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Publication 220

because they are used to transfer the do- nuts to the customer.

Example 2 - Packaging Part of Manu- facturing Process: Bakery manufactures bread. Once the bread is removed from the oven, it is placed on a tray to cool. After the bread is cooled, equipment is used to package the bread into a bag. The equipment is used exclusively to package the bread prior to being stored or displayed for sale. The packaged bread is then displayed for sale to cus- tomers. The packaging equipment, if used as described above, qualifies for the exemption for machinery and equipment used exclusively and directly in the manufacturing process.

Common Items Which Qualify for Ex- emption: Examples of items which may be purchased by a bakery without Wisconsin sales and use tax if used exclusively and di- rectly in manufacturing include:

  • Bread pans, pie pans, and other pans for baking

  • Bread slicers, cookie cutters, and glazing screens

  • Scales used to weigh dough

  • Rolling pins, scoops, measuring cups, and can openers

  • Ovens, mixers, gas fryers, and donut machines

  • Thermometers used to check the tem- perature of dough

  • Wearing apparel used by employees to prevent contamination of the manufac- tured product (e.g., gloves worn by an employee making donuts which are worn to prevent the donuts from being contaminated during the manufacturing process qualify for this exemption)

  • Cleansers and solvents used for cleaning manufacturing machinery


Common Items Which Do Not Qualify for Exemption: Examples of items which are not considered to be used directly in the manufacturing process and are subject to Wisconsin sales and use tax include:

  • Pot and pan washers and sinks

  • Display equipment, including display pans

  • Delivery carts and racks used in deliver- ing bakery products to customers if the carts and racks are not transferred to customers

  • Wearing apparel for the comfort or wel- fare of employees or for the protection of employees clothing (e.g., an apron worn by an employee to prevent the em- ployee’s clothing from being damaged does not qualify for this exemption)

  • Cleansers, chemicals, and cleaning agents used to clean the walls, ceilings, floors, drains, windows, and doors where the manufacturing takes place

Food and Food Ingredients: Ingredients used to produce baked goods which are sold may be purchased without paying Wisconsin sales and use tax. If the ingredients qualify for the exemption for food and food ingredi- ents for human consumption, the bakery does not need to provide the supplier with an exemption certificate. Part III.A.1. on pages 15 and 16 (Exempt Food and Food Ingredients and Beverages) of this publica- tion contains additional information on types of items which qualify for the exemption for food and food ingredients for human con- sumption. If the ingredients do not qualify for the exemption for food and food ingredi- ents for human consumption, the grocer must provide the supplier with an exemption certificate claiming resale or other appropri- ate exemption to purchase them without Wisconsin sales and use tax.

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