Sales Tax Obligations of Sellers in Wisconsin

April 13, 2006

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Wisconsin imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.

Procedure for accepting resale certificates. In Wisconsin you may use the Department of Revenue Form S-205 (Resale certificate), or a substitute exemption certificate. A resale certificate must contain the following information to relieve you from proving a sale is not taxable:

the purchaser's name, address, and signature
a description of the general character of the tangible personal property or service sold by the purchaser
a general description of the property or service purchased for resale if a continuous resale certificate is used, or an itemization of the property or service purchased if a single-purchase certificate is used
the purchaser's seller's permit number
an indication of the general character of the purchaser's business

Procedure for accepting blanket certificates. Wisconsin refers to blanket certificates as continuous resale certificates. You may accept blanket certificates from your customer if they repeatedly purchase the same type of property or services for processing or resale. However, blanket certificates may not be used to purchase property or services not covered by a blanket certificate. Continuous resale certificates do not expire and they do not need to be renewed at any prescribed interval. If you have not accepted a blanket certificate in good faith, liability for the tax does not shift from you to the purchaser.

Sales and use tax liability for out-of-state mail order and catalogue retailers. Wisconsin has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within Wisconsin. To determine if you have physical presence, ask yourself the following:

Do I have retail facilities, a warehouse, or any office space in Wisconsin? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
Do my employees or I enter Wisconsin for purposes of taking and transmitting orders from Wisconsin? If your employee or independent contractor goes into Wisconsin to take or transmit orders, your business may have physical presence in Wisconsin. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
Do my delivery vehicles frequently enter Wisconsin for purposes of delivering property? Frequent deliveries in Wisconsin by your trucks will give you physical presence in Wisconsin.

Sales tax "bracket system." The bracket system may be followed by sellers in computing the sales tax. The 5 percent state tax is computed on each dollar and/or fraction of a dollar according to the following table:

Amount of Sale	Tax
$0.00 to $0.09	no tax
0.10 to 0.29	$0.01
0.30 to 0.49	0.02
0.50 to 0.69	0.03
0.70 to 0.89	0.04
0.90 to 1.09	0.05
and so forth

Absorbing the tax — using a "no sales tax" advertising strategy to drum up business. In Wisconsin it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.

Claiming refund for excess tax payments. You may file a refund claim within four years of the due date of your corresponding Wisconsin income or franchise tax return. Gross receipts subject to tax doesn't include sales refunded as a result of property returned or adjustments in the sales price after sales have been completed. In order to deduct amounts refunded from gross receipts, you must have: