Wisconsin Legislature: Tax 11.10(1)(a)

(ze) Sleeping pills.

(zf) Smoking cessation products such as gums, lozenges, and patches that contain nicotine.

(zg) Sterile water (for injections).

(zh) Sterile normal saline .9% (IV or irrigation).

(zi) Vaccines.

(zj) Yeast infection medications.

Note: A listing that contains numerous items and descriptions of items that have been categorized as drugs, durable medical equipment, mobility-enhancing equipment, and prosthetic devices can be found in the Rules and Procedures of the Streamlined Sales Tax Governing Board, Inc., available at http://www.streamlinedsalestax.org.

(3) Items which are not drugs. Items which are not described in sub. (1) and which are not drugs include:

(a) Alcoholic beverages, soft drinks and distilled water.

(b) Durable medical equipment.

(d) Mobility-enhancing equipment.

(e) Dietary supplements.

(4) Exempt sales or use of drugs. Drugs shall be exempt if:

(a) Prescribed for the treatment of a human being by a person authorized to prescribe the drugs, and dispensed on prescription filled by a registered pharmacist in accordance with law. Insulin furnished by a pharmacist to a person for treatment of diabetes as directed by a physician shall be deemed dispensed on prescription.

(b) Sold to a licensed physician, surgeon, podiatrist, dentist, or hospital for the treatment of a human being.

(c) Furnished by a licensed physician, surgeon, podiatrist, or dentist to a patient who is a human being for treatment of the patient.

(d) Furnished by a hospital for treatment of any person pursuant to the order of a licensed physician, surgeon, dentist, or podiatrist. For this exemption, “hospital” has the meaning described in s. 50.33 (2), Stats., and does not include nursing homes.

(e) Sold to this state or any political subdivision or municipal corporation of the state, for use in the treatment of a human being; or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation of the state.

(f) Furnished without charge to a physician, surgeon, nurse anesthetist, advanced practice nurse, osteopath, dentist licensed under ch. 447, Stats., podiatrist licensed under ch. 448, Stats., or optometrist licensed under ch. 449, Stats., if the drug may not be dispensed without a prescription.

(5) Taxable sales of drugs. Taxable sales of drugs include:

(a) Retail sales for use in laboratories.

(b) Retail sales of drugs for pets.

Note: For exemption of drugs used on farm livestock or other animals, refer to ss. Tax 11.12 and 11.61.

Note: Section Tax 11.09 interprets ss. 77.51 (3pj) and 77.54 (14), (14r), and (33), Stats.

Note: The interpretations in s. Tax 11.09 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for certain medicines furnished without charge became effective October 14, 1997, pursuant to 1997 Wis. Act 27; and (b). The definition of “drug” is effective October 1, 2009, pursuant to 2009 Wis. Act 2.

History: Cr. Register, September, 1977, No. 261, eff. 10-1-77; r. (3) (g), Register, September, 1984, No. 345, eff. 10-1-84; am. (4) (d) and (6), Register, July, 1987, No. 379, eff. 8-1-87; am. (5) (b), Register, June, 1990, No. 414, eff. 7-1-90; am. (2) (c), (3) (c) and (4) (a), Register, March, 1991, No. 423, eff. 4-1-91; am. (1), (4) (e), cr. (4) (f), r. (6), Register, May, 1999, No. 521, eff. 6-1-99; EmR0924: emerg. r. and recr. (title), (1), (2) and (3), am. (4) (title), (intro), (a) to (d), (f), (5) (title), (intro.) and (b), eff. 10-1-09; CR 09-090: r. and recr. (title), (1), (2) and (3), am. (4) (title), (intro), (a) to (d), (f), (5) (title), (intro.) and (b) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (1) (b), renum. (2) to be (2) (intro.) and am., cr. (2) (a) to (zj) Register November 2010 No. 659, eff. 12-1-10; CR 20-027: am. (4) (a) Register July 2021 No. 787, eff. 8-1-21.

Tax 11.10 Wind, solar, and certain gas powered products.

(1) General. Section 77.54 (56), Stats., provides a sales and use tax exemption for the following:

(a) The sales price from the sale of and the storage, use, or other consumption of a product whose power source is wind energy, direct radiant energy received from the sun, or gas generated from anaerobic digestion of animal manure and other agricultural waste, if the product produces at least 200 watts of alternating current or 600 British thermal units per day, except that the exemption does not apply to an uninterruptible power source that is designed primarily for computers.

(b) Except for the sale of electricity or energy that is exempt from taxation under s. 77.54 (30), Stats., the sales price from the sale of and the storage, use, or other consumption of electricity or energy produced by a product described in par. (a).

(2) Definitions. In this section and in s. 77.54 (56), Stats.:

(a) “Agricultural waste” means a byproduct of farming.

