Chapter 77

77.53(11)(b)2. 2. An exemption certificate is received by the seller in good faith if the certificate claims an exemption for which all of the following apply:

77.53(11)(b)2.a. a. It was an exemption authorized by law on the date of the transaction in the jurisdiction where the transaction is sourced.

77.53(11)(b)2.b. b. It could be applicable to the property, item, good, or service being purchased.

77.53(11)(b)2.c. c. It is reasonable for the purchaser’s type of business.

77.53(11)(b)3. 3. If the seller obtains the information described in subd. 2., the seller is relieved of any liability for the tax on the transaction unless it is discovered through the audit process that the seller had knowledge, or had reason to know, at the time such information was provided that the information relating to the exemption claimed was materially false or the seller otherwise knowingly participated in activity intended to purposefully evade the tax that is properly due on the transaction. In order to enforce this subdivision, the state must establish that the seller had knowledge, or had reason to know, at the time the information was provided that the information was materially false.

77.53(12) (12) If a purchaser who gives a certificate makes any storage or use of the property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or service other than retention, demonstration, or display while holding it for sale in the regular course of operations as a seller, the storage or use is taxable as of the time the property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or service is first so stored or used.

77.53(13) (13) If a purchaser gives a certificate with respect to the purchase of fungible goods and thereafter commingles these goods with other fungible goods not so purchased but of such similarity that the identity of the constituent goods in the commingled mass cannot be determined sales from the mass of commingled goods shall be deemed to be sales of the goods so purchased until a quantity of commingled goods equal to the quantity of purchased goods so commingled has been sold.

77.53(14) (14) It is presumed that tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or taxable services shipped or brought to this state by the purchaser were purchased from or serviced by a retailer.

77.53(16) (16) If the purchase, rental or lease of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or service subject to the tax imposed by this section was subject to a sales tax by another state in which the purchase was made, the amount of sales tax paid the other state shall be applied as a credit against and deducted from the tax, to the extent thereof, imposed by this section, except no credit may be applied against and deducted from a sales tax paid on the purchase of advertising and promotional direct mail, if the advertising and promotional direct mail purchaser did not provide to the seller a direct pay permit, an exemption certificate claiming advertising and promotional direct mail, or other information that indicates the appropriate taxing jurisdiction to which the advertising and promotional direct mail is delivered to the ultimate recipients. In this subsection “sales tax” includes a use or excise tax imposed on the use of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or taxable service by the state to which the sale was sourced and “state” includes the District of Columbia and the commonwealth of Puerto Rico but does not include the several territories organized by congress.

77.53(16m) (16m) If the purchase, rental, license, or lease of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or service subject to the tax imposed by this section was sourced to tribal lands and, prior to imposing the tax under this subchapter, was subject to a sales tax by a federally recognized American Indian tribe or band in this state, the amount of sales tax paid to the tribe or band may, as determined by an agreement between the department and the tribal council under s. 73.03 (65), be applied as a credit against and deducted from the tax, to the extent thereof, imposed by this section. In this subsection “sales tax” includes a use or excise tax imposed on the use of tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), or taxable service by the tribe or band.

77.53(17) (17) This section does not apply to tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) purchased outside this state, as determined under s. 77.522, other than motor vehicles, boats, snowmobiles, recreational vehicles, as defined in s. 340.01 (48r), trailers, semitrailers, all-terrain vehicles, utility terrain vehicles, off-highway motorcycles, as defined in s. 23.335 (1) (q), and airplanes registered or titled or required to be registered or titled in this state, which is brought into this state by a nondomiciliary for the person’s own storage, use or other consumption while temporarily within this state when such property, item, or good is not stored, used or otherwise consumed in this state in the conduct of a trade, occupation, business or profession or in the performance of personal services for wages or fees.

77.53(17m) (17m) This section does not apply to a boat purchased in a state contiguous to this state, as determined under s. 77.522, by a person domiciled in that state if the boat is berthed in this state’s boundary waters adjacent to the state of the domicile of the purchaser and if the transaction was an exempt occasional sale under the laws of the state in which the purchase was made.

