(1) SCOPE. This section describes the general
rules for exempt occasional sales.
(2) GENERAL. Sales of tangible personal
property, items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., and taxable services are not
taxable if they are exempt "occasional sales." However, if the number, scope
and character of the sales are such that they exceed the standards in the
statutes and this section, a taxable sale occurs.
(3) STATUTES.
(a) "Occasional sale" is defined in s.
77.51(9),
Stats.
(b) Section
77.54(7),
Stats., exempts most occasional sales from the sales and use taxes.
(4) SALES WHICH ARE EXEMPT
OCCASIONAL SALES. Sales which are exempt occasional sales include:
(a) The sale of a motor vehicle, snowmobile,
recreational vehicle as defined in s.
340.01(48r),
Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle,
off-highway motorcycle, or aircraft that is registered or titled in Wisconsin
or required to be registered or titled in Wisconsin is an exempt occasional
sale only if one of the following applies:
1.
The sale is to a spouse, parent, stepparent, father-in-law, mother-in-law,
child, stepchild, son-in-law, or daughter-in-law, of the transferor provided
the property has been previously registered or titled in Wisconsin in the name
of the transferor, if required to be registered or titled, and the transferor
is not engaged in the business of selling this type of property.
2. The item is a motor vehicle and the
transferor sells the motor vehicle to a corporation owned solely by the
transferor or the transferor's spouse, provided the motor vehicle has been
previously registered or titled in Wisconsin in the name of the transferor, if
required to be registered or titled, and the transferor is not engaged in the
business of selling motor vehicles. Transferor for purposes of this subdivision
means a natural person.
3. The
motor vehicle, snowmobile, recreational vehicle as defined in s.
340.01(48r),
Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle,
off-highway motorcycle, or aircraft is sold by a nonprofit organization meeting
the requirements in s.
Tax 11.35(4).
(b) Any sale of a boat that is registered or
titled in Wisconsin or required to be registered or titled in Wisconsin or
under the laws of the United States, is an exempt occasional sale only if one
of the following applies:
1. The sale is to a
spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild,
son-in-law, or daughter-in-law, of the transferor provided the property has
been previously registered or titled in Wisconsin in the name of the
transferor, if required to be registered or titled, and the transferor is not
engaged in the business of selling boats.
2. The boat is sold by a nonprofit
organization meeting the requirements in s.
Tax 11.35(4).
(c) Except as provided in pars. (a) and (b),
five or fewer auctions that are the sale of personal farm property or household
goods and that are held by the same auctioneer at the same location during the
year. For indoor locations, "location" means a building, except that in the
case of a shopping center or shopping mall, "location" means a store.
Note: Refer to s.
Tax 11.50(4) and (5) regarding exempt
occasional sales at auction of personal farm property and household
goods.
(d) Except as
provided in pars. (a) and (b), sales of tangible personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., by an individual who operates
a sole proprietorship and who holds or is required to hold a seller's permit,
which have not been used in the course of the person's business and the sales
are not the type of property, items, or goods sold in the course of the
person's business. However, all tangible personal property or items, property,
or goods under s.
77.52(1) (b), (c), or (d), Stats., sold by a corporation or
partnership which holds or is required to hold a seller's permit shall be
considered to be used or sold in the course of the organization's business
activities and are taxable.
Example: A taxpayer operates a service station as a sole
proprietor and holds a seller's permit for the purpose of selling cigarettes
and repairing motor vehicles. The sales price from selling a refrigerator and
stove used in the taxpayer's residence are not subject to the sales tax.
However, the sales price from the sale of a desk and refrigerator which were
used in the service station's business activities are subject to the sales
tax.
(e) Except as provided
in pars. (a) and (b), the sale of a business or business assets, not including
inventory held for sale, previously used by a seller to conduct its trade or
business at a location after that person has ceased actively operating in the
regular course of business as a seller of tangible personal property, items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services at that
location.
Note: Refer to s.
Tax 11.34 regarding the occasional sales exemption for the
sale of a business or business assets.
