Wis. Admin. Code § Tax 11.11 — Utility, industrial and governmental waste treatment facilities

Tax 11.11(1) (1) General. Section 77.54 (26) , Stats., provides a sales and use tax exemption for tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., which becomes a component part of certain waste treatment facilities.

Tax 11.11(2) (2) Utility waste treatment exemption. If a utility waste treatment facility that is taxed under ch. 76 , Stats., qualifies for property tax exemption under s. 76.025 (1) , Stats., as approved by the department, it qualifies for the sales and use tax exemption under s. 77.54 (26) , Stats.

Tax 11.11(2m) (2m) Industrial waste treatment exemption.

Tax 11.11(2m)(a) (a) An industrial waste treatment facility is any property purchased or constructed as a waste treatment facility used exclusively and directly to remove, store, or cause a physical or chemical change in industrial waste or air contaminants for the purpose of abating or eliminating pollution of surface waters, the air, or waters of the state if that property is not used to grow agricultural products for sale. In this paragraph, “used exclusively” means to the exclusion of all other uses except:

Tax 11.11(2m)(a)1. 1. For other use not exceeding 5% of total use.

Tax 11.11(2m)(a)2. 2. To produce heat or steam for a manufacturing process, if the fuel consists of either 95% or more industrial waste that would otherwise be considered superfluous, discarded, or fugitive material or 50 percent or more of wood chips, sawdust, or other wood residue from the paper and wood products manufacturing process, if the wood chips, sawdust, or other wood residue would otherwise be considered superfluous, discarded, or fugitive material.

Tax 11.11(2m)(b) (b) Tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., becoming a component part of an industrial waste treatment facility is exempt from the sales and use tax under s. 77.54 (26) , Stats., if the facility qualifies for property tax exemption under s. 70.11 (21) , Stats.

Tax 11.11(3) (3) Municipal waste treatment exemption. Tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., which become a component or ingredient part of municipal facilities that treat waste qualifies for exemption from Wisconsin sales and use tax under s. 77.54 (26) , Stats. Municipal facilities that treat waste include:

Tax 11.11(3)(a) (a) Wastewater treatment facility.

Tax 11.11(3)(a)1. 1. Only the central waste treatment plant which actually treats the sewage qualifies for the exemption.

Tax 11.11(3)(a)2. 2. Storm sewers, water supply systems and private domestic waste water facilities do not qualify for the sales and use tax exemption.

Tax 11.11(3)(a)3. 3. The collection system throughout the area served by the treatment facility, the effluent pipeline carrying the treated sewage away from the central treatment plant, earthen dikes, and chain link fences on the boundary of a treatment plant, and dredge material disposal sites are not exempt. The collection systems includes the lift stations, force mains, and associated pumping equipment used to bring the raw sewage to the central treatment plant.

Tax 11.11(3)(b) (b) Material recovery facility.

Tax 11.11(3)(b)1. 1. A facility constructed by a municipality to meet mandates of ch. 287 , Stats., regarding the reuse, recycling, and recovery of waste material to reduce the need for waste disposal is exempt if the activities include all of the following:

Tax 11.11(3)(b)1.a. a. Sorting recyclable materials delivered from municipalities.

Tax 11.11(3)(b)1.b. b. Processing recyclable materials which may include removing contaminants, baling paper, shredding paper, pelletizing plastics, and crushing glass.

Tax 11.11(3)(b)1.c. c. Storing processed recyclable materials for sale to others.

Tax 11.11(3)(b)2. 2. The exemption does not apply if the only activities performed are sorting and storing and no processing of the materials takes place.

Tax 11.11(3)(c) (c) Sanitary landfill. A sanitary landfill, including the treatment equipment, such as the collection and burner system, laboratory equipment, maintenance buildings, garages, office buildings, fences, and gates, qualifies for exemption.

Tax 11.11(3)(d) (d) Groundwater facilities.

Tax 11.11(3)(d)1. 1. A municipal facility constructed to treat hazardous or contaminated groundwater, including oil and water separators, air strippers, aerators, blowers, filters, carbon units, controls, pumps, and thermal oxidizers, qualifies for exemption.

Tax 11.11(3)(d)2. 2. The collection system used to bring the hazardous or contaminated water to the facility and the distribution system used to carry the treated water away from the facility are not exempt.

Tax 11.11(4) (4) Repair, service and operation.

Tax 11.11(4)(a) (a) The repair, service, alteration, cleaning, painting, and maintenance of a utility waste treatment facility described in sub. (2) , an industrial waste treatment facility described in sub. (2m) , and a municipal waste treatment facility described in sub. (3) as well as the repair parts and replacement for those types of facilities are exempt from the sales and use tax.

Tax 11.11(4)(b) (b) Chemicals and supplies, including fuel and electricity, used or consumed in operating a utility waste treatment facility described in sub. (2) , an industrial waste treatment facility described in sub. (2m) and a municipal waste treatment facility described in sub. (3) are exempt from the sales and use tax.

Tax 11.11(5) (5) Contractors and subcontractors.

Tax 11.11(5)(a) (a) Exempt purchases. The sales and use tax exemption extends to and includes the purchases of tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., by a contractor-installer who incorporates the property into an approved utility waste treatment facility or who incorporates the property into an industrial waste treatment facility or a municipal waste treatment facility. The contractor-installer shall certify the intended exempt use of the item to each supplier in order to relieve the supplier of the duty of collecting and reporting the tax on the sales. Certification of exempt use shall be made on a Wisconsin sales and use tax exemption certificate, form S-211.

Tax 11.11(5)(b) (b) Taxable purchases. A contractor’s purchases of items used or consumed in the performance of the construction contract, and which do not become a component part of the waste treatment facility, are subject to the tax. This includes industrial gases, form lumber, tunnel shields, and supplies used by a contractor during construction. Payments by a contractor for equipment purchased or leased to perform a construction job are also taxable.

Tax 11.11(5)(c) (c) Determining exemptions.

Tax 11.11(5)(c)1. 1. ‘Utility property taxed under ch. 76, Stats.’ A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., that becomes a component part of a utility waste treatment facility that has not been approved by the department for a property tax exemption under s. 76.025 (1) , Stats.

Tax 11.11(5)(c)2. 2. ‘Industrial property taxed under ch. 70, Stats.’ Approvals are not required for industrial waste treatment facilities. A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., that becomes a component part of a facility that is determined to not qualify for a waste treatment facility property tax exemption under s. 70.11 (21) , Stats.

Tax 11.11(5)(c)3. 3. ‘Municipal waste treatment facilities.’ Approvals are not required for municipal waste treatment facilities. A contractor or subcontractor may be liable for sales and use tax on a purchase of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., that becomes a component part of a facility that is determined not to be a municipal waste treatment facility as provided in sub. (3) .