(b) “Farming” has the meaning given in s. Tax 11.12 (2) (f), except “farming” includes holding livestock in a feed lot for less than 30 days.

(d) “Gas” means a fuel that is comprised primarily of methane and exists in a gaseous state at normal room temperature and pressure.

(e) “Product” means tangible personal property that converts wind energy, direct radiant energy received from the sun, or gas generated from the anaerobic digestion of animal manure and other agricultural waste into alternating current electricity or heat.

(3) Items which are products. Product, as defined in sub. (2) (e), includes the following items:

(a) Wind turbine generators, including blade assembly and tower.

(b) Gas powered electric generators.

(d) Photovoltaic cells, modules, and arrays, including tracking equipment that maintains optimal orientation to the sun.

(e) Solar thermal collectors.

(f) Inverters used to transform direct current produced by an item described in sub. (2) into alternating current, including property used to convey the direct current from the product to the inverter.

(g) Hardware required for installation of an item described in pars. (a) to (f).

(4) Items which are not products. Product, as defined in sub. (2) (e), excludes the following items:

(a) Tangible personal property that consumes electricity or heat produced by an item described in sub. (2) (e).

Example: A refrigerator that consumes electricity produced by a wind turbine generator is not itself a product whose power source is wind energy.

(b) A foundation for an item described in sub. (2) (e).

Example: A solar tracking device that holds an array of photovoltaic cells is installed onto a concrete foundation. The concrete foundation is not a product whose power source is direct radiant energy received from the sun.

(c) Except as provided in sub. (3) (f), property necessary to convey, transfer, or alter electricity or heat generated by an item described in sub. (2) (e).

(d) Tangible personal property used to store electricity or heat produced by an item described in sub. (2) (e).

Examples: 1) A tank that stores hot water heated by a solar collector is not itself a product whose power source is direct radiant energy received from the sun.

2) Batteries used to store electricity produced by a wind turbine generator or photovoltaic cells are not themselves products whose power source is wind energy or direct radiant energy received from the sun.

(5) Exemption for products.

(a) For purposes of the exemption under sub. (1) (a), a product that produces direct current shall be considered to produce alternating current if the direct current is modified to alternating current prior to the direct current being stored, used, consumed, or sold by the producer.

Examples: 1) An array of photovoltaic cells produces direct current. All of the current produced by the array is transferred directly to an inverter. The alternating current from the inverter is then either used to power equipment or it is sold to a utility. The photovoltaic array is considered to meet the requirement that it be a product that produces alternating current.

2) A wind turbine generator produces direct current. The current is used to charge batteries. When needed, the batteries supply direct current to an inverter, producing alternating current used to power various devices. The direct current generator does not qualify for exemption since the direct current is being stored by the producer prior to changing it to alternating current.

(b) In order to qualify for the exemption under sub. (1) (a), a product using gas as a power source shall use gas from the anaerobic digestion of animal manure and other agricultural waste exclusively as its power source. A product that uses other fuels such as natural gas, propane, or gas generated from a landfill does not qualify for exemption.

1. An alternating current wind turbine generator rated by the manufacturer to produce at least 200 watts of alternating current with a wind speed of 25 miles per hour.

2. A direct current wind turbine generator that is rated by the manufacturer to produce at least 250 watts of direct current at a wind speed of 25 miles per hour and produces alternating current as described in par. (a).

Example: A direct current wind turbine generator is rated by the manufacturer to produce at least 250 watts of direct current with a wind speed of 25 miles per hour. The generator is connected to an inverter that modifies the direct current to alternating current prior to the direct current being stored, used, consumed, or sold by the producer. The generator, inverter, and the property used to convey the direct current from the generator to the inverter qualify for exemption.

3. A direct current wind turbine generator that produces alternating current as described in par. (a) of at least 200 watts as measured at the inverter under normal operating conditions with a wind speed of no more than 25 miles per hour.

4. A solar thermal collector with an output rating of at least 600 British thermal units per day, as determined by the Solar Rating and Certification Corporation, that is normally in service every day throughout the year.

5. A photovoltaic cell, module, or array with a standard test condition output rating of at least 250 watts of direct current that produces alternating current as described in par. (a).

6. A direct current gas powered generator that meets the requirement in par. (b) and produces alternating current as described in par. (a) of at least 200 watts as measured at the inverter when producing direct current under its normal operating conditions.

7. A gas fueled furnace, space heater, or water heater that meets the requirement in par. (b) and can be expected to consume gas in an amount equivalent to at least 600 British thermal units per day throughout the year.

Example: Gas generated by the anaerobic digestion of animal manure or agricultural waste is used solely as the power source for a space heater and a water heater. Both products, when in use, produce over 600 British thermal units per day. The water heater is used every day of the year while the space heater is used only during the months of October through April. The water heater qualifies for exemption; the space heater does not.

