Sales and Use Tax Information for Colleges, Universities, and Technical Colleges - State of Wisconsin Department of Revenue

 
State of Wisconsin
Department of Revenue

Sales and Use Tax
Information for
Colleges, Universities,
and Technical
Colleges

Publication 204 (09/13)
                            Printed on
                          Recycled Paper
Table of Contents
                                                                                                                                                                            Page

       I. INTRODUCTION ...............................................................................................................................................3
             A.    General ............................................................................................................................................................ 3
             B.    Definitions of College, University, and Technical College ............................................................................. 3
             C.    Difference Between the Sales and Use Tax..................................................................................................... 4
             D.    Which Sales Are Subject to Sales and Use Taxes?.......................................................................................... 4
             E.    Tax Rate and Tax Base .................................................................................................................................... 5
             F.    Seller’s Permits ............................................................................................................................................... 5
             G.    Filing Tax Returns and Payment of Tax .......................................................................................................... 5
      II. SALES BY COLLEGES, UNIVERSITIES, AND TECHNICAL COLLEGES.............................................6
             A.    General ............................................................................................................................................................ 6
             B.    Taxable Sales, Leases, Licenses, or Rentals.................................................................................................... 6
             C.    Nontaxable Sales ............................................................................................................................................. 9
             D.    Student Organizations ................................................................................................................................... 11
     III. PURCHASES BY COLLEGES, UNIVERSITIES, AND TECHNICAL COLLEGES ...............................12
             A. Operated by the State of Wisconsin or Another Federal or Wisconsin Governmental Unit ........................... 12
             B. Private College, University, or Technical College .......................................................................................... 12
             C. Student Organizations ..................................................................................................................................... 12
     IV. CONSTRUCTION FOR COLLEGES, UNIVERSITIES, AND TECHNICAL COLLEGES....................12

       V. RECORDKEEPING..........................................................................................................................................13
             A. General .......................................................................................................................................................... 13
             B. Exemption Certificates and Exemption Claims ............................................................................................ 13
     VI. QUESTIONS OR ADDITIONAL INFORMATION ......................................................................................14
             A. Department of Revenue Assistance ............................................................................................................... 14
             B. Other Aids ..................................................................................................................................................... 14
    VII. ANY SUGGESTIONS? .....................................................................................................................................15

2
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

                                                                      rentals in municipalities wholly or partially
      IMPORTANT CHANGES                                               within Milwaukee County.
Self-Service Laundry Machines.       Receipts                     (d) Premier resort area tax: Publication 403, Prem-
from token and magnetic card operated laundry                         ier Resort Area Tax. Applies to certain types of
machines become exempt on October 1, 2013.                            sellers and their sales of tangible personal prop-
Page 8.                                                               erty; items, property, and goods listed in
Exemption for Printing Services Resulting in                          Part I.D.2. to 4.; and taxable services in the Vil-
Advertising and Promotional Direct Mail. Ef-                          lage of Lake Delton, City of Wisconsin Dells,
fective July 1, 2013, the sale and purchase of                        City of Bayfield, and the City of Eagle River.
printing or imprinting services that result in ad-
vertising and promotional direct mail is exempt.                                     CAUTION
Page 8.
                                                              •    The information in this publication reflects the
I. INTRODUCTION                                                    position of the Wisconsin Department of Reve-
                                                                   nue of laws enacted by the Wisconsin
A. General                                                         Legislature and in effect as of September 1,
                                                                   2013. Laws enacted and in effect after that date,
   This publication provides information about the                 new administrative rules, and court decisions
   Wisconsin sales and use tax as it affects colleges,             may change the interpretations in this publica-
   universities, and technical colleges.                           tion.
                                                              •    The examples and lists of taxable and nontaxa-
   Note: Certain sales which are subject to the 5%                 ble sales and purchases provided in this
   state sales and use tax may also be subject to the:             publication are not all-inclusive. They merely
   (a) 0.5% county sales and use tax, (b) 0.1% or 0.5%             set forth common examples.
   stadium sales and use tax, (c) 0.5% food and bever-
   age local exposition tax, and (d) 0.5% premier
   resort area sales tax for the City of Bayfield and the    B. Definitions of College, University, and Technical
   City of Eagle River or 1.0% premier resort area              College
   sales tax for the City of Wisconsin Dells and the
   Village of Lake Delton. (Note: Prior to July 1,                “School,” for purposes of this publication, means a
   2010, the food and beverage local exposition tax               college, university, or technical college.
   was 0.25%. Prior to January 1, 2010, the premier
   resort area tax rate for the City of Wisconsin Dells           “College” and “university” mean a nonprofit or
   and the Village of Lake Delton was 0.5%.) Addi-                public educational institution which provides an ed-
   tional information about these taxes is contained in           ucational program for which it awards a bachelor’s
   the following:                                                 or higher degree, or provides a program which is
                                                                  acceptable for full credit toward such a degree or a
   (a) County tax: Publication 201, Wisconsin Sales               program of training to prepare students for gainful
       and Use Tax Information, Section XVIII.                    employment in a recognized occupation, and admits
                                                                  as regular students only individuals having a certifi-
   (b) Stadium tax: Publication 201, Wisconsin Sales              cate of graduation from a high school or the
       and Use Tax Information, Section XVIII. Ap-                recognized equivalent of such a certificate. Exam-
       plies to sales and purchases made in Brown,                ples include the University of Wisconsin, Alverno
       Milwaukee, Ozaukee, Racine, Washington, and                College, Beloit College, Cardinal Stritch College,
       Waukesha counties.                                         Carroll College, Carthage College, Concordia Uni-
                                                                  versity, Edgewood College, Lakeland College,
   (c) Local exposition taxes: Publication 410, Local             Lawrence University, Marian College, Marquette
       Exposition Taxes. Applies to sales and purchas-            University, Mount Mary College, Mount Senario
       es of certain lodging, food, beverages, and car            College, Northland College, Ripon College, St.

