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

3. Containers for Videos, DVDs, DVD Play- ers, and VCRs

A video department’s purchases of contain- ers, boxes, bags, labels, and other packaging and shipping materials which are used to transfer video tapes, DVDs, and games, DVD players, VCRs, and video game ma- chines to the video department’s customers are exempt from Wisconsin sales and use tax.

Example – Grocer purchases 200 plastic DVD containers used to protect the DVDs which are rented to Grocer’s cus- tomers. Grocer may purchase the containers without paying Wisconsin sales and use tax. Grocer must provide the supplier of the DVD containers with a properly completed exemption certifi- cate claiming resale to purchase the containers without paying Wisconsin sales and use tax.

Note: If the containers are used to transfer items which are not sold or rented to cus- tomers, the containers may not be purchased without Wisconsin sales and use tax.

  • L.

    Video Games and Amusement Devices

    • 1.

      Total Sales From Video Games and Amusement Devices

Total sales from coin-operated video games and amusement devices, such as pinball ma- chines and mechanical rides, are subject to Wisconsin sales tax.

If the grocer “controls” or is the “operator” of the machine, the grocer is responsible for reporting the Wisconsin sales tax on its total sales from the video games and amusement devices. A grocer is considered to have “control” over or be the “operator” of the video games and amusement devices if the grocer has the right to remove the money or if the grocer owns the video games and amusement devices.

If a grocer receives commissions based on the video game and amusement device sales from a third party who controls the video game or amusement device machine, the commissions received by the grocer are not subject to Wisconsin sales tax. The third par- ty is responsible for reporting the Wisconsin sales tax on the total sales from the video games and amusement devices.

2. Computing Taxable Receipts From Video Games and Amusement Devices

The method of computing taxable receipts from coin-operated video machines and amusement devices depends on whether or not the grocer conspicuously posts a sign in- dicating that the price to play the machine or device includes sales tax.

Sign Conspicuously Posted - The operator must report the total sales from the video games and amusement devices, including the sales tax, on line 1 of his or her sales and use tax return. If the operator conspicuously posts a sign informing customers that the price includes sales tax, the operator may al- so claim a deduction on his or her sales and use tax return for the sales tax included in line 1.

Sign Not Conspicuously Posted - The op- erator must report the total sales from the video games and amusement devices on line 1 of his or her sales and use tax return. If the operator does not conspicuously post a sign indicating that the price includes sales tax, the operator may not claim a deduction on his or her sales and use tax return for any sales tax on these sales.

Example: Grocer operates a video game and conspicuously posts a sign indicat- ing that the price includes the 5% Wisconsin sales tax. The total sales from the game are $500. Grocer must report the $500 on line 1 of his sales and use tax return. Since Grocer conspicuously posted a sign indicating that the price in-

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