Tax 11.34 Note
Note: Refer to s.
Tax 11.33 regarding the general occasional sales exemption. Refer to s.
Tax 11.35 regarding the occasional sales exemption for nonprofit organizations.
Tax 11.34 Note
Note: The interpretations in s. Tax 11.34 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The procedure in sub. (3) became effective May 4, 1976, and reflects the Wisconsin supreme court's decision in Three Lions Supper Club, Ltd. vs. Dept. of Revenue (May 4, 1976),
72 Wis. 2d 546; (b) The exemption described in sub. (2) (b) became effective May 17, 1988, pursuant to
1987 Wis. Act 399; (c) The requirement that a person surrender its seller's permit within 10 days after the last sale of tangible personal property for the sale of business assets to qualify as an occasional sale was repealed effective August 12, 1993, pursuant to
1993 Wis. Act 16; and (d) 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.
Tax 11.34 History
History: Cr.
Register, June, 1991, No. 426, eff. 7-1-91; am. (2) (b) 2., 3. and (5) (c), r. (3) (b) 3.,
Register, April, 1994, No. 460, eff. 5-1-94;
EmR0924: emerg. am. (2) (a), (3) (b) 1., 2., (4) (a) and (5) (c), eff. 10-1-09;
CR 09-090: am. (2) (a), (3) (b) 1., 2., (4) (a) and (5) (c)
Register May 2010 No. 653, eff. 6-1-10;
CR 10-094: am. (3) (d), r. and recr. (4)
Register November 2010 No. 659, eff. 12-1-10;
CR 12-014: am. (1), (3) (a), (b) (intro.), cr. (3) (bg), (br)
Register August 2012 No. 680, eff. 9-1-12;
CR 16-053: am. (3) (bg)
Register June 2018 No. 750, eff. 7-1-18;
CR 19-112: am. (3) (bg)
Register June 2020 No. 774, eff. 7-1-20.
Tax 11.35
Tax 11.35
Occasional sales by nonprofit organizations. Tax 11.35(1)(1)
Scope. This section describes the occasional sales exemption for nonprofit organizations as provided in s.
77.54 (7m), Stats.
Tax 11.35(2)(a)
(a) “Admission event" means that access to the event involving entertainment is generally restricted to only those who pay a required fee, who make a required donation or who are required to make a purchase of some kind such as a meal or raffle ticket.
Tax 11.35(2)(b)
(b) “Entertainment" means entertainment provided at an admission event by all persons or groups who are paid in the aggregate more than $10,000 per event by all persons for performing, for reimbursement of expenses or for prize money.
Tax 11.35(2)(c)
(c) “Nonprofit organization" includes a neighborhood association, church, civic group, garden club, social club or similar organization not operated or organized for profit where no part of the net income inures to the benefit of any private shareholder or individual. A governmental unit described in s.
77.54 (9a), Stats., is considered a “similar organization" for purposes of this paragraph.
Tax 11.35(2)(d)
(d) “Sales price" means sales price as defined in s.
77.51 (15b), Stats., from all sales in Wisconsin of otherwise taxable tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., and services after subtracting allowable exemptions.
Tax 11.35(3)
(3)
General. A nonprofit organization shall charge Wisconsin sales tax on sales of tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., and taxable services, unless the sales qualify as exempt occasional sales or are otherwise exempt. The occasional sales exemption does not apply to the sales price from the sale of bingo supplies to players or to the sale, rental or use of regular bingo cards, extra regular cards and special bingo cards.
Tax 11.35(4)
(4)
Standards. Under s.
77.54 (7m), Stats., a nonprofit organization shall meet all of the following standards for its sales to qualify as exempt occasional sales:
Tax 11.35(4)(a)
(a) The organization is not engaged in a trade or business.
Tax 11.35(4)(b)
(b) Entertainment is not involved at an event for which charges by the organization constitute admissions.
Tax 11.35(4)(c)
(c) The organization does not have and is not required to have a Wisconsin seller's permit, except for conducting bingo.
Tax 11.35(5)
(5)
Not engaged in a trade or business. A nonprofit organization is not engaged in a trade or business for purposes of sub.
