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Publication 220

In addition, certain services are subject to the 5% sales and use tax. For a list of taxable services, see Part X.B. of Publication 201.

Note: Additional local taxes may apply to your sales and purchases as explained in Part I.A. on page 5.

E. Difference Between the Wisconsin Sales and Use Tax

1. Sales Tax

The Wisconsin sales tax is a 5% tax imposed on a retailer’s receipts from selling, licensing, leasing, or renting, at retail, the products listed in Part I.D.1. through 4. on page 7, and from selling, performing, or furnishing taxa- ble services at retail in Wisconsin, unless a specific exemption applies. All sales are con- sidered taxable retail sales, unless the seller receives an exemption certificate claiming re-

sale

(Form S-211)

or

other

exemption information from the to or within 90 days after the date

appropriate buyer prior of the sale.

Example: Sales of canned soft drinks to a customer by a grocery store are subject to Wisconsin sales tax. However, sales of soft drinks by the bottler to the grocery store are not subject to Wisconsin sales tax because the grocery store is going to resell the soft drinks. In order to purchase the soft drinks from the bottler without tax, the grocery store must provide an exemption certificate claiming re- sale to the bottler.

2. Use Tax

The Wisconsin use tax is a 5% tax imposed on the purchase price of the items listed in Part I.D.1. through 4. on page 7, and taxable services that are used, stored, or consumed in Wisconsin and upon which a Wisconsin sales or use tax has not previously been paid.

Example 1: A grocery store purchases floor cleaner for $5, as an inventory item for re- sale, and does not pay sales or use tax at the time of purchase. Rather than reselling the

8

floor cleaner, the grocery store uses the floor cleaner to clean its own floors. Since the grocery store did not resell the floor cleaner, the grocery store is required to re- mit use tax to the department on its purchase price of the floor cleaner ($5). The use tax of $0.25 ($5 x 5% state tax rate = $0.25) is due with the sales and use tax re- turn the grocery store files with the department that covers the date the floor cleaner is first used in Wisconsin.

Example 2: A grocery store purchases a cash register for $500 from a seller located out- side of Wisconsin. The seller does not charge the grocery store sales or use tax. The gro- cery store is required to remit use tax to the department on its purchase price of the cash register ($500). The use tax of $25 ($500 x 5% state tax rate = $25) is due with the sales and use tax return the grocery store files with the department that covers the date the cash register is first stored, used, or con- sumed in Wisconsin.

Example 3: A grocery store purchases a cash register for $1,000 from a seller located out- side of Wisconsin. The seller does not charge the grocery store sales or use tax. The cash register is stored in Wisconsin by the grocery store. The store later decides to use the cash register at one of its locations outside of Wisconsin. Since the cash register was first stored in Wisconsin (even though it was sub- sequently used outside of Wisconsin), the grocery store is required to remit use tax to the department on its purchase price of the cash register ($1,000). The use tax of $50 ($1,000 x 5% state tax rate = $50) is due with the sales and use tax return the grocery store files with the department that covers the date the cash register is first stored, used, or consumed in Wisconsin.

  • II.

    DEFINITIONS RELATING TO FOOD AND FOOD INGREDIENTS

    • A.

      “Candy” is defined in sec. 77.51(1fm), Wis. Stats., to mean “…a preparation of suga , honey,

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