77.53(17r) (17r) This section does not apply to an aircraft if all of the following requirements are fulfilled:

77.53(17r)(a) (a) It is purchased in another state, as determined under s. 77.522.

77.53(17r)(b) (b) Its owner or lessee has paid all of the sales and use taxes imposed in respect to it by the state where it was purchased.

77.53(17r)(c) (c) If the owner or lessee is a corporation, that corporation, and all corporations with which that corporation may file a consolidated return for federal income tax purposes, neither is organized under the laws of this state nor has real property or other tangible personal property; except aircraft and such property as hangars, accessories, attachments, fuel and parts required for operation of aircraft; in this state at the time the aircraft is registered in this state.

77.53(17r)(d) (d) If the owner or lessee is a partnership, all of the corporate partners fulfill the requirements under par. (c) and none of the general partners and none of the limited partners who has management or control responsibilities is domiciled in this state and the partnership has no other tangible personal property and no real property; except aircraft and such property as hangars, accessories, attachments, fuel and parts required for operation of aircraft; in this state at the time the aircraft is registered in this state.

77.53(17r)(dm) (dm) If the owner or lessee is a limited liability company, all of the corporate members fulfill the requirements under par. (c) and none of the managers and none of the members who has management or control responsibilities is domiciled in this state and the limited liability company has no other tangible personal property and no real property; except aircraft and such property as hangars, accessories, attachments, fuel and parts required for operation of aircraft; in this state at the time the aircraft is registered in this state.

77.53(17r)(e) (e) If the owner or lessee is an individual, the owner or lessee is not domiciled in this state.

77.53(17r)(f) (f) If the owner or lessee is an estate, a trust, a cooperative, or an unincorporated cooperative association; that estate, that trust and its grantor or that cooperative or association does not have real property or other tangible personal property; except aircraft and such property as hangars, accessories, attachments, fuel and parts required for operation of aircraft; in this state at the time the aircraft is registered in this state.

77.53(17r)(g) (g) The department has not determined that the owner, if the owner is a corporation, trust, partnership or limited liability company, was formed to qualify for the exception under this subsection.

77.53(18) (18) This section does not apply to the storage, use or other consumption in this state of household goods or items, property, or goods under s. 77.52 (1) (b), (c), or (d) for personal use or to aircraft, motor vehicles, boats, snowmobiles, mobile homes, manufactured homes, as defined in s. 101.91 (2), recreational vehicles, as defined in s. 340.01 (48r), trailers, semitrailers, all-terrain vehicles, utility terrain vehicles, and off-highway motorcycles, as defined in s. 23.335 (1) (q), for personal use, purchased by a nondomiciliary of this state outside this state, as determined under s. 77.522, 90 days or more before bringing the goods, items, or property into this state in connection with a change of domicile to this state.

77.53(19) (19) This section does not apply to the storage, use, or other consumption in this state of tangible personal property, property, or goods under s. 77.52 (1) (a), (c), or (d), or taxable services, purchased outside this state, as determined under s. 77.522, by an out-of-state business, as defined in s. 323.12 (5) (a) 6., and brought into this state and used solely for disaster relief work, as defined in s. 323.12 (5) (a) 3.

77.53 History History: 1971 c. 125, 211; 1977 c. 29, 418; 1979 c. 1, 174; 1981 c. 317; 1983 a. 2; 1985 a. 29; 1987 a. 27, 268, 399; 1991 a. 39, 316; 1993 a. 16, 112; 1995 a. 27, 209; 1997 a. 27, 41, 237; 1999 a. 31; 2001 a. 109; 2003 a. 321; 2005 a. 441; 2007 a. 11, 20; 2009 a. 2, 28, 276, 330; 2011 a. 208; 2013 a. 20; 2015 a. 84; 2017 a. 59, 367; 2021 a. 238 s. 45; 2023 a. 121, 138, 141; s. 13.92 (1) (bm) 2.; s. 13.92 (2) (i); s. 35.17 correction in (10).

