Exemption for Fuel and Electricity Consumed in Manufacturing

  1. Our company consumes fuel and electricity in our manufacturing processes. What do we need to do in order to purchase our fuel and electricity without sales or use tax?

  2. Our company holds a direct pay permit issued by the Wisconsin Department of Revenue. Are we still required to furnish an exemption certificate to the seller in order to purchase fuel and electricity without tax?

  3. I am a manufacturer of tangible personal property in Wisconsin and some of my purchases of fuel and electricity qualify for the exemption from sales tax. I do not hold a direct pay permit. What happens if I do not furnish an exemption certificate to the seller?

  4. I paid sales tax in error to the seller on purchases of fuel and electricity consumed in manufacturing tangible personal property in Wisconsin. What should I do?

  5. How do I request a refund from the seller?

  6. How do I file a Buyers Claim for Refund?

  7. On the exemption certificate we previously furnished the electric utility, we claimed that 75% of the electricity billed for a specified meter is exempt as it is consumed in manufacturing tangible personal property in Wisconsin. Since that time, we have modified our manufacturing process and purchased new equipment. We now estimate that 65% of the total electricity billed for that meter is exempt. Do we need to do anything?

  8. Our company issued an exemption certificate to our supplier claiming that 85% of natural gas we purchased was consumed in manufacturing tangible personal property in Wisconsin. Later, we determined that 78% of the natural gas we purchased was actually used for the exempt purpose. The balance was used for taxable purposes. Do we need to do anything?

  9. Our company issued an exemption certificate to our supplier claiming that 80% of natural gas we purchase is consumed in manufacturing tangible personal property in Wisconsin. Later, we determined that 86% of the natural gas we purchased was actually used for exempt purposes. Can we obtain a refund of the sales and use taxes we paid on the additional 6% of natural gas purchases we determined to be exempt?

  10. We hold a direct pay permit and remitted use tax based on 65% of fuel purchased being consumed in the manufacture of tangible personal property in Wisconsin. Later, we determined that our exempt use of fuel purchased was 76%. Can we obtain a refund of the use tax we paid on the 11% of the fuel purchases we subsequently determined was used in an exempt manner?

  11. We are a seller of fuel and electricity. Since January 2006, we have received fully completed exemption certificates from various customers claiming the exemption for fuel and electricity consumed in manufacturing tangible personal property in Wisconsin. These exemption certificates are marked "continuous." Based on the exemption percentages claimed on the exemption certificates, we do not charge tax to these customers. At a later date, it is determined that all or a portion of the fuel and electricity was used in taxable manner. Are we liable for any tax on these sales?

  12. We are a seller of fuel and electricity. A purchaser contacts us, requesting a refund for overpayment of sales taxes. We are going to file a claim for refund with the Department of Revenue, and refund the tax and interest we receive to the purchaser. Is there any documentation we should obtain from the purchaser?

  13. Does the state require manufacturers to purchase a third party "utility usage study" as documentation for the percentage claimed to be used in manufacturing? If not, what evidence is acceptable?

  14. Since the manufacturer's sales tax credit was replaced with a sales and use tax exemption beginning January 1, 2006, what happens to my unused manufacturer's sales tax credits from taxable years that began before January 1, 2006?


FOR MORE INFORMATION PLEASE CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2776
Fax: (608) 267-1030
Email additional questions to DORSalesandUse@wisconsin.gov

December 14, 2017