Statute interpreted
Statutory authority
Explanation of agency authority
Section
227.11 (2) (a), Stats., provides that each agency may promulgate rules interpreting the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute.
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
This proposed rule does the following:
•
Reflects the changes in Wisconsin's sales and use tax laws due to the adoption of the statutory changes needed to bring Wisconsin's sales and use tax laws into compliance with the Streamlined Sales and Use Tax Agreement (SSUTA).
•
Provides guidance to Department employees and taxpayers so that they can properly apply the Wisconsin sales and use tax laws.
•
Removes incorrect and outdated information.
•
Revises punctuation to improve readability and conform to Legislative Clearing House rules and requirements.
•
Removes the term “gross receipts" from the rules and replaces it with “sales price," which is a newly defined term under the SSUTA.
•
Changes numerous references to “tangible personal property" that were previously contained in the rules to “tangible personal property and items, property, and goods under s.
77.52 (1) (b),
(c), and
(d), Stats." because the definition of “tangible personal property" under previous law was amended and some items that were previously included in the definition of “tangible personal property" now have the sales and use tax specifically imposed on them in new sections of the statutes, specifically secs. 77.52 (1) (b), (c), and (d), Stats.
•
Renumbers various sections within the rules to improve readability.
•
Adds additional information related to numerous statutory changes that were not previously reflected in the rules, including information related to new exemptions on items such as durable medical equipment for home use, mobility–enhancing equipment, prosthetic devices and food and food ingredients and certain admissions.
•
Creates a new rule (s.
Tax 11.945), specifically relating to the proper sourcing of transactions so a person will know whether the transaction is subject to Wisconsin sales or use tax and adds information relating to the sourcing of leases and rentals in s.
Tax 11.29.
•
Adds additional information pertaining to exemption certificates in s.
Tax 11.14.
Comparison with federal regulations
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule. However, the Streamlined Sales Tax Project (SSTP) is a nationwide project that is intended to modernize and simplify the sales and use tax reporting in the states who choose to conform their laws to the requirements contained in the Streamlined Sales and Use Tax Agreement (SSUTA). Adopting the requirements of the SSUTA will help make Wisconsin's sales and use tax laws more uniform with the sales and use tax laws of the other states that have also conformed their laws to the requirements of the SSUTA.
Comparison with rules in adjacent states
Minnesota, Michigan and Iowa have conformed their laws to the requirements of the SSUTA and therefore, like Wisconsin, must administer their laws in a manner consistent with the requirements of the SSUTA. These states do this through a combination of statutory provisions and administrative rules.
Illinois has not conformed their laws to the requirements of the SSUTA and is not bound by the requirements contained in the SSUTA.
Summary of factual data and analytical methodologies
2009 Wisconsin Act 2 adopted statutory changes to bring Wisconsin's sales and use tax statutes into conformity with the Streamlined Sales and Use Tax Agreement. The department has created this proposed rule to reflect these changes in Wisconsin's sales and use tax laws.
Analysis and supporting documents used to determine effect on small business
As explained above, this proposed rule is created to reflect changes in Wisconsin's sales and use tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Small Business Impact
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
2009 Wisconsin Act 2 adopted statutory changes to bring Wisconsin into conformity with the Streamlined Sales and Use Tax Agreement (SSUTA). The SSUTA is the result of an effort by state governments, with input from local governments and the private sector, to simplify and modernize sales and use tax administration. Under the agreement, Wisconsin must use standard definitions for sales tax purposes.
The proposed rule conforms ch.
Tax 11 to current law, as modified by the Streamlined Sales and Use Tax Agreement provisions of
2009 Wisconsin Act 2. The rule provides guidance in the application of the law by providing specific examples of items that are both included and excluded from certain SSUTA definitions. The rule provides examples of exempt durable medical equipment, exempt prosthetic devices, and exempt mobility enhancing equipment. The rule also provides several guide lists — including items typically sold by grocers that are subject to the sales tax and items typically sold by grocers that are exempt from the tax.
Since the fiscal effect of conforming Wisconsin law to the SSUTA was included in the fiscal estimate of
2009 Wisconsin Act 2, the rule has no fiscal effect.
