Wisconsin Sales and Use Tax Wisconsin Department of

Wisconsin Sales and Use Tax Wisconsin Department of Revenue WI RV Dealers Alliance December 8, 2016 1

Introduction Holly Hoffman (715) 824 -2258 Holly. Hoffman@wisconsin. gov Janet Abrams (608) 264 -7779 Janet. Abrams@wisconsin. gov 2

Topics • • Sales and Use Tax Overview Sales by RV Dealers Purchases by RV Dealers Record Keeping 3

Sales and Use Tax Overview

Overview Sales Tax: – 5% tax imposed on the sales price of taxable sales, leases, licenses, and rentals in Wisconsin Use Tax: – 5% tax imposed on the purchase price of taxable sales, leases, licenses, and rentals that are stored, used, or consumed in Wisconsin upon which a Wisconsin sales or use tax has not previously been paid 5

Overview Definition of Sales Price and Purchase Price – Total consideration with no deduction for: • • • Delivery, Handling, and Preparation "Service Fees" Extended Warranties and Service Contracts Federal Gas Guzzler Tax Manufacturer's Rebates and Coupons Credit Card Points or Dollars Exchanges or Barter Capitalized Cost Reductions Lease Cancellation Charges 6

Overview Definition of Sales Price and Purchase Price: Does not include: • • Trade-In Allowances Dealer Refunds or Credits Dealer Rebates and Manufacturer's Incentives Registration, Titling, and Filing Fees Bad Debts Interest, Financing, and Carrying Charges Insurance Rental Vehicle Fee 7

Overview What is use tax? Wisconsin use tax is a tax imposed on the purchase price of taxable products or taxable services that are stored, used, or consumed within Wisconsin, and upon which a Wisconsin sales or use tax has not previously been paid. 8

Overview Why is use tax necessary? Wisconsin retailers could be at a competitive disadvantage if WI persons could purchase taxable products or services from sources outside WI without paying sales tax. 9

Overview Rates • • State Tax – 5% County Tax – 0. 5% Baseball Stadium District Tax – 0. 1% Football Stadium District Tax – 0. 5% (ended 9/30/15) • Local Food and Beverage Tax – 0. 5% • Premier Resort Area Tax – 0. 5% or 1. 25% 10

Overview • Football Stadium Tax – • Premier Resort Tax – • City of Rhinelander effective 1/1/2017 Sheboygan County Tax – • Ended 9/30/2015 0. 5% effective 1/1/2017 Kewaunee County Tax – 0. 5% effective 4/1/2017 11

Overview What sales are subject to sales tax? • • • Tangible personal property Certain coins or stamps Certain leased tangible personal property affixed to real property Certain digital goods (Publication 240) Specified services 12

Overview Rental Vehicle Fee • • • A 5% fee is imposed on the sales price from the lease or rental of certain vehicles If your primary business is the rental or lease of vehicles without drivers for 30 days or less Vehicles covered by this fee include: – – – • Motor homes Recreational vehicles Camping trailers A rental is in Wisconsin if the lessee takes possession of the motor vehicle from the lessor in Wisconsin 13

Sales by RV Dealers

Taxable Sales Examples of Taxable Sales by RV Dealers: • RV Sales, Leases, and Rentals • RV Repairs and Maintenance Services • Sale of Parts, Accessories, and Attachments • Towing and Hauling RVs • Winterizing/Dewinterizing Services to RVs • Storage and Parking of Motorized RVs 15

Taxable Sales All retailers that hold, or are required to hold, a sellers permit must collect and remit all applicable state and local sales tax on sales of: • • Motor vehicles Boats Snowmobiles Recreational vehicles as defined in sec. 340. 01(48 r), Wis. Stats. Trailers Semitrailers ATV's Aircraft 16

Taxable Sales Retailer Should Provide Buyer Receipt: • • Signed Certificate of Title Receipt showing the tax the retailer collected Buyer Must Provide Upon Registration: • Receipt when registering or titling item to prove that tax had been paid to retailer 17

Taxable Sales Recreational vehicles as defined in sec. 340. 01(48 r), Wis. Stats. : A vehicle that is designed to be towed upon a highway by a motor vehicle, that is equipped and used, or intended to be used, primarily for temporary or recreational human habitation, that has walls of rigid construction, and that does not exceed 45 feet in length 18

Taxable Sales of RVs Where the Sale Takes Place • State, county and stadium sales tax is based on the location where the vehicle is customarily kept • Nonresident Purchaser • • State sales tax based on location where nonresident takes possession (Exemption may apply) County and stadium tax based on location where customarily kept; if kept out of state, the retailer is not required to collect county/stadium taxes 19

Exemption Nonresident Purchaser • If nonresident purchaser will make no use of the RV in WI other than to remove it from WI, sale is exempt from tax • If registered in WI, tax applies 20

Taxable Sales Camping Trailer is defined as: A vehicle with a collapsible or folding structure designed for human habitation and towed upon a highway by a motor vehicle Pop-up camper Tent camper Truck camper Slide-in truck camper 21

Taxable Sales of Camping Trailers Where the Sale Takes Place • • State, county and stadium sales tax is based on where possession takes place Same treatment for resident or nonresident (no exemption for nonresidents) 22

