(1) DEFINITIONS. In this section:
(a) "Continuous" use of a direct pay permit
means that the purchase without tax applies to the purchase being made from the
retailer and subsequent purchases from that retailer and is considered a part
of each order given to the retailer.
(b) "Single purchase" use of a direct pay
permit means that the purchase without tax applies only to the purchase being
made from a retailer for which the direct pay permit is given.
(2) GENERAL.
(a) The holder of a direct pay permit may
purchase tangible personal property, items, property, and goods under s.
77.52(1) (b), (c), and (d), Stats., and taxable services, except
those in sub. (6) (a) and (b), from a retailer without paying Wisconsin sales
or use tax to the retailer.
(b) The
direct pay permit holder shall report Wisconsin use tax on the purchase price
of tangible personal property, items, property, and goods under s.
77.52(1) (b), (c), and (d), Stats., and taxable services
purchased from a retailer without tax using a direct pay permit if the
property, item, good, or service is subject to Wisconsin sales or use tax. The
tax shall be reported on the direct pay permit holder's Wisconsin sales tax
return for the period in which the taxable storage, use, or consumption first
occurs in Wisconsin.
Note: Purchase price, for purposes of this
paragraph, has the meaning specified in s.
77.51(12m),
Stats.
(3)
ISSUANCE.
(a) The department shall issue a
direct pay permit to those applicants who meet the qualifications set forth in
s.
77.52(17m) (b), Stats.
(b) Persons who wish to obtain a direct pay
permit shall apply to the department using form S-101, "Application for Direct
Pay Permit."
Note: Form S-101 is available by writing to
Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8902, Madison WI
53708-8902; calling (608) 266-2776; or downloading it from the department's web
site, www.revenue.wi.gov.
(c) A direct pay permit shall be effective
for purchases made beginning on the first day of the applicant's taxable year,
for Wisconsin franchise or income tax purposes, after the permit is issued.
Example: A person's taxable year begins July 1
for Wisconsin franchise or income tax purposes. The person files an application
for a direct pay permit with the department on January 1, 2009. The person is
issued a direct pay permit which is effective for purchases made on or after
July 1, 2009.
(4)
REVOCATION OR CANCELLATION.
(a) A direct pay
permit issued by the department may be used indefinitely until it is revoked by
the department or cancelled by the holder.
(b) A permit may be cancelled by the holder
by mailing the permit to the department for cancellation. A letter shall be
enclosed with the permit, indicating the holder's intention to cancel the
permit.
Note: The permit to be cancelled and letter
should be mailed to Wisconsin Department of Revenue, Mail Stop 5-77, PO Box
8902, Madison WI 53708-8902.
(c) The cancellation of a direct pay permit
shall become effective immediately following the last day of the holder's
taxable year in which the permit is received by the department.
(5) USING DIRECT PAY.
(a)
Documentation. A direct
pay permit holder shall provide one of the following to a retailer when
purchasing without paying tax to the retailer using a direct pay permit:
1. A copy of its direct pay permit. The
direct pay permit holder shall also provide to the retailer a written statement
as to whether the direct pay permit is for a single purchase or is
continuous.
2. A form S-211,
"Wisconsin Sales and Use Tax Exemption Certificate," or other written document,
either of which contains all of the following:
a. The name and address of the direct pay
permit holder.
b. A statement that
the direct pay permit holder is purchasing without Wisconsin sales or use tax
using a direct pay permit.
c. The
direct pay permit holder's direct pay permit number.
d. The effective date of the direct pay
permit.
e. A statement as to
whether the use of the direct pay permit is for a single purchase or is
continuous.
f. The signature of the
direct pay permit holder.
(b)
Continuous use.
1. If a direct pay permit holder indicates in
writing to a retailer that the use of the direct pay permit is continuous, that
purchase and all subsequent purchases from the retailer, except those in sub.
(6) (a) and (b), shall be made without paying Wisconsin sales or use tax to the
retailer using the direct pay permit, unless the continuous use is voided by
the direct pay permit holder. The direct pay permit holder may void the
continuous use of its direct pay permit by furnishing the retailer a letter
indicating that continuous use no longer applies.
2. If the use of a direct pay permit is
continuous, it is necessary for the direct pay permit holder to provide the
documentation in par. (a) to a retailer only at the time the direct pay permit
holder begins making purchases without paying tax to that retailer using the
direct pay permit, rather than at the time of each purchase.
3. While the use of a direct pay permit is
continuous, all purchases from a retailer, except those in sub. (6) (a) and
(b), shall be made using the direct pay permit even though an exemption
certificate requiring different documentation may apply.
