Chapter Tax 11

Tax 11.88(1)(a)1.b. b. A mobile home, unless a mobile home is specifically excluded under the applicable statute.

Tax 11.88(1)(a)2. 2. As provided in 42 USC 5402 (6), “manufactured home” means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein; except that such term shall include any structure which meets all the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the Secretary of Housing and Urban Development and complies with the standards established under this chapter; and except that such term shall not include any self-propelled recreational vehicle.

Tax 11.88(1)(b) (b) “Mobile home,” as defined in s. 101.91 (10), Stats., means a vehicle manufactured or assembled before June 15, 1976, designed to be towed as a single unit or in sections upon a highway by a motor vehicle and equipped and used, or intended to be used, primarily for human habitation, with walls of rigid uncollapsible construction, which has an overall length in excess of 45 feet. “Mobile home” includes the mobile home structure, its plumbing, heating, air conditioning and electrical systems, and all appliances and all other equipment carrying a manufacturer’s warranty.

Tax 11.88(1)(bm) (bm)

Tax 11.88(1)(bm)1. 1. “Modular home,” as defined in s. 101.71 (6), Stats., means any structure or component thereof which is intended for use as a dwelling and satisfies either of the following conditions:

Tax 11.88(1)(bm)1.a. a. The structure or component is of closed construction and fabricated or assembled on-site or off-site in manufacturing facilities for installation, connection, or assembly and installation, at the building site. In this subd. 1. a., “closed construction” has the meaning given in s. 101.71 (1), Stats.

Tax 11.88(1)(bm)1.b. b. The structure or component is a building of open construction which is made or assembled in manufacturing facilities away from the building site for installation, connection, or assembly and installation, on the building site and for which certification is sought by the manufacturer. In this subd. 1. b. and subd. 2., “open construction” has the meaning given in s. 101.71 (7), Stats.

Tax 11.88(1)(bm)2. 2. “Modular home” does not mean any manufactured home under s. 101.91, Stats., or any building of open construction which is not subject to subd. 1. b.

Tax 11.88(1)(c) (c) “New manufactured home,” as defined in s. 101.91 (11), Stats., means a manufactured home that has never been occupied, used or sold for personal or business use.

Tax 11.88(1)(d) (d) “New recreational vehicle,” as defined in s. 218.10 (7), Stats., means a recreational vehicle which has never been occupied, used or sold for personal or business use.

Tax 11.88(1)(e) (e) “Recreational vehicle,” as defined in s. 340.01 (48r), Stats., means a vehicle that is designed to be towed upon a highway by a motor vehicle, that is equipped and used, or intended to be used, primarily for temporary or recreational human habitation, that has walls of rigid construction, and that does not exceed 45 feet in length.

Tax 11.88(1)(f) (f) “Recreational vehicle dealer” has the meaning given in s. 218.10 (1g), Stats.

Tax 11.88(1)(g) (g) “Retailer” is a person who has or is required to have a certificate under s. 77.52 (7), Stats., or s. 77.53 (9), Stats., and who holds or is required to hold a permit issued under s. 77.52 (9), Stats., or s. 77.53 (9m), Stats.

Tax 11.88(1)(h) (h) “Used manufactured home,” as defined in s. 101.91 (12), Stats., means a manufactured home that has previously been occupied, used or sold for personal or business use.

Tax 11.88(1)(i) (i) “Used recreational vehicle” has the meaning given in s. 218.10 (9), Stats.

Tax 11.88(2) (2) Manufactured and Mobile homes as personal property vs. realty improvement. A manufactured or mobile home is personal property if it is located in a manufactured home community, a mobile home park, or other place where the land on which the manufactured or mobile home is located is not owned by the manufactured or mobile home owner. A manufactured or mobile home is a realty improvement if it is permanently affixed to land owned by the owner of the manufactured or mobile home. It is permanently affixed to the land for sales tax purposes if the manufactured or mobile home sits on a foundation and is connected to utilities. “On a foundation” means it is off the wheels and sitting on some other support.

Tax 11.88(3) (3) Sales of manufactured and mobile homes which are realty improvements.

