Tax 11.55 HistoryHistory: Cr. Register, May, 1978, No. 269, eff. 6-1-78; EmR0924: emerg. am. (title), (1), (2) (a), (3) and (4), eff. 10-1-09; CR 09-090: am. (title), (1), (2) (a), (3) and (4) Register May 2010 No. 653, eff. 6-1-10; CR 22-017: r. and recr. (title), r. (1), (2) Register June 2023 No. 810, eff. 7-1-23. Tax 11.555Tax 11.555 Marketplace providers and sellers. Tax 11.555(2)(2) General. Except as provided in sub. (4), a marketplace provider is required to collect and remit Wisconsin sales or use tax on all sales of taxable products and services that the marketplace provider facilitates on behalf of a marketplace seller. The amount subject to tax is the entire amount charged to the purchaser, including any amount charged by the marketplace provider for facilitating the sale. Tax 11.555(3)(a)(a) A marketplace provider is required to notify the marketplace seller that it is collecting and remitting the tax on all taxable sales in Wisconsin. The department does not prescribe a required form or method for such notification. Tax 11.555(3)(b)(b) Only the marketplace provider can be audited and held liable for Wisconsin sale or use tax on sales facilitated on behalf of a marketplace seller, unless one of the following applies: Tax 11.555(3)(b)1.1. The marketplace provider has been granted a waiver by the department from collecting and remitting the tax, as provided in sub. (4). Tax 11.555(3)(b)2.2. The marketplace provider can demonstrate to the satisfaction of the department that the error in collecting and remitting the tax is due to insufficient or incorrect information provided by the marketplace seller. This subdivision does not apply if the marketplace provider and marketplace seller are related entities, as defined in s. 71.01 (9am), Stats. Tax 11.555(3)(c)(c) If a marketplace provider demonstrates that par. (b) 2. applies, the marketplace seller providing the insufficient or incorrect information may be audited and held liable for the tax. Tax 11.555(4)(a)(a) A marketplace provider may apply for a waiver from collecting and remitting Wisconsin sales or use tax if its only activities are facilitating sales of products or services on behalf of marketplace sellers that are operating under a hotel, motel, or restaurant brand name shared with the marketplace provider. Tax 11.555(4)(b)(b) The waiver may be granted if the department is satisfied that the marketplace seller will collect and remit the tax on the entire amount charged to the purchaser. Tax 11.555(4)(c)(c) The department may grant waivers to other types of marketplace providers if there is evidence that the marketplace sellers have a history of reliably collecting and remitting to the department or there is other evidence that the marketplace sellers will reliably collect and remit the tax to the department. Tax 11.555(4)(d)(d) Marketplace providers shall apply to the department using Form S-102, “Application for Marketplace Provider Waiver,” and the application must contain the following: Tax 11.555(4)(d)1.1. The name and address of all marketplace sellers selling or furnishing tangible personal property or services in Wisconsin that the marketplace provider is requesting the waiver. Tax 11.555(4)(d)2.2. Each marketplace seller’s Wisconsin sales or use tax permit number and any other information necessary to ensure the entire amount of tax will be collected and remitted by the marketplace seller. Tax 11.555(4)(e)(e) Within 60 days from a written request from the department, a marketplace provider that is granted a waiver must submit updated information provided in par. (d) 1. and 2. for all marketplace sellers selling or furnishing such tangible personal property or services in Wisconsin. The department can require the marketplace provider to provide any other information to ensure the tax is being collected and remitted on the entire amount charged to the purchaser by the marketplace sellers. Tax 11.555(4)(f)(f) If a waiver is granted, the department may require the marketplace provider to notify each marketplace seller that the marketplace seller is liable for the tax on the entire sales price charged to the purchaser for taxable products and services in Wisconsin through that marketplace provider. Tax 11.555(4)(g)(g) The department may regard the marketplace seller as a retailer required to collect and remit the tax for sales facilitated on its behalf by a marketplace provider, when it determines that it is necessary for the efficient administration of Wisconsin sales and use taxes, pursuant to ss. 77.51 (13) (c) and 77.52 (3m) (c), Stats. The department may require the marketplace seller to notify each marketplace provider that the marketplace seller is liable for the tax on the entire sales price charged to the purchaser for taxable products and services in Wisconsin made through that marketplace provider. Tax 11.555(5)(5) Physical marketplace. A marketplace provider includes a person that facilitates a sale on behalf of a seller at a storefront or other physical location. Brokers, dealers, consignors, and other persons that operate a physical location, advertise or list a seller’s product for sale, and process the payment are marketplace providers. Tax 11.555 NoteExamples: 1) A convenience store sells admission tickets to a concert for another organization. Customers of the convenience store purchase the tickets at the register in the convenience store. The convenience store forwards all money received from ticket sales to the other organization. The convenience store is a marketplace provider that is required to collect and remit sales tax on the admission tickets.
