Chapter Tax 11

Tax 11.71 Note Note: In Janesville Data Center, Inc. v. Department of Revenue (1978), 84 Wis. 2d 341, the Wisconsin Supreme Court held that the transfer of customer data onto tangible personal property and the verification of customer data is not subject to the sales and use tax as a transfer of tangible personal property or a taxable service.

Tax 11.71 History History: Cr. Register, February, 1986, No. 362, eff. 3-1-86; am. (1) (e) 6., (2) (a) (intro.), 1. and (b) (intro.), Register, April, 1993, No. 448, eff. 5-1-93; EmR0924: emerg. am. (1) (b), (2) (intro.), (a) (intro.), 1., (b) to (d), (3) (intro.), (b) to (e) (intro.), (f) 1. and 2., r. (1) (c), (g) and (n), renum. (1) (d), (h) to (j) and (o) to (q) to be (1) (c), (g) to (i) and (n) to (p) and am. (1) (g), (h) and (p), cr. (1) (d), (em), (j) and (2) (bm), r. and recr. (1) (e) and (k), eff. 10-1-09; CR 09-090: am. (1) (b), (2) (intro.), (a) (intro.), 1., (b) to (d), (3) (intro.), (b) to (e) (intro.), (f) 1. and 2., r. (1) (c), (g) and (n), renum. (1) (d), (h) to (j) and (o) to (q) to be (1) (c), (g) to (i) and (n) to (p) and am. (1) (g), (h) and (p), cr. (1) (d), (em), (j) and (2) (bm), r. and recr. (1) (e) and (k) Register May 2010 No. 653, eff. 6-1-10, CR 12-014: am. (2) (c) (Example 2) Register August 2012 No. 680, eff. 9-1-12.

Tax 11.72 Tax 11.72 Laundries, dry cleaners, and linen and clothing suppliers.

Tax 11.72(1) (1) Laundries and dry cleaners.

Tax 11.72(1)(a) (a) The sales price received from selling, performing, or furnishing laundry, dry cleaning, pressing, and dyeing services is taxable, except as provided in par. (b).

Tax 11.72(1)(b) (b) The sales price from selling, performing, or furnishing laundry, dry cleaning, pressing, and dyeing services is exempt from tax when:

Tax 11.72(1)(b)1. 1. The services are performed on raw materials or goods in process destined for sale.

Tax 11.72(1)(b)2. 2. The services are performed by the customer through the use of self-service machines.

Tax 11.72(1)(b)3. 3. The services are performed on cloth diapers by a diaper service. “Cloth diaper” means a cloth diaper used for sanitary purposes. “Diaper service” means a business primarily engaged in the lease or rental, delivery or laundering of cloth diapers.

Tax 11.72(2) (2) Linen and clothing suppliers. The sales price received by lessors from leasing, licensing, or renting clothing, including uniforms, towels, linens, or similar items, including cloth diapers, to commercial establishments or household users under agreements which provide for furnishing items and cleaning the items when they become soiled is subject to the tax. However, the items furnished to customers under these agreements may be purchased by the lessor without paying sales or use tax and the charge for cleaning cloth diapers by a diaper service is not subject to tax.

Tax 11.72(3) (3) Purchases.

Tax 11.72(3)(a) (a) Laundries, dry cleaners, and linen or clothing suppliers are the consumers of and shall pay tax on their purchases of all items transferred to customers incidentally in providing laundry and dry cleaning services, including solvents, soaps, detergents, spotting compounds, water repellents, disinfectants, fabric softeners, starch, dyes, mat compounds, fire repellent compounds, and marking tags they use for identification purposes. They also shall pay tax on their purchases of items transferred to customers with clean linen or clothes, such as hangers, handkerchiefs, bags, boxes, shirt boards, shoulder guards, twisters, and pins. The tax applies to the sales price on the sale of these items to laundries, dry cleaners, and linen and clothing suppliers.

Tax 11.72(3)(b) (b) The tax applies to the sales price from sales, licenses, leases, or rentals of machinery and equipment to persons engaged in performing or furnishing laundry, dry cleaning, pressing, and dyeing services, and to persons leasing, licensing, or renting linens, towels, and clothing to industrial, commercial, or household users.

Tax 11.72 Note Note: Section Tax 11.72 interprets ss. 77.51 (1m), (3m), (13) (e) and (f), and (15a) and 77.52 (2) (a) 6. and (2m) (a), Stats.

Tax 11.72 Note Note: The interpretations in s. Tax 11.72 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Laundries and dry cleaners became the consumers of, and pay tax on the purchases of, items transferred to customers effective September 1, 1983, pursuant to 1983 Wis. Act 27; (b) The exemption for diaper services and cloth diapers became effective July 1, 1990, pursuant to 1989 Wis. Act 335; (c) The repeal of the exemption for cloth diapers became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (d) The change of the term “gross receipts” to “sales price” became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (e) The exemption for coin-operated, self-service laundry machines was expanded to include all self-service machines effective October 1, 2013, pursuant to 2013 Wis. Act 20.

