(1) MOTOR CARRIERS.
(a)
Exemption. Section
77.54(5) (b), Stats., provides a sales and use tax
exemption for motor trucks, truck tractors, road tractors, buses, trailers, and
semitrailers, and accessories, attachments, parts, supplies, and materials
therefor, sold to common or contract carriers who use such motor trucks, truck
tractors, road tractors, buses, trailers, and semitrailers exclusively as
common or contract carriers, including the urban mass transportation of
passengers as defined in s.
71.38, Stats.
(am)
Definitions.
For purposes of the exemption in s.
77.54(5) (b), Stats., and this section:
1. "Common carrier" has the same meaning as
"common motor carrier" in s.
194.01(1),
Stats.
2. "Contract carrier" has
the same meaning as "contract motor carrier" in s.
194.01(2),
Stats.
3. "Exclusively" means that
the motor trucks, truck tractors, road tractors, buses, trailers, and
semitrailers are used solely as common or contract carriers to the exclusion of
all other uses, except that the sales and use tax exemption for this tangible
personal property will not be invalidated by an infrequent and sporadic use
other than as a common or contract carrier.
Note: Under department of transportation rules,
a licensed carrier (LC) number is required if a common or contract carrier
hauls goods of others for hire. The sales and use tax exemption in par. (a)
applies only if the common or contract carrier used the vehicle
exclusively for hauling goods of others for hire.
(b)
Accessories
and attachments. Accessories, attachments, parts, and supplies for
exempt vehicles are exempt from the sales and use tax under s.
77.54(5) (b), Stats. This exemption includes the
following items if they are assigned to and carried on vehicles used
exclusively as common or contract carriers: dollies, pianoboards, ladders,
walkboards, tire chains, fire extinguishers, flares, bug deflectors, engine
block heaters, defroster fans, auxiliary heaters and cooling units and their
fuel, radios, flag kits including flags and reflectors, cell phones, tracking
devices, global positioning system or "GPS" units, on board recorders, and
items designed to be used with a vehicle which protect or secure the vehicle's
load including tape, fitted tarpaulins, tarpaulin straps, furniture pads and
covers, load holding chains, logistic straps, and shoring beams. This exemption
does not include corrugated boxes, containers, and related materials that are
transferred to customers in conjunction with the selling, performing, or
furnishing of a moving service, as provided in par. (g).
Note: In a decision dated May 19, 1980 in the
case of Leicht Transfer & Storage Co., Inc. vs. Wisconsin Department of
Revenue the Dane County Circuit Court reversed the November 23, 1979 decision
of the Wisconsin Tax Appeals Commission and held that van equipment and
supplies that are exempt under s.
77.54(5) (b), Stats., include furniture pads, covers,
packing supplies, tape, pianoboards, ladders, walkboards, straps, lining paper
and corrugated boxes. The Court also stated that "It must be kept in mind that
it is undisputed that all of the items are assigned to and carried on the
vans." The Court of Appeals District IV, affirmed the Circuit Court's decision.
Under this interpretation, the only corrugated boxes and packing materials that
qualify for exemption under s.
77.54(5) (b), Stats., are those that are assigned to
and carried on an exempt van and that are not transferred to a
customer.
(c)
Repairs. The sale or furnishing of repair, service,
alteration, fitting, cleaning, painting, coating, towing, inspection, and
maintenance to exempt vehicles shall be exempt.
(d)
Exceptions. The
exemption shall not apply to the following property used by common or contract
carriers:
1. Automobiles as defined in s.
340.01(4),
Stats., except an automobile registered as a truck.
2. Self-propelled vehicles for off-highway
use, such as road machinery, fork lifts, and other industrial trucks.
(e)
Equipment and
supplies. Equipment acquired by a carrier for the repair, service, or
maintenance of its exempt vehicles is not exempt, including repair tools,
welding torches, battery chargers, and grinding discs.
(f)
Conversion to private
use. If a vehicle purchased without tax is converted to private use, a
use tax or sales tax pursuant to s.
Tax 11.14(2) (c) is due. The tax is
measured by the sales price of the vehicle to the purchaser.
(g)
Packaging materials. The
transfer to a customer of corrugated boxes, containers, and related packing
materials in conjunction with moving or transporting a customer's goods is
incidental to the selling, performing, or furnishing of the moving or
transportation service. The service provider is the consumer of the property
and shall pay tax on its purchase of the property to be transferred.
(h)
Occasional sales.Motor
carriers are not required to register as retailers with the department if the
sales price from their sales of tangible personal property, items, property,
and goods under s.
77.52(1) (b), (c), and (d), Stats., and taxable services are
less than $2,000 within a calendar year. Persons who are exempt from
registration under this standard shall pay sales or use tax on all purchases of
tangible personal property, items, property, and goods under s.
77.52(1) (b), (c), and (d), Stats., and taxable services not
otherwise exempt, including items that may be resold to customers. Persons who
exceed the standard shall register with the department and obtain a seller's
permit. Persons who register may purchase tangible personal property, items,
property, and goods under s.
