"Remote deposit capture service," as used in this article, is the electronic capturing of a check image at a remote location for deposit into an account at a financial institution. Merchants using RDCS scan checks they receive at their location and then send the scanned images to the financial institution providing the RDCS, for posting and clearing.
The financial institution offering the service purchases equipment, such as a check scanner, and certain prewritten computer software that it provides to its customers that use the RDCS. The financial institution requires any customer that uses their RDCS to obtain the necessary equipment and software from them. In return for providing the equipment and software necessary to use the RDCS, the financial institution charges the customer a monthly fee for the use of the scanner, prewritten computer software, and system support, in addition to a per item charge for each check and a deposit charge for each deposit captured remotely.
The objective of the financial institution's customer is to obtain the RDCS and not to obtain the scanner and prewritten computer software that was provided by the financial institution. Therefore, the entire transaction is considered the sale of a nontaxable service and the scanner and prewritten computer software are furnished to the customer incidentally to the service.
The monthly charges by the financial institution for the use of the scanner, prewritten computer software, system support, per item check charge and per deposit charge are not subject to Wisconsin sales or use tax. However, the financial institution is required to pay Wisconsin sales or use tax on its purchases of the scanners and prewritten computer software it furnishes to its customers who are using the RDCS.
The charge by the financial institution to the customer for the use of the equipment and software is subject to Wisconsin sales or use tax if the charge is separate and optional from the RDCS. The financial institution may purchase the equipment and software without tax for resale.
February 21, 2012