(4) (a) if it meets at least one of the following:
Tax 11.35(5)(a)
(a) Its sales of otherwise taxable tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., or services or its events occur on 75 days or less during the calendar year, regardless of the dollar amount of sales. For events involving the sales of tickets, only the actual days of the events are counted, not the days of ticket sales.
Tax 11.35 Note
Example: A boy scout troop takes orders for Christmas wreaths from August 1 through November 1. The wreaths are delivered by the troop on December 15 and 16. For purposes of determining whether its events meet the 75-day test, the troop should use the days of delivery rather than days orders are taken.
Tax 11.35(5)(b)
(b) Its taxable sales price for tangible personal property, items, property, and goods under s.
77.52 (1) (b),
(c), or
(d), Stats., and taxable services for the calendar year are $50,000 or less, regardless of the number of days on which its sales or events occur. Sales that are nontaxable are not included for purposes of the $50,000 sales price test.
Tax 11.35 Note
Examples: 1) A church sells frozen pizzas. Since sales of frozen pizzas are exempt from sales tax, the sales of the frozen pizzas are not counted as part of the sales price for purposes of the $50,000 receipts test.
Tax 11.35 Note
2) A nonprofit organization, which sells hundreds of Christmas trees, sells 5 Christmas trees for $100 to a public school. Although Christmas trees are taxable tangible personal property, a public school can purchase tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats., exempt from sales tax. As a result, this $100 exempt sale to the school is not counted as part of the sales price for purposes of the $50,000 receipts test.
Tax 11.35(6)(a)(a) For a nonprofit organization's sales to qualify as exempt occasional sales, entertainment may not be involved at an event for which charges by that nonprofit organization constitute admissions.
Tax 11.35 Note
Examples: 1) Four different bands are paid $3,000 each to perform at various times during a 3-day event. There is an admission charge for access to the event. Since the total payment for entertainment ($12,000) exceeds the $10,000 limit in sub. (2) (b), entertainment is deemed to be involved. As a result, receipts from the event are taxable.
Tax 11.35 Note
2) Two nonprofit organizations co-sponsor an admission event at which a band is hired to perform. Each organization pays the band $5,500. Since the total payment for entertainment ($11,000) exceeds the $10,000 limit in sub. (2) (b), entertainment is deemed to be involved. As a result, receipts from the event are taxable.
Tax 11.35 Note
3) A nonprofit organization sponsors a dinner and dance in the high school gymnasium. The dance band is paid in excess of the $10,000 limit in sub. (2) (b). There is no separate admission charge. However, access to the dance is restricted to those who have purchased the meal. The “meal" charge constitutes an admission charge to an event involving entertainment. Therefore, sales by the nonprofit organization at this event are taxable.
Tax 11.35 Note
4) A nonprofit organization holds a pig roast at the city park and hires a band to play at the park gazebo so that patrons, if they so wish, can be entertained while they eat. There is no admission charge and access to the band is open to anyone, whether they purchase the meal or not. Entertainment is deemed not to be involved. Therefore, the sales by the nonprofit organization may still qualify as exempt occasional sales.
Tax 11.35 Note
5) Nonprofit Organization A sponsors an admission event at which a band is hired to perform. The band is paid more than $10,000. Nonprofit Organization A allows Nonprofit Organization B, a separate entity, to sell soft drinks and food at the event for consumption on the premises of the event. Although Nonprofit Organization A's sales at the event do not qualify for the occasional sales exemption, Nonprofit Organization B's sales at the event may qualify as exempt occasional sales. The admission charge to the event involving entertainment is made by Nonprofit Organization A, not Nonprofit Organization B.
Tax 11.35(6)(b)
(b) A nonprofit organization that would otherwise qualify for exempt occasional sales, except for the involvement of entertainment, may obtain a seller's permit from the department for the day or days involving entertainment, pay the sales tax on that event and request inactivation of its seller's permit after the event, and still have exempt occasional sales on days not covered by the seller's permit. Days and receipts from events involving admissions to entertainment for which a seller's permit was obtained are included with all other sales in determining the 75-day test and the $50,000 taxable receipts test described in sub.
(5). A nonprofit organization that obtains a seller's permit for an event and does not request inactivation of its seller's permit after the event does not qualify for the occasional sale exemption while the seller's permit is active, regardless of the number of days and dollar amount of its sales.