Tax 11.88(3)(a) (a) The sale of a manufactured or mobile home and the land to which it is permanently affixed is the sale of a realty improvement not subject to the tax. The sale of a manufactured or mobile home which is a realty improvement on the land of the seller, and which is acquired by the purchaser for removal from the seller’s land for permanent attachment to the purchaser’s land, is the sale of realty.

Tax 11.88(3)(b) (b) If the seller of a manufactured or mobile home as part of the sales transaction agrees to permanently affix the home on a foundation on land owned by the purchaser, the seller is a contractor-consumer engaged in improving realty. Except as provided in par. (c), sales of manufactured or mobile homes to the contractor-consumer are subject to the tax, but the sales price from the subsequent sale by the contractor-consumer to the purchaser of the home are not taxable.

Tax 11.88(3)(c) (c) Sales of manufactured homes to the contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.

Tax 11.88(4) (4) Sales and rentals of manufactured and mobile homes which are personal property.

Tax 11.88(4)(a) (a) Under s. 77.54 (31), Stats., the total sales price from the sale of a used mobile home or a used manufactured home is exempt from the sales and use tax.

Tax 11.88(4)(b) (b) Under s. 77.51 (15b) (b) 7. and (12m) (b) 7., Stats., 35% of the total sales price from the sale of a new manufactured home is exempt from the tax. No credit is allowed for trade-in allowances on the purchase of these new manufactured homes.

Tax 11.88(4)(c) (c) Under s. 77.54 (36), Stats., the rental of a mobile home or a manufactured home used for residence for a continuous period of one month or more is exempt from the sales and use tax, whether the manufactured or mobile home is classified as real or personal property.

Tax 11.88(4)(d) (d) Under s. 77.54 (7), Stats., recreational vehicles, as defined in s. 340.01 (48r), Stats., registered or titled or required to be registered or titled in this state that are transferred to the child, spouse, parent, father-in-law, mother-in-law, son-in-law, or daughter-in-law of the transferor are exempt occasional sales if the recreational vehicle, as defined in s. 340.01 (48r), Stats., has been previously registered or titled in Wisconsin in the name of the transferor and the transferor is not engaged in the business of selling recreational vehicles, as defined in s. 340.01 (48r), Stats.

Tax 11.88(4)(e) (e) Under s. 77.53 (18), Stats., the use tax does not apply to a manufactured home or mobile home purchased by a nonresident outside Wisconsin 90 days or more before bringing the manufactured or mobile home into Wisconsin in connection with a change of domicile to Wisconsin.

Tax 11.88(4m) (4m) Modular homes.

Tax 11.88(4m)(a) (a) The sale of a modular home and the land to which it is permanently affixed is the sale of a realty improvement not subject to the tax.

Tax 11.88(4m)(b) (b) If the seller of a modular home as part of the sales transaction agrees to permanently affix the home on a foundation, the seller is a contractor-consumer engaged in improving realty. Except as provided in par. (e), the sale of the modular home to the contractor-consumer is subject to the tax, but the sales price from the subsequent sale by the contractor-consumer to the purchaser of the home is not taxable.

Tax 11.88(4m)(c) (c) The sales or purchase price from the sale of a modular home that is tangible personal property when sold (i.e., the sale to the contractor-consumer), may be reduced by one of the following:

Tax 11.88(4m)(c)1. 1. 35% of the sales or purchase price.

Tax 11.88(4m)(c)2. 2. An amount equal to the sales or purchase price of the home minus the cost of materials that become an ingredient or component part of the home.

Tax 11.88(4m)(d) (d) Once the retailer chooses one of the options provided in par. (c) 1. or 2., the retailer may not use the other option without the written approval of the department.

Tax 11.88(4m)(e) (e) Sales of modular homes to the contractor-consumer for use in real property construction activities outside Wisconsin are exempt from Wisconsin sales and use tax.

Tax 11.88(5) (5) Payment of tax.

