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Wisconsin uses the seven-point test to determine the taxability of software. The test objectively examines how much pre-sale consultation goes into the selection of the software. Relative observations, per the implementation of the software, include the amount of loading, testing, training, documentation, enhancement, and maintenance that are required. The final examination evaluates the extent of the modifications necessary to make the software functional. The major argument in the Menasha Corporation case centered on point six of the test. The Wisconsin Department of Revenue interpret that SAP was prewritten software, point six mandates that prewritten software is taxable, therefore use tax is due. Alternatively, the taxpayer refuted that SAP software, out of the box, is useless and unable to interface with anything, and should therefore be considered exempt as customized software. The commission held that while part of the software was prewritten, it was effectively unfinished without considerable programming work. The amount of requisite programming work was considered the deciding factor in this case. (Menasha Corporation v. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, No, 01-S-72, December 1, 2003)


Effective 1/1/2006, fuel and electricity consumed in manufacturing tangible personal property will be exempt. (Wisconsin State Legal Summary, 2003.)


The Wisconsin Department of Revenue has updated its Publication 210 which clarifies the treatment of landscaping services for sales and use tax purposes. You can find a copy of the Publication at Some of items covered are maintenance, exemptions, purchases, and special situations. (Wisconsin Department of Revenue, Publication 210, November 2003)


The Wisconsin Department of Revenue has created a use tax calculator that will help taxpayers keep track of their use tax liabilities in the state. The calculator should only be used as a reference tool. When submitting tax returns, the file should not be attached or sent with the use tax forms themselves. (Notice, Wisconsin Department of Revenue, May 13, 2003.)


Renting space on a communications tower located on leased land is subject to Wisconsin sales and use tax. A communication tower is considered, by both The Wisconsin Court of Appeals and the Tax Appeals Commission, to be tangible personal property, not real property. The basis for this is through a determination made by the Commission that a market exists for the sale and purchase of used towers and that it is possible for the towers to be disassembled and reassembled at another site. Also, the owner could remove the tower from the land and the landowner could terminate the lease when it expires. The court concluded that, with these facts in mind, the towers could not be permanently affixed to the land and considered real property. (All City Communications Company Inc. and Waukesha Tower Associates v. State of Wisconsin Department of Revenue, Wisconsin Court of Appeals, District IV, Docket No. 02-1201, 3/27/2003)



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