77.52(1) (b), (c), and (d), Stats., and taxable services for
resale without paying tax by issuing to their supplier a properly completed
exemption certificate claiming resale or they may pay the tax to their supplier
and, if the property is resold, claim a credit for the tax paid against any
sales tax due.
Note: Refer to s.
Tax 11.002 for description of permit requirements, how to
apply for a permit, and the 15-day time period within which the department is
required to act on permit applications.
Examples:
1) A truck
purchased to transport pads and packing materials to and from moving jobs
qualifies for the exemption in par. (a).
2) Cutting down trees, cutting them into
logs, and hauling them to a mill as a private business operation voids the
exemption in par. (a), even though the trucker also hauls logs as a common or
contract carrier for other persons at the same time.
3) Vehicles of a milk or cheese factory that
engage in hauling milk from farms to its plant for processing do not qualify
for the exemption under par. (a).
4) Towing of vehicles to the repair facility of a garage-wrecker
operator is part of a private repair business that is not exempt under par.
(a).
(2)
RAILWAY ROLLING STOCK.
(a) Section
77.54(12),
Stats., provides a sales and use tax exemption for the sales price from the
sales of and the storage, use, or other consumption in this state of rail
freight or passenger cars, locomotives, or other rolling stock used in railroad
operations, or accessories, attachments, parts, lubricants, or fuel
therefor.
(b) The exemption for
rolling stock includes:
1. The sale or
furnishing of repair, service, alteration, fitting, cleaning, painting,
coating, towing, inspection, and maintenance to exempt rolling stock.
2. Purchases of any equipment that is
operated on railroad rails, including an industrial firm's switching
locomotives used to switch freight cars on its own property, except vehicles
that may also be used on a highway.
3. Fuel used to heat a caboose or run a
compressor that cools a railway car.
4. A utility's coal cars used to haul coal
from mines to the utility.
(c) The exemption does not apply to:
1. Rails, crossties, and other road building
and maintenance materials. However, sales of crossties to a common or contract
carrier are exempt if they are shipped wholly or in part by way of the
purchasing carrier under a bill of lading, whether the freight is paid in
advance or the shipment is made freight charges collect, to a point outside
Wisconsin if the property is transported outside Wisconsin for use by the
carrier in the conduct of its business as a carrier. The exemption will not be
invalidated because of interruption of the shipment for storage, drying,
processing, or creosoting of the crossties in Wisconsin.
2. Bracing materials, rough lumber, and
dunnage materials.
3. Ice to
refrigerate a railway car.
(3) COMMERCIAL VESSELS.
(a) Section
77.54(13),
Stats., provides a sales and use tax exemption for the sales price from the
sales of and the storage, use, or other consumption in this state of commercial
vessels and barges of 50-ton burden or over primarily engaged in interstate or
foreign commerce or commercial fishing, and the accessories, attachments,
parts, and fuel therefor.
(b) The
exemption for commercial vessels applies to:
1. Vessels and barges primarily engaged in
interstate or foreign commerce or commercial fishing that are documented under
the laws of the United States showing a net volumetric tonnage of 50 tons or
more.
2. Items that become a
component part of the exempt commercial vessel.
3. The sale or furnishing of repair, service,
alteration, fitting, cleaning, painting, coating, towing, inspection, and
maintenance of exempt commercial vessels.
(c) The exemption does not apply to
consumable supplies or furnishings that are not attached to the vessel, such as
bedding, linen, table and kitchenware, tables, chairs, lubricants, work
clothes, acetylene gas, nets, fishing tackle, lumber for dry docking, bracing,
blocking and dunnage materials and other materials not incorporated into the
vessel.
Note: Section Tax 11.16 interprets ss.
77.51(9),
77.54(5) (b), (7) (a), (12), and (13),
77.55(2m),
and
77.57,
Stats.
The interpretations in s. Tax 11.16 are effective under the
general sales and use tax law on and after September 1, 1969, except: (a) The
sale of packing materials to a service provider became taxable effective
September 1, 1983, pursuant to 1983 Wis. Act 27; (b) The exemption for certain
railroad crossties became effective July 20, 1985, pursuant to 1985 Wis. Act
29; (c) Section
340.01(61),
Stats., which defined "station wagon" was repealed pursuant to 1999 Wis. Act
80; (d) In Freight Lime and Sand Hauling, Inc. v. Wisconsin Department of
Revenue, Wisconsin Tax Appeals Commission, November 20, 2002 (CCH 400-646),
trucks hauling property of others for hire were found to qualify for exemption,
even though the property being hauled had no value; (e) Section
77.57,
Stats., was amended to remove the portion of the statute that allowed a
purchaser to use the lesser of the cost or fair market value of an item that
was purchased exempt and whose first taxable use occurred more than 6 months
after it was purchased, pursuant to 2009 Wis. Act 2; (f) The change of the term
"gross receipts" to "sales price" and 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., became effective October 1,
2009, pursuant to 2009 Wis. Act 2; (g) The definition of "common motor carrier"
was amended, pursuant to 2013 Wis. Act 364, which first applies to motor
carrier operations occurring on April 25, 2014; and (h) The threshold for
exempt occasional sales was changed to less than $2,000 in annual sales,
effective for sales beginning January 1, 2018, pursuant to 2017 Wis. Act
59.