77.53 Annotation For a taxpayer to use tangible personal property for use tax purposes the taxpayer must own, possess, or enjoy the property and exercise some right or power over the property in Wisconsin. A taxpayer’s purpose in entering into a transaction is not dispositive of whether the property is subject to use tax. The substance and realities of a taxpayer’s activities are determinative. The exercise of a right or power over property encompasses financial or economic control as well as physical control. G & G Trucking, Inc. v. DOR, 2003 WI App 228, 267 Wis. 2d 847, 672 N.W.2d 80, 02-2648.

77.53 Annotation For the use tax to apply to intercompany transfers with wholly-owned subsidiaries, the subsidiaries that transferred the fixed assets must be considered “retailers” under s. 77.51 (13). It is not the case that Wisconsin has a statutory scheme that taxes all transfers of tangible personal property, unless an explicit exemption applies. When the person transferring tangible personal property lacks mercantile intent, the person will not be subject to tax, even though no explicit exemption applies. DOR v. River City Refuse Removal, Inc., 2007 WI 27, 299 Wis. 2d 561, 729 N.W.2d 396, 04-2468.

77.535 77.535 Increases; building materials. Increases in the rates of the taxes under this subchapter do not apply to building materials purchased by persons engaged in constructing, altering, repairing or improving real estate for others when the materials so purchased by those persons are affixed and made a structural part of real estate in the fulfillment of a written contract for a fixed price not subject to change or modification, or to a formal written bid that cannot be altered or withdrawn, if the contract is entered into or the bid is made before the effective date of the sales and use tax rate increase.

77.535 History History: 1981 c. 317.

77.54 77.54 General exemptions. There are exempted from the taxes imposed by this subchapter:

77.54(1) (1) The sales price from the sale of and the storage, use or other consumption in this state of tangible personal property, and items and property under s. 77.52 (1) (b) and (c), and services the sales price from the sale of which, or the storage, use or other consumption of which, this state is prohibited from taxing under the constitution or laws of the United States or under the constitution of this state.

77.54(2) (2) The sales price from the sales of and the storage, use, or other consumption of tangible personal property or item under s. 77.52 (1) (b) that is 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) 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) 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) destined for sale, except as provided in sub. (30) (a) 6.

77.54(2m) (2m) The sales price from the sales of and the storage, use, or other consumption of tangible personal property or services that are used exclusively and directly by a manufacturer in manufacturing shoppers guides, newspapers, or periodicals and that become an ingredient or component of shoppers guides, newspapers, or periodicals or that are consumed or lose their identity in the manufacture of shoppers guides, newspapers, or periodicals, whether or not the shoppers guides, newspapers, or periodicals are transferred without charge to the recipient. In this subsection, “shoppers guides,” “newspapers,” and “periodicals” have the meanings under sub. (15). The exemption under this subsection does not apply to advertising supplements that are not newspapers.

77.54(3) (3) 

77.54(3)(a) (a) The sales price from the sale of and the storage, use, or other consumption of tractors and machines, including accessories, attachments, and parts, lubricants, nonpowered equipment, and other tangible personal property, or items or property under s. 77.52 (1) (b) or (c), that are used exclusively and directly, or are consumed or lose their identities, in the business of farming, including dairy farming, agriculture, horticulture, floriculture, silviculture, beekeeping, and custom farming services, but excluding automobiles, trucks, and other motor vehicles for highway use; excluding personal property that is attached to, fastened to, connected to, or built into real property or that becomes an addition to, component of, or capital improvement of real property; and excluding tangible personal property, or items or property under s. 77.52 (1) (b) or (c), used or consumed in the erection of buildings or in the alteration, repair, or improvement of real property, regardless of any contribution that that personal property, or item or property under s. 77.52 (1) (b) or (c), makes to the production process in that building or real property and regardless of the extent to which that personal property, or item or property under s. 77.52 (1) (b) or (c), functions as a machine, except as provided in par. (c).

77.54(3)(b) (b) In par. (a):

77.54(3)(b)1. 1. “Building” has the meaning given under s. 70.111 (10) (a) 1.

77.54(3)(b)2. 2. “Machine” means an assemblage of parts that transmits force, motion and energy from one part to another in a predetermined manner.

77.54(3)(b)3. 3. “Used exclusively” means used to the exclusion of all other uses except for other use not exceeding 5 percent of total use.

