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Publication 220

  • D.

    Containers and Other Packaging and Shipping Materials

    • 1.

      General

A grocer’s purchases of returnable and non- returnable containers, labels, sacks, cans, boxes, drums, bags, or other packaging and shipping materials are not subject to Wis- consin sales and use tax if the items (e.g., grocery bags) are used to transfer merchan- dise to the grocer’s customers. (See the section below titled “Meat and Meat Product Containers, Packaging, and Shipping Mate- rials” for information on meat and meat product containers and packaging and ship- ping materials.)

Example - Grocery Bags for Transfer- ring Groceries to Customers: Grocer purchases bags used to pack customer’s groceries. Customers use the bags to car- ry their groceries from the grocery store to their homes. Since the bags are being used to transfer groceries sold to their customers, Grocer’s purchases of the grocery bags are not subject to Wiscon- sin sales and use tax. Grocer must provide the supplier of these bags with a properly completed exemption certifi- cate to purchase them without Wisconsin sales and use tax.

When a grocer sells (rather than gives away) a disposable or reusable grocery bag to its customer, the tax treatment is as follows:

  • The grocery may purchase the grocery bag without tax for resale.

  • The grocer's sale of the grocery bag is taxable.

2. Meat and Meat Product Containers, Packaging, and Shipping Materials

Meat casings, wrapping paper, tape, con- tainers, labels, sacks, cans, boxes, drums, bags, or other packaging and shipping mate- rials used in packing, packaging, or shipping meat or meat products are not subject to

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Wisconsin sales and use tax, even if these items are not used to transfer meat or meat products sold to customers.

Example - Meat Wrapping Paper Not Used to Transfer Merchandise to Cus- tomers: Grocer operates a store that is equipped to process meat. Once pro- cessed and packaged, the meat is placed on metal racks which are lined with wrapping paper and placed in the freezer until there is room for the meat in the display cases. Even though the wrapping paper used to line the metal trays is not used to transfer the meat to customers, the wrapping paper is exempt from Wis- consin sales and use tax because it is used in packaging and shipping meat from the freezer to the display cases. Grocer must provide the supplier of the wrapping paper with a properly com- pleted exemption certificate to purchase it without Wisconsin sales and use tax.

Examples of Containers and Packaging and Shipping Materials Which Qualify for Exemption

Examples of items which qualify for the ex- emption for containers and other packaging and shipping materials include:

  • Containers such as barrels, bottles, car- tons, and kegs

  • Items used inside a package to shape, form, preserve, stabilize, or protect the contents, including batting, cardboard fillers, cotton, dry ice, excelsior, ice, separators, and shredded paper

  • Packaging and shipping materials, in- cluding crates, crating material, gummed tape, mailing tubes, pallets, rope, rubber bands, skids, twine, and wrapping paper

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