ORDER OF THE DEPARTMENT OF REVENUE REPEALING, AMENDING, AND CREATING RULES
The Wisconsin Department of Revenue proposes an order to: repeal Tax 11.26 (2) (i); amend Tax 11.05 (2) (gm), (4) (f), and (4) (Note 1), 11.08 (6) (Note 2), 11.13 (6) (b) 2., 11.14 (2) (b) and (16), 11.26 (2) (q) and (3) (Note 2), 11.33 (4) (a) (intro) and 3. and (5) (c), 11.34 (3) (bg), 11.35 (2) (b), (5) (a) and (Example), (b) and (Example 1) and (Example 2), (6) (a) (Example 1), (Example 2), (Example 3), and (Example 5), (b) and (Example 2), (7) (b) (Example), (c) (Example 1) and (Example 2), (d) (Example), and (8) (Note 2), 11.41 (4) (a), 11.50 (4) (a) 1. a. and (5) (title), 11.52 (7) (Note 1) and (Note 2), 11.68 (13) (Note 1) and (Note 2), 11.72 (1) (b) 2. and (3) (Note 2), 11.83 (1) (b); and create Tax 11.01 (1) (gm), 11.26 (3) (i) and (j), 11.50 (5) (a) 9., 11.52 (7) (d), 11.68 (4) (a) (title), (b) (title), (c) (title), (d) (title), (e) (title), (f) (title), (fm), (g) (title), (h) (title), and (i); relating to sales and use tax provisions.
The scope statement for this rule, SS 083-16, was approved by the Governor on September 13, 2016, published in Register No. 729B on September 26, 2016, and approved by the Secretary of Revenue on October 14, 2016. Analysis by the Department of Revenue
Statutes interpreted: Sections 77.51 (3pb), (12m), (13b), (13g), and (15b); 77.52 (2) (a) 6. and (13); 77.53 (10); and 77.54 (1), (7m), (9m), (22b), (28), (30) (a) 6., (62m), and (63), Stats. Explanation of agency authority: Section 77.65 (3), Stats., provides “[t]he department may promulgate rules to administer this subsection…” 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, and (2) clarifies multiple rules.
a. Building Materials for Local Government or Nonprofit Facility. Create s. Tax 11.68 (4) (i) to explain the new exemption described in s. 77.54(9m), pursuant to 2015 Wis. Act 126 for building materials that become a part of a facility for a local unit of government or nonprofit organization. c. Diplomatic Exemption. Amend s. Tax 11.05 (4) (f) to state that purchases by diplomats from American Institute in Taiwan are exempt from tax consistent with s. 77.54 (1) and 22 USC 3307. d. Exemption Certificate Requirements. Amend s. Tax 11.14 (2) (b) to remove the phrase "the name and address of the seller" from the required list of data elements needed on an exemption certificate, to be consistent with the provision of the Streamlined Sales and Use Tax Agreement. f. Federal Excise Tax on Heavy Trucks. Amend sec. Tax 11.26 to provide that the taxable sales price and purchase price does not include the federal excise tax imposed on the first retail sale of heavy trucks and trailers under s. 4051 of the Internal Revenue Code, pursuant to the changes made to s. 77.51 (15b) (b) 3s. under 2015 Wis. Act 361. g. Fuel and Electricity Used in Manufacturing. Amend sec. Tax 11.41 (4) to define the phrase "fuel and electricity consumed in manufacturing" consistent with the definition in s. 77.51 (7h) and s. Tax 2.11. The income tax credit was replaced with a sales tax exemption in 2003 Wis. Act 99. h. Insulin Injection Equipment. Amend second note following s. Tax 11.08 to state that apparatus and equipment for the injection of insulin or the treatment of diabetes qualify for exemption under s. 77.54 (22b), Stats., if they meet the definition of "durable medical equipment" in s. 77.51 (3pm), Stats., and are for use in a person's home, pursuant to 2009 Wis. Act 2. j. Occasional Sale Exemption for Nonprofits. Amend s. Tax 11.35 to explain the changes to the occasional sale exemption, provided in s. 77.54 (7m), as amended by 2015 Wis. Act 364. k. Off-Highway Motorcycles. Update Chapter Tax 11 to reflect changes in s. 77.61(1)(b), under 2015 Wis. Act 170, relating to the registration and operation of off-highway motorcycles. l. Sports and Entertainment Arena Facilities. Create sec. Tax 11.68 (4) (fm) to explain the new exemption provided in s. 77.54 (62m), as created by 2015 Wis. Act 60, for building materials, supplies, and equipment used in the construction or development of sports and entertainment arena facilities. m. Video Service Franchise Fees. Amend s. Tax 11.26 to correct a reference to the statutes. The annual, state-issued video service provider fee is imposed under s. 66.0420 (3), Stats., not under s. 66.0420 (7) as the rule provides. Also specify in the rule that the percentage-based, municipal video service provider fee imposed under s. 66.0420 (7), Stats., is not included in sales price and purchase price. Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states: The department has not found a similar rule in an adjacent state.