                                                                                                                       3
Publication 204

    Norbert College, Silver Lake College, Viterbo Col-      D. Which Sales Are Subject to Sales and Use
    lege, and Wisconsin Lutheran College.                      Taxes?

    “Technical college” is a school subject to regulation      Sales, licenses, leases, and rentals of the following
    established by the Wisconsin Technical College             property, items, and goods are subject to sales and
    System Board. Examples include Blackhawk Tech-             use taxes:
    nical College, Chippewa Valley Technical College,
                                                               1. Tangible personal property;
    Fox Valley Technical College, Gateway Technical
    College, Lakeshore Technical College, Madison              2. Coins or stamps of the United States that are
    Area Technical College, Mid-State Technical Col-              sold, licensed, leased, rented, or traded as collec-
    lege, Milwaukee Area Technical College, Moraine               tor’s items above their face value;
    Park Technical College, Nicolet Area Technical             3. Leased property that is affixed to real property, if
    College, Northcentral Technical College, Northeast            the lessor has the right to remove the leased
    Wisconsin Technical College, Southwest Wisconsin              property upon breach or termination of the lease
    Technical College, Waukesha County Technical                  agreement, unless the lessor of the leased proper-
    College, Western Wisconsin Technical College, and             ty is also the lessor of the real property to which
    Wisconsin lndianhead Technical College.                       the leased property is affixed;
C. Difference Between the Sales and Use Tax                    4. Specified digital goods, additional digital goods,
                                                                  and digital codes. These digital goods are char-
    1. Sales tax: The Wisconsin sales tax is a 5% tax             acterized by the fact that they are transferred
       imposed on the sales price of colleges, universi-          electronically to the purchaser (i.e., accessed or
       ties, and technical colleges who sell, license,            obtained by the purchaser by means other than
       lease, or rent tangible personal property; items,          tangible storage media). “Specified digital
       property, and goods listed in Part I.D.2. to 4; or         goods” means “digital audio works,” “digital au-
       taxable services at retail in Wisconsin. General-          diovisual works,” and “digital books.”
       ly, a sale of such property, items, goods, and             “Additional digital goods” means greeting cards,
       services is at retail unless the buyer purchases           finished artwork, periodicals, video or electronic
       the property for the purpose of reselling it.              games, and newspapers or other news or infor-
                                                                  mation products.
    2. Use tax: The Wisconsin use tax is a 5% tax im-
       posed on the purchase price of tangible personal           See Publication 240 for a description of the
       property; items, property, and goods listed in             products that are included.
       Part I.D.2. to 4.; and taxable services that are
       used, stored, or consumed in Wisconsin, upon            In addition, certain services are subject to Wiscon-
       which a Wisconsin sales or use tax has not pre-         sin sales and use taxes. For a list of taxable services,
       viously been paid.                                      see Part X.B. of Publication 201.

        Note: Wisconsin universities, colleges, and            As used throughout this publication, the terms
        technical colleges are not subject to use tax.         “property, items, and goods,” “property, items, or
        The reason for this is that all purchases by Wis-      goods,” or “property, item, good,” refers to the
        consin governmental units and nonprofit                property, items, and goods described in Part I.D.1.
        schools organized and operated exclusively for         to 4.
        religious, educational, scientific, or charitable
        purposes are exempt from use tax.                      As used throughout this publication, the term “digi-
                                                               tal goods” refers collectively to products listed in
                                                               Part I.D.4.

