Wisconsin: Sales Tax Handbook
What is included in Wisconsin's sales tax basis?
Many times, an otherwise-taxable transaction will include bundled fees like excise taxes, installation fees, or finance charges or be modified with coupons, installment payment plans, etc. One question that will often arise is whether or not a certain payment or fee is included in a transaction's taxable basis.
The taxable basis refers to the portion of an entire transaction that is subject to Wisconsin's sales tax. This page answers common questions about which common fees are included in the sales tax basis in Wisconsin, and which are excluded.
- Are coupons and discounts included in the sales tax basis?
- Are excise taxes included in the included in the sales tax basis?
- How are installment-based sales taxed?
- Are installation fees included in the sales tax basis?
- Are finance charges included in the sales tax basis?
- Can I get a refund on sales taxes paid on returned or repossessed items?
- Can I get a refund on sales taxes paid on bad debts?
Inclusion in Sales Tax Basis
Are coupons and cash discounts included in the Wisconsin sales tax basis?
What is not included are discounts and retailers coupons, while manufacturers coupons are included.Top
Are excise taxes included in the Wisconsin sales tax basis?
Excise taxes are separate levies added by many states to the price of commodity items such as alcohol, gasoline, etc. What is not included are separately stated taxes which were legally imposed directly on the purchaser and separately stated taxes imposed on the seller, provided the seller may, but is not required to, pass on to and collect the tax from the user or consumer. What is included are the Wisconsin fermented malt beverage and intoxicating liquors taxes; federal stamp taxes and manufacturer's or importer's excise tax not imposed directly on the purchaser; federal, county, or municipal fuel taxes included in the price of alternate fuels and general aviation fuel subject to the sales tax; Wisconsin cigarette and tobacco products taxes; foreign export gallonage taxes on fuels; federal gas guzzler tax; federal excise tax on heavy trucks and trailers; federal medical device excise tax; federal universal service fund fee; dry cleaning and dry cleaning products fees; Wisconsin Public Service Commission fees; certain telephone and telecommunications surcharges; state- issued video service franchise fee; petroleum inspection fee; and Wisconsin motor fuel taxes.Top
How are installment-based sales taxed?
Many businesses offer customers payment plans that allow them to pay the full price for a product over time in installments, often leading to confusion about when and how much sales tax is collected and remitted to Wisconsin. The state has implemented the following provisions regarding installment sales:
Payments reported when purchaser takes possession of the property
Are installation charges included in the Wisconsin sales tax basis?
While the taxation of tangible goods is relatively straightforward, some states consider the installation costs associated with a tangible object (like carpeting, a home or vehicle fixture, etc) to be taxable. Wisconsin policy states:
Installation charges are generally excluded from the taxable price of a tangible product.
Are finance charges included in the Wisconsin sales tax basis?
Many businesses offer customers financing on higher-value products, and include financing charges in the overall cost of the item. These finance charges may also be subject to sales taxes. Wisconsin policy states:
Finance charges are generally included in the taxable price of a tangible product.
Note: Must be separately stated
How can I get reimbursed for sales taxes paid on items that are returned or repossessed?
If a taxable good for which sales tax has been collected is returned or reposessed by the merchant, the state may allow the amount of sales tax collected to be either deducted from the merchant's current sales tax balance or refunded to the merchant by the state. Wisconsin's policies state that returns and repossessions are:
Repossession of property or other taxable items by the seller from the purchaser is not taxable when the only consideration is cancellation of the purchaser's obligation to pay the remaining balance of the purchase price
Note: A deduction for repossessed property is not allowed unless the entire consideration paid by the purchaser is refunded, or a deduction for worthless accounts is allowable
How can I get reimbursed for sales taxes paid on bad debts?
If a merchant offers goods to a consumer on credit and the payment for those goods becomes delinquent, the merchant may be eligible to be reimbursed any sales tax they paid to the state on the consumer's behalf when the transaction was made. The method of reimbursement varies state by state.
Tax paid on bad debts can generally be recovered by the merchant as a deduction.
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