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Silviculture, defined as the business of raising trees for timber, lumber and other wood products, including the logging of timber when it is performed, now qualifies for tax exemption because of a new expanded definition of farming. Tractors, machines, other equipment, directly used in the business of farming would be tax exempt. This exemption became effective July 1, 2007. (Tax Release, Wisconsin Department of Revenue, July 2007)


Wisconsin has made various terminology revisions to Act 11 (S.B. 7), Laws 2007 which affect mobile and manufactured homes. As a result, newly-manufactured homes which qualify as dwellings are exempt from tax as a realty improvement. Taxpayers are reminded that use tax does not apply to mobile homes purchased by non-residents outside the state 90 days before they are brought into the state in connection with a change in domicile. Additional information is provided regarding municipal permit fees and licensee rights. (Act 11, S.B. 7, Laws 2007)


Effective January 1, 2006, a Wisconsin sales and use tax exemption applies to fuel and electricity consumed to operate machines and equipment used directly in the manufacturing process. The exempt amount should be calculated on a meter-by-meter basis in a similar manner as was previously used to calculate the amount of fuel and electricity qualifying for the manufacturer’s sales tax credit. In addition to determining the qualifying amounts, manufactures must also provide an exemption certificate to the fuel and/or electricity supplier. Accompanying rules and procedures for the exemption do apply. (Sales and Use Tax Report No. 3-05, Wisconsin Department of Revenue)


The sale, lease, or license of canned computer software in Wisconsin is subject to Wisconsin sales or use tax, regardless of how it is delivered to the customer (tangibly vs. electronically). For the tax to apply, however, the canned software must be situated in Wisconsin when used by the customer. Software located on a server outside Wisconsin (customer uses the software at the physical location of the server outside the state) is not subject to the Wisconsin tax. Customized computer software is not taxable. The Wisconsin Department of Revenue has developed a list of examples of taxable and nontaxable sales of computer software. (Frequently Asked Questions, Wisconsin Department of Revenue)


The Circuit Court of Dane County overruled a previous decision that a sale of software was exempt as a custom program. The court found that the software did not qualify for an exemption primarily due to the fact that the vendor of the program did not modify it to an extent that it would be considered custom software. The company still has a chance to appeal the decision. (Dept. of Revenue v. Menasha Corp.)



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