Tax 11.88(5)(a) (a) No recreational vehicle may be registered in Wisconsin unless the registrant presents proof that the sales or use tax has been paid or that the registrant’s acquisition of the recreational vehicle was exempt from the tax. If the recreational vehicle registrant does not present proof that the tax has been paid, the registrant shall pay the tax at the time the recreational vehicle is registered with the department of transportation even though the recreational vehicle may also be used out-of-state.

Tax 11.88(5)(b) (b) If a recreational vehicle purchased outside Wisconsin is subject to the Wisconsin use tax, a credit is permitted against the Wisconsin use tax for any sales or use tax paid to the state in which the recreational vehicle was purchased.

Tax 11.88(6) (6) Consignment sales. When a recreational vehicle dealer displays and sells a recreational vehicle on behalf of another person, the dealer is a marketplace provider and responsible for collecting and remitting tax on the transaction if the dealer directly or indirectly, through agreements or arrangements with third parties, processes the payment from the purchaser for the retail sale, regardless of whether the dealer receives compensation or other consideration in exchange for the services provided by the dealer.

Tax 11.88 Note Note: For information regarding marketplace providers and sellers, see s. Tax 11.555.

Tax 11.88 Note Note: Section Tax 11.88 interprets ss. 77.51 (2), (7i), (7j), (11d), (12m) (b) 7., (13), (14) (n) 7., and (15b) (b) 7., (17) (g), 77.52 (2) (a) 1., 77.523, 77.53 (17) and (18), 77.54 (7), (31), and (36), 77.61 (1) (a) and (c), 101.91 (2), (10), (11), and (12), 218.10 (1g), (7), and (9), and 340.01 (29) and (48r), Stats.

Tax 11.88 Note Note: The interpretations in s. Tax 11.88 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Nonretailer sales of mobile homes became taxable effective August 1, 1977, pursuant to Chapter 29, Laws of 1977; (b) Nonretailer sales of mobile homes exceeding 45 feet in length became exempt effective July 1, 1978, pursuant to Chapter 418, Laws of 1977; (c) Rental of a mobile home that is personal property for lodging for a continuous period of one month or more became exempt effective July 1, 1984, pursuant to 1983 Wis. Act 341, clarified effective April 1, 1986, pursuant to 1985 Wis. Act 149; (d) Gross receipts from a used mobile home became exempt effective January 1, 1987, pursuant to 1985 Wis. Act 29; (e) Thirty−five percent of the gross receipts from the sale of new mobile homes became exempt January 1, 1987, pursuant to 1985 Wis. Act 29; (f) The exemption from use tax of mobile homes purchased 90 or more days before moving to Wisconsin became effective August 1, 1987, pursuant to 1987 Wis. Act 27; (g) The exemption for transfers to in-laws became effective August 15, 1991, pursuant to 1991 Wis. Act 39; (h) The exemption for certain new mobile homes transported in two unattached sections became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (i) The changes in terminology related to “mobile homes,” “manufactured homes,” and “recreational vehicles,” became effective January 1, 2008, pursuant to 2007 Wis. Act 11; (j) The change of the term “gross receipts” to “sales price” became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (k) 2019 Wis. Act 10 relating to marketplace providers became effective January 1, 2020.

Tax 11.88 History History: Cr. Register, December, 1980, No. 300, eff. 1-1-81; r. and recr. (3) and (6), Register, July, 1987, No. 379, eff. 8-1-87; am. (2) (b), (3) (d), (4) (b) and (5), cr. (3) (e), Register, June, 1991, No. 426, eff. 7-1-91; am. (3) (b) and (d), Register, April, 1993, No. 448, eff. 5-1-93; corrections in (3) (c) and (6) (a) made under s. 13.93 (2m) (b) 7., Stats., Register July 2002 No. 559; EmR0924: emerg. r. and recr. eff. 10-1-09; CR 09-090: r. and recr. Register May 2010 No. 653, eff. 6-1-10; CR 12-014: am. (title), cr. (1) (bm), am. (3) (b), cr. (3) (c), (4m) Register August 2012 No. 680, eff. 9-1-12; CR 20-027: am. (6) Register July 2021 No. 787, eff. 8-1-21; CR 22-017: r. and recr. (6) Register June 2023 No. 810, eff. 7-1-23.

subch. X of ch. Tax 11 Subchapter X — Administrative Provisions

Tax 11.90 Tax 11.90 Penalty for failure to produce records under s. 77.61 (19), Stats.

