Wis. Admin. Code § Tax 11.35 — Occasional sales by nonprofit organizations

Tax 11.35(1) (1) Scope. This section describes the occasional sales exemption for nonprofit organizations as provided in s. 77.54 (7m) , Stats.

Tax 11.35(2) (2) Definitions. In this section:

Tax 11.35(2)(a) (a) “Admission event” means that access to the event involving entertainment is generally restricted to only those who pay a required fee, who make a required donation or who are required to make a purchase of some kind such as a meal or raffle ticket.

Tax 11.35(2)(b) (b) “Entertainment” means entertainment provided at an admission event by all persons or groups who are paid in the aggregate more than $10,000 per event by all persons for performing, for reimbursement of expenses or for prize money.

Tax 11.35(2)(c) (c) “Nonprofit organization” includes a neighborhood association, church, civic group, garden club, social club or similar organization not operated or organized for profit where no part of the net income inures to the benefit of any private shareholder or individual. A governmental unit described in s. 77.54 (9a) , Stats., is considered a “similar organization” for purposes of this paragraph.

Tax 11.35(2)(d) (d) “Sales price” means sales price as defined in s. 77.51 (15b) , Stats., from all sales in Wisconsin of otherwise taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., and services after subtracting allowable exemptions.

Tax 11.35(3) (3) General. A nonprofit organization shall charge Wisconsin sales tax on sales of tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., and taxable services, unless the sales qualify as exempt occasional sales or are otherwise exempt. The occasional sales exemption does not apply to the sales price from the sale of bingo supplies to players or to the sale, rental or use of regular bingo cards, extra regular cards and special bingo cards.

Tax 11.35(4) (4) Standards. Under s. 77.54 (7m) , Stats., a nonprofit organization shall meet all of the following standards for its sales to qualify as exempt occasional sales:

Tax 11.35(4)(a) (a) The organization is not engaged in a trade or business.

Tax 11.35(4)(b) (b) Entertainment is not involved at an event for which charges by the organization constitute admissions.

Tax 11.35(4)(c) (c) The organization does not have and is not required to have a Wisconsin seller’s permit, except for conducting bingo.

Tax 11.35(5) (5) Not engaged in a trade or business. A nonprofit organization is not engaged in a trade or business for purposes of sub. (4) (a) if it meets at least one of the following:

Tax 11.35(5)(a) (a) Its sales of otherwise taxable tangible personal property, items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., or services or its events occur on 75 days or less during the calendar year, regardless of the dollar amount of sales. For events involving the sales of tickets, only the actual days of the events are counted, not the days of ticket sales.

Tax 11.35(5)(b) (b) Its taxable sales price for tangible personal property, items, property, and goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., and taxable services for the calendar year are $50,000 or less, regardless of the number of days on which its sales or events occur. Sales that are nontaxable are not included for purposes of the $50,000 sales price test.

Tax 11.35(6) (6) Entertainment.

Tax 11.35(6)(a) (a) For a nonprofit organization’s sales to qualify as exempt occasional sales, entertainment may not be involved at an event for which charges by that nonprofit organization constitute admissions.

Tax 11.35(6)(b) (b) A nonprofit organization that would otherwise qualify for exempt occasional sales, except for the involvement of entertainment, may obtain a seller’s permit from the department for the day or days involving entertainment, pay the sales tax on that event and request inactivation of its seller’s permit after the event, and still have exempt occasional sales on days not covered by the seller’s permit. Days and receipts from events involving admissions to entertainment for which a seller’s permit was obtained are included with all other sales in determining the 75-day test and the $50,000 taxable receipts test described in sub. (5) . A nonprofit organization that obtains a seller’s permit for an event and does not request inactivation of its seller’s permit after the event does not qualify for the occasional sale exemption while the seller’s permit is active, regardless of the number of days and dollar amount of its sales.

Tax 11.35(7) (7) Holding a seller’s permit.

Tax 11.35(7)(a) (a) A nonprofit organization is not required to hold a seller’s permit if its sales are exempt from sales and use taxation by meeting the provisions of sub. (4) (a) and (b) . However, an organization required to hold a seller’s permit solely for the purpose of conducting bingo games may still qualify for the occasional sales exemption on nonbingo sales if it otherwise qualifies under the provisions of sub. (4) (a) and (b) .

Tax 11.35(7)(b) (b) If a nonprofit organization holds a seller’s permit in the current year, but intends or believes in good faith that its activities in the following year would qualify as exempt occasional sales except for its holding of a seller’s permit, it may request inactivation of its seller’s permit and its sales in the following year will qualify as exempt occasional sales provided it meets the standards in sub. (4) (a) and (b) in that following year.

Tax 11.35(7)(c) (c) If a nonprofit organization did not hold or was not required to hold a seller’s permit or requested inactivation of its seller’s permit in good faith but later, due to unforeseen circumstances, exceeds the standards, only the sales occurring after the standards are exceeded do not qualify as exempt occasional sales and are subject to tax.

Tax 11.35(7)(d) (d) If a nonprofit organization has sales in the current year and then requests inactivation of its seller’s permit, sales made in the current year before requesting inactivation of the seller’s permit do not qualify as exempt occasional sales, even if the standards for exempt occasional sales in sub. (4) (a) and (b) are met.

Tax 11.35(8) (8) When sales do not qualify for occasional sales exemption. If a nonprofit organization has sales of tangible personal property, items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., or taxable services, and the sales do not qualify as exempt occasional sales, it is required to obtain a seller’s permit and collect and remit sales tax on its taxable sales.