Taxable Sales Leases or Rentals of Motor Vehicles, Trailers, Semitrailers, and Aircraft – Where the Sale Takes Place • • State, county and stadium sales tax is based on the primary location of such vehicles Motor vehicles equipment, etc. used on highways in Wisconsin and out-of-state are subject to Wisconsin sales tax if the lease payments are sourced to a location in Wisconsin 23

Taxable Sales Change in Where the Sale Takes Place Effective March 3, 2016, the location where a onepayment lease of a motor vehicle, trailer, semitrailer, or aircraft takes place is where the customer receives the vehicle. – Generally the lessor or dealer's location. 24

Taxable Sales Service, Maintenance, Towing, etc. to RV's: • • • Services to tangible personal property are taxable Sale sourced to location where service was received (where customer receives the service property) For example, towing is sourced to where the vehicle is towed to 25

Taxable Sales Winterizing (Dewinterizing) Services for RVs are Taxable Including: • • Draining water from a water heater Opening water faucets to allow water to drain Blowing air through water lines & drain pipes to clear water Installing temporary storm windows or plastic sheeting on the windows 26

Taxable Sales Storage and Parking • Parking of self-propelled vehicles is taxable including: • • RVs, Boats, Aircraft, Motor Vehicles Storage of boats is taxable Storage of RVs, aircraft, and motor vehicles is not taxable if the vehicle is not available for immediate use (e. g. , motor vehicle stored on blocks) Providing storage/parking for campers that are not self-propelled is not taxable NOTE: Admissions to campgrounds and RVs setup on campsites are taxable (see Publication 239: Campgrounds) 27

Taxable Sales Other taxable sales – Sales of used equipment – Office furniture – Vehicles – Sales or rentals to employees 28

Purchases by RV Dealers

Purchases Taxable purchases: • • • Machinery and equipment for business use Small tools Shop supplies Office furniture, equipment, and supplies Out of state purchases/credit card purchases 30

Licensed Carrier • DOT may require persons hauling goods of others for hire to obtain a License Carrier number (LC number). • Although a person may have an LC number, the exemption for motor trucks used in common or contract carriage is only allowed if the motor truck / semitrailer is used EXCLUSIVELY to haul goods of others for hire. 31

Purchases Resale Exemption: Items purchased must qualify for resale • • • Exclusively held, displayed, or demonstrated for sale purposes Physically transferred to customer If used for business purposes or personally: • • • Use tax is due on original purchase price or lease value Use tax may be due on dealer plate 32

Record Keeping

Exemption Certificates • Must get within 90 days of sale • No good faith requirement within 90 days (if fully completed) • Relieves seller of requirement to collect unless: • • • Seller fraudulently fails to collect the tax Solicits purchaser to claim unlawful exemption Sale to an exempt entity, at seller’s location and certificate indicates claimed exemption is not available 34

Exemption Certificates A fully completed exemption certificate contains the following information: Purchaser’s name and address; Type of business; Reason(s) for exemption; ID number required by the state where the sale is sourced; and • If paper is used, signature of the purchaser. • • 35

Exemption Certificates Allowable Exemption Certificates include: § Wisconsin Sales and Use Tax Exemption Certificate (Form S 211) § Streamlined Sales and Use Tax Agreement Certificate of Exemption (S-211 -SST/SSTGB Form F 0003 and F 0008) § A substitute exemption certificate if it contains all the essential information and is approved by the Department (sec. Tax 11. 14(2)(b), Wis. Adm. Code) 36

Exemption Certificates When the seller does not receive an exemption certificate within 90 days of the sale, the seller must apply good faith in obtaining the exemption certificate from its customer. 37

Exemption Certificates A seller accepts an exemption certificate in good faith if the certificate: • is fully completed, • contains no statement or entry which the seller knows, or has reason to believe, is false or misleading, and • discloses a valid reason for exemption from Wisconsin sales and use tax under Wisconsin law 38

Records Recordkeeping Keep good records – What you sold – Who you sold it to – Where sale took place – Exemption certificates – Anything unique about the transaction 39

Online Resources Electronic Mailing Lists – Go to revenue. wi. gov and search "Email updates" to subscribe ▪Tax Professionals ▪Sales and Use Tax Training Opportunities – Go to revenue. wi. gov and search "Training" – My Tax Account webinars Publications on our website: revenue. wi. gov ▪ Wisconsin Tax Bulletins ▪ Publication 201: WI Sales and Use Tax Information ▪ Publication 202: Motor Vehicle Sales, Leases, and Repairs ▪ Publication 207: Contractors ▪ Publication 216: Filing Claims for Refund ▪ Publication 240: Digital Goods

Articles: Sales of Watercraft, Such as Boats and Jet Skis Boats and Trailers: Determining Which County and Stadium Taxes Apply One-Payment Leases of Automobiles Effective March 3, 2016 - Where Does The Sale Take Place? Snowmobiles, ATVs, UTVs, and Similar Property Sold to Nonresidents

Technical Assistance for Sales and Use Tax Write: P. O. Box 8949 Mail Stop 5 -77 Madison, WI 53708 Email: DORSalesand. Use@wisconsin. gov Telephone: (608) 266 -2776 42