4
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

E. Tax Rate and Tax Base                                         3. Business Tax Registration Fees

   The tax rate of 5% is the same for both the Wiscon-               Colleges, universities, and technical colleges
   sin state sales and use tax. The sales tax is based               applying for a seller’s permit may be required
   upon the sales price from retail sales. The use tax is            to pay a Business Tax Registration (BTR) fee
   based upon the purchase price of the property, item,              of $20. The initial BTR fee covers a period of
   good, or service purchased.                                       two years. At the end of that period, a $10 BTR
                                                                     renewal fee applies. The Department of Reve-
   If a sale is subject to the 0.5% county tax, the tax              nue will send a renewal notice.
   rate is 5.5% (5% state tax and 0.5% county tax). If
   the sale is subject to the 0.5% football stadium tax,     G. Filing Tax Returns and Payment of Tax
   the tax rate is 5.5%. If the sale is subject to the
   0.1% baseball stadium tax, the tax rate is 5.1%, or           Every holder of a Seller’s Permit, Use Tax Certifi-
   5.6% if both county tax and the baseball stadium              cate, or Consumer’s Use Tax Certificate must file a
   tax apply.                                                    return for each reporting period, even if no tax is
                                                                 due for that period. A reporting period may be
F. Seller’s Permits                                              monthly, quarterly, or annually, depending on the
                                                                 person’s annual tax liability. The Department of
   1. Who Must Have a Seller’s Permit?                           Revenue will notify each person of their reporting
                                                                 period and the due date for filing returns.
       Every college, university, and technical college
       making taxable sales in Wisconsin, regardless             The law requires that sales and use tax returns be
       of whether its sales are mercantile in nature, is         filed electronically. Wisconsin sales and use tax re-
       required to have a seller’s permit, unless all            turns should be filed using one of the following
       sales by the seller are exempt from sales and             electronic filing methods:
       use taxes.
                                                                 1. My Tax Account
       The seller’s permit shows that the seller is
       properly registered with the Department of                    My Tax Account is a free, secure online appli-
       Revenue, as required by law. It is a misde-                   cation that allows you to file and pay your sales
       meanor to make taxable sales of property,                     and use taxes electronically. It performs the
       items, goods, or services without a seller’s per-             necessary computations of tax based on infor-
       mit.                                                          mation that you enter and allows you to make
                                                                     your tax payment via electronic funds transfer,
   2. Application                                                    credit card, or paper check. My Tax Account al-
                                                                     so allows you to:
       A person may apply for a seller’s permit using
       one of the following methods:                                 • View business tax filing and payment history
                                                                       and identify any tax periods that need atten-
       •   Use the Department of Revenue’s online                      tion.
                                                                     • Change your address, obtain an extension to
           Business Tax Registration Process to sub-
                                                                       file a return, or inactivate your account.
           mit the application electronically.
                                                                     • File a buyer’s claim for refund of sales tax
       •   Complete Form BTR-101, Application for                      paid to a seller in error.
           Business Tax Registration, and mail it to                 • Appeal adjustment notices.
           the Department of Revenue. Keep a copy of
           the completed application for your records.               To use My Tax Account, you must obtain a lo-
                                                                     gon ID and password from the Department of
       You should apply for a seller’s permit at least               Revenue. Go to the My Tax Account Common
       three weeks before your business operations                   Questions on the Department of Revenue’s
       begin.                                                        website for more information, including how to
                                                                     obtain your logon ID and password.

                                                                                                                    5
Publication 204

    2. Sales TeleFile                                           portion of the publication describes how the sales
                                                                tax applies to sales by colleges, universities, and
        You can file your Wisconsin sales and use tax           technical colleges.
        return with any touch-tone telephone using Te-
        leFile. This program accepts four payment            B. Taxable Sales, Leases, Licenses, or Rentals
        types: Direct withdrawal from your checking or
        savings account (only available during the call         Caution: The following sales are not taxable if they
        in which you file your return); credit card,            are mandatory charges which are included in the
        check, or money order. To use TeleFile, obtain          billing for tuition, as explained in Part II.C.1.
        a Sales TeleFile Worksheet and Payment
        Voucher from the Department of Revenue’s                1. Property, Items, and Goods.
        website. When you have completed the work-
        sheet, call (608) 261-5340 (Madison number) or              Important: If the school charges the purchaser
        (414) 227-3895 (Milwaukee number) to actual-                for the delivery of any of the following items,
        ly file your return.                                        the school’s total charge, including the shipping
                                                                    and handling charge, is taxable.
    3. eFile Transmission
                                                                    •   Over-the-counter sales of magazines, but
        This program is a service for taxpayers using                   not newspapers.
        approved private vendors’ software or who
        have the technical expertise to create a file in            •   Books, yearbooks, annuals, lecture notes,
        XML format. eFile transmission places return                    directories, and bulletins.
        data into a file format that can be directly pro-
        cessed into the Department of Revenue system.               •   Student course materials (e.g., lab sup-
        Using secure transmission over the Internet you                 plies).
        can submit a payment at the same time that you
                                                                    •   Textbooks, whether a paper version or digi-
        file your return using ACH debit or ACH credit.
                                                                        tal version.
        You will receive an email acknowledgement to
        confirm receipt of a successful file transmis-              •   Digital books.
        sion. Information about file transmission can be
        found on the Department of Revenue’s website                •   Digital audio works.
        at revenue.wi.gov/eserv/eftgen.html.                        •   Digital audiovisual works.

    If you have questions about electronic filing or                •   Certain other digital goods. See Publica-
    payments, contact the department by writing to                      tion 240, Digital Goods, for additional
    Wisconsin Department of Revenue, Electronic                         information.
    Funds Transfer Assistance, Mail Stop 3-80,                      •   Sales of candy, soft drinks, dietary supple-
    PO Box 8902, Madison, WI 53708-8902; calling                        ments, and prepared foods.
    (608) 266-2776;   or    emailing    at     DOR-
    SalesandUse@revenue.wi.gov.                                         Example: Sales of candy, soft drinks, die-
                                                                        tary supplements, and prepared foods to
II. SALES BY COLLEGES,                                                  teachers and visitors are taxable.
    UNIVERSITIES, AND TECHNICAL                                         Exception: Sales of candy, soft drinks, die-
    COLLEGES                                                            tary supplements, and prepared foods that
                                                                        are furnished in accordance with any con-
A. General                                                              tract or agreement or paid to the school
                                                                        through the use of an account of the school
    All sales of property, items, and goods are subject                 to the following are exempt from tax (see
    to the sales tax, unless an exemption applies. How-                 Part II.C.2.):
    ever, sales of only certain services are taxable. This

