requirement to collect and remit tax on these sales applies, even if the retailer is not a "dealer" or "registered dealer" of the item sold.
Who is a Retailer? A retailer, as used in this article, is a person who holds a Wisconsin seller's permit or use tax registration certificate issued by the Wisconsin Department of Revenue to collect and remit sales or use tax on taxable sales made by that person.
Retailer Should Provide Receipt: The retailer should sign the Certificate of Title and give this to the buyer along with a receipt showing the tax the retailer collected and will remit to the Wisconsin Department of Revenue. The buyer must provide the receipt when registering or titling the item to prove that the tax has been paid to the retailer. Without a receipt showing the tax paid to the retailer, the buyer will be required to pay the tax when registering or titling the item.
Reporting the Tax: The retailer should report the tax on the sales and use tax return that it files with the Wisconsin Department of Revenue.
Items Used Personally Rather Than in a Business: If an individual holds a seller's permit or use tax registration certificate and sells a motor vehicle, boat, snowmobile, recreational vehicle as defined in sec. 340.01(48r), Wis. Stats., trailer, semitrailer, all-terrain vehicle, or aircraft that was registered or titled or required to be registered or titled in this state that it did not use in its business, but which it used personally, the individual is not responsible to collect tax on the sale. Instead, the buyer must pay the applicable tax when registering or titling the item.
Example - Individual A operates a hardware store as a sole proprietor and is registered to collect and remit Wisconsin sales or use tax. Individual A sells his car to Individual B. Individual A did not use the car in his business. Since Individual A did not use the car in his business, Individual A is not required to collect Wisconsin state, county, and/or stadium sales or use tax on his sale of the motor vehicle. However, Individual B is required to report the applicable Wisconsin state, county, and/or stadium sales or use tax at the time Individual B registers or titles the motor vehicle.
When Do County and Stadium Taxes Apply? Whether or not a retailer is required to collect and remit county and stadium taxes depends on the type of item sold.
Motor vehicles, boats, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats., and aircraft: The retailer is required to collect and remit the county and/or stadium taxes in effect for the location where the item will be customarily kept. If the buyer will customarily keep the item outside Wisconsin, the retailer is not required to collect and remit county or stadium tax on the sale.
Example - Individual X purchases a boat from Retailer Y. Retailer Y is located in Dane County (i.e., a county that has adopted the 0.5% county sales and use tax). Individual X picks up the boat from Retailer Y's location in Dane County. Individual X will customarily keep the boat at his home in Milwaukee County (a county that has adopted the 0.5% county and 0.1% baseball stadium district sales and use tax). Retailer Y is
required to remit the 5% Wisconsin state tax, 0.5% Milwaukee County use tax and the 0.1% baseball stadium district tax on its sale of the boat to Individual X.
Note: If the purchaser of a motor vehicle, boat, recreational vehicle as defined in sec. 340.01(48r), Wis. Stats., or aircraft has not previously paid any county and/or stadium tax on the purchase price of the motor vehicle, boat, recreational vehicle, or aircraft and will customarily keep the item in a county and/or stadium district that has adopted the county and/or stadium district tax, the purchaser is liable for that county's and/or stadium district's tax.
Snowmobiles, trailers, semitrailers, and all-terrain vehicles: The retailer is required to collect and remit the county and/or stadium taxes in effect for the location where the buyer receives possession of the item. Additional information is provided in
Publication 201, Appendix I, on page 104.
Note: If the purchaser of a snowmobile, trailer, semitrailer, or all-terrain vehicle has not previously paid any county and/or stadium tax on the purchase price of the snowmobile, trailer, semitrailer, or all-terrain vehicle and subsequently stores, uses, or otherwise consumes the snowmobile, trailer, semitrailer, or all-terrain vehicle in a county and/or stadium district that has adopted the county and/or stadium taxes, the purchaser is liable for that county's and/or stadium district's tax. A retailer may collect the county and/or stadium district tax for the convenience of its customer.
Example - Individual A purchases a snowmobile from Retailer B located in Wisconsin for $5,000. Retailer B is located in Wisconsin in a county that has not adopted the county and/or stadium district tax. Individual A picks up the snowmobile at Retailer B's location and will bring the snowmobile back to Individual A's residence in Dane County. Retailer B is only
required to remit the 5% Wisconsin state tax ($250) on this transaction since the Wisconsin county in which Retailer B makes the sale has not adopted the county and/or stadium taxes. However, since Individual A will subsequently store, use or otherwise consume the snowmobile in Dane County, Individual A is required to remit the 0.5% Dane County use tax ($25) on the $5,000 purchase price of the snowmobile. Although Retailer B is
not required to collect the Dane County use tax in this example, Retailer B
may collect this tax for the convenience of Individual B.
Sales to Nonresidents: Sales of motor vehicles, aircraft, and truck bodies (including semitrailers) to nonresidents of Wisconsin who do not use such property other than to remove it from Wisconsin, are exempt from Wisconsin sales and use taxes. However, a retailer's sales of boats, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats., snowmobiles, trailers, and all-terrain vehicles to nonresidents of Wisconsin are subject to Wisconsin state, county, and/or stadium tax as described above.
Prior to October 1, 2009, a person who was not a "dealer" or "licensed dealer" was not required to collect and remit the applicable Wisconsin state, county, and/or stadium sales and/or use tax on their sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats., trailers, semitrailers, all-terrain vehicles, and aircraft, if the motor vehicle, boat, snowmobile, recreational vehicle as defined in sec. 340.01(48r), Wis. Stats., trailer, semitrailer, all-terrain vehicle, or aircraft was registered or titled or required to be registered or titled in this state.
October 27, 2011