Tax 11.28(4)(a)(a) A sales promotional agency may sell coupon books or voucher books to purchasers who use the coupons or vouchers in obtaining reduced prices from participating retailers. The coupon books may contain coupons redeemable by several retailers or may contain coupons redeemable by only one retailer. The sales promotional agency may have agreed to retain all receipts from the sales of coupon books, or to remit some portion of the receipts to the participating retailers.

Tax 11.28(4)(b)(b) A sales promotional agency’s receipts from sales of coupon or voucher books are not taxable, because the agency is selling intangible rights. These intangible rights entitle the purchaser of the coupon or voucher book to receive tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services at a reduced price or for no charge. However, any receipts received by participating retailers from the sales promotional agency are subject to the sales tax, if taxable property, items, goods, or services are furnished to the person using the coupon or voucher. Any additional receipts received by the retailer from the person using the coupons or vouchers also are taxable.

Tax 11.28 NoteExample: Motel A provides a free breakfast with the purchase of lodging. Motel A purchases fruit, milk, cereal, bakery goods including rolls, bagels, muffins, and bread, ground coffee beans, frozen juice, napkins, plastic utensils, and paper plates and cups from a vendor. Motel A prepares the coffee and juice. The food and beverages are placed on a table in the lobby. Motel A’s customers may take as much or as little as they want of the food and beverage items.

Tax 11.28 NoteMotel A’s purchases of fruit, milk, cereal, bakery goods, ground coffee beans, and frozen juice are not subject to Wisconsin sales or use tax because they are exempt food items under s. 77.54 (20n), Stats. Motel A’s purchases of the napkins, plastic utensils, and paper plates and cups are subject to sales or use tax because no exemption applies.

Tax 11.28(5)(a)(a) Furnishing trading stamps and stamp books, with or without charge, to a retailer is an advertising or sales promotional service. The person furnishing the stamps and books is the consumer of the material and shall pay the Wisconsin sales or use tax on purchases of the material.

Tax 11.28(6)(6) Manufacturer rebates. A manufacturer’s rebate to a person who purchases tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., or taxable services from a retailer is not a reduction of the retailer’s sales price or purchase price for the item for sales or use tax purposes.

Tax 11.28 Note2) An automobile manufacturer gives an automobile dealer’s customer the option of receiving a $1,500 cash rebate or allowing the $1,500 rebate to be applied against the price of the automobile ($15,000) by assigning the right to the rebate to the dealer. The customer chooses to assign the rebate to the dealer and apply the rebate against the price paid for the automobile and pays the dealer $13,500 ($15,000 - $1,500) for the automobile. The manufacturer subsequently reimburses the dealer $1,500. The taxable sales price from the sale of the automobile is $15,000.

Tax 11.28(7)(7) Certain drugs furnished without charge. No sales or use tax is owed on drugs furnished without charge to a physician, surgeon, nurse anesthetist, advanced practice nurse, osteopath, dentist licensed under ch. 447, Stats., podiatrist licensed under ch. 448, Stats., or optometrist licensed under ch. 449, Stats., if the drug may not be dispensed without a prescription.

Tax 11.28 NoteNote: Section Tax 11.28 interprets ss. 77.51 (1f), (3pf), (11d), (15a), and (15b), 77.52 (20) and (21), 77.54 (14) (f), 77.56 (3), and 77.57, Stats.

Tax 11.28 NoteNote: The interpretations in s. Tax 11.28 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption from use tax of certain donated property became effective August 9, 1989, pursuant to 1989 Wis. Act 31; (b) The exemption for certain medicines furnished without charge became effective October 14, 1997, pursuant to 1997 Wis. Act 27; (c) Section 77.57, Stats., was amended to remove the portion of the statute that allowed a purchaser to use the lesser of the cost or fair market value of an item that was purchased exempt and whose first taxable use occurred more than 6 months after it was purchased, pursuant to 2009 Wis. Act 2; (d) The requirements for a third party reimbursement to be considered part of the sales price or purchase price of a product are effective October 1, 2009, pursuant to 2009 Wis. Act 2; (e) 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., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (f) The tax treatment of products provided for free by retailers became effective September 1, 2011 pursuant to 2011 Wis. Act 32.

