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Since the napkins are being provided free of charge to Customer, Grocer is re- quired to pay Wisconsin sales or use tax on its purchase price of the napkins.

Example 4 - Grocer’s Coupon Offered for Free Taxable Item - Purchase of Nontaxable Item Required: Grocer of- fers a coupon which entitles a customer to a free package of napkins with the purchase of frozen chicken (a nontaxa- ble item). The napkins cost the grocer 60¢ per package. Customer purchases the frozen chicken and receives the free napkins.

Since the napkins are being provided free of charge to Customer, Grocer is re- quired to pay Wisconsin sales or use tax on its purchase price of the napkins.

Example 5 - Grocer’s Coupon Offered for Free Taxable Item - Purchase of Both Taxable and Nontaxable Items Al- so Required: Grocer offers a coupon which entitles a customer to free napkins with the purchase of $20 or more of oth- er items in the grocery store. The napkins cost the grocer 60¢ and normal- ly sell for $1. The $20 or more worth of items being purchased by a customer is made up of different taxable and nontax- able items.

Customer purchases $15 of taxable items and $10 of nontaxable items and receives the free napkins.

Since the napkins are being provided free of charge to Customer, Grocer is re- quired to pay Wisconsin sales or use tax on its purchase of the napkins.

Grocer’s Discounts and Coupons - Non- taxable Items: Discounts and coupons offered by grocers on nontaxable items do not affect the amount of sales subject to Wisconsin sales tax.

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Example 1 - Grocer’s Coupon for Free Potato Chips: Grocer offers a coupon for a free bag of potato chips. Customer presents the coupon to Grocer and re- ceives the potato chips. Grocer does not report any sales subject to Wisconsin sales tax on this transaction. In addition, since potato chips are an exempt food or food ingredient, Grocer is not liable for any Wisconsin sales or use tax on its purchase price of the potato chips.

Example 2 - Grocer’s Coupon for Re- duced Price Soup: Grocer offers a coupon which entitles customers to 25¢ off the purchase price of a can of soup which usually sells for $1. Customer presents the coupon to Grocer and pays 75¢ for a can of soup. Since cans of soup are not subject to Wisconsin sales tax, the 75¢ received from Customer is not subject to Wisconsin sales tax.

3. SNAP (EBT, Food Stamps)

A grocer's receipts from SNAP, formerly known as the federal food stamp program, are not subject to sales tax even if the items purchased by the consumer are not exempt food or food ingredients. The recipient is provided with an EBT card which they can use to make purchases from an EBT SNAP account. A sale using an EBT card is con- sidered to be made to the federal government.

Example 1 - Purchase With EBT: Custom- er purchases a 12-pack of soft drinks for $4.00. Customer pays for the 12-pack using his EBT card. The sale is exempt from tax, since it is considered to be a sale to the fed- eral government.

Example 2 - Purchase With Manufactur- er's Coupon, No EBT: Customer purchases a 12-pack of soft drinks for $4.00. Customer presents a manufacturer’s coupon for $1.00 off the $4.00 purchase price. Customer pays for the 12-pack using $3.00 cash along with the $1.00 off manufacturer’s coupon. The

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