Sales And Use Tax Information For Motor Vehicle Sales, Leases, And Repairs - State Of Wisconsin Page 29
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49Sales and Use Tax Information for Motor Vehicle Sales, Leases, and Repairs
•
services are exempt from sales and use tax, such per-
Rentals to organizations under sec. 77.54(9a),
son is required to keep a record of the name and
Wis. Stats., including a Wisconsin state
address of the person to whom the exempt sale was
agency, county, city, village, town, public
made, the date of sale, the article sold, the amount of
school, or school district and nonprofit or-
exemption, the reason that the sale was exempt from
ganizations that hold a Certificate of Exempt
tax, and a signature of the purchaser. The department
Status (CES) issued by the Wisconsin De-
has preprinted exemption certificates available (e.g.,
partment of Revenue
Form S-205, Form S-207). However other documents
•
such as purchase orders, sales documents, etc., may
Rentals by any public or private elementary
be used in lieu of the department prepared forms,
or secondary school exempt from Wisconsin
provided they contain the required information dis-
income or franchise taxes, including school
cussed above.
districts
The reason for keeping such records is that the sales
3. Returns
and use tax law provides that all gross receipts are
The limousine fee is reported on the Wisconsin
taxable until the contrary is established. The seller has
Rental Vehicle Fee Return (Form RV-012). Note:
the burden of proving that a sale of tangible personal
Do not report the limousine fee on a Wisconsin
property or taxable services is exempt, unless the
seller takes in good faith a certificate (or other infor-
sales and use tax return, Form ST-12.
mation as described in 3. and 4. below) in an
approved form from the purchaser which indicates
X. RECORD KEEPING
that the property or service being purchased is for re-
sale or is otherwise exempt.
A. General
Four common reasons that sales of tangible personal
Every person required to have a seller’s permit must
property or taxable services may be exempt are:
keep adequate records of business transactions to en-
able that person, as well as the Department of
1. The customer furnishes the seller a resale certifi-
Revenue, to determine the correct amount of tax for
cate which the seller accepts in good faith. The
which the person is liable. The law requires that all
resale certificate is given to the seller because the
persons must report their gross receipts by the accrual
customer declares that he or she is going to resell
accounting method, unless the Department of Reve-
the item.
nue determines an undue hardship would result. In
such situations, the cash basis is permitted.
2. The use to be made of the item purchased (for ex-
ample, the item is going to be used exclusively in
Each permittee is required to keep a complete and ac-
common or contract carriage and is, therefore,
curate record of beginning and ending inventories,
exempt). The seller should obtain a completed
purchases, sales, cancelled checks, receipts, invoices,
exemption certificate from the customer.
bills of lading, and all other pertinent documents and
books of accounting pertaining to the business. Re-
3. The nature of the organization the customer rep-
tailers engaged in business in a county which has
resents (such as churches, schools, Wisconsin
adopted the county tax or a county that has the sta-
municipalities, federal government). Sales to the
dium tax shall keep records showing the county and
federal government and Wisconsin government,
stadium sales and use taxes due in that county or dis-
municipalities, and public schools may be sup-
trict. Any person who fails or refuses to keep
ported by a) a government exemption certificate
adequate records may be subject to penalties.
(Form S-209), or b) a copy of the purchase order,
which should be retained as part of the seller’s re-
B. Exemption Certificates and Exemption Claims
cords, or by recording the governmental unit’s
Certificate of Exempt Status on the invoice.
If a person (such as a motor vehicle dealer, lessor, ga-
rage, service station, etc.) claims that part or all of his
or her sales of tangible personal property or taxable
27
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