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Wisconsin Sales Tax Application

 

Sales Tax

The state of Wisconsin sales tax is 5%.  Local governments have the latitude to collect an optional local tax just as long as it does not to exceed 0.6%.  Within the states borders, there are about 265 local tax jurisdictions.  Across the state the average local tax is about 5.46%.  In conjunction with the state sales tax and the local tax the cities of Wisconsin Dells and Lake Delton have the highest tax rate of 6.75% within the state.

 

Sales and Use Tax License

Sales tax permits are mandatory for most businesses in Wisconsin.  New businesses or if it one is initiating sales for the first time within the state of Wisconsin, then you will need to know and understand which business permit(s) (if any) are required.  After submitting the application for a Wisconsin Seller’s Permit, one could be ready to conduct business operations within 48 hours.

 

 

Resale Certificate

There is no requirement in the state of Wisconsin for registration with the state in order to obtain a resale certificate. By filling out and completing the Wisconsin Sales and Use Tax Exemption Certificate (Form S-211) is the way to get a resale certificate in the state of Wisconsin.

 

Retailers wishing to make purchases with the purpose of resale or execute transactions that is exempt from Wisconsin sales tax, one is obligated to obtain and have in their possession the necessary Wisconsin sales tax exemption certificate before you are authorized to make tax-free purchases.

• Sales and Use Tax Exemption Certificate
• Streamlined Sales Tax Certificate of Exemption
• Streamlined Sales Tax Certificate of Exemption (Multistate)

Note: Uniform sales tax exemption certificates are also acceptable in Wisconsin, this is a common or general certificate that maybe used across various states.

 

Seller’s Permit

According to the Wisconsin Department of Revenue all persons, organizations, corporations and partnerships performing retail sales, leases, or rentals of tangible personal property as well as taxable services in the state of Wisconsin must have in their possession a Wisconsin Seller’s Permit.  If all sales are excused from sales or use tax then a seller’s permit is not required. The following does not have to apply for a seller’s permit.

• Businesses not involved in firsthand sales of tangible personal property to include taxable services to the end user
• Manufacturers
• Wholesalers

Note: A business is regarded as establishing sales tax nexus within the state of Wisconsin once considered as having a taxable presence within the state.

 

Sales Tax Exemption Certificate – Is no more than a form presented to a vendor at the time of making a sales tax-free purchase.  It is your responsibility to fill out & complete the form but responsibility falls on the vendor to validate that you are indeed qualified to make tax-exempt purchases.

Note:  Wisconsin has a specific form to be used when making tax exempt purchases such as certain farming equipment, prescription medicines, or biotechnology and manufacturing.

 

• Wisconsin Sales and Use Tax Exemption Certificate – its intended purpose is to be used to purchase tax exempt items, for example items strictly purposed for resale.

 

When conducting transactions, the purchaser presents the seller with their written certificate and legally documenting the exemption.  Those things that are included in the certificate include:

• Date certificate was created
• Signature of buyer, agent or representative on buyer’s behalf
• Both parties’ names and addresses
• Legal stance of the exemption being utilized
• Buyer’s tax registration and/or a business license number
• Description of items buyer intends to buy or purchase

 

Expiration of Wisconsin sales tax exemption certificate

Wisconsin’s sales tax exemption certificate has no specified expiration period and a considered valid just about indefinitely, with that said good business practice should require from time to time a review to ensure accuracy and that it is up to date.

NOTE:  Certificates are only good for sales that are purposed for resale

 

Blanket Resale Certificate

In Wisconsin, the use of blanket certificates are permitted for use.  Blanket resale certificates are good or valid unless it is revoked in writing in the state of Wisconsin.  As long as a vendor maintains on file a single certificate then it maybe reused for all exempt purchases made between a specific buyer and that particular vendor. It is not necessary for a new certificate for every transaction between that particular vendor and buyer.

 

Wisconsin is an affiliate of the Streamlined Sales and Use Tax Agreement; the goal of this interstate partnership is to make compliance with sales tax simplistic amongst associated states.  As a result of this affiliation, buyers within the state of Wisconsin can use the Multistate Tax Commission (MTC) Uniform Sales Tax Certificate when conducting qualifying sales tax-exempt transactions from vendors within the state.

 

Taxable Items

Within the state of Wisconsin, sales tax is legally mandated to be collected as a result of selling any tangible or physical merchandise to a patron.  Some exceptions include:

• Burial caskets
• Certain types of groceries
• Certain agricultural items
• Manufacturing equipment
• Medical devices
• Modular or manufactured homes
• Printed publications

 

Services

For the vast majority of services performed within the state of Wisconsin, sales tax is not normally collected.  Any service(s) dealing with the creation of a product or manufacturing are normally viewed as taxable.

 

Shipping and Handling

Wisconsin’s guidance as it pertains to shipping and handling cost are not complicated at all.  Shipping cost are taxable if the purchased item or item being shipped is considered taxable, on the other hand if the purchased item or item being shipped is exempt from taxation, then shipping is also exempt from taxation.  If a purchased item is being delivered via direct mail, shipping charges should not be tax, if the shipping charges are listed separately on the invoice

NOTE: If a shipment contains both taxable and non-taxable items, shipping cost should only be applied to the portion of the shipment that is taxable. 

 

 

Drop Shipments

In the state of Wisconsin, drop shipments normally are subject to state sales tax(es).  Drop shipments is a commonly used business practice of shipping via a third party hired by the vendor (usually located in another state) to be transported to the purchaser.