Sales and Use Tax

A sales tax is a tax paid to a governing body for the sales of certain goods and services.


Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase.  When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax.  Often laws provide for the exemption of certain goods or services from sales and use tax.

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Background

On January 1, 1997, the current Wisconsin sales and use tax was equal to 5% of gross receipts. In addition, many Wisconsin counties have instituted a 0.5% county sales and use tax. Finally, a 0.1% stadium sales and use tax applies in Milwaukee, Racine, Ozaukee, Washington and Waukesha counties. Current rates can generally be found in the Wisconsin Tax Bulletin, which is published quarterly by the Wisconsin Department of Revenue (DOR) and can be accessed on their Web page at http://www.revenue.wi.gov/ise/wtb/. A list of the counties that have enacted the 0.5% local sales and use tax can be located on DOR’s Web page at http://www.revenue.wi.gov/report/s.html.

Constraints

Purchases

Purchases by Wisconsin governmental units, including the University of Wisconsin System, are generally exempt from Wisconsin sales and use tax under s. 77.54(9a)(a), Wis. Stats,., and Section 11.05(4)(b) of the Wisconsin Administrative Code. In addition, the Wisconsin Department of Revenue has issued the University of Wisconsin System a Certificate of Exempt Status (CES). To avoid payment of sales and use tax on purchases, UW institutions should provide vendors with this CES number.

Sales of Goods and Services

Each institution is responsible for carefully reviewing its operations and procedures to ensure that sales tax is collected where required and that sales tax payments are properly made to the Wisconsin Department of Revenue. Individual institutions will be held responsible for any penalties or other assessments made for failure to collect and deposit sales tax. The summary below notes the tax status of the more common sales transactions at UW institutions. Please refer to the Wisconsin Department of Revenue Publications listed in the References section of this document.

Each institution is responsible for carefully reviewing its operations and procedures to ensure that sales tax is collected where required and that sales tax payments are properly made to the Wisconsin Department of Revenue. Individual institutions will be held responsible for any penalties or other assessments made for failure to collect and deposit sales tax. The summary below notes the tax status of the more common sales transactions at UW institutions. Please refer to the Wisconsin Department of Revenue Publications for transactions not listed in this summary.

TAXABLE GOODS 

  • Food and food products sold for consumption on the premises
  • Food service contracts (except for those specifically excluded below)
  • Beer, liquor, soft drinks, gum, candies and confections
  • Clothing, such as UW sweatshirts and athletic apparel
  • Publications, pamphlets, magazines and books
  • Pens, pencils and miscellaneous supplies
  • Gifts, cards, souvenirs, etc., in hospital and union gift shops or other areas
  • Surplus property and scrap, including old rental equipment, except registered vehicles
  • Building plans and specifications, maps, etc.

TAXABLE SERVICES 

  • Admission to athletic, amusement and entertainment events, e.g., football games, plays, concerts, movies, etc.
  • Fees, dues, etc., paid for access or use of recreational, athletic or amusement facilities or equipment
  • Catering services
  • Reproduction, duplication and photographic services

NONTAXABLE GOODS 

  • Food intended for home consumption
  • Food service contracts sold to an undergraduate, graduate or professional school student enrolled for credit at your institution who will personally consume the food items purchased
  • Food service contracts sold to NFL football teams
  • Newspapers and subscriptions to periodicals and magazines
  • Items sold to farmers for farming purposes
  • Items sold to the United States, its unincorporated agencies and instrumentalities
  • Items sold to other state agencies, other university departments, and elementary and secondary schools
  • Items sold for use outside of Wisconsin which are delivered to an agent for shipment out of the state

NONTAXABLE SERVICES 

  • Laundry services only when performed in self-service, coin-operated machines. Sales from machines using tickets or tokens are not exempt
  • Building space rentals
  • Transportation of people
  • University I.D. cards/debit cards, including replacement cards

When is sales and use collection required?

Sales tax must be collected on all taxable items.

Wisconsin Department of Revenue Publication 204 covers Sales and Use Tax information for Colleges, Universities and Technical Colleges.

As stated in the Wisconsin Department of Revenue Publication 204, the general rule is “All sales of property, items, and goods are subject to the sales tax, unless an exemption applies.”

Who is responsible for sales and use collection at UW?

University departments are responsible for collection and deposit of sales tax on all taxable items and are liable for penalties assessed for failure to report and collect sales tax.  Wisconsin Department of Revenue Publication 204 covers sales and use tax information for colleges, universities and technical colleges.

Where should sales and use tax be assessed?

Sales and Use Tax is always based on the delivery destination of the items or services being purchased.

Collection and deposit of sales and use tax

Please visit the Deposits, Revenue and Receivables web page at UW-Madison Business Services.

Based on what departments identify and collect for sales tax, Cash Management reports, processes, and submits monthly collection of sales tax to the Department of Revenue on a monthly basis.

Remember: when reporting taxable receipts, report gross receipts and identify the appropriate amount subject to Sales and Use Tax on the appropriate receipt/deposit form, including the appropriate taxable county code.

Where is the UW Exempt from sales and use tax?

  1. State of Wisconsin:    Refer to Wisconsin Sales Tax Exemption
  2. Other States:   Sales Tax Exemption From Other States
  3. Countries:  UW is not exempt outside the U.S.

Other Taxes:  UW is not exempt from Excise Tax or any other Non-Sales and Use Tax

Note:  Purchases made outside of university approved payment mechanisms cannot claim the UW Sales and Use Tax exemption and are required to pay applicable Sales and Use Tax charged on the purchases. Purchases made outside approved payment mechanisms also cannot use the UW tax exempt documents (W-9, etc.) or the UW EIN numbers for purchases. Only purchases made by the UW directly through approved payment mechanisms can use these documents and exemptions.

References

Forms

Contact

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21 North Park Street
5th Floor, Room 5352
Madison, WI 53715

email iconJose A. Carus, Jr.
Tax Compliance Manager
Email: jose.carus@wisc.edu

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Phone: 608-262-0582