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Grocers - How Do Wisconsin Sales and Use Taxes Affect Your Operations?

more than 50 percent vegetable or fruit juice by volume.”

Natural and artificial sweeteners include corn syrup, dextrose, invert sugar, sucrose, fructose, sucralose, saccharin, aspartame, stevia, fruit juice concentrates, molasses, evaporated cane juice, rice syrup, barley malt, honey, maltitol, and aga- ve.

Soft drinks are beverages that are in liquid form and do not include items that are not in liquid form such as powdered fruit drinks, powdered teas, and frozen drink concentrates.

Water and tea that contain sweeteners are soft drinks, unless they contain more than 50% fruit or vegetable juice by volume.

Water and tea that are unsweetened are not soft drinks, even if carbonated or flavored.

  • III.

    SALES AND PURCHASES BY GROCERY STORES

    • A.

      Sales and Purchases of Inventory Items Grocers purchase and resell many different types

of products. Certain products which are sold are not subject to Wisconsin sales tax, while other products are subject to Wisconsin sales tax. In addition, sales of products which are usually not subject to Wisconsin sales tax (e.g., donuts), are subject to Wisconsin sales tax if the product meets the definition of “prepared food” as de- scribed in Part II.D.4. on pages 12 through 14.

The following sections explain the Wisconsin sales and use tax treatment of the sales and pur- chases of inventory items.

1. Sales of Inventory Items by Grocers

Sales of items described in Part I.D.1. through 4. on page 7 are subject to Wisconsin sales tax, unless a specific exemption applies. There are three common reasons that sales made by grocers may not be subject to Wis- consin sales tax. The reasons are:

  • (a)

    The grocer is selling products which qual- ify for the exemption for “food and food ingredients” that are for human consump- tion.

  • (b)

    The grocer is selling products to organi- zations which are exempt from Wisconsin sales tax (e.g., churches, federal govern- mental agencies, any federally recognized American Indian tribe or band in Wiscon- sin, Wisconsin state and local governmental agencies) and the organiza- tion provides the grocer with either:

    • (1)

      A certificate of exemption, indicating the organization’s certificate of ex- empt status (CES) number (Note: In lieu of obtaining a certificate of ex- emption, the grocer may record the CES number on its copy of the bill of sale), or

    • (2)

      For federal and Wisconsin (state and local) governmental agencies, which includes public school districts, an exemption certificate indicating the governmental entity’s CES number or a purchase order or similar written document from the governmental agency.

  • (c)

    The grocer is selling products to custom- ers who provide the grocer with an exemption certificate claiming an exemp- tion from Wisconsin sales and use tax

(e.g., resale).

Food and Food Ingredients for Human Con- sumption

Exempt Food and Food Ingredients and Bever- ages: An exemption from Wisconsin sales and use tax is provided for all “food and food ingredients” except “candy,” “dietary supplements,” “prepared food,” and “soft drinks.” The following examples of food and food ingredients are exempt from Wisconsin sales tax, provided they do not meet the definition of “candy,” “dietary supplements,” “soft drinks,” or “prepared foods.”

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