77.54(3)(c) (c) For purposes of this subsection, the following items retain their character as tangible personal property, regardless of the extent to which they are fastened to, connected to or built into real property:

77.54(3)(c)1. 1. Auxiliary power generators.

77.54(3)(c)2. 2. Bale loaders.

77.54(3)(c)3. 3. Barn cleaners and elevators.

77.54(3)(c)4. 4. Conveyors.

77.54(3)(c)5. 5. Feed elevators and augers.

77.54(3)(c)6. 6. Grain dryers and grinders.

77.54(3)(c)7. 7. Milk coolers.

77.54(3)(c)8. 8. Milking machines; including piping, pipeline washers and compressors.

77.54(3)(c)9. 9. Powered feeders, excluding platforms and troughs constructed from ordinary building materials.

77.54(3)(c)10. 10. Silo unloaders.

77.54(3m) (3m) The sales price from the sale of and the storage, use, or other consumption of the following items if they are used exclusively by the purchaser or user in the business of farming; including dairy farming, agriculture, horticulture, floriculture, silviculture, beekeeping, and custom farming services:

77.54(3m)(a) (a) Seeds for planting.

77.54(3m)(b) (b) Plants.

77.54(3m)(c) (c) Feed.

77.54(3m)(d) (d) Fertilizer.

77.54(3m)(e) (e) Soil conditioners.

77.54(3m)(f) (f) Animal bedding.

77.54(3m)(g) (g) Sprays, pesticides and fungicides.

77.54(3m)(h) (h) Breeding and other livestock.

77.54(3m)(hm) (hm) Bees, beehives, and bee combs.

77.54(3m)(i) (i) Poultry.

77.54(3m)(j) (j) Farm work stock.

77.54(3m)(k) (k) Baling twine and baling wire.

77.54(3m)(L) (L) Containers for fruits, vegetables, bee products, grain, hay, silage, and animal wastes.

77.54(3m)(m) (m) Plastic bags, plastic sleeves and plastic sheeting used to store or cover hay or silage.

77.54(4) (4) The sales price from the sale of tangible personal property and items and property under s. 77.52 (1) (b) and (c) and the storage, use or other consumption in this state of tangible personal property and items and property under s. 77.52 (1) (b) and (c), which is the subject of any such sale, by any elementary school or secondary school, exempted as such from payment of income or franchise tax under ch. 71, whether public or private.

77.54(5) (5) The sales price from the sale of and the storage, use or other consumption of:

77.54(5)(a) (a)

77.54(5)(a)1. 1. Aircraft, including accessories, attachments, and fuel for such aircraft, sold to persons using the aircraft as certified or licensed carriers of persons or property in interstate or foreign commerce under authority of the laws of the United States or any foreign government, or sold to any foreign government for use by such government outside this state.

77.54(5)(a)2. 2. Aircraft, including attachments for such aircraft, sold to persons who are not residents of this state and who will not use such aircraft in this state otherwise than in the removal of such aircraft from this state or in the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of such aircraft in this state.

77.54(5)(a)3. 3. Parts used to modify or repair aircraft.

77.54(5)(a)4. 4. Motor vehicles or truck bodies sold to persons who are not residents of this state and who will not use such motor vehicles or trucks for which the truck bodies were made in this state otherwise than in the removal of such motor vehicles or trucks from this state.

77.54(5)(am) (am) Modular homes, as defined in s. 101.71 (6), and manufactured homes, as defined in s. 101.91 (2), that are used in real property construction activities outside this state.

77.54(5)(b) (b) Motor trucks, truck tractors, road tractors, buses, trailers and semitrailers, and accessories, attachments, parts, supplies and materials therefor, sold to common or contract carriers who use such motor trucks, truck tractors, road tractors, buses, trailers and semitrailers exclusively as common or contract carriers, including the urban mass transportation of passengers as defined in s. 71.38.

77.54(5)(c) (c) Motor vehicles which are not required to be licensed for highway use and which are exclusively and directly used in conjunction with waste reduction or recycling activities which reduce the amount of solid waste generated, reuse solid waste, recycle solid waste, compost solid waste or recover energy from solid waste. For the purposes of this paragraph, “solid waste” means garbage, refuse, sludge or other materials or articles, whether these materials or articles are discarded or purchased, including solid, semisolid, liquid or contained gaseous materials or articles resulting from industrial, commercial, mining or agricultural operations or from domestic use or from public service activities.