Tax 11.90(1) (1) General. A person who fails to produce records or documents, as provided under ss. 73.03 (9) and 77.59 (2), Stats., that were requested by the department may be subject to any of the following penalties under s. 77.61 (19), Stats.:

Tax 11.90(1)(a) (a) The disallowance of deductions, credits, exemptions or inclusions of additional taxable sales or additional taxable purchases to which the requested records relate.

Tax 11.90(1)(b) (b) In addition to any other penalties that the department may impose, a penalty for each violation that is equal to the greater of $500 or 25% of the amount of the additional tax on any adjustment made by the department that results from the person’s failure to produce the records.

Tax 11.90(2) (2) Definitions. In this section:

Tax 11.90(2)(a) (a) “Disallowance,” “inclusion,” or “adjustment” means that an item is disallowed, included or adjusted through action taken by the department when a proposed assessment or refund or notice of assessment or refund is issued to a taxpayer.

Tax 11.90(2)(b) (b) “Records” include both paper and electronic formats. Examples include bills, receipts, invoices, contracts, letters, memos, accounting statements or schedules, general ledgers, journal entries, and board of director’s minutes. “Records” do not include items protected by attorney-client privilege, if the taxpayer provides a brief description or summary of the contents of each record, the date each record was prepared, the person or persons who prepared each record, the person to whom each record was directed, or for whom each record was prepared, the purpose in preparing each record, and how each element of the privilege is met as to each record.

Tax 11.90(2)(c) (c) “Records requested were not provided” means that all records requested were not provided to the department within the time specified by the department.

Tax 11.90(2)(d) (d) “Written request for records” includes requests made by letter, e-mail, fax or any other written form.

Tax 11.90(2)(e) (e) “Provided” means the records are provided by electronic means or in paper format to the address specified by the department in its written request for records. If the address specified by the department is the person’s location, the records are considered provided on the date the person notifies the department they are available for review at that location.

Tax 11.90(3) (3) Procedures. The penalties in this section may be imposed if the records requested were not provided and the department provided the notifications in pars. (a), (b), and (c) regarding the records requested. The number of days established by the department for the person to respond to the record requests should be reasonable based on the facts of each situation.

Tax 11.90(3)(a) (a) A first written request for records where the department allowed the person a minimum of 30 days from the date of request for the records to be provided.

Tax 11.90(3)(b) (b) After the time period to respond to the first written request has expired as provided in par. (a), a second written request for records where the department allowed the person a minimum of 30 days from the date of request for the records to be provided. This second written request for records shall include a statement explaining that if the requested records are not provided by the date specified, the penalties provided by s. 77.61 (19), Stats., may be imposed.

Tax 11.90(3)(c) (c) After the time period to respond to the second written request has expired as provided in par. (b), a summons request for records where the department allowed the person a minimum of 30 days from the date of receipt of the request for the records to be provided. This summons request shall be prepared on a form prescribed by the department and shall be served:

Tax 11.90(3)(c)1. 1. By certified mail, evidenced by a return receipt signed by the taxpayer or an authorized representative.

Tax 11.90(3)(c)2. 2. By personal service pursuant to sec. 801.11, Stats., if unable to obtain a signature as provided in subd. 1.

Tax 11.90 Note Examples: 1) The department issues a first written request for records to Corporation A on September 1, 2016, allowing Corporation A until October 6, 2016, to provide the records requested. Corporation A does not provide the requested records to the department by October 6, 2016. The department issues a second written request for records to Corporation A on October 21, 2016, allowing Corporation A until November 30, 2016, to provide the records requested. Included in this second written request for records is a notification regarding the penalties provided by s. 77.61 (19), Stats. Corporation A does not provide the requested records by November 30, 2016. The department mails a summons request for records to Corporation A which is received on December 20, 2016, allowing Corporation A until January 31, 2017, to provide the records requested. Corporation A does not provide the requested records by January 31, 2017. Therefore, the department may disallow the deductions, credits, or exemptions or include the additional taxable sales or additional taxable purchases to which the requested records relate and impose a penalty equal to the greater of $500 or 25% of the additional tax on the adjustments made resulting from Corporation A not providing the records requested.