Tax 11.35 Note
Examples: 1) A nonprofit organization plans 5 events covering 3 days each for the year for a total of 15 days. Entertainment will be involved at one event only. The sales by the nonprofit organization would qualify as exempt occasional sales, except for the involvement of entertainment at the one event. The nonprofit organization may obtain a seller's permit for the one event involving entertainment and request inactivation of its seller's permit after the event; thus allowing the other 4 events to qualify as exempt occasional sales.
Tax 11.35 Note
2) A nonprofit organization holds several events during the year. For one of the events, the nonprofit organization obtains a seller's permit because entertainment is involved, collects sales tax on its receipts of $5,000 from that event and requests inactivation of its seller's permit after the event. Taxable receipts from its other events must be combined with the $5,000 of receipts from the event for which it held a seller's permit for purposes of determining whether the $50,000 taxable receipts test is met.
Tax 11.35(7)(a)
(a) A nonprofit organization is not required to hold a seller's permit if its sales are exempt from sales and use taxation by meeting the provisions of sub.
(4) (a) and
(b). However, an organization required to hold a seller's permit solely for the purpose of conducting bingo games may still qualify for the occasional sales exemption on nonbingo sales if it otherwise qualifies under the provisions of sub.
(4) (a) and
(b).
Tax 11.35(7)(b)
(b) If a nonprofit organization holds a seller's permit in the current year, but intends or believes in good faith that its activities in the following year would qualify as exempt occasional sales except for its holding of a seller's permit, it may request inactivation of its seller's permit and its sales in the following year will qualify as exempt occasional sales provided it meets the standards in sub.
(4) (a) and
(b) in that following year.
Tax 11.35 Note
Example: A nonprofit organization has held nineteen 4-day events for a total of 76 days each year for the past 5 years. Receipts were always over $50,000, and there were no admissions to entertainment events. One event has lost money for the past 2 years. The organization intends to discontinue that event for the following year; thus, it may anticipate coming under the 75-day standard and request inactivation of its seller's permit in good faith.
Tax 11.35(7)(c)
(c) If a nonprofit organization did not hold or was not required to hold a seller's permit or requested inactivation of its seller's permit in good faith but later, due to unforeseen circumstances, exceeds the standards, only the sales occurring after the standards are exceeded do not qualify as exempt occasional sales and are subject to tax.
Tax 11.35 Note
Examples: 1) A church held 73 days of events or sales in the current year. Receipts for the events equaled $70,000 and no entertainment was involved. The church expects to hold the same 73 days of events in the following year. It requests inactivation of its seller's permit. However, in the middle of the following year, the church garage is destroyed by fire. An additional 4-day event is held to raise funds to help replace the garage. Only the receipts from days 76 and 77, the days exceeding the standard, are subject to sales tax.
Tax 11.35 Note
2) A garden club is organized in the current year. The garden club is not required to hold a seller's permit and does not apply for one. In the following year, the garden club holds 77 days of events with taxable receipts from the events of $70,000. Only receipts from days 76 and 77, the days exceeding the standard, are subject to sales tax.
Tax 11.35(7)(d)
(d) If a nonprofit organization has sales in the current year and then requests inactivation of its seller's permit, sales made in the current year before requesting inactivation of the seller's permit do not qualify as exempt occasional sales, even if the standards for exempt occasional sales in sub.
(4) (a) and
(b) are met.
Tax 11.35 Note
Example: A nonprofit organization holds 70 days of sales in the current year. The organization holds a seller's permit, files sales and use tax returns and pays sales tax on all its receipts in the current year. At the end of the current year, the organization realizes that its sales would have qualified as exempt occasional sales except for its holding of a seller's permit. The organization may not claim a refund of taxes paid while it held a seller's permit.
Tax 11.35(8)
(8)
When sales do not qualify for occasional sales exemption. If a nonprofit organization has sales of tangible personal property, items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., or taxable services, and the sales do not qualify as exempt occasional sales, it is required to obtain a seller's permit and collect and remit sales tax on its taxable sales.
