Wis. Admin. Code § Tax 11.32 — “Sales price” and “purchase price.”

” (1) General. The amount to which the sales and use tax rate is applied is the “sales price” for sales tax and the “purchase price” for use tax. Both “sales price” and “purchase price” mean the total amount of the consideration for the sale, license, lease or rental from retail sales of tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., or taxable services, valued in money, whether received in money or otherwise.

Tax 11.32(2) (2) Delivery, handling and service charges. A retailer’s charges for customer alterations, handling services, small orders, returned merchandise, restocking, split shipments, shipping, postage, crating, packing, fuel surcharges, and similar charges for services related to retail sales, are included in the sales price derived from the sale of taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., or taxable services. Cancelled order charges are not taxable if there is no transfer of merchandise to a customer. For orders that include property and items that are subject to tax and property and items that are not subject to tax, the amount of the delivery charge that the seller allocates to the property and items subject to tax shall be based either upon the total sales price of property and items that are subject to tax as compared to the total sales price of all of the property and items included in the shipment or on the weight of the property and items subject to tax compared to the total weight of all of the property and items included in the shipment.

Tax 11.32(3) (3) Cash discounts or price rebates.

Tax 11.32(3)(a) (a) Cash discounts, term discounts and coupons that are not reimbursed by a third party and which are allowed by a retailer directly to customers reduce the sales price subject to the tax. The customer must receive the discount for the retailer to exclude it from the sales price.

Tax 11.32(3)(b) (b) A retail cooperative’s rebates to members, which are made after the net profit is determined at the end of a year, are patronage dividends rather than cash discounts, and are not deductible from the cooperative’s sales price.

Tax 11.32(3)(c) (c) A manufacturer’s cash rebate to a person who purchases tangible personal property, items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., or taxable services from a retailer is not a reduction in the retailer’s sales price or purchase price for the item, regardless of whether the rebate is paid in cash or is used to reduce the selling price.

Tax 11.32(3)(d) (d) “Sales price” and “purchase price” include consideration paid by third parties if all of the following apply:

Tax 11.32(3)(d)1. 1. The seller actually receives consideration from a third party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale.

Tax 11.32(3)(d)2. 2. The seller is obligated to pass the price reduction or discount to the purchaser.

Tax 11.32(3)(d)3. 3. The amount of the consideration that is attributable to the sale is a fixed amount and the seller is able to determine that amount at the time of the sale to the purchaser.

Tax 11.32(3)(d)4. 4. One of the following applies:

Tax 11.32(3)(d)4.a. a. The purchaser presents a coupon, certificate or other documentation to the seller to claim the price reduction or discount, if the coupon, certificate or other documentation is authorized, distributed or granted by a third party with the understanding that the third party will reimburse the seller for the amount of the price reduction or discount.

Tax 11.32(3)(d)4.b. b. The purchaser identifies himself or herself to the seller as a member of a group or organization that may claim the price reduction or discount.

Tax 11.32(3)(d)4.c. c. The seller provides an invoice to the purchaser, or the purchaser presents a coupon, certificate or other documentation to the seller that identifies the price reduction or discount as a third party price reduction or discount.

Tax 11.32(3m) (3m) Lease, license, and rental receipts.

Tax 11.32(3m)(a) (a) The following charges related to the lease, license, or rental of tangible personal property, or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., are also included in the “sales price” or “purchase price”:

Tax 11.32(3m)(a)1. 1. Personal property taxes, including any personal property tax administration fee, imposed on the lessor or licensor that are passed on to the lessee or licensee.

Tax 11.32(3m)(a)2. 2. Contract documentation or administration fees.

Tax 11.32(3m)(a)3. 3. Disposal and return fees.

Tax 11.32(3m)(a)4. 4. Service contract charges, warranty charges, and maintenance agreement charges.

Tax 11.32(3m)(b) (b) The following charges related to the lease, license, or rental of tangible personal property, or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., are not included in the “sales price” or “purchase price” if they are separately stated on the invoice, bill of sale, or similar document provided to the lessee or licensee:

Tax 11.32(3m)(b)1. 1. Personal property taxes imposed directly on the lessee or licensee.

Tax 11.32(3m)(b)2. 2. Title and registration fees.

Tax 11.32(3m)(b)3. 3. Late payment fees that do not extend the term of the lease, license, or rental.

Tax 11.32(3m)(b)4. 4. Returned check fees.

Tax 11.32(3m)(b)5. 5. Insurance charges, including credit life and accident, casualty, theft, and loss, and gap insurance, as provided in s. 77.54 (8) , Stats.

Tax 11.32(4) (4) Sales tax collected from customers.

Tax 11.32(4)(a) (a) Section 77.585 (7) , Stats., provides in part that if a retailer establishes to the department’s satisfaction that the sales tax has been added to the total amount of the sales price and has not been absorbed by the retailer, the total amount of the sales price shall be the amount received exclusive of the sales tax imposed. Therefore, when the tax is collected from customers who are notified of that fact, the amount of the tax collected is not included in the base to which the tax applies. The notification may be by any one of the following methods:

Tax 11.32(4)(a)1. 1. Providing the customer a receipt which separately itemizes the tax or states “Prices Include Sales Tax.”

Tax 11.32(4)(a)2. 2. Conspicuously posting the bracket system card, Form S-213, issued by the department.

Tax 11.32(4)(a)3. 3. Conspicuously posting a sign which states “Prices Include Sales Tax.”

Tax 11.32(4)(b) (b) If a retailer cannot collect any tax because all sales are below the minimum price on which tax is collectible using the straight mathematical computation described in sub. (5) (a) or under the bracket systems set forth in sub. (5) (b) , no part of the retailer’s sales price may be treated as tax collected from customers.

Tax 11.32(4)(c) (c) If a vending machine retailer sells taxable property at a price such that a sales tax is collectible using either the straight mathematical computation described in sub. (5) (a) or the bracket systems set forth in sub. (5) (b) , part of the sales price from these sales shall include sales tax if customers are advised that the vending machine prices include sales tax.

Tax 11.32(5) (5) Straight mathematical computation.

Tax 11.32(5)(a) (a) A retailer shall determine the amount of tax due on a transaction by combining the applicable tax rates under subchs. III and V, Stats., and multiplying the combined rate times the sales price or purchase price of each item or the total invoice amount. The tax collectible from the customer shall be rounded to the nearest $.0l by using the following rounding procedures:

Tax 11.32(5)(a)1. 1. For amounts less than $.005, the amount shall be rounded down to the next lowest penny.

Tax 11.32(5)(a)2. 2. For amounts equal to or greater than $.005, the amount shall be rounded up to the next highest penny.

Tax 11.32(5)(b) (b) The following bracket systems represent straight mathematical computations that comply with s. 77.61 (3m) , Stats., and may be used by a retailer to determine the amount of tax due on a transaction. When using the bracket system, a retailer shall determine the amount of tax due on a transaction using either the sales price of each item or the total invoice amount.

Tax 11.32(5)(b)1. 1. In locations with no county or stadium district taxes the following bracket system may be used.

Tax 11.32(5)(b)2. 2. In counties having a county tax, but no stadium tax, the following bracket system may be used.

Tax 11.32(5)(b)3. 3. In counties having a stadium tax, but no county tax, the following bracket system may be used.