Tax 11.72 History History: Cr. Register, December, 1979, No. 288, eff. 1-1-80; am. (3) (a) and r. (3) (c), Register, September, 1984, No. 345, eff. 10-1-84; am. (2) and (3) (a), cr. (1) (b), renum. (1) to be (1) (a) and am., Register, June, 1991, No. 426, eff. 7-1-91; EmR0924: emerg. am. (1) (a), (b) (intro.), (2) and (3), eff. 10-1-09; CR 09-090: am. (1) (a), (b) (intro.), (2) and (3) Register May 2010 No. 653, eff. 6-1-10; CR 19-112: am. (1) (b) 2. Register June 2020 No. 774, eff. 7-1-20.

subch. IX of ch. Tax 11 Subchapter IX — Types of Tangible Personal Property and Items, Property, and Goods Under s. 77.52 (1) (b), (c), and (d), Stats.

Tax 11.78 Tax 11.78 Stamps, coins, and bullion.

Tax 11.78(1) (1) Taxable sales. Retail sales of the following tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., are subject to the sales and use tax:

Tax 11.78(1)(a) (a) Cancelled United States and foreign postage stamps.

Tax 11.78(1)(b) (b) Uncancelled United States postage stamps when sold or traded as collectors’ items above their face value.

Tax 11.78(1)(c) (c) Uncancelled foreign postage stamps.

Tax 11.78(1)(d) (d) Postage charges which are billed by the seller of the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to the purchaser in connection with the sale and delivery of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., if the sale of the property, item, or good is subject to the tax.

Tax 11.78(1)(e) (e) Foreign coins and paper currency when sold or traded as collectors’ items.

Tax 11.78(1)(f) (f) United States coins and paper currency when sold or traded as collectors’ items above their face value.

Tax 11.78(1)(g) (g) Silver bullion and gold bullion if the sale is sourced to a location in Wisconsin under s. 77.522, Stats., whether the sales contract is entered into in or outside of Wisconsin. Sales of silver and gold bullion sourced to a location outside Wisconsin are subject to the use tax when the bullion is brought into Wisconsin.

Tax 11.78(1)(h) (h) Commemorative medals.

Tax 11.78(2) (2) Nontaxable sales. Retail sales of the following tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., are not subject to the sales and use tax:

Tax 11.78(2)(a) (a) United States coins and paper currency sold at face value.

Tax 11.78(2)(b) (b) The portion of the selling price attributable to postage in the sale of prestamped envelopes if the nontaxable postage is separately itemized to the customer.

Tax 11.78(2)(c) (c) Sales of bullion to persons in Wisconsin if the sale is sourced to a location outside Wisconsin under s. 77.522, Stats.

Tax 11.78(2)(d) (d) Foreign coins and paper currency in current circulation, when sold at face value and when acquired as a medium of exchange.

Tax 11.78(2)(e) (e) Uncancelled United States postage stamps intended for use as postage even if sold for an amount above face value.

Tax 11.78 Note Note: Section Tax 11.78 interprets ss. 77.51 (15b) and (20) and 77.522, Stats.

Tax 11.78 Note Note: The interpretations in s. Tax 11.78 are effective under the general sales and use tax law on and after September 1, 1969, except that the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.

Tax 11.78 History History: Cr. Register, January, 1977, No. 253, eff. 2-1-77; am. (2) (a), cr. (2) (e), Register, March, 1991, No. 423, eff. 4-1-91; EmR0924: emerg. am. (1) (intro.), (d), (g), (2) (intro.) and (c), eff. 10-1-09; CR 09-090: am. (1) (intro.), (d), (g), (2) (intro.) and (c) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (title), (1) (g) Register November 2010 No. 659, eff. 12-1-10.

Tax 11.79 Tax 11.79 Leases of highway vehicles and equipment.

Tax 11.79(1) (1) General rule. The sales price received from the license, lease, or rental of motor vehicles and mobile equipment used on a highway is subject to the sales and use tax.

Tax 11.79 Note Note: See s. Tax 11.32 for additional information explaining what is included in the “sales price.”

Tax 11.79(2) (2) Deductions from sales price. In determining a lessor’s taxable receipts under sub. (1), the cost of the following items may be deducted if they meet the conditions in sub. (3):

Tax 11.79(2)(a) (a) Motor vehicle fuel.

Tax 11.79(2)(b) (b) Vehicle license fees.

Tax 11.79(2)(c) (c) Federal highway use taxes.