Tax 11.35 Note
Note: To obtain a seller's permit, a nonprofit organization shall file Wisconsin form BTR-101, Application for Business Tax Registration, with the department. Form BTR-101 may be obtained from any department of revenue office, or by writing or calling Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902, telephone (608) 266-2776.
Tax 11.35 Note
Note: The interpretations contained in s. Tax 11.35 became effective January 1, 1989, pursuant to 1987 Wis. Act 399, except: (a) the $25,000 receipts standard and the $500 entertainment standard became effective January 1, 2006, pursuant to 2005 Wis. Act 25; (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; and (c) the 75 day standard, the $50,000 receipts standard, and the $10,000 entertainment standard became effective January 1, 2017, pursuant to 2015 Wis. Act 364.
Tax 11.35 History
History: Cr.
Register, June, 1991, No. 426, eff. 7-1-91; renum. (1) and (2) to be (2) and (1) and am. (2) (b), am. (3), (5) (b) and (6) (a),
Register, October, 1997, No. 502, eff. 11-1-97;
EmR0924: emerg. am. (2) (b), (3), (4) (c), (5) (a), (b), (6) (b), (7) (d) and (8), r. (2) (c), renum. (2) (d) to be (2) (c) and am., cr. (2) (d), eff. 10-1-09;
CR 09-090: am. (2) (b), (3), (4) (c), (5) (a), (b), (6) (b), (7) (d) and (8), r. (2) (c), renum. (2) (d) to be (2) (c) and am., cr. (2) (d),
Register May 2010 No. 653, eff. 6-1-10;
CR 10-094: am. (4) (b), (6) (b), (7)
Register November 2010 No. 659, eff. 12-1-10;
CR 12-014: am. (1)
Register August 2012 No. 680, eff. 9-1-12;
CR 19-112: am. (2) (b), (5) (a), (Example), (b), (Example 1), (Example 2), (6) (a), (Example 1), (Example 2), (Example 3), (Example 5), (b), (Example 2), (7) (b) (Example), (c) (Example 1), (Example 2), (d) (Example)
Register June 2020 No. 774, eff. 7-1-20.
Tax 11.38
Tax 11.38
Fabricating, processing, and printing. Tax 11.38(1)(1)
Sales of fabricating, processing, and printing services. The producing, fabricating, processing, printing, or imprinting of tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., for a consideration for consumers who furnish directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting is subject to Wisconsin sales or use tax unless:
Tax 11.38(1)(a)
(a) The printing or imprinting is done on tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., that results in printed materials that are exempt under s.
77.54 (25), Stats., or catalogs and their mailing envelopes that are exempt under s.
77.54 (25m), Stats.
Tax 11.38 Note
Example: Printer ABC prints an advertising flyer for Company DEF. Company DEF furnishes the paper and the ink. Company DEF will send the flyer to its customers outside Wisconsin. The charge by Printer ABC for printing the advertising flyer is not subject to Wisconsin sales tax provided Company DEF provides Printer ABC with a properly completed exemption certificate.
Tax 11.38 Note
Examples: 1) Company GHI is in the business of cleaning used oil. A Wisconsin municipality contracts with Company GHI to have all used oil it collects from residents cleaned by Company GHI. The charge by Company GHI to the municipality for cleaning the oil is not subject to Wisconsin sales or use tax because sales to Wisconsin municipalities are exempt from Wisconsin sales tax under s.
77.54 (9a), Stats.
Tax 11.38 Note
2) The charge by a feed mill to grind a farmer's corn that the farmer will use as feed is not subject to Wisconsin sales or use tax because the sale of feed to a farmer is not subject to Wisconsin sales or use tax under s.
77.54 (3m), Stats. The farmer must provide the feed mill with a properly completed exemption certificate.
Tax 11.38 Note
3) The charge by a cooperative to age a cigar manufacturer's tobacco is not subject to Wisconsin sales or use tax because a sale of tobacco to a cigar manufacturer is not subject to Wisconsin sales or use tax under s.
77.54 (2), Stats. The cigar manufacturer must provide the cooperative with a properly completed exemption certificate.
Tax 11.38(1)(c)
(c) The producing, fabricating or processing is for resale.
