Tax 11.41(2)(a)4.4. Cleaning compounds and solvents for maintaining exempt manufacturing machinery whether used while the machinery is operating or while the machinery is idle. Tax 11.41(2)(a)15.15. Gloves and other wearing apparel, including hair nets, beard nets and facemasks used by employees working on the production line to prevent contamination of the product while it is being manufactured. Tax 11.41 NoteExamples: 1) Employees of Manufacturer A wear gloves and aprons while grading, weighing, and slicing meat products within the scope of manufacturing as defined in s. Tax 11.39 (2). The gloves and aprons are used only in this manner and prevent the meat products being manufactured from being contaminated. The gloves and aprons worn by the employees to protect the meat products from contamination are used directly in manufacturing and qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats. Tax 11.41 Note2) Employees of Manufacturer B wear gloves and aprons while they are working on the production line. The gloves and aprons are used only in this manner. The gloves and aprons are worn to protect the employees’ clothing rather than to prevent contamination of the product while it is being manufactured. Although the gloves and aprons are used exclusively in manufacturing, the gloves and aprons are not used directly in manufacturing and do not qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats. Tax 11.41(2)(b)(b) Tangible personal property and items under s. 77.52 (1) (b), Stats., used exclusively and directly by a manufacturer and which become an ingredient or component part of tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats., is exempt from Wisconsin sales or use tax. Tax 11.41 NoteExamples: 1) Property and items sold to an automobile repair shop or other repair business to repair a customer’s product does not qualify for exemption under s. 77.54 (2), Stats., because the property or items are not used exclusively and directly by a manufacturer in manufacturing. Tax 11.41 Note2) A manufacturer-contractor is not entitled to the exemption when purchasing tangible personal property or items under s. 77.52 (1) (b), Stats., consumed, destroyed or losing its identity in manufacturing building components which it, as a contractor, will affix to real property in a real property construction activity, because the item or property is not sold by the manufacturer-contractor as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats. Tax 11.41(3)(a)(a) An exemption under sub. (1) (a) is not allowed for property or items consumed or destroyed or losing their identity in manufacturing if any of the following apply: Tax 11.41(3)(a)1.1. The activity is not manufacturing or is not within the scope of manufacturing. Tax 11.41(3)(a)2.2. The property or item manufactured is not destined for sale as tangible personal property or an item or property under s. 77.52 (1) (b) or (c), Stats. Tax 11.41(3)(a)3.3. The property or item is not used exclusively and directly by a manufacturer in manufacturing. Tax 11.41(3)(b)(b) The following property and items are not within the exemption provided by s. 77.54 (2), Stats., although the property or item may be exempt under s. 77.54 (6) (am) 1., Stats., if the property or item is a machine or specific processing equipment, or a part for that machine or equipment, used exclusively and directly in manufacturing, as described in s. Tax 11.40: Tax 11.41(3)(b)7.7. Hand tools, including files, wrenches, hammers, saws, screwdrivers, planes, punches, chisels, and spray guns. Tax 11.41(3)(b)8.8. Wearing apparel for the comfort or welfare of the employee or for the protection of the employee’s clothing, such as helmets, hard hats, work gloves, aprons, coveralls, pants, coats, and fur-lined boots and jackets. Tax 11.41 NoteExample: Employees of Manufacturer C wear hard hats, as required by federal regulations, while working within the scope of manufacturing as defined in s. Tax 11.39 (2). The hard hats are worn to protect the employees. The hard hats are not used directly in manufacturing and do not qualify for exemption from Wisconsin sales and use tax under s. 77.54 (2), Stats. Tax 11.41(3)(b)9.9. Chemicals and cleaning agents used to clean the room where manufacturing takes place, including