Tax 11.28(1)(a)(a) Section 77.51 (15a) (b) 2., Stats., provides that “sales, lease, or rental for resale, sublease, or subrent” does not include any sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to a purchaser even though the property, items, or goods may be used or consumed by another person to whom the purchaser transfers the property, items, or goods without valuable consideration, such as gifts and other advertising specialties distributed at no charge and apart from the sale of other tangible personal property, items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or services. Tax 11.28(1)(b)(b) Section 77.51 (15b) (a), Stats., provides that “sales price” means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or services are sold, licensed, leased or rented, valued in money, whether received in money or otherwise. Tax 11.28(2)(a)(a) General. Persons who make gifts of taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or distribute tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., at no charge to others are the consumers of the property, items, or goods and the tax shall apply to the sales price from the sale of the property, items, or goods to persons making gifts. Taxable sales include sales of samples, advertising material, display cases, racks, and other similar marketing aids to manufacturers, distributors, jobbers, and wholesalers acquiring the property, items, or goods for the purpose of giving it to retailers for use in selling merchandise to customers. Tax 11.28 NoteExamples: 1) A paint manufacturer is the consumer of color cards which it provides to retailers without charge to facilitate the sale of the manufacturer’s paint.
Tax 11.28 Note2) A tavern operator is liable for the tax measured by the tavern operator’s purchase price of liquor given to customers.
Tax 11.28(2)(b)(b) Grand opening gifts. A person who sells tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to a retailer who uses the property, items, or goods as gifts at a grand opening or similar event, such as an open house, celebrity appearance, or farm days, should charge the retailer the applicable Wisconsin sales or use tax, unless the retailer provides the seller with a fully completed exemption certificate at the time of the sale. In cases where a seller furnishes free property to a retailer for use as gifts at a grand opening or similar event, the seller furnishing the property to the retailer without charge is subject to the sales or use tax on the property donated, unless the property is exempt from use tax under s. 77.56 (3), Stats., because it is donated to an entity exempt from sales or use tax under s. 77.54 (9a), Stats. Tax 11.28(2)(c)1.1. The sales price from the sale of a gift certificate is not taxable because the certificate represents an intangible right. When a gift certificate is redeemed for taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, the transaction is completed and the retailer’s tax liability accrues at that time. Tax 11.28 NoteExample: Retailer A sells Customer B a gift certificate that is valued at $50. The gift certificate can be used to purchase any items that Retailer A sells. The sale of the gift certificate is not subject to Wisconsin sales tax.
Tax 11.28(2)(c)2.2. The sale of a certificate that entitles the holder of the certificate to redeem the certificate for a specific product follows the tax treatment of the product for which the certificate can be redeemed. Tax 11.28 NoteExamples: 1) Retailer A sells Customer B a certificate that can be redeemed for a free radio. The sale of the certificate is subject to Wisconsin sales tax since a radio is subject to tax under s. 77.52 (1) (a), Stats. Tax 11.28 Note2) Retailer X sells Customer Y a certificate that can be redeemed for 10 pounds of fresh fruit for human consumption. The sale of the certificate is not subject to Wisconsin sales tax since the sale of fresh fruit for human consumption is not subject to tax.
Tax 11.28(2)(d)(d) Gifts shipped out-of-state. When taxable property, items, or goods to be given as a gift are purchased at retail and the purchaser, without obtaining possession of the gift, directs the seller to ship it to a location outside Wisconsin, the sales price is not subject to Wisconsin sales tax. Tax 11.28(2)(e)(e) Awards. Persons transferring tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to salespersons or distributors or both in redemption of awards, such as points, given under a sales incentive plan shall pay the tax on their purchases of the property, items, or goods. Tax 11.28(2)(f)(f) Gifts originally purchased for resale. When a person purchases property for resale or for another exempt purpose or under a valid exemption certificate but uses the property for a purpose other than for resale or another exempt purpose and does not donate the property to an entity described in s. 77.54 (9a), Stats., the purchaser shall be liable for tax on its purchase price of the property. Tax 11.28 NoteNote: The amount subject to tax is the purchase price as described in s. Tax 11.32. Tax 11.28(3)(a)(a) Coupons for free property, items, or goods issued and redeemable by a manufacturer or other third party. When a manufacturer’s or other third party’s coupons are distributed to consumers and subsequently are redeemed by a retailer for tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., without charge, the transfer of the property, items, or goods by the retailer to the coupon holder is a sale, not a gift. The consideration for the sale upon which the measure of tax is based, if taxable tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., is transferred, is the amount the manufacturer or other third party reimburses the retailer for the coupon, less any coupon handling fees, if the following conditions are met: Tax 11.28(3)(a)1.1. The retailer receives consideration from a third party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale. Tax 11.28(3)(a)2.2. The retailer is obligated to pass the price reduction or discount on to the purchaser. Tax 11.28(3)(a)3.3. The amount of the consideration attributable to the sale is a fixed amount and the retailer is able to determine the amount at the time of the sale. Tax 11.28(3)(a)4.a.a. The purchaser presents a coupon, certificate, or other documentation to the retailer to claim the price reduction or discount, if the coupon, certificate, or other documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse the retailer for the amount of the price reduction or discount. Tax 11.28(3)(a)4.b.b. The purchaser identifies himself or herself to the retailer as a member of a group or organization that may claim the price reduction or discount. Tax 11.28(3)(a)4.c.c. The retailer provides an invoice to the purchaser, or the purchaser presents a coupon, certificate, or other documentation to the retailer that identifies the price reduction or discount as a third party price reduction or discount. Tax 11.28(3)(b)(b) Cents-off coupons reimbursed by manufacturers and other third parties. A common arrangement between manufacturers or other third parties and retailers involves the use of cents-off coupons. The coupons are issued by manufacturers or other third parties and used by consumers toward the purchase of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats. The retailer then is reimbursed by the manufacturer or other third party. In this situation, the retailer’s taxable sales price includes the amount the retailer receives from the customer. The retailer’s taxable sales price also includes the amount the retailer receives from the manufacturer, less any coupon handling fees paid by the manufacturer to the retailer, if the conditions in par. (a) 1. to 4. are met. Tax 11.28(3)(c)1.1. When a retailer distributes coupons which its customer may use to obtain free tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services, the following shall apply: