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

sible for stocking, restocking, or remov- ing the money from the vending machine. The total sales from the vend- ing machine are $1,000. Grocer receives a commission of $500. The $500 com- mission received by Grocer is not subject to Wisconsin sales or use tax. However, Vending Company’s total sales from the vending machine of $1,000 are subject to Wisconsin sales tax and must be reported on Vending Com- pany’s sales and use tax return.

2. Computing Taxable Receipts From Vend- ing Machines

The method of computing taxable receipts from a vending machine depends on whether or not the operator conspicuously posts a sign indicating that the prices of the items in the machine include sales tax.

Sign Conspicuously Posted - The operator must report the total sales from the vending machine, including sales tax, on line 1 of his or her sales and use tax return. If the opera- tor conspicuously posts a sign informing customers that the prices include sales tax, the operator may claim a deduction on its sales and use tax return for the sales tax in- cluded in line 1.

Sign Not Conspicuously Posted - The op- erator must report the total sales from the vending machine on line 1 of his or her sales and use tax return. If the operator does not conspicuously post a sign indicating that the prices include sales tax, the operator may not claim a deduction on its sales and use tax return for any sales tax on these sales.

Example: Grocer operates two soft drink vending machines and conspicu- ously posts a sign indicating the prices of the items in the vending machines in- clude the 5% Wisconsin sales tax. The total sales from the machines are $1,000. The grocer must report the $1,000 on line 1 of his or her sales and use tax re-

turn. Since the grocer conspicuously posted a sign indicating that the prices included sales tax, the grocer may also claim a deduction of $47.62 on its sales and use tax return for sales tax included in the prices of the items sold through the vending machines. The $47.62 is computed as follows: $1,000 (total sales) divided by 1.05 (1 plus tax rate) = $952.38 (taxable receipts); $1,000 - $952.38 = $47.62 (tax included in total sales).

Note: If the grocer in the example above had not conspicuously posted a sign indicating the prices included sales tax, the grocer would still report the $1,000 on line 1 of the sales and use tax return, but the grocer may not claim a deduction on its sales and use tax return for any sales tax included and would report taxable receipts of $1,000 instead of $952.38.

3. Purchases for Vending Machines

A grocer’s purchases of items which are re- sold through vending machines may be purchased without Wisconsin sales and use tax. Depending on the type of item being purchased, the grocer may need to provide the supplier with an exemption certificate claiming resale to purchase these items without Wisconsin sales and use tax. See Part III.A.1. on pages 16 and 17 (Taxable Food and Food Ingredients and Beverages) for information on when an exemption cer- tificate claiming resale must be issued to purchase items without Wisconsin sales and use tax.

A grocer’s purchase of vending machines and repairs and parts for the machines are subject to Wisconsin sales and use tax.

  • K.

    Video Department Rentals, Sales, and Purchases

    • 1.

      Rentals and Sales by Video Departments

Taxable sales include:

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