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required to pay tax on its purchase of the paper plates and plastic forks, cups, and knives that it provided to its customers for free (i.e., the price did not vary de- pending on whether the customer received the disposable items).

Example 2: Customer hires Grocer to prepare, sell, and serve prepared food for $1,000. Grocer gives Customer the option of either (1) providing her own plates, cups, napkins, and utensils, or (2) having Grocer provide disposable plates, cups, napkins, and utensils for an addi- tional $50 charge. Customer chooses to have Grocer provide the disposable plates, cups, napkins, and utensils. Gro- cer’s $1,050 charge to Customer for the preparing, selling, and serving of the prepared food and the sale of the dispos- able plates, cups, napkins, and utensils is subject to Wisconsin sales or use tax. Grocer may purchase the disposable plates, cups, napkins, and utensils with- out tax for resale because Grocer is selling them to Customer.

  • D.

    Deli Sales and Purchases

    • 1.

      Sales by Delis

The taxability of sales of food and food in- gredients and beverages for human consumption by a deli depends on whether the items are sold “heated,” or otherwise meet the definition of prepared food, candy,


soft drink, or dietary supplement, as ex- plained on pages 8 to 15. Table 2 below may be used to determine if an item being sold by the deli is subject to Wisconsin sales tax. Note: In order to determine the proper Wis- consin sales and use tax treatment of the sale of deli items using Table 2, you must start at question 1 in the table and stop at the first de- scription that accurately describes the transaction in question and indicates “Taxa- ble” or “Not Taxable.”

Table 2 assumes the following:

  • The item being sold is not a bakery item. See Table 1 in Part III.B.1. on page 21 titled “Retail Sales of Bakery Products by Grocery Stores” for the proper Wisconsin sales and use tax treatment of bakery items.

  • The item being sold is a food or food ingredient that does not meet the def- inition of candy, dietary supplement, or soft drink as explained in Part II.A., B., and E. on pages 8 to 9 and 14 to 15.

  • The retailer’s North American Indus- try Classification System (NAICS) code is not manufacturing under sub- sector 311, except for bakeries and tortilla manufacturing under industry group 3118.

  • The package does not contain a uten- sil placed in it by a person other than the retailer.

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