6
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

    –   Students who consume the candy, soft                     Exception: Sales of photocopies of public
        drinks, dietary supplements, or pre-                     or confidential records by schools operated
        pared foods and are enrolled for credit                  by the state, or another governmental unit
        at the college, university, or technical                 that is included in the definition of “au-
        college; or                                              thority” in sec. 19.32(l), Wis. Stats., are
                                                                 exempt. This exemption applies primarily
    –   A National Football League team.
                                                                 to transcripts and other records. Copyright-
                                                                 ed printed material is not a public record.
•   A restaurant’s sales of candy, soft drinks,
                                                                 Therefore, photocopy charges in a library
    dietary supplements, and prepared foods to
                                                                 generally are taxable.
    the restaurant’s employees, even if sold to
    employees during the employee’s work
                                                                 Caution: Private schools are not included
    hours.
                                                                 in the definition of “authority’ and all re-
                                                                 ceipts from their sales of photocopies are
    Refer to Publication 220, Grocers - How
                                                                 taxable, unless some other exemption ap-
    Do Wisconsin Sales and Use Taxes Affect
                                                                 plies.
    Your Operations? for more information in-
    cluding the definitions of "candy," "soft                •   Auction sales. (See Publication 217, Auc-
    drinks," "dietary supplements," and "pre-                    tioneers, for more information.)
    pared food."
                                                             •   Cap and gown rentals, including collections
•   Fermented malt beverages (e.g., beer) and                    made by the school for a private vendor.
    intoxicating liquors
                                                             •   Uniforms for employees or others.
•   Food for animals
                                                             •   Parts and labor for repairing motor vehicles
•   Food used in research and experimentation                    or other tangible personal property, items,
                                                                 or goods. These charges are taxable even
•   Gift shop sales.                                             though the customer is only charged for
                                                                 parts at the school’s cost.
•   Vending machine sales of:                                •   Motor vehicles, boats, snowmobiles, rec-
                                                                 reational      vehicles     as    defined     in
        o   Soft drinks                                          sec. 340.01(48r). Wis. Stats., trailers, semi-
                                                                 trailers, all-terrain vehicles, and aircraft.
        o   Candy and chewing gum
                                                             •   Computer hardware and prewritten com-
        o   Heated foods, heated beverages,                      puter software.
            and other prepared foods
                                                             •   Fundraiser sales.
        o   Dietary supplements
                                                             •   Portable stages, public address systems,
        o   Fermented malt beverages and in-                     chairs, pianos, forklift trucks, music racks,
            toxicating liquor                                    spotlights, and projectors rented to groups
                                                                 using a school’s theater.
        o   Hygiene products
                                                         2. Taxable Services
        o   Toiletries
                                                             •   Parking or providing parking space for mo-
•   Photocopies, microfilm, videotape, or CD                     tor vehicles and aircraft, and docking or
    or DVD copies.                                               providing storage space for boats.

                                                                 Note: Parking fines are not taxable.

                                                                                                               7
Publication 204

       •   Admissions to events and places which are          •   Services that consist of recording telecom-
           amusement, athletic, entertainment, or rec-            munications messages and transmitting
           reational in nature and the furnishing, for            them to the purchaser of the service or at
           dues, fees, or other considerations, the priv-         the purchaser’s direction.
           ilege of access to clubs or the privilege of
           having access to, or the use of, amusement,            Exception: These telecommunications
           entertainment, athletic, or recreational facil-        messaging services are not taxable if they
           ities.                                                 are merely incidental to a nontaxable ser-
                                                                  vice provided to the purchaser.
           Examples include:
                                                              •   Laundry, dry-cleaning, and pressing ser-
           –      Admissions to sporting events, plays,           vices.
                  theatrical and musical performances,
                  and dances.                                     Exception: Receipts from coin-operated
                                                                  laundry machines are not taxable. Begin-
           –      Access to ball diamonds, tennis courts,         ning on October 1, 2013, receipts from self-
                  swimming pools, gymnasiums, and golf            service laundry machines that are operated
                  courses.                                        by tokens and magnetic cards are also not
                                                                  taxable. Prior to October 1, 2013, receipts
           –      Players’ or other persons’ use of the           from self-service laundry machines that are
                  school’s ball diamonds or football              operated by tokens or magnetic cards are
                  fields.                                         taxable.

           –      Season tickets for amusement, athletic,     •   Landscaping and lawn maintenance ser-
                  entertainment, or recreational events.          vices.

           –      Optional student activity fees which        •   Cable television services, including instal-
                  admit the student to taxable events, ser-       lation or hookup charges.
                  vices, or facilities, or which permit the
                  student to use tangible personal proper-    •   Meals (i.e., prepared food), tickets to thea-
                  ty.                                             tre performances, etc., provided to persons
                                                                  in exchange for donations are subject to
           –      Intramural fees paid by students for use        sales tax to the extent of their value when
                  of recreational facilities.                     the donation equals or exceeds that amount.
           –      Fees for bowling, unless for class in-          Example: Patrons donate $100 and receive
                  struction.                                      a $10 meal. Their actual donation is $90.
                                                                  The $10 portion for the meal is subject to
           –      Rentals of auditoriums, gymnasiums,             the sales tax.
                  and other multipurpose recreational or
                  entertainment type facilities to persons    •   Printing or imprinting tangible personal
                  who use the facilities for their self-          property or other property, items, or goods,
                  entertainment. However, see Part II.C.4         except:
                  for exceptions.
                                                                  –   Catalogs and their mailing envelopes,
       •   Telecommunications and ancillary services,                 and
           unless the services are furnished by the
           school with lodging services.                          –   Advertising and promotional direct
                                                                      mail (effective July 1, 2013).*
       •   Internet access services.