Tax 11.90 Note 2) The department issues a first written request for records to Corporation B on December 21, 2016, allowing Corporation B until January 20, 2017, to provide the records requested. Corporation B does not provide the requested records to the department by January 20, 2017. The department issues a second written request for records to Corporation B on February 8, 2017, allowing Corporation B until March 10, 2017, to provide the records requested. Included in this second written request for records is a notification regarding the penalties provided by s. 77.61 (19), Stats. Corporation B does not provide the requested records to the department by March 10, 2017. The department personally serves a summons request for records on Corporation B on March 28, 2017, allowing Corporation B until May 10, 2017, to provide the records requested. Corporation B provides records to the department by May 10, 2017, but the department determines that the taxpayer did not provide some of the records requested by May 10, 2017. Therefore, since the taxpayer did not provide all of the records requested by May 10, 2017, the department may disallow the deductions, credits, or exemptions or include the additional taxable sales or additional taxable purchases to which the requested records that were not provided relate and impose a penalty equal to the greater of $500 or 25% of the additional tax on the adjustments made resulting from the requested records that were not provided.

Tax 11.90(4) (4) Waiver of penalties.

Tax 11.90(4)(a) (a) The penalties in this section may be waived if the person whose records were requested can show that, under all the facts and circumstances, its response to the written request for records or its failure to respond to the written request for records was reasonable or justified by factors beyond the person’s control. In determining whether the penalties will be waived, the department may consider any of the following factors:

Tax 11.90(4)(a)1. 1. Death of the taxpayer, tax preparer, accountant or other responsible party.

Tax 11.90(4)(a)2. 2. Onset of debilitating illness or injury of the taxpayer, tax preparer, accountant or other responsible party.

Tax 11.90(4)(a)3. 3. Natural disaster such as tornado, flood or fire.

Tax 11.90(4)(a)4. 4. Records that were destroyed due to events beyond control of the taxpayer or other responsible party and not due to neglect.

Tax 11.90(4)(a)5. 5. Any other facts and circumstances that the department believes pertinent.

Tax 11.90(4)(b) (b) Providing requested records after the time period required for providing the records has expired, as provided in sub. (3), shall result in a reduction of the penalties provided in sub. (1) (a) and (b) if the department determines that these records support a reduction in the disallowance or inclusion previously made by the department.

Tax 11.90 Note Examples: 1) Since Corporation C does not provide the records requested by the date specified in a summons request for records to support deductions for exempt sales, the department issues a proposed audit report to Corporation C disallowing all the deductions for exempt sales previously claimed, which represents the penalty provided in s. 77.61 (19) (a) 1., Stats. Additional tax of $100,000 and the penalty as provided in s. 77.61 (19) (a) 2., Stats., of $25,000 results in the proposed audit report from disallowing the deductions for exempt sales. Corporation C provides the records requested 26 days after the department issues the proposed audit report but before the notice of assessment is issued and explains, without any further detail, that they were too busy with other aspects of their business to respond to the three written requests for records by the dates specified. In this situation, the failure to provide the records requested is not reasonable or justified by factors beyond the person’s control. In addition, the records provided do not support a reduction of the exempt sales deductions disallowed in the proposed audit report. Therefore, the deductions for exempt sales adjustment is not modified so the proposed additional tax of $100,000 and the original proposed penalty as provided in s. 77.61 (19) (a) 2., Stats., of $25,000 remain.

