Grocers - How Do Wisconsin Sales and Use Taxes Affect Your Operations?
2. Purchases by Caterers
Food and Food Ingredients
Items Which May Be Purchased Without Sales and Use Tax and Without Issuing an Exemption Certificate - Certain food and food ingredients a caterer purchases and re- sells may be purchased without Wisconsin sales and use tax because the items qualify for the exemption for food and food ingredi- ents for human consumption. Examples of such items are cake mixes, meats, vegeta- bles, and milk. See Part III.A.1. on pages 15 and 16 (Exempt Food and Food Ingredients and Beverages) for additional information on these types of items.
A caterer is not required to provide the sup- plier of these types of items with an exemption certificate to purchase them without Wisconsin sales and use tax.
Items For Which an Exemption Certificate Must Be Issued To Purchase Them Without Sales and Use Tax - Certain food and food ingredients which a caterer purchases and resells may only be purchased without Wis- consin sales and use tax if the caterer provides the supplier with an exemption cer- tificate claiming resale. Examples of such items are beer, soft drinks, and candy. See Part III.A.1. on pages 16 and 17 (Taxable Food and Food Ingredients and Beverages) for additional information on these types of items.
Preparation and Serving Equipment
Non-Disposable Items - Purchases of items used by caterers to prepare, transport, and serve food and food ingredients and bever- ages to their customers are subject to Wisconsin sales and use tax. Examples of such items include dishes, glasses, silver- ware, tablecloths, linen napkins, and pots and pans. However, if the customer is given the option of whether or not to have the ca- terer provide the dishes, glasses, silverware, tablecloths, linen napkins, etc., and a sepa-
rate and optional charge is made by the ca- terer for those customers who choose to have the caterer provide these items (i.e., the caterer is leasing or renting the items to the customer), the caterer may purchase these items without tax for resale if the caterer is using them solely for lease or rental purpos- es. Note: Packaging and shipping materials for use in packing, packaging, or shipping meat or meat products are exempt from Wisconsin sales and use taxes.
Disposable Items - Purchases by caterers of disposable items which are resold to cus- tomers along with the caterer’s sales of prepared food, food ingredients, and bever- ages are not subject to Wisconsin sales or use tax. A caterer is reselling the disposable items if the disposable items are provided to the customer with the required purchase of taxable products, even if the caterer does not charge the customer for the disposable items. If the caterer is reselling the disposa- ble items, the caterer must provide the supplier of these items with an exemption certificate claiming resale to purchase them without Wisconsin sales and use tax. Exam- ples of disposable items include plastic or paper cups and plates, plastic eating utensils, paper napkins, straws, disposable place mats, and toothpicks.
Example 1: Customer hires Grocer to prepare, sell, and serve prepared food for $1,000. As part of the catering ser- vice, Grocer also furnishes paper plates and plastic cups, forks, and knives. Gro- cer will not reduce its charge if customer does not want the paper plates and plas- tic forks, cups, and knives. Grocer’s $1,000 charge for the preparing, selling, and serving of the prepared food is sub- ject to Wisconsin sales or use tax. Grocer may purchase the paper plates and plastic forks, cups, and knives with- out tax for resale.
Note: For sales between October 1, 2009 and August 31, 2011, Grocer was