8
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

           Exception: Printing or imprinting tangible                b. Examples of sales of services which are not
           personal property or other property, items,                  taxable include:
           or goods that results in printed advertising
           materials which will be subsequently trans-                   •   Mandatory student activity fees which
           ported outside Wisconsin by the purchaser                         are included in the billing for tuition.
           for use solely outside Wisconsin is not tax-                      These activity fees may provide admis-
           able.                                                             sions or reduced admissions to social,
                                                                             sporting, recreational, or athletic events
           *See Part VI.B. of Publication 235, Adver-                        or places, or to parking spaces.
           tising Companies, for information about
           exemptions for certain printed materials,                         Example: If a charge of $50 is includ-
           including the definition of and explanation                       ed in the activity fee for parking
           of advertising and promotional direct mail.                       privileges, and all students must pay
                                                                             this fee, regardless of whether or not
C. Nontaxable Sales                                                          they drive, the $50 charge is not taxa-
                                                                             ble.
   Caution: The nontaxable sales and receipts illus-
   trated below are applicable to schools. The                               Caution: If only the students who are
   examples given may not apply to activities con-                           actually going to use the parking facili-
   ducted by other entities.                                                 ties are charged the $50 parking fee, the
                                                                             $50 charge is taxable.
   1. Tuition, activity, and course instruction fees.
                                                                         •   Admission to a golf course or bowling
       Charges for student tuition are not taxable be-                       center which is required as part of a
       cause they are for educational services. If the                       specific course in golf or bowling.
       billing for tuition includes mandatory charges
       for materials (which are incidental to the educa-             Minor deviations in billing procedures will not
       tional services) or mandatory charges for                     void this basic exemption and the transaction
       otherwise taxable services, the entire billing is             will still be exempt. For example:
       considered to be for a nontaxable educational
       service. This is the case whether or not the                  •   A course is dropped two weeks after the
       mandatory charges for materials or taxable ser-                   original registration date and the student
       vices are separately stated on the billing for                    pays for a substitute course at this later
       tuition issued to the student.                                    date.

       a. Examples of sales, licenses, leases, or rent-              •   Activity fees are charged all students at the
          als of tangible personal property which are                    main campus, but satellite locations not of-
          not taxable include:                                           fering activities do not have an activity fee.

           •   Mandatory charges for textbooks, la-                  •   Each tuition billing includes charges for
               boratory materials, or supplies and                       different materials, depending on courses.
               equipment rentals included in the bill-
               ing for tuition.                                      •   Separate charges for required textbooks are
                                                                         included in the original tuition billing and
           •   Mandatory rentals of golf clubs includ-                   the student subsequently picks up the books
               ed in the billing for tuition for a                       at the college operated bookstore.
               specific educational course in golfing.
                                                                     Caution:

                                                                     (1) Except as described under minor deviations
                                                                         above, mandatory charges for materials and

                                                                                                                     9
Publication 204

             other property, items, and goods billed sub-     3. Furnishing rooms or lodging to students or any
             sequent to the billing for tuition are subject      other persons, regardless of the duration.
             to sales tax.
                                                              4. Rental of auditoriums, gymnasiums, and other
         (2) Taxable services billed subsequent to the           multipurpose facilities (including associated
             billing for tuition are taxable, unless the         charges for heat, light, and janitor fees) are not
             services billed are required by a specific          taxable admissions to amusement, athletic, en-
             educational course and, therefore, consid-          tertainment, or recreational facilities when:
             ered to be part of the nontaxable
             educational service.                                 •   The facility is rented to a promoter or pro-
                                                                      fessional group which will convert it to a
     2. Food and food ingredients, including candy,                   place of recreation, amusement, or enter-
        soft drinks, dietary supplements, and prepared                tainment and sell admissions to the public.
        food, furnished in accordance with any contract               The promoter or professional group must
        or agreement or paid for to such institution                  provide the school with a fully completed
        through the use of an account of such institu-                exemption certificate (e.g., Form S-211)
        tion, by a public or private institution of higher            claiming resale.
        education, are exempt if:
                                                                  •   The facility is rented to a promoter or group
         •   The items are furnished to an undergraduate              which conducts a nonrecreational-type
             student, a graduate student, or a student en-            event on the premises, such as a religious
             rolled in a professional school if the student           meeting, graduation ceremony, political
             is enrolled for credit at that institution and           meeting, trade show, antique show, or wed-
             if the items are consumed by that student,               ding ceremony.
             or
                                                              5. Membership dues in a school’s student union.
         •   The items are furnished to a National Foot-
             ball League team.                                6. Admission to facilities that are used primarily
                                                                 for fitness or health.
         Caution: The following sales of food products
         are subject to Wisconsin sales or use tax, unless        An admission to a facility is primarily for fit-
         an exemption applies (e.g., sales to Wisconsin           ness and health if users spend more than 50% of
         governmental units, sales for resale, etc.):             their overall time using the following nontaxa-
                                                                  ble facilities:
         •   Prepared foods, candy, soft drinks, and die-
             tary supplements sold to professors,                 •   Aerobics classes
             teachers, and administrators.                        •   All lessons (swimming, tennis, golf, etc.)
                                                                  •   Free weights and machines
         •   Prepared foods, candy, soft drinks and die-
             tary supplements sold at wedding                     •   Whirlpool, sauna
             receptions.                                          •   Running track (other than for races)

