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Nexus & Overview - Wisconsin

State Sales Tax Nexus Requirements and General Overview

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Wisconsin (WI)

WI Sales Tax - Name and General Application of Tax:

Wisconsin imposes a general sales tax on retailers for the privilege of selling, leasing, or renting tangible personal property and certain other items at retail in Wisconsin and on persons selling, performing, or furnishing designated services at retail to consumers or users in Wisconsin. Wisconsin use tax is imposed on the storage, use, or other consumption in Wisconsin of tangible personal property and certain other items and taxable services purchased from any retailer and on "self-produced" goods that are manufactured, processed, or otherwise altered inside or outside Wisconsin.

WI Nexus - General Requirements:

Whether an obligation to collect Wisconsin use tax attaches to a sale by an out-of-state seller is determined by a combination of federal and state restrictions. At the federal level, the determination revolves around whether a nexus between the sale and Wisconsin can be established. If there is sufficient nexus, it then must be determined whether the seller qualifies as a "retailer engaged in business" in Wisconsin.

Before a state can tax out-of-state activities, it must be able to show a connection or "nexus" that the activities have with the state.

Wisconsin requires any retailer engaged in business in Wisconsin, who makes sales of tangible personal property or other taxable items or taxable services that are sourced to the state to collect and remit sales or use tax at the time of making a sale. In addition, retailers that are registered or required to be registered to collect and remit state sales and use taxes are required to collect, report, and remit the applicable county and stadium district sales and use taxes, regardless of whether the retailer is engaged in business in the county or special district.

For Wisconsin sales and use tax purposes, a retailer engaged in business in Wisconsin includes any retailer:

  • owning any real property in Wisconsin, leasing or renting out any tangible personal property located in Wisconsin, or maintaining a place of business in Wisconsin, either permanently or temporarily, directly or indirectly, or through a subsidiary or agent;
  • having any representative, agent, or salesperson operating in Wisconsin under its authority for the purpose of selling, delivering, or taking orders for tangible personal property or other taxable items or taxable services;
  • selling tangible personal property or other taxable items or taxable services for storage, use, or other consumption in Wisconsin, unless otherwise limited by federal law; or
  • any person who has an affiliate in Wisconsin, if the person is related to the affiliate and if the affiliate uses facilities or employees in Wisconsin to advertise, promote, or facilitate the establishment of or market for sales of items by the related person to purchasers in Wisconsin or for providing services to the related person's purchasers in Wisconsin, including accepting returns of purchases or resolving customer complaints.

Additional activities that create nexus with Wisconsin include:

  • performing construction activities in Wisconsin;
  • servicing, repairing, or installing equipment or other tangible personal property or taxable items in Wisconsin;
  • maintaining, occupying, or using an office, place of distribution, sales or sample room, warehouse, storage place, or other place of business in Wisconsin, regardless of whether the property is maintained, occupied, or used permanently or temporarily, directly or indirectly, or through a subsidiary, agent, or other person; and
  • delivering property, items, or goods into Wisconsin in company-operated vehicles.

WI - Local tax:

Wisconsin authorizes local county sales and use taxes, premier resort area taxes, special district (stadium) taxes, and local exposition district taxes.

WI SST/Streamlined Sales Tax:

Wisconsin is a full member of the SST Agreement with a seat on the SST Governing Board. It has enacted all of the provisions necessary to comply with the Agreement's requirements and these provisions currently are in effect. As a full member, it may vote on amendments to or interpretations of the Agreement, and sellers registering under the SST system must collect and remit tax on sales into the state.

WI Sourcing:

Destination

WI Resale / Exemption Certificates:

Exemption certificates - A Wisconsin exemption certificate (Form S-211) is given to sellers and lessors by purchasers or lessees to verify that a transaction is exempt. The acceptance in good faith of an exemption certificate relieves the seller or lessor of the burden of overcoming the statutory presumptions that sales of tangible personal property in Wisconsin are subject to sales tax. and that sales of tangible personal property sold for delivery in Wisconsin are subject to use tax. Form S-211 may be used as a blanket/continuous certificate or for a single purchase.

Resale certificates - The burden of proving that sales are not taxable is upon the person making the sale unless the seller takes from the purchaser an exemption certificate stating that the purchase is for resale or is otherwise exempt. No exemption certificate is required for certain items and services. Form S-211 has been adopted by the Department of Revenue for use as a resale exemption certificate.

WI Statute of Limitations:

No determination of tax liability of a person may be made unless written notice is given to the taxpayer by the later of the following:

  • within four years after the due date of the taxpayer's Wisconsin income or franchise tax return (or, if exempt, within four years of April 15th of the year following the close of the calendar or fiscal year);
  • within four years of the dissolution of a corporation; or
  • within four years of the date any sales and use tax return required to be filed for any period in that year was filed.

The limitations period may be extended if the taxpayer consents in writing before the expiration of the limitations period.

There is no limitations period in cases where a required return is not filed, or where a false or fraudulent return is filed with the intent to defeat or evade the tax.

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