Internet Access Service Charges Exempt in Wisconsin Beginning July 1, 2020

Effective July 1, 2020, charges for internet access services are no longer subject to Wisconsin sales and use tax. This change correlates with legislation enacted in 2016 that permanently extended the Internet Tax Freedom Act. The legislation established an end date of June 30, 2020 for seven states that imposed a tax on internet access at the time.

The Wisconsin Department of Revenue notes that for sales occurring on or after July 1, 2020, if a retailer sells internet access services and taxable products for one non-itemized price and the taxable products are greater than 10% of the retailer’s total purchase price or sales price of the bundled products, the sale is a bundled transaction. Per Wisconsin tax law, the entire sales price of a bundled transaction is subject to tax. If the retailer can identify the portion of the sales price in a bundled transaction that is attributable to exempt products, the retailer may choose to not charge tax on the exempt portion. If a retailer separately states the taxable and exempt items on an invoice or billing statement, the retailer would only charge tax on the taxable items. (Wisconsin Tax Bulletin, November 2019, Wisconsin Department of Revenue)

Posted on June 29, 2020