Tax 11.555 Note2) An antique store displays and sells antiques in its store that are owned by the antique store and by others. When making sales of antiques owned by other persons, the antique store collects the money from the purchaser and provides the sale amount, less a commission, to the owner of the antiques. The antique store is a marketplace provider that is required to collect and remit the sales tax on the entire sales price charged to the purchaser from the sale of the antiques.
Tax 11.555(6)(a)1.1. A marketplace provider reports its own sales, and the sales it facilitates on behalf of marketplace sellers, on its sales and use tax return. Tax 11.555(6)(a)2.2. A marketplace seller shall include all of its sales, including sales facilitated on its behalf by a marketplace provider, in total sales on its sales and use tax return. The marketplace seller may claim a deduction on its return for sales amounts that are made through the marketplace provider and for which the marketplace seller received notification under s. 77.523 (2), Stats. Tax 11.555(6)(b)(b) Exemption certificates. A marketplace provider is required to obtain and maintain fully completed exemption certificates from purchasers claiming an exemption from Wisconsin sales or use tax for sales facilitated on behalf of a marketplace seller. The marketplace provider is also required to obtain and maintain exemption certificates for sales made on its own behalf. Tax 11.555(6)(c)1.1. A marketplace provider is allowed to claim a bad debt deduction on a sales transaction if it collects and remits Wisconsin sales or use tax on behalf of the marketplace seller, and either the marketplace provider or marketplace seller is eligible to claim the deduction under section 166 of the Internal Revenue Code for the worthless amount of the transaction. Tax 11.555(6)(c)2.2. For an eligible bad debt deduction under subd. 1., a marketplace provider shall claim the bad debt deduction on its Wisconsin sales and use tax return for the period in which the marketplace provider or marketplace seller writes off the amount as uncollectible in its books and records. Tax 11.555(6)(c)3.3. A marketplace seller may not claim a bad debt deduction on a sales transaction if the marketplace provider claims a bad debt deduction on that same transaction. Tax 11.555(6)(d)(d) Small seller exception. A marketplace provider or marketplace seller with no physical presence or activities in Wisconsin other than making sales into Wisconsin may qualify for the small seller exception under s. 77.51 (13gm), Stats. A retailer that qualifies for the small seller exception may, but is not required to, collect and remit Wisconsin sales and use tax. In determining the annual gross sales amount for purposes of the small seller exception, the following apply: Tax 11.555(6)(d)2.2. A marketplace provider’s gross sales include sales made into Wisconsin on its own behalf and on behalf of other sellers. Tax 11.555(6)(d)3.3. A marketplace seller’s gross sales includes sales made into Wisconsin on its own behalf and made on its behalf by a marketplace provider. Tax 11.555(6)(e)1.1. A marketplace provider is required to collect and remit Wisconsin sales or use tax on taxable sales it facilitates on behalf of a nonprofit organization. Although the nonprofit organization’s own sales may be an exempt occasional sale under s. 77.54 (7m), Stats., the exemption does not apply or extend to sales by a marketplace provider, unless the marketplace provider is a nonprofit organization that qualifies for the occasional sales exemption. Tax 11.555(6)(e)2.2. A nonprofit organization does not include sales facilitated by a marketplace provider in determining if it is engaged in a trade or business for purposes of the occasional sales exemption. Tax 11.555 NoteNote: Section Tax 11.55 interprets ss. 77.51 (7i), (7j), (11d), (13), (13g), (13gm), (14) (n) 7., and (17) (g), 77.52 (3m) and (14) (c), 77.523, 77.54 (7m), and 77.585 (1g) and (11), Stats. Tax 11.555 NoteNote: 2019 Wis. Act 10 relating to marketplace providers and sellers became effective January 1, 2020. Tax 11.555 HistoryHistory: CR 22-017: cr. Register June 2023 No. 810, eff. 7-1-23; correction in (3) (b) 2. made under s. 13.92 (4) (b) 7., Stats., and corrections in (4) (g), (6) (d) 2. made under s. 35.17, Stats., Register June 2023 No. 810. Tax 11.56(1)(a)(a) “Manufacturer” includes