Tax 11.79(2)(d) (d) Public liability insurance furnished by the lessor solely for the protection of the lessee but not including collision and comprehensive coverage.

Tax 11.79(3) (3) Conditions for deductions.

Tax 11.79(3)(a) (a) The items listed in sub. (2) may be deducted if:

Tax 11.79(3)(a)1. 1. The charge is reasonable.

Tax 11.79(3)(a)2. 2. The charge is separately stated in the lease agreement, billing, or invoice.

Tax 11.79(3)(a)3. 3. The lessor is willing and able to lease the motor vehicle or mobile equipment without providing the items listed in sub. (2).

Tax 11.79(3)(b) (b) The deduction is limited to the lessor’s cost of the items furnished with the leased equipment.

Tax 11.79(4) (4) Nondeductible items. In determining a lessor’s taxable sales price under sub. (1), the cost of the following may not be deducted:

Tax 11.79(4)(a) (a) Amounts spent for the lessor’s own protection or for the protection of leased property, including collision or other insurance protection.

Tax 11.79(4)(b) (b) Maintenance or repair charges incurred by the lessor.

Tax 11.79(4)(c) (c) Interest and other financing costs incurred by the lessor.

Tax 11.79(4)(d) (d) Dispatch service.

Tax 11.79(5) (5) Multistate use.

Tax 11.79(5)(a) (a) The sales price received from the license, lease, or rental of motor vehicles and mobile equipment used on a highway is taxable in Wisconsin if the license, lease, or rental payments are sourced to Wisconsin under s. 77.522, Stats., as described in pars. (b) and (c).

Tax 11.79(5)(b) (b) A license, lease, or rental of a motor vehicle, trailer, semitrailer, or aircraft that only requires one payment, is sourced as follows:

Tax 11.79(5)(b)1. 1. If the motor vehicle, trailer, semitrailer, or aircraft is received by the lessee or licensee at the lessor’s or licensor’s business location, the payment is sourced to the lessor’s or licensor’s business location.

Tax 11.79(5)(b)2. 2. If the motor vehicle, trailer, semitrailer, or aircraft is not received by the lessee or licensee at the lessor’s or licensor’s business location, the payment is sourced to the location where the lessee or licensee or the lessee’s or licensee’s designated donee receives the product. This would include the location indicated by instructions known to the lessor or licensor for delivery to the lessee or licensee or the lessee’s or licensee’s designated donee. The delivery may be made by the lessor or licensor or by a shipping company hired by the lessee or licensee.

Tax 11.79(5)(b)3. 3. If the location cannot be determined under subds. 1. and 2., the payment is sourced to the lessee’s or licensee’s address as indicated by the lessor’s or licensor’s business records, if the records are maintained in the ordinary course of the lessor’s or licensor’s business and if using that address to establish the location of the lease, license, or rental is not in bad faith.

Tax 11.79(5)(b)4. 4. If the location cannot be determined under subd. 1., 2., or 3., the payment is sourced to the lessee’s or licensee’s address as obtained during the consummation of the license, lease, or rental, including the address indicated on the lessee’s or licensee’s payment instrument, if no other address is available and if using that address to determine the location of the lease, license, or rental is not in bad faith.

Tax 11.79(5)(b)5. 5. If the location cannot be determined under subd. 1., 2., 3., or 4., the payment is sourced to the location from which the motor vehicle, trailer, semitrailer, or aircraft was shipped.

Tax 11.79(5)(c) (c) Except as provided in par. (b), licenses, leases, and rentals of motor vehicles, trailers, semitrailers, and aircraft that are not transportation equipment, as defined in s. 77.522 (1) (a) 2., Stats., are sourced to the primary location of such property as indicated by an address for the property that is provided by the lessee or licensee and that is available in the business records of the lessor or licensor that are maintained in the ordinary course of the lessor’s or licensor’s business, provided the use of such address does not constitute bad faith.

Tax 11.79(6) (6) Exempt leases. The sales price from the license, lease, or rental of the following property shall be exempt from sales and use tax provided the lessor receives a properly completed exemption certificate as described in s. Tax 11.14:

Tax 11.79(6)(a) (a) Highway vehicles, except automobiles, leased to common or contract carriers who use the vehicles exclusively in common or contract carriage, including urban mass transportation of passengers as defined in s. 71.38, Stats.

Tax 11.79(6)(b) (b) Motor vehicles not licensed for highway use which are used exclusively and directly in conjunction with waste reduction or recycling activities described in s. 77.54 (5) (c), Stats.

Tax 11.79(6)(c) (c) Mobile units used for mixing and processing, including the motor vehicle or trailer on which the unit is mounted. Accessories, attachments, parts, supplies, and materials for the mobile unit, vehicle, and trailer are also exempt.

