Wisconsin Legislature: Tax 11.39(3)(wr)

(b) Bakeries.

(d) Breweries and soda water bottling plants.

(e) Candy factories.

(f) Cement and concrete plants.

(fr) Cheese cutting and repackaging plants.

(g) Chemical processing plants.

(h) Concrete block and tile producers.

(i) Creameries and instant milk producers.

(j) Dairies and cheese plants.

(jd) Dental labs.

(jr) Ductwork fabricators.

(k) Electric generating companies.

(L) Flour and feed mills, including mobile units.

(m) Food processing plants, canning and freezing.

(n) Foundries.

(o) Glass making plants.

(oc) Grain dryers.

(om) Heat treaters and metal platers performing these services on semi-finished products furnished by manufacturers.

(os) Hide curers.

(p) Limestone calcination plants.

(q) Machine and equipment producers.

(r) Malting plants.

(s) Meat packing and processing plants.

(t) Motor vehicle and aircraft factories.

(u) Oil refineries.

(v) Paint factories.

(w) Paper making plants.

(wd) Persons engaged in snowmaking for a ski hill.

(wr) Photofinishers.

(x) Printers.

(y) Sawmills.

(z) Scrap processors.

(za) Shoe and clothing factories.

(zb) Smelting and steel mills.

(zc) Tanneries.

(zd) Tool and die making plants.

(ze) Persons engaged in crushing, washing, grading and blending sand, rock, gravel and other minerals.

(zf) Persons engaged in ore dressing, including the mechanical preparation, by crushing and other processes, and the concentration, by flotation and other processes, of ore, and beneficiation, including but not limited to the preparation of ore for smelting.

(zg) Tire retreaders.

(4) Nonmanufacturers. Nonmanufacturers ordinarily include the following:

(a) Contractors, when engaged in real property construction activities and installing or repairing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.

(d) Fish hatcheries.

(e) Freezer and locker plants.

(f) Highway truckers.

(g) Hotels.

(h) Laundries and dry cleaners.

(i) Repairpersons.

(j) Restaurants.

(k) Television and radio stations.

(L) Persons engaged in:

1. Corn shelling.

2. Experimental and development activities.

3. Logging and forestry operations.

4. Mining.

5. Paper recycling.

6. Photography.

7. Popping corn.

8. The business of raising and breeding animals.

9. Real property construction activities.

10. Custom slaughtering of animals.

11. Vending machine operations.

Note: Section Tax 11.39 interprets ss. 77.51 (7h), (10b), and (10c) and 77.54 (2) and (6) (am) 1., Stats.

Note: The interpretations in s. Tax 11.39 are effective under the general sales and use tax law on and after September 1, 1969 except that (a) 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., and certain leased property affixed to real property under s. 77.52 (1) (c), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2.

History: Cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (3) (j), (4) (c) and (r) 13., cr. (3) (om), Register, June, 1983, No. 330, eff. 7-1-83; am. (1), (3) (f), cr. (3) (ze), (zf) and (zg), r. (4) (p), (q) and (r) 10., Register, September, 1984, No. 345, eff. 10-1-84; am. (3) (f), Register, July, 1987, No. 379, eff. 8-1-87; correction in (4) (m) made under s. 13.93 (2m) (b) 5., Register, April, 1994, No. 460; correction in (2) (a) made under s. 13.93 (2m) (b) 5., Stats., Register, October, 1995, No. 478; am. (2) (a), (3) (m), (ze), (zf), (4) (intro.), cr. (3) (fr), (jd), (jr), (oc), (os), (wd), (wr), r. (4) (a), (d), (r), 2. and 4., renum. (4) (b), (c), (e), (f), (g), (h), (i), (j), (k), (L), (m), (n), (o) and (r) to be (4) (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (L), (m) and (n) and am. (4) (a) and (k), Register, October, 1997, No. 502, eff. 11-1-97; EmR0924: emerg. r. and recr. (1) and (2), am. (4) (intro.) and (a), r. (4) (h) and (i), renum. (4) (j) to (n) to be (4) (h) to (L), eff. 10-1-09; CR 09-090: r. and recr. (1) and (2), am. (4) (intro.) and (a), r. (4) (h) and (i), renum. (4) (j) to (n) to be (4) (h) to (L) Register May 2010 No. 653, eff. 6-1-10; CR 14-006: am. (1) (b) Register August 2014 No. 704, eff. 9-1-14.; CR 20-018: r. (4) (b) Register July 2021 No. 787, eff. 8-1-21.

Tax 11.40 Exemption of machines and processing equipment.

(1) General.

(a) Section 77.54 (6) (am) 1., Stats., exempts the sales price from the sale of and the storage, use or other consumption of machines and specific processing equipment and repair parts or replacements thereof, exclusively and directly used by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., and safety attachments for those machines and equipment. “Exclusively,” as used in s. 77.54 (6) (am) 1., Stats., and in this section, means that the machines and specific processing equipment and repair parts or replacements thereof are used solely by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., to the exclusion of all other uses, except that the sales and use tax exemption will not be invalidated by an infrequent and sporadic use other than in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats. This exemption is to be strictly construed.

(b) Section 77.51 (7h) (a), Stats., provides that manufacturing means the production by machinery of a new article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., with a different form, use, and name from existing materials by a process popularly regarded as manufacturing, and that begins with conveying raw materials and supplies from plant inventory to the place where work is performed in the same plant and ends with conveying finished units of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., to the point of first storage in the same plant.

(c) In determining whether a particular machine or piece of processing equipment is included in the exemption under s. 77.54 (6) (am) 1., Stats., ss. 77.51 (7h) and 77.54 (6) (am) 1., Stats., must be considered together.

(d) Section 77.54 (5) (d), Stats., provides an exemption for mobile mixing and processing units and the motor vehicle or trailer on which they are mounted, including accessories, attachments, parts, supplies and materials for those vehicles, trailers and units.

(e) Section 77.54 (5) (c) and (26m), Stats., provide exemptions for certain motor vehicles, machinery and equipment used in waste reduction and recycling processes.

Note: See s. Tax 11.11 for more information on waste reduction and recycling exemptions.

(2) Conditions for exemption and examples. The exemption under sub. (1) (a) shall apply if all the following conditions are met:

(a) Machines and processing equipment shall be used by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats. The exemption shall not apply to machines and processing equipment used in providing services or in other nonmanufacturing activities.

Example: Machines and equipment of a dry cleaner are not used by a manufacturer in manufacturing, because a dry cleaner provides a service and is neither a manufacturer nor producer of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.

(b) Machines and processing equipment shall be used exclusively in manufacturing.

Example: A forklift truck used on a production line to move products from machine to machine and used regularly or frequently in a warehouse to move and stock finished products is not used exclusively in manufacturing.

(c) Machines and processing equipment shall be used directly in manufacturing. The exemption shall not apply if machines and processing equipment are not used directly in the step-by-step processes by which an end product results, even though the machine and equipment are indirectly related to the step-by-step processes. Machine foundations are real property improvements rather than personal property and do not qualify for exemption.

Example: Machines and equipment are not used directly in manufacturing if used for sweeping a plant; disposing of scrap or waste; plant heating or air conditioning; communications; lighting, safety, fire protection or prevention; research; storage; or delivery to or from a plant or repair or maintenance of machines, processing equipment or facilities. In addition, electric substations, tool storage facilities, water softening equipment, refrigerated storage facilities and catwalks that provide access to various parts of a building are not used directly in manufacturing.

(3) Other examples of the exemption. Other examples of application of the exemption are as follows:

(a) Small tools used exclusively and directly in the manufacturing process qualify as “processing equipment.” Small tools include hand tools such as drills, saws, micrometers and hammers. However, if the items are also used for machine repair or general maintenance, they are not exempt.

(b) The exemption applies if machines and processing equipment are used exclusively and directly by a manufacturer to produce other machines or processing equipment which, in turn, are used by the manufacturer to produce tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.

Example: A lathe purchased by a manufacturer and used directly and exclusively to produce machines which are used on the manufacturer’s production line is exempt. However, if the lathe is used partly for production of the machines and partly for repair purposes, it is not exempt.

(c) The exemption applies if machines and processing equipment are used exclusively and directly by a manufacturer to produce component parts of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats.

(d) The exemption does not apply to machines or processing equipment used in whole or in part by a manufacturer before the manufacturing process has begun or after it has been completed.

Example: Machines or equipment used for storage, delivery to or from a plant, repair or maintenance of facilities or equipment, research, or crating or packaging of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., for shipment are not exempt.

(e) The exemption does not apply to tangible personal property or an item, property, or good under s. 77.52 (1) (b), (c), or (d), Stats., which is not machinery or equipment, but is used in a manufacturing plant.