a printer or other person who performs any one or more of the processes in manufacturing printed matter, provided that the printer or other person qualifies as being engaged in manufacturing under s. 77.51 (7h), Stats., whether or not the printed matter is sold. Tax 11.56(1)(b)(b) “Manufacturing printed matter” includes either of the following processes by a manufacturer: Tax 11.56(1)(b)1.1. Initial typesetting and composition, producing a paste-up, combining photographs with words, making page makeups and taking pictures of them, making proofs and paper for editing, producing negatives which go to the stripping department for assembly of the flat and taking a picture, either positive or negative, of a flat which after it is finally proofed is known as plate-ready film, and producing an image carrier which is installed on a printing press, or using equivalent prepress technology to produce an image carrier, and the bindery/finishing stage. Tax 11.56(1)(b)2.2. Using computers, scanners, proofers, typesetters, photographic equipment, film processors, and direct-to-plate equipment exclusively in performing any of the processes listed in subd. 1. “Manufacturing printed matter” does not include using the equipment described in this subdivision to design, write, or compose an original document to be printed. Tax 11.56(1)(c)(c) “Typesetting” includes converting images into standardized letter forms of a certain style which usually are hyphenated, justified and indented automatically by means of machinery and equipment. Typesetting machinery and equipment includes fonts, video display terminals, tape and disc making equipment, computers, and typesetters which are interconnected to operate essentially as one machine. A system shall be considered to operate essentially as one machine whether or not the tape or disc is automatically fed to the typesetter. Tax 11.56(2)(2) Printers’ taxable sales. Taxable receipts of printers include receipts from the following, unless otherwise exempt: Tax 11.56(2)(a)(a) Charges for printing, lithography, photolithography, rotogravure, gravure, letter press, silk screen printing, imprinting, multilithing, mimeographing, photostating, steel die engraving, and similar operations for customers, whether or not the paper and other materials are furnished by the customers. A printer’s charge for printing on paper furnished by a customer to produce printed matter not to be sold is subject to the tax. Tax 11.56(2)(b)(b) Charges for services in connection with the sale of printed matter, such as overtime and set-up charges, die cutting, embossing, folding, and binding operations, and charges for painting signs, show cards, and posters, whether the materials are furnished by the printer or by the customer. Tax 11.56(2)(c)(c) Charges for envelopes, but not for separately stated charges for postage in the sale of prestamped envelopes. Tax 11.56(3)(a)(a) Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., by persons who are not printers, including so-called “trade shops” such as typesetters, image reproduction manufacturers, color separators and binders, or finishers are taxable unless the sales qualify for a statutory exemption, including the following: Tax 11.56(3)(a)1.1. Section 77.54 (2), Stats., which exempts from tax the sales price of tangible personal property or items under s. 77.52 (1) (b), Stats., that are 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), Stats., 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), Stats., 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), Stats., destined for sale, except as provided in s. 77.54 (30) (a) 6., Stats. Tax 11.56(3)(a)2.2. Section 77.54 (2m), Stats., which exempts from tax the sales price 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. The exemption does not apply to advertising supplements that are not newspapers. Tax 11.56(3)(b)(b) Tangible personal property and items under s. 77.52 (1) (b), Stats., include typed matter, whether or not combined with artwork, such as typeset output, a paste-up, mechanical, assembly, camera-ready copy, flat, or a photoreproduction, including film plates. Tax 11.56(4)(a)(a) Tax does not apply to charges, if stated separately on invoices and in the accounting records, for mailing services such as: Tax 11.56(4)(a)1.1. Addressing printed matter by hand or mechanically for the purpose