(d) The exemption under sub. (1) (a) may be claimed by the consumer of the product who purchases the product as tangible personal property. A contractor who will purchase, furnish, and install a product which will become real property when installed is the consumer of the product, and may provide its supplier with a properly completed exemption certificate, claiming the product is exempt under s. 77.54 (56), Stats. A contractor who will furnish and install a product that will remain tangible personal property when installed may purchase a product without tax for resale. The purchaser may then issue the contractor an exemption certificate, claiming the product is exempt under s. 77.54 (56) (a), Stats.

Note: See s. Tax 11.68 (4), (5), and (6) for information on the determination of the classification of property after installation.

(6) Exemption for energy produced by a product.

(a) The exemption under sub. (1) (b) applies to a direct sale from the producer of electricity or energy to the consumer of the same electricity or energy where all of the following apply:

1. The electricity or energy is produced by a product that qualifies for exemption under sub. (1) (a).

2. The sale does not qualify for exemption under s. 77.54 (30), Stats.

Note: Section 77.54 (30) (a), Stats., includes an exemption for electricity sold from November through April for residential use, fuel and electricity sold for use in farming, and fuel and electricity consumed in manufacturing tangible personal property in Wisconsin.

(b) The exemption under sub. (1) (b) does not apply to electricity or energy which is first purchased for resale from the producer and is then sold in a subsequent retail sale, unless the person making the retail sale is able to account for the quantity of electricity or energy that qualifies for exemption under s. 77.54 (56) (b), Stats., and is able to identify the person to whom such electricity or heat is sold.

Example: Electricity that would otherwise qualify for exemption under s. 77.54 (56) (b), Stats., is commingled in a distribution network with electricity that is not produced by a product whose power source is wind energy, direct radiant energy received from the sun, or gas generated from anaerobic digestion of animal manure and other agricultural wastes. It is not possible to determine to whom, or in what amount, the electricity that qualifies for exemption is sold. A purchaser of this electricity will not be able to provide an exemption certificate to a utility and properly claim what portion of the electricity it has purchased is exempt pursuant to s. 77.54 (56) (b), Stats., nor is it possible for a utility to know what portion of the electricity purchased by the consumer was from eligible sources.

(c) The exemption under sub. (1) (b) does not apply to the sale of, or the storage, use or other consumption of gas produced by the anaerobic digestion of animal manure or other agricultural wastes unless such gas is produced by a product described in sub. (1) (a).

History: EmR1110: emerg. cr., eff. 6-29-11; CR 11-052: cr. Register July 2012 No. 679, eff. 8-1-12.

Tax 11.11 Utility, industrial and governmental waste treatment facilities.

(1) General. Section 77.54 (26), Stats., provides a sales and use tax exemption for tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., which becomes a component part of certain waste treatment facilities.

(2) Utility waste treatment exemption. If a utility waste treatment facility that is taxed under ch. 76, Stats., qualifies for property tax exemption under s. 76.025 (1), Stats., as approved by the department, it qualifies for the sales and use tax exemption under s. 77.54 (26), Stats.

Note: Refer to s. Tax 6.40 for information on how to request approvals for property tax exemption for utility waste treatment facilities. For more information regarding exemptions for waste treatment facilities owned by a utility, including railroads, airlines, and pipelines, approved by the department, write to Wisconsin Department of Revenue, Manufacturing and Utility Bureau, PO Box 8971, Madison WI 53708-8971; telephone (608) 266-3845; send an e-mail to mfgtelco@wisconsin.gov; or access the department’s web site at www.revenue.wi.gov and search ”waste treatment facilities”.

(2m) Industrial waste treatment exemption.

(a) An industrial waste treatment facility is any property purchased or constructed as a waste treatment facility used exclusively and directly to remove, store, or cause a physical or chemical change in industrial waste or air contaminants for the purpose of abating or eliminating pollution of surface waters, the air, or waters of the state if that property is not used to grow agricultural products for sale. In this paragraph, “used exclusively” means to the exclusion of all other uses except:

1. For other use not exceeding 5% of total use.

2. To produce heat or steam for a manufacturing process, if the fuel consists of either 95% or more industrial waste that would otherwise be considered superfluous, discarded, or fugitive material or 50 percent or more of wood chips, sawdust, or other wood residue from the paper and wood products manufacturing process, if the wood chips, sawdust, or other wood residue would otherwise be considered superfluous, discarded, or fugitive material.

(b) Tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., becoming a component part of an industrial waste treatment facility is exempt from the sales and use tax under s. 77.54 (26), Stats., if the facility qualifies for property tax exemption under s. 70.11 (21), Stats.