Tax 11.71(2)(b)3.3. The consideration received for designing, producing, implementing, testing, and installing the prewritten computer software. Tax 11.71(2)(bm)(bm) The sale of computer software maintenance contracts for prewritten computer software, unless the sale, license, lease, or rental in Wisconsin of the software to which the maintenance contract relates is or was exempt from tax to the purchaser of the contract. Tax 11.71(2)(c)(c) The sale of training materials, such as books and manuals, including digital books and manuals furnished to trainees for a specific charge. However, separately stated training services are not taxable, unless they are a service necessary to complete the sale of a taxable product. Tax 11.71 NoteExamples: 1) Company A sells prewritten computer software to Customer B for $1,000. Company A also offers optional training on how to use the prewritten computer software for an additional $100. Customer B chooses to purchase the training service. The $1,000 sale of the prewritten computer software is subject to Wisconsin sales tax but the $100 charge for the training is not subject to tax since the training was not required by the seller or the purchaser as a service necessary to complete the sale.
Tax 11.71 Note2) Company C sells prewritten computer software to Customer D for $1,000. In addition, Company C also requires that any customer that purchases the prewritten computer software, must also purchase the training services on how to use the software for $100. Since Company C requires that Customer D purchase the training services as a part of the sale of the prewritten computer software to Customer D, the training services are a service necessary to complete the sale and Company C must charge Wisconsin sales tax on the entire $1,100 it charges Customer D.
Tax 11.71(2)(d)(d) The charge for additional copies of records, reports, or tabulations, including copies produced by means of photocopying, multi-lithing, or by other means. “Additional copies” means all the copies in excess of copies produced on multipart carbon paper simultaneous with the production of the original and on the same printer, whether the copies are prepared by rerunning the same program, by using multiple simultaneous printers, by looping a program so that a program is run continuously, by using different programs to produce the same output product, or by other means. Tax 11.71(2)(e)(e) The sale of mailing lists as set forth in s. Tax 11.82, including listings in the form of mailing labels produced as result of a computer run. However, the tax does not apply to the charge for addressing material to be mailed with names and addresses furnished by a customer, or maintained by a service bureau for the customer, by the use of automatic data processing equipment. Tax 11.71(3)(3) Nontaxable computer and data processing services. The sales price from the following computer or data processing services are not taxable: Tax 11.71 NoteNote: A contract to process a client’s data by the use of computer software or through an electrical accounting machine programmed by a wired plugboard will usually include receiving the client’s source documents, recording data in machine readable form such as in punch cards or on magnetic media, making corrections, rearranging or creating new information as the result of the processing, and then providing tabulated listings or recording output on other media. This service is not taxable, even though the total charge is broken down into specific charges for each step.
Tax 11.71 NoteNote: If a client furnishes data and computer software for processing the data and the processing is under the direction and control of the person providing the service, the processing service is not taxable, even though charges for the service may be based on computer time. The true object of this arrangement is considered to be a service, even though some tangible personal property may be incidentally transferred to the client.
Tax 11.71(3)(b)(b) Providing computer software that is not prewritten computer software. Tax 11.71(3)(c)(c) Providing program technical support, error correction services, and maintenance and enhancement to computer software that is not prewritten computer software. Tax 11.71(3)(d)(d) Providing time-sharing services which permit persons at different locations to access the same computer through remote access by telephone lines, microwave, or other means. Nontaxable time-sharing exists when a person or that person’s employees, who have access to the equipment, are not located on the premises where the equipment is located and do not operate the equipment or control its operation. Tax 11.71(3)(e)(e) Miscellaneous services which are not part of the sale of prewritten computer software or other tangible personal property, or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., including: Tax 11.71(3)(e)1.1. Designing and implementing computer systems including determining equipment and personnel required and how they will be utilized. Tax 11.71(3)(e)2.2. Designing storage and data retrieval systems including determining what data communications and high-speed input-output terminals are required. Tax 11.71(3)(e)3.3. Consulting services including study of all or part of a data processing system. Tax 11.71(3)(e)4.4. Feasibility studies including studies to determine what benefits would be derived if procedures were automated. Tax 11.71(3)(e)5.5. Evaluation of bids including studies to determine which proposal for computer equipment would be most beneficial. Tax 11.71(3)(f)(f) Keypunching and keystroke verifying services, including: Tax 11.71(3)(f)1.1. Keypunching only, keypunching and keystroke verification, or keypunching and providing a proof list or verification data, or both. Charges for these services are not taxable, whether the cards or tapes are furnished by the customer or by a service bureau. Tax 11.71(3)(f)2.2. Recording data from source documents directly on magnetic tape, off-line. This operation may include keystroke verifying or proof listing of data, or both, and is comparable to the punch card operation. Tax 11.71(3)(f)3.3. Imprinting characters on a document to be used as the input medium in an optical character recognition system, whether paper tape or other media are used in the operation. Tax 11.71 NoteNote: The interpretations in s. Tax 11.71 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) Computer and data processing services were taxable under s. 77.52 (2) (a) 13., Stats., Laws of 1977, from August 1, 1977, through June 30, 1978; (b) The definition of prewritten computer software became effective March 6, 2009, pursuant to 2009 Wis. Act 2; (c) The definitions of computer, computer software, computer software maintenance contract and load and leave became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (d) 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. Tax 11.71 NoteNote: In Janesville Data Center, Inc. v. Department of Revenue (1978), 84 Wis. 2d 341, the Wisconsin Supreme Court held that the transfer of customer data onto tangible personal property and the verification of customer data is not subject to the sales and use tax as a transfer of tangible personal property or a taxable service. Tax 11.71 HistoryHistory: Cr. Register, February, 1986, No. 362, eff. 3-1-86; am. (1) (e) 6., (2) (a) (intro.), 1. and (b) (intro.), Register, April, 1993, No. 448, eff. 5-1-93; EmR0924: emerg. am. (1) (b), (2) (intro.), (a) (intro.), 1., (b) to (d), (3) (intro.), (b) to (e) (intro.), (f) 1. and 2., r. (1) (c), (g) and (n), renum. (1) (d), (h) to (j) and (o) to (q) to be (1) (c), (g) to (i) and (n) to (p) and am. (1) (g), (h) and (p), cr. (1) (d), (em), (j) and (2) (bm), r. and recr. (1) (e) and (k), eff. 10-1-09; CR 09-090: am. (1) (b), (2) (intro.), (a) (intro.), 1., (b) to (d), (3) (intro.), (b) to (e) (intro.), (f) 1. and 2., r. (1) (c), (g) and (n), renum. (1) (d), (h) to (j) and (o) to (q) to be (1) (c), (g) to (i) and (n) to (p) and am. (1) (g), (h) and (p), cr. (1) (d), (em), (j) and (2) (bm), r. and recr. (1) (e) and (k) Register May 2010 No. 653, eff. 6-1-10, CR 12-014: am. (2) (c) (Example 2) Register August 2012 No. 680, eff. 9-1-12.