         •   Prepared foods, candy, soft drinks and die-          •   Exercycles, lifecycles
             tary supplements sold to employees, even if          •   Rowing machines
             sold to the employees during the employees           •   Stepping machines
             work hours.
                                                                  •   X-country ski machines
                                                                  •   Treadmills
                                                                  •   Tanning booths and beds
                                                                  •   Massage table/room

10
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

A reasonable method of determining nontaxable                  in nontaxable activities (running and exercis-
use is a representative survey of participants                 ing).
and their time spent in each facility. Schools
must keep adequate records to substantiate how                 Since the primary purpose of the members was
they determine the primary purpose of the par-                 to use the facilities for taxable activities, all of
ticipants’ use of the facilities.                              the club’s membership fees are subject to sales
                                                               tax.
Example 1: A school’s health and fitness center
has two membership plans. The blue card                        Note: Even in situations where the primary
membership ($30/month) entitles members to                     purpose of the members is to use the facilities
use the weight room, swimming pool, running                    for nontaxable activities and, therefore, the or-
track, and exercise machines. A separate fee is                ganization’s fee has been determined to be
charged to blue card members for the use of                    nontaxable, any separate charges for taxable ac-
racquetball courts. The gold card membership                   tivities, services, or property are subject to sales
($40/month) entitles members to use all of the                 tax.
above facilities and also entitles the members to
use the racquetball courts with no additional              7. Lessons.
charge.
                                                           8. Charges for mandatory or optional appliance
Based on a survey of blue card members, the                   hookups or rentals of refrigerators, microwaves,
club has found that these members spend 30%                   etc., to dorm residents by the school, but not
of their time swimming (free swim or lap swim,                cable television services. Appliance rentals
no lessons: taxable activity) and the remaining               from other vendors are taxable unless the ven-
70% of their time in nontaxable activities, in-               dor has a contract with the school and the
cluding running, exercising, and lifting weights.             students directly pay the school.
Since the primary purpose of the blue card
members is to use the facilities for nontaxable            9. Library and book fines and charges for books
activities, the club’s receipts from all of the blue          not returned.
card memberships are not subject to sales tax.
                                                           10. Advertising space in newspapers, brochures,
Based on a survey of gold card members, the                    and programs.
club has found that these members spend 75%
of their time swimming or playing racquetball           D. Student Organizations
(taxable activities) and the remaining 25% of
their time in nontaxable activities. Since the             1. Independent, nonprofit student organizations
primary purpose of the gold card members is to                which control their own funds, and are not oth-
use the facilities for taxable activities, the club’s         erwise required to hold a seller’s permit, may
receipts from all of the gold card memberships                not be required to charge sales tax on their sales
are subject to sales tax.                                     of otherwise taxable tangible personal property,
                                                              property, items, goods, or services if the sales
Example 2: A school’s health and fitness center               qualify as “occasional sales.”
charges a single fee to its members for the use
of tennis courts, racquetball courts, a swimming               For additional information about sales by stu-
pool, a running track, and exercise machines. In               dent organizations and the occasional sale
a study conducted by the club, in which it ob-                 exemption, see the following:
served and recorded the use made of each area
of the club, it found that 65% of the members’                 •   Publication 206, Sales Tax Exemption for
time was spent in taxable activities (playing                      Nonprofit Organizations.
tennis, racquetball, and swimming) and the re-
maining 35% of the members’ time was spent

                                                                                                                11
Publication 204

         •   Publication 245, Sales and Use Tax Infor-            seller the CES number issued by the Wisconsin De-
             mation for Schools, Part VII., "School-              partment of Revenue or an exemption certificate
             Related Organizations."                              (Form S-211 or Form S-211-SST).

     2. If a student organization is a part of the school,    C. Student Organizations
        the tax treatment of its sales is the same as that
        of the school.                                            1. Student organizations which are a part of the
                                                                     school may make purchases exempt from sales
                                                                     tax in the same manner as their respective
III.     PURCHASES BY COLLEGES,                                      schools, as outlined in Part III.A. or B. above.
         UNIVERSITIES, AND TECHNICAL
         COLLEGES                                                 2. Student organizations which are separate from
                                                                     the school, but are organized and operated ex-
     The exemption that a college, university, or tech-              clusively for religious, charitable, scientific, or
     nical college has for its purchases does not extend             educational purposes, may qualify for a CES
     to purchases by others, such as contractors hired by            and should apply to the Wisconsin Department
     the college, university, or technical college or an-            of Revenue for their own number. The school’s
     other state's university system.                                CES number should not be used.

