Wis. Admin. Code § Tax 11.555 — Marketplace providers and sellers

Tax 11.555(1) (1) Definitions. In this section:

Tax 11.555(1)(a) (a) “Marketplace provider” has the meaning given in s. 77.51 (7i) , Stats.

Tax 11.555(1)(b) (b) “Marketplace seller” has the meaning given in s. 77.51 (7j) , Stats.

Tax 11.555(1)(c) (c) “Retailer” has the meaning given in s. 77.51 (13) , Stats.

Tax 11.555(2) (2) General. Except as provided in sub. (4) , a marketplace provider is required to collect and remit Wisconsin sales or use tax on all sales of taxable products and services that the marketplace provider facilitates on behalf of a marketplace seller. The amount subject to tax is the entire amount charged to the purchaser, including any amount charged by the marketplace provider for facilitating the sale.

Tax 11.555(3) (3) Notification and liability.

Tax 11.555(3)(a) (a) A marketplace provider is required to notify the marketplace seller that it is collecting and remitting the tax on all taxable sales in Wisconsin. The department does not prescribe a required form or method for such notification.

Tax 11.555(3)(b) (b) Only the marketplace provider can be audited and held liable for Wisconsin sale or use tax on sales facilitated on behalf of a marketplace seller, unless one of the following applies:

Tax 11.555(3)(b)1. 1. The marketplace provider has been granted a waiver by the department from collecting and remitting the tax, as provided in sub. (4) .

Tax 11.555(3)(b)2. 2. The marketplace provider can demonstrate to the satisfaction of the department that the error in collecting and remitting the tax is due to insufficient or incorrect information provided by the marketplace seller. This subdivision does not apply if the marketplace provider and marketplace seller are related entities, as defined in s. 71.01 (9am) , Stats.

Tax 11.555(3)(c) (c) If a marketplace provider demonstrates that par. (b) 2. applies, the marketplace seller providing the insufficient or incorrect information may be audited and held liable for the tax.

Tax 11.555(4) (4) Waivers.

Tax 11.555(4)(a) (a) A marketplace provider may apply for a waiver from collecting and remitting Wisconsin sales or use tax if its only activities are facilitating sales of products or services on behalf of marketplace sellers that are operating under a hotel, motel, or restaurant brand name shared with the marketplace provider.

Tax 11.555(4)(b) (b) The waiver may be granted if the department is satisfied that the marketplace seller will collect and remit the tax on the entire amount charged to the purchaser.

Tax 11.555(4)(c) (c) The department may grant waivers to other types of marketplace providers if there is evidence that the marketplace sellers have a history of reliably collecting and remitting to the department or there is other evidence that the marketplace sellers will reliably collect and remit the tax to the department.

Tax 11.555(4)(d) (d) Marketplace providers shall apply to the department using Form S-102, “Application for Marketplace Provider Waiver,” and the application must contain the following:

Tax 11.555(4)(d)1. 1. The name and address of all marketplace sellers selling or furnishing tangible personal property or services in Wisconsin that the marketplace provider is requesting the waiver.

Tax 11.555(4)(d)2. 2. Each marketplace seller’s Wisconsin sales or use tax permit number and any other information necessary to ensure the entire amount of tax will be collected and remitted by the marketplace seller.

Tax 11.555(4)(e) (e) Within 60 days from a written request from the department, a marketplace provider that is granted a waiver must submit updated information provided in par. (d) 1. and 2. for all marketplace sellers selling or furnishing such tangible personal property or services in Wisconsin. The department can require the marketplace provider to provide any other information to ensure the tax is being collected and remitted on the entire amount charged to the purchaser by the marketplace sellers.

Tax 11.555(4)(f) (f) If a waiver is granted, the department may require the marketplace provider to notify each marketplace seller that the marketplace seller is liable for the tax on the entire sales price charged to the purchaser for taxable products and services in Wisconsin through that marketplace provider.