Example: On October 1, 2009, Company A begins
using its direct pay permit when purchasing tangible personal property or
items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., from Company B. Company A
provides a written statement to Company B that the use of its direct pay permit
will be continuous. All purchases of tangible personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services, except
those described in sub. (6) (a) and (b), by Company A from Company B on or
after October 1, 2009, while continuous use is in effect, must be made without
paying sales or use tax to the retailer using the direct pay permit. While
continuous use of a direct pay permit is in effect, no other exemption
certificate may be used.
(c)
Single purchase. If a
direct pay permit holder uses its direct pay permit for a single purchase, any
subsequent purchase by the direct pay permit holder from that retailer is
subject to Wisconsin sales or use tax unless the direct pay permit holder
provides the information in par. (a) for that purchase or that purchase is
otherwise exempt from tax.
(d)
Retailer records. The retailer shall keep the information
provided by the direct pay permit holder under par. (a) on file as
authorization for the direct pay permit holder to make purchases without paying
tax to the retailer.
(6)
SERVICES AND PROPERTY NOT ELIGIBLE FOR DIRECT PAY.
(a)
Services. A direct pay
permit holder shall pay Wisconsin sales or use tax to a retailer on the
retailer's sales of services to the direct pay permit holder under the
following Wisconsin statutes:
1. Section
77.52(2) (a)1, Stats., relating to furnishing rooms or
lodging.
2. Section
77.52(2) (a)2, Stats., relating to admissions to
amusement, athletic, entertainment, or recreational events, devices, or
facilities.
3. Section
77.52(2) (a) 5 and 5m., Stats., relating to internet
access services; prepaid calling services and intrastate, interstate, and
international telecommunications services, except interstate 800 services;
ancillary services, and telecommunications message services.
4. Section
77.52(2) (a)9, Stats., relating to parking.
5. Section
77.52(2) (a) 12., Stats., relating to cable television
system services.
6. Section
77.52(2) (a) 20., Stats., relating to landscaping
services.
(b)
Property. A direct pay permit holder shall pay Wisconsin sales
or use tax to a retailer on the retailer's sale, lease, license, or rental to
the direct pay permit holder of the following tangible personal property or
items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats.:
1. Tangible personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., transferred to a purchaser in
connection with the sale of landscaping services subject to tax under s.
77.52(2) (a) 20., Stats.
2. Motor vehicles, boats, snowmobiles,
recreational vehicles as defined in s.
340.01(48r),
Stats., trailers, semitrailers, all-terrain vehicles, utility terrain vehicles,
off-highway motorcycles, or aircraft.
3. Candy as defined in s.
77.51(1fm),
Stats., soft drinks as defined in s.
77.51(17w),
Stats., dietary supplements as defined in s.
77.51(3n),
Stats., prepared foods as defined in s.
77.51(10m),
Stats., and alcoholic beverages as defined in s.
77.51(1b),
Stats.
(c)
Exemptions. Although not eligible to be purchased without
paying Wisconsin sales or use tax to a retailer using a direct pay permit, the
taxable services and tangible personal property, and items, property, or goods
under s.
77.52(1) (b), (c), or (d), Stats., described in pars. (a) and
(b) may be purchased without Wisconsin sales or use tax if a resale, farming,
manufacturing, or other exemption applies. Documentation is required to
purchase without tax, as provided in s.
Tax 11.14.
(d)
Penalty for prohibited or incorrect use. A person who uses a
direct pay permit in a manner that is prohibited by or inconsistent with the
Wisconsin sales and use tax laws or who provides incorrect information to a
seller or certified service provider related to their direct pay permit shall
be subject to a penalty of $250 for each invoice or bill of sale related to the
prohibited or inconsistent use of their direct pay permit as provided in s.
77.60(13),
Stats.
(7) RETAILER'S
LIABILITY - PERMIT REVOKED OR CANCELLED. A retailer is not liable for sales or
use tax on the sales price from the sale of tangible personal property, items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services, except
those described in sub. (6) (a) and (b), to a person who has provided the
retailer with the appropriate information under sub. (5) (a), until the earlier
of the following:
(a) The date the retailer
is notified by the direct pay permit holder or the department that the holder's
direct pay permit has been revoked by the department. A direct pay permit is
considered revoked on the date the holder receives the department's notice of
revocation.
(b) The last day of the
direct pay permit holder's taxable year in which the retailer is notified by
the holder or the department that the holder's direct pay permit is being
cancelled by the holder as provided in sub. (4) (b).
Note: Section Tax 11.13 interprets ss.
77.52(17m) and
77.60(13),
Stats.
The change of the term
"gross receipts" to "sales price," the separate impositions of tax on coins and
stamps sold above face value under s.
77.52(1) (b), Stats., certain leased property affixed
to real property under s.
77.52(1) (c), Stats., and digital goods under s.
77.52(1) (d), Stats., and the penalty for prohibited
or inconsistent use of a direct pay permit became effective October 1, 2009,
pursuant to 2009 Wis. Act 2.
