Current through August 26, 2024
(1) GENERAL RULE.
The sales price received from the license, lease, or rental of motor vehicles
and mobile equipment used on a highway is subject to the sales and use tax.
Note: See s.
Tax 11.32 for additional information explaining what is
included in the "sales price."
(2) DEDUCTIONS FROM SALES PRICE. In
determining a lessor's taxable receipts under sub. (1), the cost of the
following items may be deducted if they meet the conditions in sub. (3):
(a) Motor vehicle fuel.
(b) Vehicle license fees.
(c) Federal highway use taxes.
(d) Public liability insurance furnished by
the lessor solely for the protection of the lessee but not including collision
and comprehensive coverage.
(3) CONDITIONS FOR DEDUCTIONS.
(a) The items listed in sub. (2) may be
deducted if:
1. The charge is
reasonable.
2. The charge is
separately stated in the lease agreement, billing, or invoice.
3. The lessor is willing and able to lease
the motor vehicle or mobile equipment without providing the items listed in
sub. (2).
(b) The
deduction is limited to the lessor's cost of the items furnished with the
leased equipment.
(4)
NONDEDUCTIBLE ITEMS. In determining a lessor's taxable sales price under sub.
(1), the cost of the following may not be deducted:
(a) Amounts spent for the lessor's own
protection or for the protection of leased property, including collision or
other insurance protection.
(b)
Maintenance or repair charges incurred by the lessor.
(c) Interest and other financing costs
incurred by the lessor.
(d)
Dispatch service.
(5)
MULTISTATE USE.
(a) The sales price received
from the license, lease, or rental of motor vehicles and mobile equipment used
on a highway is taxable in Wisconsin if the license, lease, or rental payments
are sourced to Wisconsin under s.
77.522, Stats., as
described in pars. (b) and (c).
(b)
A license, lease, or rental of a motor vehicle, trailer, semitrailer, or
aircraft that only requires one payment, is sourced as follows:
1. If the motor vehicle, trailer,
semitrailer, or aircraft is received by the lessee or licensee at the lessor's
or licensor's business location, the payment is sourced to the lessor's or
licensor's business location.
2. If
the motor vehicle, trailer, semitrailer, or aircraft is not received by the
lessee or licensee at the lessor's or licensor's business location, the payment
is sourced to the location where the lessee or licensee or the lessee's or
licensee's designated donee receives the product. This would include the
location indicated by instructions known to the lessor or licensor for delivery
to the lessee or licensee or the lessee's or licensee's designated donee. The
delivery may be made by the lessor or licensor or by a shipping company hired
by the lessee or licensee.
3. If
the location cannot be determined under subds. 1. and 2., the payment is
sourced to the lessee's or licensee's address as indicated by the lessor's or
licensor's business records, if the records are maintained in the ordinary
course of the lessor's or licensor's business and if using that address to
establish the location of the lease, license, or rental is not in bad
faith.
4. If the location cannot be
determined under subd. 1., 2., or 3., the payment is sourced to the lessee's or
licensee's address as obtained during the consummation of the license, lease,
or rental, including the address indicated on the lessee's or licensee's
payment instrument, if no other address is available and if using that address
to determine the location of the lease, license, or rental is not in bad
faith.
5. If the location cannot be
determined under subd. 1., 2., 3., or 4., the payment is sourced to the
location from which the motor vehicle, trailer, semitrailer, or aircraft was
shipped.
(c) Except as
provided in par. (b), licenses, leases, and rentals of motor vehicles,
trailers, semitrailers, and aircraft that are not transportation equipment, as
defined in s.
77.522(1) (a) 2, Stats., are sourced to the primary
location of such property as indicated by an address for the property that is
provided by the lessee or licensee and that is available in the business
records of the lessor or licensor that are maintained in the ordinary course of
the lessor's or licensor's business, provided the use of such address does not
constitute bad faith.
(6) EXEMPT LEASES. The sales price from the
license, lease, or rental of the following property shall be exempt from sales
and use tax provided the lessor receives a properly completed exemption
certificate as described in s.
Tax 11.14:
(a) Highway
vehicles, except automobiles, leased to common or contract carriers who use the
vehicles exclusively in common or contract carriage, including urban mass
transportation of passengers as defined in s.
71.38,
Stats.
(b) Motor vehicles not
licensed for highway use which are used exclusively and directly in conjunction
with waste reduction or recycling activities described in s.
77.54(5) (c), Stats.
(c) Mobile units used for mixing and
processing, including the motor vehicle or trailer on which the unit is
mounted. Accessories, attachments, parts, supplies, and materials for the
mobile unit, vehicle, and trailer are also exempt.
(d) Leases of highway vehicles and equipment
for resale.
Section Tax 11.79 interpretss.
77.51(13) (k) and (14) (intro.) and (j),
77.522, 77.54 (5) (c)
and (d) and (26m), and 77.58 (6), Stats.
The interpretations in s. Tax 11.79 are effective under
the general sales and use tax law on and after September 1, 1969, except: (a)
The exemption for vehicles and equipment used in waste reduction or recycling
activities became effective July 1, 1984, pursuant to 1983 Wis. Act 426; (b)
The exemption for mobile mixing units became effective July 20, 1985, pursuant
to 1985 Wis. Act 29; (c) The sourcing provisions under s. 77.522, Stats.,
became effective October 1, 2009, pursuant to 2009 Wis. Act 2; and (d) The
change of the term "gross receipts" to "sales price" became effective October
1, 2009, pursuant to 2009 Wis. Act 2.
