Wis. Admin. Code § Tax 11.15 — Containers and other packaging and shipping materials

Tax 11.15(1) (1) Property exempt under s. 77.54 (6) (am) 2., stats.

Tax 11.15(1)(a) (a) To be exempt, containers, labels, sacks, cans, boxes, drums, bags, or other packaging and shipping materials for use in packing, packaging, or shipping tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., shall be “used by the purchaser to transfer merchandise to customers.” Whether the containers or other packaging or shipping materials are returnable or nonreturnable is not a factor. The exemption does not apply to containers used in the incidental transfer of property to customers by persons providing services.

Tax 11.15(1)(b) (b) Containers include barrels, bottles, cartons, chemical carboys, and kegs. Packaging and shipping materials include property used inside a package to shape, form, preserve, stabilize, or protect the contents, such as excelsior, straw, cotton, cardboard fillers, separators, shredded paper, ice, dry ice, and batting, and rope, twine, gummed tape, wrapping paper, rubber bands, crates, and crating materials, pallets, skids, and mailing tubes.

Tax 11.15(1)(c) (c) The sales price from the sale of the following items is within the exemption:

Tax 11.15(1)(c)1. 1. Cans in which canned goods, paints, and other commodities are contained; medicine bottles; boxes in which jewelry, candy, suits, dresses, and hats are delivered to customers; and ice cream cartons.

Tax 11.15(1)(c)2. 2. Bottles and cases used by breweries, wineries, or soda water beverage producers to transfer the product to customers.

Tax 11.15(1)(c)3. 3. Barrels, half-barrels, kegs, and the like, used by a brewery to transfer draft beer to wholesalers or retailers.

Tax 11.15(1)(c)4. 4. Caps for milk, beer, and soda water bottles.

Tax 11.15(1)(c)5. 5. “Fragile,” “Handle with Care,” or other shipping labels.

Tax 11.15(1)(c)6. 6. Paper food dividers used to separate food sections in a container for transfer to a customer.

Tax 11.15(1)(c)7. 7. Paper bags purchased by grocery stores, bakeries, or other retailers and used by their customers in carrying out their purchases.

Tax 11.15(1)(c)8. 8. Feed bags purchased by feed dealers who use the bags to transfer merchandise sold to their customers.

Tax 11.15(1)(c)9. 9. Bale ties sold to a hay owner and used to deliver hay to the owner’s customers.

Tax 11.15(1)(c)10. 10. Ice used by a commercial fisher inside a box of fish to preserve the fish during shipment to market.

Tax 11.15(1)(c)11. 11. LPG tanks used to transfer fuel to customers which are replaced each time the fuel is exhausted.

Tax 11.15(1)(c)12. 12. Packaging and shipping materials for use in packing, packaging, or shipping meat or meat products, regardless of whether these items are used to transfer merchandise to customers.

Tax 11.15(2) (2) Property not exempt under s. 77.54 (6) (am) 2., Stats. Sales of the following items are not within this exemption:

Tax 11.15(2)(a) (a) Wrapping equipment such as paper holders, tape dispensers, staplers, and string holders.

Tax 11.15(2)(b) (b) Coat hangers used on display racks in stores.

Tax 11.15(2)(c) (c) Shopping carts or baskets and similar equipment.

Tax 11.15(2)(d) (d) Computer produced gummed label mailing lists used to address envelopes. However, labels for envelopes used to transfer tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., to customers are exempt.

Tax 11.15(2)(e) (e) Containers or other packaging and shipping materials used merely for storage or to transfer merchandise owned by a person from one location to another, such as bakery delivery carts and containers used in delivering bakery products to retailers, where the carts are not transferred by the bakery to the retailer.

Tax 11.15(2)(f) (f) Lumber or other material used for bracing, blocking, skidding, or shoring items while in transit that is not transferred to the customer of the shipped items; and cardboard and paper used to line box cars.

Tax 11.15(2)(g) (g) Price tags and advertising matter used in connection with the sale of tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., including counter display cards used for advertising and display purposes.

Tax 11.15(2)(h) (h) Tanks on trucks used to deliver merchandise to customers.

Tax 11.15(2)(i) (i) Corrugated boxes and other containers and related packing materials purchased by movers for use in transporting a customer’s goods.

Tax 11.15(2)(j) (j) Bags, boxes, hangers, and other containers transferred to customers by laundries, dry cleaners, and other persons providing services.

Tax 11.15(3) (3) Deposits on returnable containers.

Tax 11.15(3)(a) (a) Returnable container deposits received by a retailer at the time of the retail sale of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., such as soft drink bottles, beer bottles and containers, and refunds of the deposits may be excluded from the computation of the taxable sales price if they are excluded from the sales price on the retailer’s books of account.

Tax 11.15(3)(b) (b) If a retailer’s books of account include container deposits in the sales price and if refunds of the deposits are deducted from the sales price, the retailer shall use this method of reporting the taxable sales price on a sales tax return. Under this method, the sales price from the deposit is subject to the tax and the tax may be collected from the customer. However, when the deposit is refunded to the customer, the applicable sales tax shall also be refunded to the customer.

Tax 11.15(4) (4) Disposable items used by restaurants.

Tax 11.15(4)(a) (a) The sales price from sales to restaurants, cafeterias, caterers, nursing homes, or vending machine operators of disposable items, including paper and plastic cups, plates, butter chips, hamburger and frankfurter baskets or buckets, utensils, straws, placemats, napkins, doggie bags, wrapping materials, and toothpicks, transferred to customers for a valuable consideration by these persons as part of the sale of food, food products, and beverages to customers are not subject to the tax.

Tax 11.15(4)(b) (b) The sales price from the sale of disposable products to a restaurant that are transferred with candy, soft drinks, dietary supplements, and prepared foods furnished for no consideration by the restaurant to the restaurant’s own employees during the employee’s work hours is not subject to the tax.

Tax 11.15(5) (5) Demurrage, lease, or rental of fuel storage tanks. A gas supplier’s monthly charge to a customer for the use of an LPG or other fuel storage tank which remains indefinitely on the customer’s premises is taxable. The charge a supplier makes because a gas cylinder is retained by a customer beyond a 30-day period is also taxable. These “demurrage” charges constitute taxable rentals paid for the continuation of possession of the container. If a charge is made to the customer for the use of the container and the container is used exclusively for those leasing purposes, the gas supplier may issue an exemption certificate claiming resale when the supplier purchases the container.

Tax 11.15(6) (6) Containers and packaging materials sold.

Tax 11.15(6)(a) (a) If a charge is made by a seller or lessor of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., to a customer for a container or packaging materials used in connection with the shipment of the property or item, the charge for the container or packaging materials becomes a part of the sales price or rental charge. If the sale of the property or item shipped is not subject to or is exempt from tax, the charge for the container or packaging materials is not subject to or is exempt from tax. If the sale of the property or item shipped is subject to tax, the charge for the container or packaging materials is subject to tax. This paragraph is applicable to the taxation of containers and packaging materials regardless of whether the charge for the containers or packaging materials is separately stated or not separately stated.

Tax 11.15(6)(b) (b) Any credit given by a seller or lessor to a customer for the container or packaging materials used in connection with the shipment of property or items which the customer returns to the seller or lessor shall reduce the seller’s or lessor’s sales price subject to tax in the reporting period during which the materials are returned, if the seller or lessor included the selling price of the container or packaging materials in the sales price subject to tax, and the seller or lessor returns the tax to the customer.

Tax 11.15(7) (7) Gift wrapping. The amount charged for gift wrapping packages is taxable.