Tax 11.52(7)(a)(a) Except as provided in pars. (b), (c), (d) and (e), receipts from the sale, lease, rental, or license to use coin-operated machines and attachments, parts and supplies for the machines are subject to the sales tax. Taxable receipts include sales to persons providing a service, such as laundry and dry cleaning service. If the machines, attachments, parts, or supplies are purchased for use in Wisconsin from an unregistered out-of-state supplier, the purchaser shall remit the use tax directly to the department.

Tax 11.52(7)(b)(b) Nontaxable receipts include the lease of coin-operated machines by non-governmental retailers to exchanges of the army, air force, navy, or marine corps which acquire title to and sell merchandise through the machines to authorized purchasers from such exchanges.

Tax 11.52(7)(c)(c) Machines purchased exclusively for license, lease, or rental to others may be purchased by the lessor without tax if the lessor gives an exemption certificate to the lessor’s supplier. If the lessor intends to make any use of the machines other than license, lease, or rental, an exemption certificate claiming resale may not be given. In either event, the lessor’s rental receipts are taxable.

Tax 11.52(7)(d)(d) Music sold in a tangible or digital form to a person described in s. 77.54 (63), Stats., for use in a jukebox is exempt from sales and use tax if the music is used exclusively for the jukebox. When the music is sold with a jukebox, the music is exempt as a separate sale from the jukebox if the sales price of the music is stated separately from the sales price of the jukebox on the invoice or bill of sale the seller gives to the purchaser.

Tax 11.52(7)(e)1.1. A video or electronic game sold in a tangible or digital form to a person in the business of providing a taxable service through an amusement device, as defined in s. 77.54 (65m) (b), Stats., is exempt from sales and use tax if the video or electronic game is used exclusively for the amusement device. For exemption, the sales price of the video or electronic game shall be stated separately from the amusement device on the invoice, bill of sale, or similar document the seller gives to the purchaser.

Tax 11.52 NoteExamples: 1) Distributor is in the business of providing taxable admission services through amusement devices. Distributor owns an arcade game console that is an amusement device. The arcade game console is placed in a tavern. The tavern owner gives the receipts from customers playing arcade games on the console to Distributor, less a commission. Distributor purchases a software upgrade that is an electronic game played on the console, but does not replace the arcade game console. Distributor’s purchase of the software upgrade is exempt.

Tax 11.52 Note2) Arcade purchases a pinball machine it used in providing taxable admission services. The invoice to Arcade separately states the purchase price of the pinball machine from the video game component of the pinball machine. Arcade’s purchase of the video game that is used in the pinball machine is exempt from tax because it is separately stated on the invoice. Arcade’s purchase of the pinball machine is taxable.

Tax 11.52 Note3) Tavern purchases a dart board that is an amusement device. Customers insert $1 to use the dart board. Although Tavern’s primary business is selling food and drinks, its business also includes taxable admission services. Tavern’s purchase of the dart board is taxable. Tavern’s purchase of the dart board’s game component is not taxable if separately stated on the invoice.

Tax 11.52 Note4) Distributor is in the business of providing taxable admission services through amusement devices. Distributor purchases a video gambling machine that will be placed in a tavern. A commission will be paid to the tavern based on receipts from the video gambling machine. Distributor’s invoice for the video gambling machine separately states the purchase price of the video gambling machine from the electronic game that is a component of the video gambling machine. Distributor’s purchase of the video gambling machine and the electronic game is taxable, even though the electronic game is separately stated. The video gambling machine is not an amusement device because it is a device, machine, or game that is illegal to operate in Wisconsin. The operation of video gambling machines is in violation of Wisconsin law, as provided in ss. 945.03 and 945.04, Stats.

Tax 11.52 NoteNote: Section Tax 11.52 interprets ss. 77.51 (1fm), (3n), (3t), (13), and (17w), 77.52 (1), (1m), (2) (a) 2., 6., 7., 10., and 11., and (2m), and 77.54 (20n), (63), and (65m), Stats.

Tax 11.52 NoteNote: The interpretations in s. Tax 11.52 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The definitions of “candy,” “dietary supplement,” “food and food ingredient,” and “soft drink,” the exemption for food and food ingredients, 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; (b) Receipts from all self-service laundry, dry cleaning, pressing, and dyeing machines, including those that are not coin-operated, are not taxable effective October 1, 2013, pursuant to 2013 Wis. Act 20; (c) The exemption for music sold to a jukebox operator for use in jukeboxes in s. 77.54 (63), Stats., became effective June 1, 2016, pursuant to 2015 Wis. Act 251; and (d) The exemptions for a video or electronic game sold to an amusement device operator for use in the amusement device and prizes awarded or transferred through the use of the amusement device under s. 77.54 (65m) became effective December 1, 2017, pursuant to 2017 Wis. Act 59.

Tax 11.52 HistoryHistory: Cr. Register, January, 1978, No. 265, eff. 2-1-78; am. (3) (a) 1. and r. (4) (c), Register, December, 1983, No. 336, eff. 1-1-84; am. (1) (intro.), (3) (a) 1., (5) (c) 5. and (6) (a), Register, June, 1991, No. 426, eff. 7-1-91; EmR0924: emerg. r. and recr. eff. 10-1-09; CR 09-090: r. and recr. Register May 2010 No. 653, eff. 6-1-10; correction to numbering of (4) (a) 4m. made under s. 13.92 (4) (b) 1., Stats., Register May 2010 No. 653; CR 14-006: am. (5) (a) Register August 2014 No. 704, eff. 9-1-14; CR 19-112: cr. (7) (d) Register June 2020 No. 774, eff. 7-1-20; correction in (7) (d) made under s. 35.17, Stats., Register June 2020 No. 774; CR 20-018: cr. (5m), am. (7) (a), cr. (7) (e) Register July 2021 No. 787, eff. 8-1-21.