A. Operated by the State of Wisconsin or Another                  For additional information, see Publication 245,
   Federal or Wisconsin Governmental Unit (e.g.,                  Sales and Use Tax Information for Schools,
   UW-Madison, UW Eau Claire, Madison Area                        Part VII, "School-Related Organizations."
   Technical College)

     All property, items, goods, and services may be          IV. CONSTRUCTION FOR COLLEGES,
     purchased exempt from Wisconsin sales or use tax.            UNIVERSITIES, AND TECHNICAL
     To claim the exemption, the college, university, or          COLLEGES
     technical college must give the seller one of the fol-
     lowing:                                                  Even though a contractor is constructing, altering, re-
                                                              pairing, or improving real property for a school, sales of
     1. A completed purchase order or similar docu-           building materials to the contractor for use in real prop-
        ment clearly identifying the college, university,     erty construction are taxable. The reason for this
        or technical college as the purchaser.                treatment is that the contractor is the consumer of the
                                                              building materials used in constructing, altering, repair-
     2. A Wisconsin Sales and Use Tax Exemption               ing, or improving the real property. Therefore, the sale
        Certificate (Form S-211 or Form S-211-SST).           to the contractor is a retail sale and is subject to tax.

     3. The Certificate of Exempt Status (CES) number         Note: The exemption that a college, university, or tech-
        issued by the Department of Revenue.                  nical college has for its purchases does not extend to
                                                              purchases by others, such as contractors hired by the
B. Private College, University, or Technical College          college, university, or technical college or another
   (e.g., private nonprofit schools which are not oper-       state's university system.
   ated by the State of Wisconsin or another
   governmental unit or agency, but which are operat-         For more information about construction for schools
   ed exclusively for religious, charitable, scientific, or   and other exempt entities, see Publication 207, Sales
   educational purposes and have been issued a CES            and Use Tax Information for Construction Contractors.
   by the Wisconsin Department of Revenue)

     All property, items, goods, and services may be
     purchased exempt from Wisconsin sales or use tax.
     To claim the exemption, the school must give the

12
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

V. RECORDKEEPING                                                       clares that he or she is going to resell the item
                                                                       or service.
A. General
                                                                   2. The purchaser uses the item purchased in an
   Every school required to have a seller’s permit must               exempt manner (for example, the item is going
   keep adequate records of business transactions to                  to be used exclusively and directly in manufac-
   enable the school, as well as the Department of                    turing or in farming and is, therefore, exempt).
   Revenue, to determine the correct amount of tax for                The seller should obtain a completed exemption
   which the school is liable. The law requires that all              certificate from the purchaser.
   persons (including schools) must report their sales
   using the accrual accounting method, unless the                 3. The purchaser is an exempt organization (such
   Department of Revenue determines an undue hard-                    as a church, federal governmental unit, federal-
   ship would result. The cash basis is then permitted.               ly recognized American Indian tribe or band in
                                                                      Wisconsin, or Wisconsin governmental unit, in-
   Schools selling taxable property, items, goods, or                 cluding Wisconsin municipalities and public
   taxable services that are sourced to a county which                schools). Sales to federal and Wisconsin gov-
   has adopted the county tax or a stadium district                   ernmental      units,     including     Wisconsin
   must also keep records showing the sales and use                   municipalities and public schools, and sales to
   tax due in that county or stadium district.                        any federally recognized American Indian tribe
                                                                      or band in Wisconsin do not have to be sup-
   See sec. Tax 11.92, Wis. Adm. Code, "Records and                   ported by exemption certificates. However, an
   record keeping,"                                                   exemption certificate, a copy of the purchase
                                                                      order from the governmental unit, or an invoice
B. Exemption Certificates and Exemption Claims                        copy indicating the unit’s CES number must be
                                                                      retained as part of the seller’s records.
   If a school claims that part or all of its retail sales of
   property, items, goods, or taxable services are ex-                 For exempt sales to organizations holding a
   empt from sales and use tax, the school must keep a                 CES number (such as a church), the number
   record of the name and address of the person to                     should be recorded on the invoice or an exemp-
   whom the exempt sale was made, the date of sale,                    tion certificate obtained.
   the article sold, the amount of exemption, and the
   reason the sale was exempt from tax.                                Nonprofit organizations organized and operated
                                                                       exclusively for religious, charitable, scientific,
   The reason for keeping such records is that the sales               or educational purposes, or for the prevention
   and use tax law provides that all receipts are taxable              of cruelty to children or animals, may apply to
   until the contrary is established. The seller (school)              the Department of Revenue for a CES and if
   has the burden of proving that a sale of the proper-                approved, will be issued an exempt status num-
   ty, item, good, or taxable service is exempt, unless                ber by the department.
   the seller takes a certificate (or other information as
   described in Part V.B.3. and 4. below) in an ap-                4. The purchaser furnishes the seller (a) a copy of
   proved form from the purchaser no more than 90                     its Wisconsin direct pay permit or (b) a state-
   days after the date of the sale which indicates that               ment that the purchaser holds a Wisconsin
   the property, item, good, or service being purchased               direct pay permit, the permit number, and the
   is for resale or is otherwise exempt.                              date the permit was issued. The purchaser is
                                                                      subject to Wisconsin use tax on the purchase
   Four common reasons that sales of property, items,                 price if the property or service purchased is
   goods, or taxable services may be exempt are:                      used in a taxable manner.

