Exemption for Fuel and Electricity Consumed in Qualified Research

  1. Our company is one of the following:
    1. Primarily engaged in biotechnology in Wisconsin on or after January 1, 2012,

    2. Engaged in manufacturing in Wisconsin at a building assessed under sec. 70.995, Wis. Stats., on or after July 2, 2013.

    3. A combined group member performing qualified research on or after July 2, 2013 for another member of the combined group who is described in (a) or (b).

    Our company uses fuel and electricity exclusively and directly in conducting qualified research. What do we need to do in order to purchase our fuel and electricity without sales or use tax?

  2. What are the effective dates for the exemption for fuel and electricity consumed exclusively and directly in conducting qualified research?

  3. 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?

  4. Does the exemption include fuel and electricity used for plant heating, cooling, and lighting?

  5. My business is engaged primarily in biotechnology 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?

  6. My business is engaged in manufacturing in Wisconsin at a building assessed under sec. 70.995, Wis. Stats. I paid sales tax in error to the seller on purchases of fuel and electricity consumed in conducting qualified research in Wisconsin. What should I do?

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

  8. How do I file a Buyer's Claim for Refund?

  9. On the exemption certificate we previously furnished to the electric utility, we claimed that 75% of the electricity billed for a specified meter is exempt as it is consumed exclusively and directly in qualified research. Since that time, we have determined that only 65% of the total electricity billed for that meter is exempt. Do we need to do anything?

  10. Our company gave an exemption certificate to our supplier claiming that 85% of natural gas we purchase after December 31, 2014 is consumed exclusively and directly in qualified research. In January 2016, we determine that 78% of the natural gas we purchased in 2015 was actually used for the exempt purpose. The balance was used for taxable purposes. Do we need to do anything?

  11. Our company is a corporation filing its franchise tax return on a calendar year basis. We gave an exemption certificate to our supplier claiming that 60% of natural gas we purchase after December 31, 2013 is consumed exclusively and directly in qualified research. In February 2015, we determined that 74% of the natural gas we purchased in 2014 was actually used for exempt purposes. The balance was used for taxable purposes. Can we obtain a refund of the sales and use taxes we paid on the additional 14% of natural gas purchases in 2014 we determine to be exempt?

  12. We hold a direct pay permit and paid use tax based on 65% of fuel purchased in 2015 being consumed exclusively and directly in qualified research. In February 2016, we determine that our exempt use of fuel purchased in 2015 was 76%. Can we obtain a refund of the use tax we paid on the 11% of the fuel purchases we subsequently determine was used in an exempt manner?

  13. We are a seller of fuel and electricity. Since January 2012, we have received fully completed exemption certificates from various customers claiming the exemption for fuel and electricity consumed exclusively and directly in qualified research. 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?

  14. 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?

  15. We are a seller of fuel and electricity. A purchaser contacts us, requesting a refund for overpayment of sales taxes, and furnishes us with a fully completed exemption certificate for a prior sale. We have already filed the return and paid the tax for the prior sale. Can I obtain refund for these taxes without filing an amended return to claim the refund?

  16. Does the state require a business to purchase a third party "utility usage study" as documentation for the percentage of fuel or electricity claimed to be used exclusively and directly in qualified research? If not, what evidence is acceptable?


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