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Publication 220

the item being sold meets the definition of “candy,” “dietary supplement,” “soft drink,” or “prepared food,” as those terms are defined on pages 8 to 15 of this publication.

Examples of exempt sales from vending machines, assuming the items do not meet the definition of “candy,” “dietary supplement,” “soft drink,” or “prepared food,” as those terms are defined on pages 8 to 15 of this publication, in- clude:

  • Beverages that contain milk or milk products

  • Cookies

  • Donuts

  • Fruit

  • Granola bars that contain flour

  • Ice tea that is not sweetened

  • Juices that are more than 50% fruit or vegetable juice by volume

  • Milk

  • Peanuts that are plain or just salted

  • Potato chips and corn chips

  • Pretzels

  • Raisins that are not sweetened

  • Water that is not sweetened

  • Yogurt

(See pages 15 and 16 of this publication, under the heading “Exempt Food and Food Ingredients and Beverages,” for more examples.)

Example: Grocer sells fruit, milk, and potato chips through vending machines located in the employee break room. Such sales are exempt from Wisconsin sales tax.

(b) Taxable Vending Machine Sales

Sales of the following items from vending machines are taxable:

  • Soft drinks

  • Candy and chewing gum

  • Cigarettes and other tobacco prod-



    • Heated foods, heated beverages, and other prepared foods

    • Dietary supplements

    • Fermented malt beverages and in- toxicating liquors

    • Photocopies

    • Non-food items, except newspapers (See pages 18 to 19 of this publication for examples of non-food items.)

  • (c)

    Who is Responsible for Tax?

If the grocer “controls” or is the “opera- tor” of the machine, the grocer is responsible for reporting the Wisconsin sales tax on taxable sales from the vend- ing machines. A grocer is considered to have “control” over the vending ma- chine or be the “operator” of the vending machine if the grocer has the right to ac- cess the machine for stocking, restocking, or removing the money or if the grocer owns the items being sold through the vending machine.

If a grocer receives commissions based on the vending machine sales from a third-party who controls the vending machine, the commissions received by the grocer are not subject to Wisconsin sales tax. The third- party is responsible for reporting the Wis- consin sales tax on the sales from the vending machine.

Example 1 - Grocer Controls Machine: Grocer owns a vending machine which dispenses candy. The grocer has the right to access the machine, stock the machine, and remove the money from the machine. The total sales by Grocer through the vending machine are subject to Wisconsin sales tax.

Example 2 - Grocer Receives Commis- sion: Grocer receives a commission from Vending Company equal to 50% of the total sales from a soft drink vending machine in return for allowing Vending Company’s vending machine to be placed in his store. Grocer is not respon-

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