Tax 11.555(4)(g) (g) The department may regard the marketplace seller as a retailer required to collect and remit the tax for sales facilitated on its behalf by a marketplace provider, when it determines that it is necessary for the efficient administration of Wisconsin sales and use taxes, pursuant to ss. 77.51 (13) (c) and 77.52 (3m) (c) , Stats. The department may require the marketplace seller to notify each marketplace provider that the marketplace seller is liable for the tax on the entire sales price charged to the purchaser for taxable products and services in Wisconsin made through that marketplace provider.

Tax 11.555(5) (5) Physical marketplace. A marketplace provider includes a person that facilitates a sale on behalf of a seller at a storefront or other physical location. Brokers, dealers, consignors, and other persons that operate a physical location, advertise or list a seller’s product for sale, and process the payment are marketplace providers.

Tax 11.555(6) (6) Reporting and other provisions.

Tax 11.555(6)(a) (a) Filing tax returns.

Tax 11.555(6)(a)1. 1. A marketplace provider reports its own sales, and the sales it facilitates on behalf of marketplace sellers, on its sales and use tax return.

Tax 11.555(6)(a)2. 2. A marketplace seller shall include all of its sales, including sales facilitated on its behalf by a marketplace provider, in total sales on its sales and use tax return. The marketplace seller may claim a deduction on its return for sales amounts that are made through the marketplace provider and for which the marketplace seller received notification under s. 77.523 (2) , Stats.

Tax 11.555(6)(b) (b) Exemption certificates. A marketplace provider is required to obtain and maintain fully completed exemption certificates from purchasers claiming an exemption from Wisconsin sales or use tax for sales facilitated on behalf of a marketplace seller. The marketplace provider is also required to obtain and maintain exemption certificates for sales made on its own behalf.

Tax 11.555(6)(c) (c) Bad debt deduction.

Tax 11.555(6)(c)1. 1. A marketplace provider is allowed to claim a bad debt deduction on a sales transaction if it collects and remits Wisconsin sales or use tax on behalf of the marketplace seller, and either the marketplace provider or marketplace seller is eligible to claim the deduction under section 166 of the Internal Revenue Code for the worthless amount of the transaction.

Tax 11.555(6)(c)2. 2. For an eligible bad debt deduction under subd. 1. , a marketplace provider shall claim the bad debt deduction on its Wisconsin sales and use tax return for the period in which the marketplace provider or marketplace seller writes off the amount as uncollectible in its books and records.

Tax 11.555(6)(c)3. 3. A marketplace seller may not claim a bad debt deduction on a sales transaction if the marketplace provider claims a bad debt deduction on that same transaction.

Tax 11.555(6)(d) (d) Small seller exception. A marketplace provider or marketplace seller with no physical presence or activities in Wisconsin other than making sales into Wisconsin may qualify for the small seller exception under s. 77.51 (13gm) , Stats. A retailer that qualifies for the small seller exception may, but is not required to, collect and remit Wisconsin sales and use tax. In determining the annual gross sales amount for purposes of the small seller exception, the following apply:

Tax 11.555(6)(d)1. 1. Gross sales includes both taxable and nontaxable sales.

Tax 11.555(6)(d)2. 2. A marketplace provider’s gross sales include sales made into Wisconsin on its own behalf and on behalf of other sellers.

Tax 11.555(6)(d)3. 3. A marketplace seller’s gross sales includes sales made into Wisconsin on its own behalf and made on its behalf by a marketplace provider.

Tax 11.555(6)(e) (e) Nonprofit occasional sales.

Tax 11.555(6)(e)1. 1. A marketplace provider is required to collect and remit Wisconsin sales or use tax on taxable sales it facilitates on behalf of a nonprofit organization. Although the nonprofit organization’s own sales may be an exempt occasional sale under s. 77.54 (7m) , Stats., the exemption does not apply or extend to sales by a marketplace provider, unless the marketplace provider is a nonprofit organization that qualifies for the occasional sales exemption.

Tax 11.555(6)(e)2. 2. A nonprofit organization does not include sales facilitated by a marketplace provider in determining if it is engaged in a trade or business for purposes of the occasional sales exemption.