walls, ceilings, floors, drains, windows, and doors, even if the cleaning is required in order to meet sanitation standards required by state and federal regulatory agencies. Tax 11.41(4)(a)(a) Fuel and electricity are specifically excluded from the exemption provided by s. 77.54 (2), Stats. However, an exemption is provided in s. 77.54 (30) (a) 6., Stats., for fuel and electricity consumed in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., in this state. Consistent with s. 77.51 (7h), Stats., “fuel and electricity consumed in manufacturing” means only fuel and electricity used to operate machines and equipment used directly in the step-by-step manufacturing process and does not include fuel and electricity consumed in providing plant heating, cooling, air conditioning, communications, lighting, safety and fire prevention, storing raw materials or finished units of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., research and product development, delivery to or from the plant, repairing or maintaining plant facilities, or shipping, advertising, distribution, sales, or administrative department activities. Tax 11.41(4)(b)1.1. Oxygen used to enrich the fuel mixture in an industrial furnace, or oxygen and acetylene used in a welding process. Tax 11.41(4)(b)2.2. Coal or coke used by a foundry, except the portion of the coke which actually becomes an ingredient or component part of any grey-iron produced. Tax 11.41(4)(b)3.3. Gasoline, fuel oil, kerosene, natural gas, liquid propane gas, also called LPG, or other natural or synthetic liquids used as fuel. Tax 11.41 NoteNote: Since “fuel” is not defined in the sales and use tax statutes, it shall be given its ordinary meaning as provided in a dictionary. Dictionaries generally define fuel as a material used to produce heat or power by burning, or something that feeds a fire.
Tax 11.41 NoteNote: The interpretations in s. Tax 11.41 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) The exemption for wood residue was effective on September 1, 1987, pursuant to 1987 Wis. Act 27; (b) The exemption for fuel and electricity consumed in manufacturing was effective January 1, 2006 pursuant to 2003 Wis. Act 99; (c) The requirement that property and items which qualify for exemption under s. 77.54 (2), Stats., be consumed exclusively and directly by a manufacturer in manufacturing property and items destined for sale became effective August 1, 2009, pursuant to 2009 Wis. Act 28; 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., 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. Tax 11.41 HistoryHistory: Cr. Register, November, 1977, No. 263, eff. 12-1-77; cr. (3) (a) 15. and am. (4) (h), Register, October, 1979, No. 286, eff. 11-1-79; am. (3) (a) 4., Register, July, 1987, No. 379, eff. 8-1-87; am. (5) (intro.), Register, April, 1990, No. 412, eff. 5-1-90; am. (2) (intro.), (3) (b) and (4) (intro.), cr. (5) (c), Register, March, 1991, No. 423, eff. 4-1-91; r. and recr. (1), r. (2), (3) (b), cr. (2) (a) 4. b., (b), (4) (b) (intro.), renum. (3) (a) (intro.), 1. to 15., (4), (5) (intro.), (a), (b) and (c) to be (2) (a) (intro.), 1. to 4. a., 5 to 15., (3), (4) (a), (b) 1. to 3. and am. (2) (a) 4. a., (3) (intro.), (4) (a), Register, October, 1997, No. 502, eff. 11-1-97; am. (1) (b) 2. b., (3) (b) and (h), Register, August, 1999, No. 524, eff. 9-1-99; EmR0924: emerg. am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3), eff. 10-1-09; CR 09-090: am. (title), (1) (a), (2) (title), (a) (intro.), (b) and (4) (a), r. and recr. (1) (b) and (3) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (a) (intro.), 15., (3) (a) (intro.), r. and recr. (2) (a) 4., cr. (3) (a) 3., (b) 9. Register November 2010 No. 659, eff. 12-1-10; correction in (3) (b) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register August 2014 No. 704; CR 19-112: am. (4) (a) Register June 2020 No. 774, eff. 7-1-20. Tax 11.42Tax 11.42 Fertilizer blending, feed milling, and grain drying operations. For purposes of s. 77.54 (6) (bn), Stats., primarily engaged in fertilizer blending, feed milling, or grain handling operations does not include the planting, harvesting, and tilling of grain, but may include the custom farming services of grain drying. Tax 11.42 NoteExamples: 1) Individual