Sellers Using Distribution Facilities in Wisconsin Are Liable for Wisconsin Tax on Their Sales

Businesses that sell products online, by mail order, or otherwise may contract with a distribution or fulfillment facility to store their products, ship their products to customers, and/or handle product returns. When the distribution or fulfillment facility is located in Wisconsin, sellers with products stored at the facility are engaged in business in Wisconsin. It does not matter that the sellers are located outside Wisconsin and do not have their own business location or employees in Wisconsin.

When a seller is engaged in business in Wisconsin, the seller is liable for Wisconsin sales or use tax on its sales of taxable products when the sales take place in Wisconsin (i.e., products are shipped to locations in Wisconsin). The seller is liable for tax on sales that take place in Wisconsin, regardless of whether a product is shipped from the Wisconsin facility or from another facility which may be located outside Wisconsin. In addition, the seller is liable without regard to whether the distribution or fulfillment facility lists the seller's products on its website and/or collects payments on behalf of the seller.

When a distribution or fulfillment facility is responsible for collecting payments from the seller's customers, the seller may request the distribution or fulfillment facility to collect the sales or use tax on the seller's behalf. In some cases, the distribution or fulfillment facility may also be liable for the tax, but this does not relieve the seller of its liability to remit the tax. When more than one party is liable for the tax, the liability for the tax is extinguished for both parties when either party remits the tax to the department.

Sellers may apply electronically for a Wisconsin seller's permit using the department's online Business Tax Registration application. A seller may also apply by completing Form BTR 101, Application for Business Tax Registration, and mailing their completed application to the Department of Revenue.

March 28, 2014