Current through August 26, 2024
(1) SCOPE. This
section describes the exemption under s.
77.54(7) (a), Stats., for the occasional sale of a
business or business assets as described in s.
77.51(9) (a) and (am), Stats.
(2) GENERAL.
(a) The sale of business assets, consisting
of tangible personal property or items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., by a person who holds or is
required to hold a seller's permit at the time of the sale is subject to sales
tax, except as provided in sub. (3) (c).
(b) Except as provided in sub. (3) (c), the
tax applies if the business assets are sold as:
1. A disposition of surplus assets of a
continuing business.
2. A single
transaction or series of transactions prior to termination of a
business.
3. Piecemeal sales,
whether part of a continuing business or prior to termination.
(c) The tax does not apply to
merchandise inventory sold to another retailer who purchases it for resale and
sells it in the regular course of that retailer's business.
(3) EFFECT OF HOLDING A SELLER'S
PERMIT.
(a) Pursuant to s.
77.51(9) (a) and (am), Stats., a person holding or
required to hold a seller's permit at the time of disposition of business
assets may not claim that a sale of a business asset is an occasional sale,
except as provided in par. (b).
(b)
A sale, other than a sale described in par. (bg) or (br), is exempt from sales
and use tax as an occasional sale if all of the following conditions are met:
1. The sale is of personal property or items,
property, or goods under s.
77.52(1) (b), (c), or (d), Stats., other than inventory held for
sale, previously used by a person to conduct a trade or business at a
location.
2. The sale occurs after
the person 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.
(bg) A 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 subject to tax unless
s.
Tax 11.33(4) (a) 1. or 2. apply.
Example: A business has four business locations in Wisconsin
and has ceased all of its business activities at one location. All of the
business assets at the location where the business has ceased operating,
including one motor vehicle that it used in its business, are being sold. The
business is required to continue to hold a seller's per- mit for its other
three locations. The motor vehicle is sold, but the purchaser is not a person
described in s.
Tax 11.33(4) (a) 1. or 2. The sale of the
motor vehicle is not an exempt occasional sale of a business asset and the
seller is required to collect tax on its sale of the motor vehicle.
(br) A sale of a boat that is
registered or titled or required to be registered or titled in Wisconsin or
under the laws of the United States is subject to tax unless s.
Tax 11.33(4) (b) 1. applies.
(c) A sale meeting the conditions in par. (b)
is exempt from sales or use tax even though the person holds a seller's permit
for one or more other locations.
(d) The holder of a seller's permit shall
wait until ceasing business before requesting the inactivation of the permit
because a person may not continue regular business operations without a
permit.
(4) INACTIVATION
OF SELLER'S PERMIT.
(a) A permit holder may
request that the department inactivate its seller's permit by providing the
department with the permit holder's name, address, seller's permit number, and
the date the permit holder ceased business. The request may be made in any one
of the following ways:
1. A permit holder may
make a written request for seller's permit inactivation. The department shall
presume that the request was made at 12:01 a.m. on the postmark date of a
postpaid properly addressed envelope, if the envelope and its contents are
actually received by the department. If the retailer desires assurance that the
department has received the request, the permit holder may use certified mail,
return receipt requested.
Note: A person making a written request for
seller's permit inactivation should send its request to Wisconsin Department of
Revenue, P.O. Box 8902, Madison, WI 53708-8902.
2. A permit holder may make a request for
seller's permit inactivation by telephone. The department shall presume that
the request was made at 12:01 a.m. on the day the department received the
telephone call.
Note: A person requesting seller's permit
inactivation by telephone should call (608) 266-2776.
3. A permit holder may make a request for
seller's permit inactivation by electronic mail. The department shall presume
that the request was made at 12:01 a.m. on the day the department received the
electronic mail message.
Note: A person requesting seller's permit
inactivation by email should send its request to
dorsalesanduse@wisconsin.gov.
4. A permit holder may make a request for
seller's permit inactivation in person at one of the department's income, sales
and excise tax division offices. The department shall presume that the request
was made at 12:01 a.m. on the day the department received the
request.
(b) A person
who has requested inactivation of its seller's permit may not qualify for the
occasional sale exemption if the person contemplates resumption of those
activities which would require that the person hold a seller's permit, unless
the person qualifies for exemption under sub. (3) (b).
(c) The fact that a business ceases operating
and no longer conducts its day-to-day sales of tangible personal property,
items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services does not
result in the automatic inactivation of its seller's permit.
(5) CANCELLATION OF SELLER'S
PERMIT.
(a) Although a seller's permit may be
deemed to have been delivered and canceled on a postmark date under sub. (4),
cancellation shall not be effective prior to the postmark date.
(b) If a permit is delivered to the
department for cancellation, the permittee shall immediately qualify for the
occasional sales exemption, even though the person contemplates a subsequent
sale of fixtures or equipment. The person shall not qualify for the occasional
sale exemption if the person contemplates resumption of those activities which
would require that person to hold a seller's permit.
(c) The fact that a business ceases operating
and no longer conducts its day-to-day sales of tangible personal property,
items, property, or goods under s.
77.52(1) (b), (c), or (d), Stats., or taxable services may not
result in the automatic cancellation of a seller's permit.
Note: Refer to s.
Tax 11.33 regarding the general occasional sales
exemption. Refer to s.
Tax 11.35 regarding the occasional sales exemption for
nonprofit organizations.
Note: Section Tax 11.34 interprets ss.
77.51(9) (a) and (am) and (14g) (h),
77.52(12) and
77.54(7),
Stats.
The interpretations in s. Tax 11.34 are effective under
the general sales and use tax law on and after September 1, 1969, except: (a)
The procedure in sub. (3) became effective May 4, 1976, and reflects the
Wisconsin supreme court's decision in Three Lions Supper Club, Ltd. vs. Dept.
of Revenue (May 4, 1976), 72 Wis. 2d 546; (b) The exemption described in sub.
(2) (b) became effective May 17, 1988, pursuant to 1987 Wis. Act 399; (c) The
requirement that a person surrender its seller's permit within 10 days after
the last sale of tangible personal property for the sale of business assets to
qualify as an occasional sale was repealed effective August 12, 1993, pursuant
to 1993 Wis. Act 16; and (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.