77.54(5)(d) (d) Mobile units used for mixing and processing and the motor vehicle or trailer on which the unit is mounted, including accessories, attachments, parts, supplies and materials for those vehicles, trailers and units.

77.54(6) (6) 

77.54(6)(am) (am) The sales price from the sale of and the storage, use or other consumption of:

77.54(6)(am)1. 1. 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) and safety attachments for those machines and equipment.

77.54(6)(am)2. 2. Containers, labels, sacks, cans, boxes, drums, bags or other packaging and shipping materials for use in packing, packaging or shipping tangible personal property or items or property under s. 77.52 (1) (b) or (c), if the containers, labels, sacks, cans, boxes, drums, bags, or other packaging and shipping materials are used by the purchaser to transfer merchandise to customers or physically transferred to the customer in conjunction with the selling, performing, or furnishing of the type of services under s. 77.52 (2) (a) 7., 10., 11., or 20. that are exempt from or not subject to taxation under this subchapter. This subdivision does not apply to services provided by veterinarians.

77.54(6)(am)2m. 2m. Meat casing, wrapping paper, tape, containers, labels, sacks, cans, boxes, drums, bags or other packaging and shipping materials for use in packing, packaging or shipping meat or meat products regardless of whether such items are used to transfer merchandise to customers.

77.54(6)(am)3. 3. Fuel converted to electric energy, gas or steam by utilities and that portion of the amount of fuel converted to steam for purposes of resale by persons other than utilities.

77.54(6)(am)4. 4. Machines and specific processing equipment used exclusively and directly in a fertilizer blending, feed milling, or grain drying operation, including holding structures used for weighing and dropping feed or fertilizer ingredients into a mixer, wet corn holding bins, grain dryers, mixers, conveying equipment, and grinding, mixing, and saturation bins, regardless of whether such items become an addition to, a component of, or a capital improvement of real property. The exemption under this subdivision applies to repair parts, replacements, and safety attachments for such machines and equipment.

77.54(6)(am)5. 5. Building materials acquired solely for and used solely in the construction or repair of holding structures used for weighing and dropping feed or fertilizer ingredients into a mixer or for storage of grain, if such structures are used in a fertilizer blending, feed milling, or grain drying operation.

77.54(6)(bn) (bn) The exemptions under par. (am) 4. and 5. apply only to items located on the same parcel of property where the fertilizer blending, feed milling, or grain drying operation activities are conducted, or on an adjoining parcel, including parcels that are separated only by a public road. The exemptions under par. (am) 4. and 5. apply only to persons who are primarily engaged in fertilizer blending, feed milling, or grain handling operations which include grain drying operations, or primarily engaged in any combination of fertilizer blending, feed milling, or grain handling operations which include grain drying operations, and to contractors providing real property construction activities to such persons.

77.54(6)(cn) (cn) The exemptions under this subsection shall be strictly construed.

77.54(7) (7) 

77.54(7)(a) (a) Except as provided in pars. (b) to (d), the occasional sales of tangible personal property, items and property under s. 77.52 (1) (b) and (c), and services and the storage, use or other consumption in this state of tangible personal property and items and property under s. 77.52 (1) (b) and (c) the transfer of which to the purchaser is an occasional sale.

77.54(7)(b) (b) If the item transferred is a motor vehicle, snowmobile, recreational vehicle, as defined in s. 340.01 (48r), trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, as defined in s. 23.335 (1) (q), or aircraft and the item is registered or titled, or required to be registered or titled, in this state or if the item is a boat that is registered or titled, or required to be registered or titled, in this state or under the laws of the United States, the exemption under par. (a) applies only if all of the following conditions are fulfilled:

77.54(7)(b)1. 1. The item is transferred to a child, spouse, parent, father-in-law, mother-in-law, daughter-in-law or son-in-law of the transferor or, if the item is a motor vehicle, from the transferor to a corporation owned solely by the transferor or by the transferor’s spouse.