   1. The purchaser furnishes the seller an exemption              Note: If exemptions are claimed for any of the
      certificate claiming resale. The certificate is              above four reasons, the seller must keep the com-
      given to the seller because the purchaser de-

                                                                                                                      13
Publication 204

     pleted certificates, purchase orders, and invoices to   Number                  Subject
     prove that the sales were exempt.                         201    Wisconsin Sales and Use Tax In-
                                                                      formation
VI. QUESTIONS OR ADDITIONAL                                   202     Motor Vehicle Sales, Leases, and
    INFORMATION                                                       Repairs
                                                              203     Manufacturers
A. Department of Revenue Assistance
                                                              206     Sales Tax Exemption for Nonprofit
     If you have a question about Wisconsin sales and                 Organizations
     use taxes, you may contact the Department of Rev-        207     Contractors
     enue as follows:                                         209     Wisconsin Counties and Municipali-
     Visit our website . . . revenue.wi.gov                           ties
                                                              210     Sales and Use Tax Treatment of
     Email . . . DORSalesandUse@revenue.wi.gov                        Landscaping
     Write . . . Wisconsin Department of Revenue              211     Cemetery Monument Dealers
                 Mail Stop 5-77                               212     Businesses: Do You Owe Use Tax
                 PO Box 8949                                          on Imported Goods?
                 Madison, WI 53708-8949
                                                              214     Businesses: Do You Owe Use Tax?
     Telephone… (608) 266-2776                                216     Filing Claims for Refund of Sales or
     Fax . . . (608) 267-1030                                         Use Tax
     You may also contact any of the Department of            217     Auctioneers
     Revenue offices. For a listing of offices and their      219     Hotels, Motels, and Other Lodging
     current hours, please see the department’s website               Providers
     at: revenue.wi.gov/faqs/ise/address.html.                220     Grocers
                                                              221     Farm Suppliers and Farmers
B. Other Aids
                                                              222     Motor Vehicle Fuel Users
     Other informational aids available include:              223     Bakeries
                                                              224     Veterinarians
     1. Sales and Use Tax Report
                                                              225     Barber and Beauty Shops
         The Sales and Use Tax Report is published one        226     Golf Courses
         or more times each year by the Department of         228     Temporary Events
         Revenue. It includes general information about       229     Brackets for Collecting Wisconsin
         sales and use tax, including new tax laws enact-             Sales or Use Tax Paid on Retail
         ed by the legislature.                                       Sales
                                                              230     Sellers of Antiques, Crafts, and
         Notification of new Sales and Use Tax Reports                Artwork
         will be sent to subscribers of the sales and use
         tax electronic mail list.                            231     Manufactured and Modular Homes
                                                              235     Advertising Companies
     2. Publications                                          240     Digital Goods
                                                              245     Schools
         The following sales and use tax and other local
         tax publications are available on the depart-        403     Premier Resort Area Tax
         ment's website.                                      405     Wisconsin Taxation of Native
                                                                      Americans
          Number                     Subject                  410     Local Exposition Taxes
            200        Electrical Contractors

14
Sales and Use Tax Information for Colleges, Universities, and Technical Colleges

Notification of new and revised publications will be              release, private letter ruling, or Attorney Gen-
sent to subscribers of the sales and use tax electron-            eral opinion that deals with your particular tax
ic mail list.                                                     question. The second part of the index (a Court
                                                                  Case Index) lists Wisconsin Tax Appeals
3. Wisconsin Tax Bulletin                                         Commission, circuit Court, Court of Appeals,
                                                                  and Wisconsin Supreme Court decisions relat-
    The Wisconsin Tax Bulletin is a quarterly publi-              ing to your question.
    cation of the Department of Revenue which is
    available on the department’s website. The Bul-           6. Electronic Mailing Lists
    letin includes information on most taxes
    administered by the Department of Revenue,                    The Department of Revenue has several elec-
    including sales and use, income, franchise, and               tronic mailing lists available to the public. The
    excise taxes. It includes up-to-date information              goal is to provide communication from the de-
    on new tax laws, interpretations of existing                  partment to list members on information and
    laws, and information on filing returns. It gives             news specific to the respective list they have
    brief excerpts of major Wisconsin tax cases de-               signed up for.
    cided by the Wisconsin Tax Appeals
    Commission and the courts.                                    For additional information or to subscribe, go to
                                                                  revenue.wi.gov/html/lists.html.
    Notification of new bulletins will be sent to
    subscribers of the sales and use tax electronic
    mail list.                                            VII. ANY SUGGESTIONS?

4. Rules - Wisconsin Administrative Code                  The Department of Revenue wants this publication to
                                                          be as complete and informative as possible. If you
    The Wisconsin Administrative Code includes            have any suggestions to improve this publication,
    administrative rules that interpret the Wisconsin     please either call or write to:
    Statutes. Rules have the force and effect of law.
    The Department of Revenue has adopted a                   Wisconsin Department of Revenue
    number of rules pertaining to sales and use tax.          PO Box 8949, Mail Stop 5-77
                                                              Madison, WI 53708-8949
5. Topical and Court Case Index                               (608) 266-2776

    The Topical and Court Case Index is a two-part
    index. The first part (a Topical Index) will help
    you find the particular Wisconsin Statute, ad-
    ministrative rule, Wisconsin Tax Bulletin tax

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