Tax 11.28 HistoryHistory: Cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (2) (intro.) and (a), Register, July, 1987, No. 379, eff. 8-1-87; r. and recr. (1) (a) and (b) and (2) (intro.), am. (2) (a) and (d), (3) (a), (b) and (c) 2., and (4) (a), cr. (2) (e) and (6), Register, March, 1991, No. 423, eff. 4-1-91; am. (1) (a), renum. (2) (intro.) (a) to (e) to be (2) (a) to (f) and am. (2) (b) and (e), (3) (b), (4) (c) and (5), r. and recr. (3) (c), Register, December, 1996, No. 492, eff. 1-1-97; am. (2) (b), (c) and (f), (3) (c) 1. b. and (4) (b) and (c), cr. (7), Register, May, 1999, No. 521, eff. 6-1-99; EmR0924: emerg. am. (1), (2) (a) to (e), (3) (a) (title), (b), (c), (4) (b), (c), (5) (b), (6) and (7), renum. (3) (a) to be (3) (a) (intro.) and am., cr. (3) (a) 1. to 4., eff. 10-1-09; CR 09-090: am. (1), (2) (a), (b), (d), (e), (3) (a) (title), (b), (c), (4) (b), (c), (5) (b), (6) and (7), renum. (2) (c) and (3) (a) to be (2) (c) 1. and (3) (a) (intro.) and am., cr. (2) (c) 2. and (3) (a) 1. to 4. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (2) (f), (3) (c) 1. a., b. Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (3) (c) 1. (intro.), a., cr. (3) (c) 1. a. (Example), ag., ar., am. (3) (c) 1. b., r. (3) (c) 1. b. (Example 1), renum. (3) (c) 1. b. (Example 2) to (Example) Register August 2012 No. 680, eff. 9-1-12.

Tax 11.29(1)(a)(a) “Lease or rental,” as defined in s. 77.51 (7) (a), Stats., means any transfer of possession or control of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., for a fixed or indeterminate term and for consideration and includes:

Tax 11.29(1)(a)2.2. Agreements related to the transfer of possession or control of motor vehicles or trailers, if the amount of any consideration may be increased or decreased by reference to the amount realized on the sale or other disposition of such motor vehicles or trailers, consistent with section 7701 (h) (1) of the Internal Revenue Code.

Tax 11.29(1)(b)1.1. A transfer of possession or control of tangible personal property or items, property or goods under s. 77.52 (1) (b), (c), or (d), Stats., under a security agreement or deferred payment plan, if such agreement or plan requires transferring title to the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., after making all required payments.

Tax 11.29(1)(b)2.2. A transfer of possession or control of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., under any agreement that requires transferring title to the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., after making all required payments and after paying an option price that does not exceed the greater of $100 or one percent of the total amount of the required payments.

Tax 11.29(1)(b)3.3. Providing tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., along with an operator, if the operator is necessary for the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., to perform in the manner for which it is designed and if the operator does more than maintain, inspect, or set up the tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats.

Tax 11.29(1)(c)(c) The definition of “lease or rental” provided in pars. (a) and (b) first applies to lease and rental contracts entered into on October 1, 2009 and has no effect on lease or rental contracts entered into prior to October 1, 2009 until such lease or rental contract is renewed, extended, or modified on or after October 1, 2009.

Tax 11.29(1)(d)(d) “Receive” as provided in s. 77.522 (1) (a) 1., Stats., means taking possession of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., or taking possession or making first use of digital goods under s. 77.52 (1) (d), Stats., whichever comes first. “Receive” does not include a shipping company taking possession of tangible personal property or items or property under s. 77.52 (1) (b) or (c), Stats., on a purchaser’s behalf.