PROPOSED ORDER OF THE DEPARTMENT OF REVENUE REPEALING, RENUMBERING, RENUMBERING AND AMENDING, AMENDING, REPEALING AND RECREATING, AND CREATING RULES
The Wisconsin Department of Revenue proposes an order to: repeal Tax 11.84 (2) (a) 3.; renumber and amend Tax 11.16 (1) (am), 11.30 (2) (a), and 11.63 (3); amend Tax 11.01 (1) (g), 11.05 (2) (gm), 11.11 (3) (intro.), 11.13 (6) (b) 2., 11.16 (1) (am) (title) and (b) and (3) (Note 2), 11.33 (4) (a) (intro.) and 3. and (5) (c), 11.34 (3) (bg), 11.50 (4) (a) 1.a. and (5) (title),11.51 (2) (a) and (b), 11.56 (9) (b) (intro.), (Example 1) to (Example 4), and (Note 2), 11.63 (1) (intro.) and (5) (Note 1) and (Note 2), 11.68 (3) (b) (Example), (6) (d) and (h), (7) (a) 2. and 4., and (11) (c) (intro.), 11.83 (1) (b), 11.84 (1) (a) and (c), (2) (a) (title) and 2., (3) (title), (a), and (b), and (4) (Note 1) and (Note 2), and 11.945 (2) (intro.); repeal and recreate Tax 11.56 (9) (a) and (b) 1. to 3.; and create Tax 11.16 (1) (am) (intro.), 1., and 2., 11.42, 11.50 (5) (a) 7m., 11.56 (9) (b) (Example 5) to (Example 8), 11.63 (1) (c) and (d), (2) (d), (e), and (f), and (3) (intro.), (b), (c), and (d), 11.68 (4) (h) and (h) (Note) and (7) (a) 7m., and 11.84 (2) (a) 2. (Example 1) to (Example 3), (3) (c), and (4) (j); relating to sales and use tax provisions.
The scope statement for this rule, SS 071-14, was approved by the Governor on July 24, 2014, published in Register No. 704 on August 14, 2014, and approved by the Secretary of Revenue on August 27, 2014. Analysis by the Department of Revenue
Explanation of agency authority: Section 77.65 (3), Stats., provides “[t]he department may promulgate rules to administer this section…” Section 227.11 (2) (a), Stats., provides “[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute...” Related statute or rule: There are no other applicable statutes or rules.
Plain language analysis: The rule (1) reflects various law changes, (2) clarifies multiple rules, and (3) corrects an error in current rule provisions.
a. Aircraft
· Clarify Rule. Amend s. Tax 11.84 (1), to add that a credit is permitted against the Wisconsin use tax for sales or use tax paid to another state where the aircraft was purchased. · Exemption for Aircraft Parts, Maintenance, and Labor. Reflect 2013 Wisconsin Act 185, which repeals and recreates the exemption in s. 77.54 (5) (a), Stats., and amends s. 77.52 (2) (a) 10., Stats. These provisions exempt the sale of aircraft parts, as well as the services performed to aircraft. This requires updates to s. Tax 11.84. b. Clarify Rule. Amend s. Tax 11.11 (3), to clarify that the list of facilities is not an all-inclusive list but only types of municipal waste facilities currently recognized by the department. c. Common Motor Carriers.
· Reflect 2013 Wisconsin Act 364, which amends the definition of "common motor carrier" in s. 194.01 (1), Stats. For purposes of the sales and use tax exemption in sec. 77.54 (5) (b), Stats., "common carrier" has the same meaning as s. 194.01 (1), Stats. This requires updates to s. Tax 11.16. · Clarify Rule. Amend s. Tax 11.16 (1) (b), to include "cell phones," "tracking devices," "GPS units," and "on board recorders" to the list of items in the rule to make it clear that these items qualify as exempt accessories and attachments if they are assigned to and carried on vehicles used exclusively as common and contract carriers. d. Construction Contractors.
· Clarify Rule. Amend the example following s. Tax 11.68 (3) (b), to remove "hot" from "hot water heater" in the example. · Clarify Rule. Amend s. Tax 11.68 (6) (d), to include "underground wiring" to the list of items in the rule to make it clear that the underground wiring becomes part of the realty. · Clarify Rule. Amend s. Tax 11.68 (7) (a) 2, by removing "satellite dishes" from items listed. Create additional item number to be inserted in between s. Tax 11.68 (7) (a) 6. & 7. that clarifies tax treatment for both satellite dishes mounted to concrete foundation and the compact roof mounted satellite dishes that are installed in a residence or a business. · Clarify Rule. Amend s. Tax 11.68 (11) (c), to clarify that the items listed only retain their character as tangible personal property for repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance. e. Correct Error. Amend s. Tax 11.945 (2) (intro.), to remove "telecommunications message services" from the list, since "telecommunications message services" are sourced under the general sourcing hierarchy. f. Fertilizer Blending, Feed Milling, and Grain Drying Machinery and Equipment. Reflect 2013 Wisconsin Act 324, which creates exemptions in s. 77.54 (6) (am) 4. and 5., Stats., for equipment used in a fertilizer blending, feed milling, or grain drying operation and building materials used in constructing or repairing certain holding structures used in a fertilizer blending, feed milling, or grain drying operation. This requires the creation of s. Tax 11.68 (4) (h). It will also be useful to (1) create a new section to explain the exemption, and (2) add examples to s. Tax 11.68 (6) and (7). g. Grocers' Guidelist.
· Clarify Rule. Amend s. Tax 11.51 (2) (a), to include potato chips that are chocolate covered in the taxable list, unless they contain flour. · Clarify Rule. Amend s. Tax 11.51 (2) (b), to clarify "chips, potato, corn and similar items" and "potato chips" are exempt unless they are chocolate covered and do not contain flour as provided in par. (a). · Clarify Rule. Amend s. Tax 11.51 (2) (b), to clarify "ice cream in cones" is exempt only when prepackaged by someone other than the retailer. i. Radio and Television Broadcasting Equipment. Reflect 2013 Wisconsin Act 346, which creates an exemption in s. 77.54 (23n), Stats., for property used by certain commercial radio and television stations. This requires an update to s. Tax 11.63.
