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Effective January 1, 2016 and first applicable to contracts entered into on or after January 1, 2016, Wisconsin has created a sales and use tax exemption for tangible personal property and other items purchased by a contractor who transfers the property to an exempt local government entity or nonprofit organization when fulfilling a real property construction activity. To qualify for the exemption, the purchased property must become a component of a facility in Wisconsin that is owned by the exempt entity or organization. For purposes of the exemption, "facility" means any building, shelter, parking lot, parking garage, athletic field, athletic park, storm sewer, water supply system, or sewerage and waste water treatment facility, but does not include a highway, street, or road. (Act 126 (S.B. 227), Laws 2015, effective January 1, 2016, and first applicable to contracts entered into on January 1, 2016)

(05/10/2016)

Wisconsin has updated a news release detailing the sales tax treatment of educational services, tangible books and videos; and digital books and videos. Charges for live in-person educational services and live digital online educational services, including charges for mandatory educational materials, are exempt from sales and use tax. Educational service providers must pay tax on purchases of mandatory educational materials provided incidentally with nontaxable educational services. Tangible books and videos are taxable unless a specific exemption applies, and there is no exemption for sales of educational products. Certain digital goods - including digital audio works, digital audiovisual works, and digital books - are taxable unless a specific exemption applies. Prerecorded webinars are generally taxable as digital goods, regardless of whether the webinar is downloaded or viewable streaming online. Digital goods are exempt if they would be exempt when sold in tangible form. Since sales of tangible videos are taxable, the sale of a prerecorded webinar is also taxable. Sales of a digital good such as a prerecorded webinar may be exempt if the purchaser is receiving an educational service, and the digital good is transferred incidentally to the service. There are specific requirements that must be met for this to qualify. In a bundled transaction - when taxable and nontaxable products, goods or services are sold for one non-itemized price - and the value of the taxable products or services is 10% or more, the entire sales price is generally taxable in Wisconsin. However, sellers can report and remit tax on the taxable portion of the sales price if they can show in their books and records the portions of the sales price that are attributable to the taxable and nontaxable products or services. The bundled transaction rules do not apply when a product such as a digital good is transferred incidentally in connection with a service.(News for Tax Professionals—Sales Tax Treatment of Educational Products, Goods, and Services, Wisconsin Department of Revenue, April 7, 2016)

(04/26/2016)

On February 11, 2016, the U.S. Senate approved a permanent extension of the Internet Tax Freedom Act (ITFA) that is included in H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. The bill also establishes an end date of June 30, 2020 for the seven states that currently impose a tax on internet access: Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. President Obama is expected to sign the permanent extension of the ITFA into law. The House of Representatives had previously passed H.R. 235, the Permanent Internet Tax Freedom Act, on December 15, 2015.  For our previous news item on this topic, visit Internet Tax Freedom Act Extended Through October 1, 2016.

 

UPDATE: On February 24, 2016, President Barack Obama signed into law the permanent extension of the Internet Tax Freedom Act.

 

(Trade Facilitation and Trade Enforcement Act of 2015)

(02/23/2016)

On December 18, 2015, President Barack Obama signed H.R. 2029 – Consolidated Appropriations Act, 2016. The Act extends the Internet Tax Freedom Act (ITFA) through October 1, 2016. Prior provisions that grandfather taxes that existed prior to October 1, 1998 are also extended through October 1, 2016. For our previous news item on this topic, see Internet Tax Freedom Act Extended Until December 11, 2015. (H.R. 2029 – Consolidated Appropriations Act, 2016)

(01/18/2016)

On September 30, 2015 the U.S. House of Representative passed H.R. 719, which includes a provision that would extend the Internet Tax Freedom Act (ITFA) through December 11, 2015. The ITFA was scheduled to expire on October 1, 2015. The bill will now go to President Obama for signature.

 

To see our previous news item on the ITFA, visit Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.

 

To see an update on this news item, visit Internet Tax Freedom Act Extended Through October 1, 2016,

 

(H.R. 719)

(10/26/2015)

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