of mailing. Tax 11.56(5)(5) Exempt printing machinery and equipment. Section 77.54 (6) (am) 1., Stats., provides that 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 are exempt from the sales or use tax. This includes machinery and equipment and repair parts or replacements of the machinery and equipment used exclusively and directly by a manufacturer in the printing process to manufacture tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats. Tax 11.56(6)(6) Purchases for use in manufacturing printed matter for sale. Tax 11.56(6)(a)(a) Persons engaged in manufacturing printed matter for sale may purchase the following property and items without tax under the statutes indicated: Tax 11.56(6)(a)1.1. Section 77.54 (2), Stats. Property and items, such as paper stock or printing ink, used exclusively and directly in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., that is destined for sale and that becomes an ingredient or component part of an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale. Tax 11.56(6)(a)2.2. Section 77.54 (2), Stats. Property and items such as chemicals, emulsions, acids, raw film, lubricating oils, greases, nonoffset spray, finished art, color separations, plate-ready film, other positives and negatives, flats, and similar items, used exclusively and directly in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., destined for sale and which are consumed, destroyed, or lose their identity in the manufacture of tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., destined for sale. Tax 11.56 NoteExample: A printer’s purchases of positives and negatives which are used exclusively and directly to produce catalogs and shoppers guides it sells to other persons are exempt from the tax.
Tax 11.56(6)(a)3.3. Section 77.54 (6) (am) 2., Stats. Containers and packaging and shipping materials for use in packing, packaging, or shipping printed matter to their customers. Tax 11.56(6)(b)(b) The exemption under s. 77.54 (2), Stats., described in par. (a) 1. and 2., applies to property and items purchased by a person who does not use the property other than to provide it to a manufacturer described in par. (a) for use by the manufacturer exclusively and directly in manufacturing tangible personal property and items and property under s. 77.52 (1) (b) and (c), Stats., to be sold. The exemption under s. 77.54 (2), Stats., does not apply if the manufactured tangible personal property or item or property under s. 77.52 (1) (b) or (c), Stats., is not to be sold by the manufacturer to its customer or by the customer. Tax 11.56 NoteExamples: 1) A paper manufacturer’s purchases of negatives which it transfers to a printer, who uses the negatives exclusively and directly to produce printing which the printer sells to the paper manufacturer are exempt from the tax.
Tax 11.56 Note2) An advertising agency’s purchases of color separations which are furnished to a commercial printer who uses the color separations exclusively and directly to produce advertising material the printer sells to the advertising agency are exempt from the tax.
Tax 11.56(7)(7) Purchases for use in manufacturing printed matter not for sale. Tax 11.56(7)(a)(a) The exemption under s. 77.54 (2m), Stats., applies to 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 the shoppers guides, newspapers, or periodicals or that are consumed or lose their identity in the manufacture of the shoppers guides, newspapers, or periodicals, whether or not they are transferred without charge to a recipient. Tax 11.56 NoteExamples: Examples of nontaxable purchases for use in manufacturing printed matter include:
Tax 11.56 Note1) A shoppers guide publisher, who distributes the publication without charge, purchases paper and furnishes it to a printer who charges for the printing of the shoppers guide.
Tax 11.56 Note2) A shoppers guide publisher purchases paper it uses to print a shoppers guide which it distributes without charge to recipients.
Tax 11.56(7)(b)(b) Section 77.54 (43), Stats., provides that Wisconsin sales or use tax is not imposed on raw materials if both of the following conditions are met: Tax 11.56(7)(b)1.1. The raw materials are processed, fabricated, or manufactured into, attached to, or incorporated into printed materials. Tax 11.56(7)(b)2.2. The resulting printed materials will be transported and used solely outside Wisconsin.