Tax 11.79(6)(d) (d) Leases of highway vehicles and equipment for resale.

Tax 11.79 Note Note: Section Tax 11.79 interprets ss. 77.51 (13) (k) and (14) (intro.) and (j), 77.522, 77.54 (5) (c) and (d) and (26m), and 77.58 (6), Stats.

Tax 11.79 Note Note: The interpretations in s. Tax 11.79 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for vehicles and equipment used in waste reduction or recycling activities became effective July 1, 1984, pursuant to 1983 Wis. Act 426; (b) The exemption for mobile mixing units became effective July 20, 1985, pursuant to 1985 Wis. Act 29; (c) The sourcing provisions under s. 77.522, Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (d) The change of the term “gross receipts” to “sales price” became effective October 1, 2009, pursuant to 2009 Wis. Act 2.

Tax 11.79 History History: Cr. Register, January, 1977, No. 253, eff. 2-1-77; cr. (4) (d), Register, September, 1984, No. 345, eff. 10-1-84; cr. (6), Register, June, 1991, No. 426, eff. 7-1-91; EmR0924: emerg. am. (1), (2) (title), (intro.), (a), (4) (intro.), (6) (intro.) and (c), renum. (3) to be (3) (a) and (b) and am. (3) (a) 2., r. and recr. (5), eff. 10-1-09; CR 09-090: am. (1), (2) (title), (intro.), (a), (4) (intro.), (6) (intro.) and (c), renum. (3) to be (3) (a) and (b) and am. (3) (a) 2., r. and recr. (5) Register May 2010 No. 653, eff. 6-1-10.

Tax 11.80 Tax 11.80 Sales of ice.

Tax 11.80(1) (1) Ice, including dry ice, is tangible personal property, the retail sale of which is subject to sales tax, unless sold in an exempt transaction. Ice is sold at retail when it is sold for use or consumption but not for resale.

Tax 11.80 Note Example: Ice used for refrigeration purposes is consumed in the process of refrigeration. Ice used in drinks is purchased for resale by the seller of the drink.

Tax 11.80(2) (2) Taxable sales of ice include:

Tax 11.80(2)(a) (a) Sales of ice blocks through vending machines.

Tax 11.80(2)(b) (b) Sales of ice blocks and ice cubes to restaurants, taverns, grocery stores, and meat markets when the ice is consumed in cooling bottled drinks or preserving foods.

Tax 11.80(3) (3) Nontaxable sales of ice include:

Tax 11.80(3)(a) (a) Sales of ice cubes to be used in drinks, including sales to restaurants, taverns, and individuals.

Tax 11.80 Note Note: Ice sold by a food retailer in cubes or crushed form can be ingested for taste. Therefore, a seller may exempt the sale of such ice. If the purchaser uses the ice to keep food or beverages cold rather than ingesting or chewing it, the purchaser is subject to tax on the purchase of the ice.

Tax 11.80(3)(b) (b) Sales to manufacturers, producers, or food processors for use inside the shipping cases of merchandise being transferred to a customer. The sales are exempt as “shipping material” under s. 77.54 (6) (am) 2., Stats.

Tax 11.80(3)(bm) (bm) Sales of ice for use inside shipping cases for meat or meat products, regardless of whether such items are used to transfer merchandise to customers. The sales are exempt as “shipping materials” under s. 77.54 (6) (am) 2m., Stats.

Tax 11.80(3)(c) (c) Ice sold to manufacturers which is used exclusively and directly by the manufacturer in manufacturing an article of tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., that is destined for sale and that becomes an ingredient or component part of the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale or is consumed or destroyed or loses its identity in manufacturing the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., in any form destined for sale.

Tax 11.80(4) (4) 

Tax 11.80(4)(a) (a) If ice is sold to a person who will use it both for a taxable purpose and nontaxable purpose, such as for refrigeration and for resale, the purchaser may either purchase the ice without tax by providing a properly completed exemption certificate and then pay the applicable use tax on the ice used in a taxable manner or pay tax on the entire purchase price of the ice and then claim a credit on its sales and use tax return for that portion of the ice that is used in a manner that is not subject to tax.

Tax 11.80(4)(b) (b) Ice purchased without payment of the tax and subsequently used in a taxable manner is subject to the use tax or sales tax pursuant to s. Tax 11.14 (2) (c).

Tax 11.80 Note Note: Section Tax 11.80 interprets ss. 77.52 (1), 77.53 (1), and 77.54 (2) and (6) (am) 2m., Stats.

Tax 11.80 Note Note: The interpretations in s. Tax 11.80 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The clarification that items must be consumed exclusively and directly by a manufacturer in manufacturing property or items destined for sale became effective August 1, 2009, pursuant to 2009 Wis. Act 28; and (b) The change of the term “gross receipts” to “sales price” and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.