Tax 11.90 Note 2) Since Mr. Smith does not provide the records requested regarding his business, which primarily receives payments in cash, to support the reported gross receipts by the date specified in a summons request for records, the department issues a notice of assessment to Mr. Smith including an estimated amount into taxable sales for unreported receipts, which represents the penalty provided in s. 77.61 (19) (a) 1., Stats. Additional tax of $60,000, a negligence penalty of $15,000 and the penalty as provided in s. 77.61 (19) (a) 2., Stats., of $15,000 results in the assessment from including these estimated receipts. Mr. Smith appeals the assessment, provides the records that were requested during the audit, and explains that he forgot to provide the records that were previously requested. In this situation, the failure to provide the records requested is not reasonable or justified by factors beyond the person’s control. However, the records provided show that unreported receipts were only 20% of the amount previously included by the department as estimated unreported receipts. Therefore, the unreported receipts adjustment is modified to reduce the additional tax from $60,000 to $12,000, the negligence penalty is reduced from $15,000 to $3,000 and the original penalty as provided in s. 77.61 (19) (a) 2., Stats., is reduced from $15,000 to $3,000.

Tax 11.90 Note 3) Assume the same facts as example 2, except that Mr. Smith explains that he did not previously provide the requested records because his accountant had possession of them and was in the hospital when the records were requested during the audit. In this situation the failure to provide the records requested is reasonable or justified by factors beyond the person’s control. Therefore, the unreported receipts adjustment is modified to reduce the additional tax from $60,000 to $12,000, the negligence penalty is reduced from $15,000 to $3,000 and the original penalty as provided in s. 77.61 (19) (a) 2., Stats., of $15,000 is waived.

Tax 11.90 History History: EmR0929: emerg. cr. eff. 10-19-09; CR 09-087: cr. Register June 2010 No. 654, eff. 7-1-10; correction in (3) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register June 2010 No. 654; CR 17-018: am. (3) (intro.), cr. (3) (c), am. (3) (c) (Examples), (4) (b) (Examples) Register September 2019 No. 765, eff. 10-1-19; correction in (4) (b) (Examples) made under s. 13.92 (4) (b) 7., Stats., Register September 2019 No. 765.

Tax 11.905 Tax 11.905 Statistical sample criteria.

Tax 11.905(1) (1) Purpose. The purpose of this section is to establish criteria applicable to field audits using statistical sampling conducted by the department. Sales transactions and purchase transactions must independently meet the criteria in sub. (4). This section does not apply to non-statistical sampling conducted by the department in field audits.

Tax 11.905(2) (2) Definitions. In this section:

Tax 11.905(2)(a) (a) “Annual sales” means net sales reportable for federal income tax purposes for the person’s taxable year.

Tax 11.905(2)(b) (b) “Electronic records” means machine readable records that include electronic transactions and electronic source documents.

Tax 11.905(2)(c) (c) “Electronic transaction” means a record produced by a computerized data processing accounting system that is used for recording an accounting transaction.

Tax 11.905(2)(d) (d) “Maximum sample size” means the maximum number of sample units selected using statistical sampling for each sample population identified.

Tax 11.905(2)(e) (e) “Net error” means the total error from the sample population determined by projecting the error from each subgroup or stratum of the sample population and summing those results.

Tax 11.905(2)(f) (f) “Person” has the meaning given in s. 77.51 (10), Stats., and includes an entity described in s. 77.61 (19m) (a), Stats.

Tax 11.905(2)(g) (g) “Record” means any document described in s. Tax 11.92 (1).

Tax 11.905(2)(h) (h) “Relative precision” means the accuracy of the sample projection compared to the real or inherent value of the net error sampled for in the population.

Tax 11.905(2)(i) (i) “Sample population” means the electronic transactions from the total population that will be used to draw the sample. More than one sample population may exist in the total population.

Tax 11.905 Note Example: A person uses separate accounting systems to record purchase and sales transactions. The department draws samples from two sample populations; one for purchase transactions and one for sales transactions.

Tax 11.905(2)(j) (j) “Sample unit” means a single electronic transaction within the sample population. A sample unit may be a single transaction or separate items of a transaction depending on how the person records the transaction in its data processing accounting system.

Tax 11.905 Note Example: For each equipment sales transaction, person enters two transactions in its data processing accounting system; equipment and delivery. Equipment and delivery are each sample units.

Tax 11.905(2)(k) (k) “Source document” means a record containing the detail of a transaction entered in a data processing accounting system.