(f) Except as provided in pars. (a) and (b),
sale of tangible personal property, items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services by a
person who does not hold and is not required to hold a seller's permit, if the
total taxable sales price from sales of tangible personal property, items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., and taxable services are less
than $2,000 during the calendar year. However, purchases of tangible personal
property, items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services which
when resold are exempt under this paragraph, are taxable purchases by that
person. This paragraph does not apply to nonprofit organizations.
Examples:
1) If the
sales price from a person's garage and rummage sales, lawn maintenance
services, bait sales to fishermen, sales of books, charges for parking and
other normally taxable receipts are less than $2,000 during the calendar year,
that per- son's receipts are deemed exempt occasional sales under par. (f).
However, purchases by the seller of the tangible personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., which are sold are taxable.
2) Sales of soft drinks by
employee groups are not taxable if the sales price from soft drink sales are
less than $2,000 per year. These groups are deemed consumers and the supplier's
sales to them are taxable retail sales
(g) Sales by nonprofit organizations meeting
the requirements in s.
77.54(7m),
Stats.
Note: Refer to s.
Tax 11.35 regarding the occasional sales exemption for
nonprofit organizations.
(5) SALES WHICH ARE NOT EXEMPT OCCASIONAL
SALES. Sales which are not exempt occasional sales, except as provided in sub.
(4), include:
(a) Sales by a person who holds
or is required to hold a seller's permit.
Example: Sales of used equipment by a retail store or vending
machine retailer are not occasional sales and would be subject to sales or use
tax.
(b) Sales of a business
or the assets of a business when the seller holds or is required to hold a
seller's permit. The tax applies to the portion of the sales price reasonably
attributable to the taxable personal property such as equipment, furniture and
fixtures.
(c) Sales of motor
vehicles, aircraft, boats, recreational vehicles as defined in s.
340.01(48r),
Stats., snowmobiles, trailers, semitrailers, all-terrain vehicles, utility
terrain vehicles, and off-highway motorcycles. Unless exempt, a use tax or
sales tax pursuant to s.
Tax 11.14(2) (c) shall be paid by the
purchaser at the time the motor vehicle, aircraft, boat, recreational vehicle
as defined in s.
340.01(48r),
Stats., snowmobile, trailer, semitrailer, all-terrain vehicle, utility terrain
vehicle, or off-highway motorcycle is registered or titled within
Wisconsin.
(d) Sales made by
persons who hold themselves out to the public as engaged in business, even
though their sales may be few and infrequent. This includes the sales of works
of art, handmade articles, antiques or used property by artists or others who
are pursuing a vocation or part-time business as a seller of this
property.
(e) Sales of bingo
supplies to players or the sale, rental or use of regular bingo cards, extra
regular cards and special bingo cards.
(f) Sales by persons engaged primarily in the
business of making nontaxable sales of tangible personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., such as manufacturers and
wholesalers. Since these persons are in the business of selling tangible
personal property or items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., the mere fact that only a
small fraction of their total sales are taxable retail sales does not make
these sales exempt occasional sales.
Note: Section Tax 11.33 interprets ss.
77.51(9),
77.52(1) and (2) (a) 2 and
77.54(7) and (7m), Stats.
The interpretations in s. Tax 11.33 are effective under the
general sales and use tax law on and after September 1, 1969, except: (a) The
exemption in sub. (3) (b) became effective March 1, 1979; (b) Non-retailer
sales of all-terrain vehicles as described in sub. (4) (c) became taxable and
the sale of an all-terrain vehicle as described in sub. (3) (c) and (d) became
exempt effective September 1, 1987, pursuant to 1987 Wis. Act 27; (c) The
exemption for the sale of a business or business assets in sub. (3) (e) became
effective May 17, 1988, pursuant to 1987 Wis. Act 399; (d) The exemption for
transfers of motor vehicles, boats, etc., to in-laws became effective August
15, 1991, pursuant to 1991 Wis. Act 39; (e) The occasional sales exemption for
5 or fewer auctions became effective January 1, 2000, pursuant to 1999 Wis. Act
9; (f) The term "mobile home" was changed to "recreational vehicle, as defined
in s.
340.01(48r),
Stats." effective January 1, 2008, pursuant to 2007 Wis. Act 11; (g) 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 (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.
