Grocers - How Do Wisconsin Sales and Use Taxes Affect Your Operations?
entire $4.00 is subject to Wisconsin sales or use tax. The $3.00 received from the cus- tomer and the $1.00 received from the manufacturer are all part of the “sales price” of the 12-pack of the soft drinks.
Example 3 - Purchase With Manufactur- er's Coupon and 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 her EBT card for $3.00 along with the $1.00 off manufactur- er’s coupon. Only the $1.00 reimbursement the retailer receives from the manufacturer is subject to Wisconsin sales or use tax. The $3.00 from the customer uses from the EBT SNAP account to purchase the soft drinks is exempt from Wisconsin sales or use tax since this is considered to be a sale to the federal government.
which the return or allowance is provided to the customer.
Example - Exempt Item Returned: Cus- tomer purchases bread (exempt item) from Grocer. Grocer charges Customer $1 for the bread. Customer C later returns the bread to Grocer and receives a $1 refund. Since the $1 sale of the bread was not subject to Wis- consin sales tax, Grocer may not claim a credit of $1 on its sales and use tax return for the refund provided to Customer with re- spect to the bread Customer returned.
C. Items Given to Customers for Free
Exempt Items: When a grocer gives items to its customers for free and the free item is exempt from Wisconsin sales and use tax (e.g., crack- ers), no tax is due from the grocer or the customer on the item.
B. Returns and Allowances
If an item is sold and Wisconsin sales tax is col- lected on the sale of the item, and that item is later returned, a credit may be claimed on the sales and use tax return covering the period in which the return or allowance is provided to the customer.
Example - Taxable Item Returned: In June 2010, Customer purchases paper towels from Grocer. Grocer charges Customer $2.10 ($2 plus $.10 of sales tax) for the pa- per towels and reports the $2 of taxable receipts on its June 2010 sales and use tax return. Customer returns the paper towels to Grocer in July 2010 and receives a $2.10 re- fund. Grocer may claim a credit of $2 on its July 2010 sales and use tax return for the re- fund provided to Customer with respect to the paper towels Customer returned.
If an item is sold and Wisconsin sales tax is not collected on the sale of the item and that item is later returned, no credit may be claimed on the sales and use tax return covering the period in
Example - Exempt Item Given Away: Gro- cer provides free crackers for its customers. Since crackers are an exempt food item, nei- ther Grocer nor the customers are liable for Wisconsin sales or use tax on the crackers.
Taxable Items: If an item described in Part I.D. 1. to 4. on page 7 is given away free (e.g., sam- ples of laundry detergent), a grocer is liable for Wisconsin sales and use tax when purchasing such property. If the taxable item given to cus- tomers was acquired by the grocer without tax for resale, the grocer must report Wisconsin use tax based on the grocer’s purchase price of the item.
Example - Taxable Items Given Away: Gro- cer purchases 2,000 plastic mugs for $1,000 from Supplier. Grocer provides Supplier with an exemption certificate claiming re- sale since Grocer does not know whether the mugs will be sold or given away. Grocer de- cides to give the mugs to the first 2,000 customers. Grocer is liable for use tax based on its purchase price of the mugs (i.e., $1,000).