Tax 11.38 Note
Example: Company JKL is in the business of custom making cabinets. A customer orders a cabinet from Company JKL. Due to time constraints, Company JKL is unable to make the cabinet. Therefore, Company JKL contracts with Company MNO to make the cabinet from materials provided by Company JKL. Company MNO is not subject to Wisconsin sales or use tax on the charge to Company JKL for making the cabinet if Company JKL provides Company MNO with a properly completed exemption certificate claiming resale.
Tax 11.38(2)
(2)
Examples of fabricating and processing services. Fabricating and processing services, where materials are furnished directly or indirectly by the customer, that are subject to Wisconsin sales or use tax include, except as provided in sub.
(1) (a) to
(c):
Tax 11.38(2)(g)
(g) Cutting lumber to specifications and producing cabinets, counter tops or other items from lumber for customers, often called “millending."
Tax 11.38(2)(h)
(h) Cutting or crushing stones, gravel or other construction materials.
Tax 11.38(2)(k)
(k) Fabricating steel which may involve cutting the steel to length and size, bending and drilling holes in the steel to specifications of a particular construction job.
Tax 11.38(2)(o)
(o) Making a fur coat from pelts, gloves or a jacket from a hide.
Tax 11.38(2)(p)
(p) Making curtains, drapes, slip covers or other household furnishings.
Tax 11.38(3)
(3)
Purchases by fabricators or processors. Persons providing fabricating, processing and printing services, including those services listed in sub.
(2), may qualify as manufacturers. If the service provider qualifies as a manufacturer as provided in s.
77.51 (7h) (a), Stats., the following items may be purchased by the service provider without Wisconsin sales or use tax:
Tax 11.38(3)(a)
(a) Machinery and equipment used exclusively and directly in manufacturing.
Tax 11.38 Note
Example: Company PQR is in the business of heat treating metal for steel manufacturers. Company PQR uses its machinery and equipment only in providing this heat treating to steel manufacturers. Company PQR is performing a manufacturing process in acting as a submanufacturer. Since the machinery and equipment is used exclusively and directly in manufacturing, it may be purchased without Wisconsin sales or use tax provided Company PQR gives its supplier a properly completed exemption certificate.
Tax 11.38(3)(b)
(b) Tangible personal property or items under s.
77.52 (1) (b), Stats., that are used exclusively and directly by a manufacturer in manufacturing an article of tangible personal property or item or property under s.
77.52 (1) (b) or
(c), Stats., destined for sale and which becomes an ingredient or component part of the property or item destined for sale or is consumed or destroyed or loses its identity in the manufacture of tangible personal property or item or property under s.
77.52 (1) (b) or
(c), Stats., in any form destined for sale, except for fuel and electricity as provided in s.
77.54 (30) (a) 6., Stats.
Tax 11.38 Note
Example: Company VWX is an electroplater. Company STU is a manufacturer of car bumpers. Company STU hires Company VWX to electroplate the bumpers. Company VWX may purchase the caustic soda, boric acid, etc., that is consumed or destroyed in the electroplating without Wisconsin sales or use tax when acting as a submanufacturer. These items are consumed or destroyed in the manufacture of tangible personal property, bumpers, destined for sale.
Tax 11.38 Note
Note: For information regarding what is manufacturing and exemptions for machinery and equipment and other items used in manufacturing, refer to ss.
Tax 11.39,
11.40 and
11.41.
Tax 11.38 Note
Note: The interpretations in s.
Tax 11.38 are effective under the general sales and use tax law on and after September 1, 1969 except that (a) The exemption for catalogs and the envelopes in which they are mailed became effective April 1, 2009 pursuant to
2007 Wis. Act 20; 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.
Tax 11.38 History
History: Cr.
Register, October, 1976, No. 250, eff. 11-1-76; r. and recr.
Register, June, 1993, No. 450, eff. 7-1-93;
EmR0924: emerg. am. (title), (1) (title), (intro.), (a), (2) (e) and (3) (b), eff. 10-1-09;
CR 09-090: am. (title), (1) (title), (intro.), (a), (2) (e) and (3) (b)
Register May 2010 No. 653, eff. 6-1-10; correction in (3) (intro.) made under s.
13.92 (4) (b) 7., Stats.,
Register May 2010 No. 653; correction in (2) made under s.
35.17, Stats.,
Register April 2019 No. 760.