operates a dairy farm and also grows corn and soybeans. Individual conducts corn and soybean drying operations on the farm with respect to corn and soybeans grown and harvested by Individual. Individual also mills corn, soybeans, and other grains into feed for Individual’s dairy cattle. Individual’s primary activity is operating a dairy farm and the grain drying and feed milling operations are conducted as an incident to Individual’s grain growing and dairy farming activities. Individual is not a person described in s. 77.54 (6) (bn), Stats. Tax 11.42 Note2) Business’ primary business activity is the operation of a grain dryer. For a fee, Business will dry grain owned by farmers. Business is primarily engaged in “grain handling operations which include grain drying operations” for purposes of this section. Drying grain owned by a farmer for a fee is a “custom farming service” as defined in s. Tax 11.12 (2) (b). Business’ drying of a farmer’s grain for a fee, while a “custom farming service,” constitutes being engaged in “grain handling operations which include grain drying operations” for purposes of this section. Tax 11.42 NoteNote: The interpretations in s. Tax 11.42 are effective under the general sales and use tax law on and after September 1, 1969, except that the exemption for fertilizer blending, feed milling, and grain drying operations became effective on April 19, 2014, pursuant to 2013 Wis. Act 324. Tax 11.42 HistoryHistory: CR 16-054: cr. Register June 2018 No. 750, eff. 7-1-18. Tax 11.45Tax 11.45 Sales by pharmacies and drug stores. Tax 11.45(1)(1) Taxable sales. All sales of tangible personal property and items, property and goods under s. 77.52 (1) (b), (c) and (d), Stats., by a pharmacy or drug store are taxable under the general sales tax law unless exempted by a specific statute. The most common exemptions are described and enumerated in this section. Tax 11.45(2)(a)(a) “Drug” is defined in s. 77.51 (3pj), Stats., to mean a compound, substance, or preparation, or any component of them, other than food and food ingredients, dietary supplements, or alcoholic beverages, to which any of the following applies: Tax 11.45(2)(a)1.1. It is listed in the United States Pharmacopoeia, Homeopathic Pharmacopoeia of the United States, or National Formulary, or any supplement to any of them. Tax 11.45(2)(a)2.2. It is intended for use in diagnosing, curing, mitigating, treating, or preventing a disease. Tax 11.45(2)(b)(b) Drugs are exempt from the tax if prescribed by a licensed physician, surgeon, podiatrist or dentist to a patient, who is a human being, for treatment and dispensed on prescription filled by a registered pharmacist in accordance with law. Tax 11.45(2)(c)6.6. Other preparations consumed orally, injected or applied, including dermal fillers. Tax 11.45(2)(c)12.12. Other items which remain or dissolve in the body, such as birth control implants including intra-uterine devices (IUD). Tax 11.45(2)(d)1.1. Prosthetic devices, mobility-enhancing equipment, or durable medical equipment. Tax 11.45(2)(d)2.2. Non-medicated bandages, pads, compresses, supports, or dressings. Tax 11.45(2)(d)5.5. Food and food ingredients, including dietary supplements and soft drinks. Tax 11.45(3)(3) Prosthetic devices. The exemption for prosthetic devices under s. 77.54 (22b), Stats., applies to sales of all prosthetic devices, including repair and replacement parts, that are used for a human being. The exemption also includes accessories for exempt prosthetic devices. Tax 11.45(3)(a)(a) “Prosthetic device” is defined in s. 77.51 (11m), Stats., to mean a replacement, corrective, or supportive device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body. Tax 11.45 NoteNote: 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 Streamlined Sales Tax Governing Board, Inc.’s Rules and Procedures, available at www.streamlinedsalestax.org. Tax 11.45(3)(b)(b) “Prosthetic devices” include the following items, as well as repair and replacement parts and accessories for those items, if they are implanted or worn on the body:
/exec_review/admin_code/tax/11
true
administrativecode
/exec_review/admin_code/tax/11/vi/41/3/b/4
Department of Revenue (Tax)
administrativecode/Tax 11.41(3)(b)4.
administrativecode/Tax 11.41(3)(b)4.
section
true
