Current through August 26, 2024
(1) DEFINITIONS. In
this section:
(a) "Utility facilities"
include telephone, telegraph, and television lines; electrical, water, and gas
transmission and distribution lines; and poles, transformers, and towers,
including pipes, conduits, sleeves, risers for cable television lines, or other
property by which lines are supported or in which they are contained or
connected.
(b) "Real property"
includes underground utility facilities; lines, poles, foundations, towers,
gravel, and any buildings of a substation located on a utility's own land; and
concrete foundations, anchors, crushed rock, and backfill whether or not on
land owned by the utility.
(c)
"Tangible personal property" includes overhead utility facilities and circuit
breakers and other equipment, but not their foundations, installed to control
the flow of electricity. It also includes other overhead property by which
lines are supported or in which they are contained or connected if erected or
installed under an easement or license, including authorizations under ss.
86.16 and
182.017,
Stats., on land owned by a person other than the utility.
(2) GENERAL.
(a) The sales price from the installation,
license, lease, rental, repair, service, alteration, fitting, cleaning,
painting, coating, towing, inspection, or maintenance of tangible personal
property or items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., is subject to sales
tax.
(b) Materials used in
construction or forming of real property are taxable when purchased by the
contractor.
Examples:
1) The
charges by a contractor for the construction and installation of an overhead
utility facility, or a portion of an overhead utility facility, and from a sale
"in place" of the facility, if installed under an easement on land owned by a
person other than the utility, are taxable. Materials used in the construction
or installation of the property may be purchased without tax for resale.
2) The charges by a utility for the
repair, service, alteration, fitting, cleaning, painting, coating, towing,
inspection, or maintenance of an overhead utility facility, or a portion of an
overhead facility of another utility are taxable. Materials used in the repair,
service, alteration, fitting, cleaning, painting, coating, towing, inspection,
maintenance, or installation may be purchased without tax for resale.
3) Charges for the installation,
sale, license, lease, rental, repair, service, alteration, fitting, cleaning,
painting, coating, towing, inspection, or maintenance and removal of
underground utility facilities are not subject to sales or use tax. However,
the mate- rials used in the construction or installation of the underground
utility facilities cannot be purchased for resale and are subject to tax at the
time of purchase unless otherwise exempt.
4) X-ray testing of weld joints in the pipe
as part of the construction of an under- ground utility pipeline is part of the
construction process and the charges are not subject to sales or use tax.
However, materials used in the X-ray testing of the under- ground utility
pipeline cannot be purchased for resale and are subject to tax at the time of
purchase unless otherwise exempt.
(3) RELATED EXPENSES. The taxable receipts
from the performance of a lump sum contract for the construction of an overhead
utility facility, which is tangible personal property, may not be reduced by
expenses in performing the contract, such as payments for crop damage, site
preparation, restoration work, tree trimming, line clearing, relocating
existing lines, engineering and design work, surveying, purchasing a
right-of-way, and unloading and hauling materials.
Note: The related expenses described in sub. (3)
are costs of performing the contract and do not affect the amount of taxable
receipts.
(4) EQUIPMENT
CHARGES.
(a) The taxable receipts from a
contract to construct or repair an overhead utility facility which is tangible
personal property may not be reduced by the amount of hourly charges for the
use of equipment.
(b) The charges
for the rental of equipment used in the construction or repair of a utility
line to a utility are taxable.
Note: See s.
Tax 11.29(5) for more
information.
(5)
NONTAXABLE SERVICES.
(a) The sales price
received from tree and shrub trimming services for a utility for the purpose of
keeping the overhead transmission and distribution lines free from interference
from nearby trees and shrubs or inaccessible to children is not taxable under
s.
77.52(2) (a) 20., Stats.
(b) The sales price received under a separate
contract for tree trimming and line clearing in connection with the
construction of a new utility line is not taxable.
(c) The sales price received from a separate
charge for removing an existing utility line is not taxable.
(d)
1. The
sales price received for a service provided by an electric cooperative to
another electric cooperative, or by a telecommunications utility to another
telecommunications utility, for disaster relief work performed during a
disaster period.
2. In this
paragraph:
a. "Disaster period" has the
meaning given in s.
77.54(68) (b)2, Stats.
b. "Disaster relief work" has the meaning
given in s.
77.54(68) (b)3, Stats.
c. "Electric cooperative" has the meaning
given in s.
76.48(1g) (c), Stats.
d. "State of emergency" has the meaning given
in s.
77.54(68) (b)4m, Stats.
e. "Telecommunications utility" has the
meaning given in s.
196.01(10),
Stats.
3. The exemption
in this paragraph does not apply to materials and supplies used in performing
exempt disaster relief services.
(6) LANDSCAPING SERVICES. The sales price
received from landscaping and lawn maintenance services is taxable. Except as
provided in sub. (5) (a) and (b), landscaping and lawn maintenance services
include:
(a) Landscape planning and
counseling.
(b) Lawn and garden
services, such as planting, mowing, spraying, and fertilizing.
(c) Shrub and tree services.
(d) Spreading topsoil and installing sod or
planting seed where trenches have been dug or sump pump, transmission, and
distribution lines have been buried in residential, business, commercial, and
industrial locations, cemeteries, golf courses, athletic fields, stadiums,
parking lots, and other areas, and along highways, streets, and walkways.
Note: Section Tax 11.86 interprets ss.
77.51(20),
77.52(2) (a) 10., 11. and 20., 77.54 (68), 86.16 and
182.017, Stats.
The interpretations in s. Tax 11.86 are effective on and
after September 1, 1969, except: (a) Underground utility facilities were
determined not to be tangible personal property, effective September 1, 1970;
(b) Landscaping services described in sub. (6) became taxable effective May 1,
1982, pursuant to Chapter 317, Laws of 1981; (c) The Wisconsin Tax Appeals
Commission decision in Capital City Tree Experts, Inc., dated June 19, 1987,
later modified by stipulation and order of the Circuit Court of Dane County
dated September 21, 1987, held that the service of trimming trees on a utility
right-of-way to prevent interference and to make inaccessible to children is
not a taxable landscaping service; d) 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; and (e) The exemption for services performed
during a disaster period became effective January 1, 2017, pursuant to 2017
Wis. Act 290.