Summary of factual data and analytical methodologies: 2003 Wisconsin Act 99, 2009 Wisconsin Act 2, 2013 Wisconsin Act 20, and 2015 Wisconsin Acts 55, 60, 126, 170, 251, 361, and 364 have made numerous changes to Wisconsin's sales and use tax laws. The department has created this proposed rule order to reflect these statutory changes, as well as provide needed clarification and correction as described above. No other data was used in the preparation of this proposed rule order or this analysis. Analysis and supporting documents used to determine effect on small business: This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated costs incurred by private sector: This proposed rule does not have a fiscal effect on the private sector.
Effect on small business: This proposed rule does not affect small business.
Agency contact person: Please contact Jen Chadwick at (608) 266-8253 or jennifer.chadwick@wisconsin.gov, if you have any questions regarding this proposed rule. Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.
Jen Chadwick
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
SECTION 1. Tax 11.01 (1) (gm) is created to read:
Tax 11.01 (1) (gm) Form 9400-609. A department of natural resources form for occasional and dealer sales of off-highway motorcycles.
SECTION 2. Tax 11.05 (2) (gm) and (4) (f) and (f) (Note 1) are amended to read:
Tax 11.05 (2) (gm) Sales of motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), Stats., trailers, semitrailers, all−terrain vehicles, utility terrain vehicles, off-highway motorcycles, and aircraft. Governmental units must collect the sales tax on its sales of these items. If the governmental unit does not collect the tax from the purchaser, the purchaser shall file a sales tax return and pay the tax prior to titling or registering the property in this state. (4) (f) Purchases by consular and diplomatic personnel of other countries which have entered into multilateral treaties with the United States government providing for sales and use tax exemptions are exempt provided the personnel present their tax exemption card issued by the United States department of state or the American Institute in Taiwan showing their tax exemption number.
(f) (Note 1) Note: Section Tax 11.05 interprets ss. 77.52 (1), (2), (13), and (14) and 77.54 (1), (9a), (10), (15), (17), (20n), (30), (32), (37), (42), (44), and (55), Stats. SECTION 3. Tax 11.08 (6) (Note 2) is amended to read: Tax 11.08 (6) (Note 2) Note: The interpretations in s. Tax 11.08 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to 1983 Wis. Act 27; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to 1985 Wis. Act 29; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar levels became exempt March 1, 1989, pursuant to 1987 Wis. Act 399; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to 1989 Wis. Act 31; (e) The exemption for adaptive equipment for a handicapped person's vehicle became exempt effective June 1, 1990, pursuant to 1989 Wis. Act 238, renumbered by 1989 Wis. Act 359; (f) The exemption for parts and accessories became effective August 15, 1991, pursuant to 1991 Wis. Act 39; (g) The exemptions provided in s. 77.54 (14s) and (22), Stats., were repealed effective October 1, 2009, and replaced with the exemptions provided under s. 77.54 (22b), Stats., pursuant to 2009 Wis. Act 2; (h) The exemption in s. 77.54 (28), Stats., was amended to remove the exemption for apparatus and equipment for the injection of insulin or the treatment of diabetes. These items will still qualify for exemption under s. 77.54 (22b), Stats., if they are for home use meet the definition of "durable medical equipment" in s. 77.51 (3pm), Stats., and are for use in a person's home, pursuant to 2009 Wis. Act 2; and (i) The clarification that a "prosthetic device" must be a replacement, corrective, or supportive device became effective July 2, 2013, pursuant to 2013 Wis. Act 20. SECTION 4. Tax 11.13 (6) (b) 2. is amended to read:
Tax 11.13 (6) (b) 2. Motor vehicles, boats, snowmobiles, recreational vehicles as defined in s. 340.01 (48r), Stats., trailers, semitrailers, all−terrain vehicles, utility terrain vehicles, off-highway motorcycles, or aircraft. SECTION 5. Tax 11.14 (2) (b) and (16) are amended to read:
Tax 11.14 (2) (b) Use of an exemption certificate designed by the department is not required by law. A person may use a substitute exemption certificate if it contains all the essential information relating to the transaction and if it is in a form approved by the department. Paper exemption certificates must be signed by and bear the name and address of the purchaser, the name and address of the seller, a general description of the purchaser’s business and the reason for the claimed exemption. An electronic exemption certificate shall contain the same information as a paper exemption certificate, except that a signature is not required.
(16) Exemption certificate not needed for certain sales. No exemption certificate is required for sales of property, items, goods, or services that are exempt from Wisconsin sales and use tax under s. 77.54 (5) (a) 3., (7), (7m), (8), (10), (11), (14), (15), (17), (20n), (21), (22b), (31), (32), (35), (36), (37), (42), (44), (45), (46), (51), and (52), Stats. SECTION 6. Tax 11.26 (2) (i) is repealed.
SECTION 7. Tax 11.26 (2) (q) is amended to read:
Tax 11.26 (2) (q) The state-issued video service franchise fee imposed under s. 66.0420 (7) (3), Stats. SECTION 8. Tax 11.26 (3) (i) and (j) are created to read:
