Source: https://salesandincometax.com/campground-faqs/
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Wisconsin Campground Provider Sales Tax FAQ’s
May 27, 2020 | News and Service Announcements, Wisconsin Sales Tax
Q: A campground hosts an event for a 501(c)3 organization. The campground takes the payments from attendees during the event and cuts the charity a check for the proceeds after the event. Let’s assume it is a taxable event or sale. Is the campground a marketplace provider and liable for the sales tax on sales of admission and other related taxable sales because it is hosting the event and processing payments? Does it matter if the charity (marketplace seller) is an exempt organization, does the exempt status apply to the campground’s sales?
A: If the campground is hosting the event and processing the payments for the event, the campground is a marketplace provider, as defined in sec. 77.51(7i), Wis. Stats. This assumes the campground lists or advertises taxable products or services, including taxable admissions, for sale by a marketplace seller (the charitable organization), and directly or indirectly, processes the payment from the purchaser (the attendees of the event).
If the 501(c)3 organization qualifies for the nonprofit occasional sales exemption, the exemption does NOT flow through to the campground. The campground must report and remit sales tax on its taxable sales, including sales it facilitates as a marketplace provider on behalf of a marketplace seller (the charitable organization). Please note, in determining whether a nonprofit organization is engaged in a trade or business for purposes of the occasional sales exemption (sec. 77.54(7m), Wis. Stats.), the nonprofit would not count sales facilitated on its behalf by the campground (marketplace provider). Only the nonprofit’s taxable receipts are used to determine whether the nonprofit occasional sales exemption applies.
Marketplace providers and sellers provisions became effective January 1, 2020. See Wisconsin Department of Revenue’s website for more information about marketplace providers/sellers here.
Q: If a customer cancels their campsite reservation and the campground charges a cancellation fee, is that fee subject to Wisconsin sales tax?
A: Amounts charged to customers who cancel a campsite or lodging reservation are not taxable if the site or lodging is available to be furnished to another customer. If the campground holds the site or lodging available for the customer who is charged the cancellation fee, the cancellation fee is taxable.
Q: Do we need to pay tax on the purchases of prizes available for the redemption of arcade tokens or credits?
A: You may purchase prizes without tax for resale that are used exclusively for the redemption of arcade tokens, tickets, or credits. If the customer purchases the prizes using cash, the amount charged to the customer is subject to Wisconsin sales tax.
For more information see my article titled, “Amusement Devices: Tax Treatment of Related Purchases and Sales.”
A: You may purchase prizes without tax for resale that are used exclusively for the redemption of arcade tokens, tickets, or credits. If the customer purchases the prizes using cash, the amount
Q: Should I charge tax for campsite rentals that are long term (more than 30 days)?
A: Campsites or long-term rentals of sites where folks park their RV’s are taxable. The more than 30 day exemption applies only to lodging providers such as hotels/motels. A campground does not provide “lodging” because they do not have a building in which they are furnishing a room or other accommodations, s. 77.52(2)(a)1, Wis. Stats. Per 11.65(1)(g), Wis Adm. Code, the receipts from the sale or furnishing of access to campgrounds are taxable whether the fees are collected on a daily, weekly, or other basis.
However, cabins (or mobile homes) provided at your campground for rental does qualify for the more than 30 day exemption. Those rentals of 30 days or more would not be subject to sales tax. If those mobile homes/cabins are rented for less than 30 days, those sales would be subject to tax.
Q: A nonprofit organization is bringing a group of campers to our campground. Do I charge them sales tax? If not, how do I document the exempt sale?
A: Sales made to nonprofit organizations organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, are exempt from Wisconsin sales and use tax if the nonprofit organization provides its Wisconsin Certification of Exempt Status (CES) number to the campground. A similar out-of-state nonprofit organization is also exempt from tax even though it has not been issued a Wisconsin CES number.
The campground may record the Wisconsin nonprofit organization’s Wisconsin CES number on its bill of sale, or may obtain Form S-211 or S-211E, Wisconsin Sales and Use Tax Exemption Certificate, or Form S-211-SST, Streamlined Sales and Use Tax Exemption Certificate, from the nonprofit organization. The campground must obtain a fully completed exemption certificate (Form S-211, S-211E, or Form S-211-SST) from an out-of-state nonprofit organization for the sale to be exempt.
Caution: The exemption for nonprofit organizations does not apply to individual members of the organization. In order for this exemption to apply, the nonprofit organization must be identified as the purchaser on the invoice or other billing document.
Q: When I collect money in advance from seasonal campers for the upcoming season, when is the sales tax reported?
A: If campground admissions are paid in advance, the campground should report the tax when the money is received. In general, campground admissions/fees should be reported when the money is received or when the admission service is furnished (whichever comes first).
Note: If a person pays in advance for property (rather than services), the tax is reported based on when the customer receives the property. For example, if a customer pre-pays for a campsite and three bundles of firewood, the campsite fee (taxable admission) should be reported when the customer pays for the campsite. However, the sale of the firewood should not be reported until the customer receives the firewood.
Q: Are sales of ice taxable?
A: Sales of ice cubes are exempt from Wisconsin sales and use tax. Sales of ice blocks, however, are taxable. A campground may purchase the ice blocks and ice cubes that is sells to its customers, without tax, for resale. A campground’s purchases of ice blocks and ice cubes that the campground uses in cooling bottled drinks or preserving food are subject to Wisconsin sales or use tax.
Q: How do I know if a contractor should be charging me tax?
A: General Sales and Use Tax Treatment for Contractor Charges
Sales of Taxable Products and Services:
The contractor charges sales tax on its sales price from the retail sale of taxable products and services unless an exemption applies.
The term “sales price” also includes other charges made by a contractor which the contractor separately states on their invoices to its customer, such as:
Contractor’s cost of property
Cost of materials used, labor or service cost, transportation to the contractor
Taxes imposed on the contractor (with certain exceptions)
Services necessary to complete the sale (e.g., general overhead, consulting, installation, trip charge, fuel surcharge)
The contractor may purchase without tax, for resale, the tangible personal property that is physically transferred to its customer.
Contractor Providing Real Property Construction Activities:
The contractor’s sale of or service to real property is not taxable.
The contractor is the consumer of materials used in making a real property improvement and must pay sales or use tax on its purchase of these materials.
For information on distinguishing between real property and personal property activities, see Part 2 and Appendix A in Wisconsin Department of Revenue Publication 207, Sales and Use Tax Information for Contractors.
Wisconsin Department of Revenue Publication 239, Campgrounds, provides the following:
Part 4.B.1.b. – Taxable purchases of camping cabins, trailers and recreational vehicle by a campground
Part 4.C.4. – Examples of nontaxable real property improvement purchased by a campground
Q: When is a repair taxable?
A: The repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of tangible personal property is a taxable service. The campground’s purchases (including charges for materials, labor, and any services necessary to complete the sale) of such services are subject to tax.
Exception: Unless, at the time of that repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance, the campground may purchase the property being serviced exempt (sec. 77.52(2)(a)10., Wis. Stats.).
Part 4. in, Wisconsin Department of Revenue Publication 239, Campgrounds, provides information on a campground’s purchases.
Tangible personal property installed in a commercial facility (campground is a commercial facility) which primarily (more than 50%) serves a business or process function, rather than a building function, retains its character as tangible personal property regardless of the extent that it is affixed to real property.
Although services to real property are not subject to tax, there are certain types of property that are treated as tangible personal property for purposes of repair or other service to that property. Repair and other services to these items are taxable, regardless of the extent that they are attached to or fastened to real property. A complete list of these “deemed items” can be found in Part 3.A of Wisconsin Department of Revenue Publication 207, Sales and Use Tax Information for Contractors.
Q: Should I pay tax on the purchase of items used for recreation that are sold with tax (e.g., laser tag guns, wristbands for guests to use amenities)?
A: If you sell admissions to amusement, athletic, entertainment or recreational events or places, and you purchase wristbands and equipment (e.g., laser tag guns), your purchase of the wristbands and equipment are subject to Wisconsin sales or use tax. The campground is the consumer of the property (wristbands, laser tag guns) that it transfers incidentally with the selling or furnishing of its services (i.e., admission, lodging). As detailed in sec. Tax 11.67 (1), Wis. Adm. Code, the objective of the purchaser is to obtain the admission to the amusement event or recreational place. You are considered the consumer of the wristbands or laser tag guns that you transfer to your customer incidentally in providing the admission to the campground or athletic event (i.e., laser tag game) and are liable for Wisconsin sales or use tax on your purchase of the wristbands and equipment.
Q: Should I pay tax on the purchase of parts for coin operated laundry and rental golf carts?
A: The campground’s purchase of parts and repairs to (including parts, labor, and other services necessary to complete the sale) the coin operated washers and dryers are subject to tax.
The campground’s purchases of parts and services for golf carts that are used by the campground in a taxable manner (e.g., used by employees, provided to campers for no additional charge) are subject to tax.
A campground’s purchases of parts and services for golf carts which are used only for rental to campers are not subject to tax.
If the purchase of the item was subject to tax, the repairs and repair parts are subject to tax. If the item was purchased without tax, for resale, and used exclusively for rental to campers (not used in a taxable manner), the campground may purchase repair parts or repair services without tax, for resale.
Q: Should I pay tax on cleaning supplies we purchase and provide to folks providing janitorial services? Do we pay tax on the janitorial services labor?
A: A campground’s purchase of taxable products (e.g., cleaning supplies) are taxable. The tax treatment of charges for cleaning labor only follow the tax treatment of the property being cleaned.
Note: Routine and repetitive janitorial services, where there is a variety of cleaning services in a building to both tangible personal property and real property, are not taxable. See the article titled “Janitorial Services” on the Wisconsin Department of Revenue’s website.
Q: Should I pay tax on used equipment purchased off of Craig’s List or a rummage sale (e.g., pizza oven, blenders, etc.)?
A: The campground is liable for Wisconsin sales or use tax on its purchases of tangible personal property (e.g., pizza oven, blenders), unless an exemption applies.
Occasional Sales Exemption
There is an exemption which exempts the seller from the sales tax on their sale of tangible personal property or taxable services if the sales are “occasional sales” (sec. 77.51(9), Wis. Stats.). If the seller is making an exempt occasional sale, the buyer is also exempt from use tax on that purchase. The exemption also applies to business assets (other than inventory held for sale) sold by a business after that business has ceased conducting all business activities at that location (sec. 77.51(9)(am), Wis. Stats.).
Purchases from Craig’s List may be from individuals making exempt occasional sales or it can be from individuals/businesses that are registered, or are required to be registered, for a seller’s permit. Use caution in these purchases and, like all purchases, be sure to obtain documentation from the transaction regarding who the seller is, their contact information, and details of the purchase.
Q: Should I pay tax on the purchase of an in-ground fire ring?
A: The campground’s purchase of an in-ground fire rings, with or without installation, is taxable.
Q: Should I charge tax on fees for reservations related to cancellations and bookkeeping?
A: The campground’s charges for cancellation and bookkeeping fees for reservations are taxable.
Q: Should I pay tax when I buy equipment for mini golf like balls and clubs since we charge tax to guests to play?
A: The campground is the consumer of and liable for Wisconsin sales or use tax on its purchases of taxable items (e.g., golf clubs, golf balls, scorecards, pencils) that it transfers incidentally with the admission service (i.e., mini golf).
Q: Should I pay tax for online services like Wix.com where they house our web page and we pay for email domain through them?
A: Charges for web hosting and domain names are not subject to Wisconsin sales or use taxes. Electronic mail (email) services are taxable telecommunications message services under sec. Tax 11.66(4)(b)3, Wis. Adm. Code.
Additional information about the tax treatment of computer services can be found in one of the Wisconsin Department of Revenue’s Common Questions, titled “Sales and Use Tax Treatment Computer – Hardware, Software, Services“.
Q: What is taxable when purchasing installation of black top roads or purchases of materials for roads, such as sand, gravel, etc?
A: A campground’s purchase of gravel, sand, stone, and building materials without installation is the purchase of tangible personal property and is taxable (including charges for delivery).
A campground’s purchase of installed roads and walks is a nontaxable real property construction activity (including charges for materials, labor, and services necessary to complete the sale.)
Q: Should I charge tax on entrance fees for entertainment (e.g., bands, petting zoos, hypnotists, etc.)?
A: The sale of admissions to amusement, athletic, entertainment, or recreational events or places are subject to Wisconsin sales tax.
Q: Should I pay tax for a tree trimming service?
A: Taxable landscaping services include: planting, trimming, spraying, fertilizing, moving, removing, pruning, bracing, and surgery of trees, stumps, plants, shrubs, hedges, and flowers.
For more information, see Part 3.E. of Wisconsin Department of Revenue Publication 210, Sales and Use Tax Treatment of Landscaping Services.
Q: Should I pay tax on my purchases from Amazon?
A: All purchases of tangible personal property and taxable services are subject to tax, unless an exemption applies. A campground that purchases taxable products or services online from a vendor that does not collect Wisconsin sales tax must remit use tax to the Department of Revenue.
See Part 4.B.1. of Wisconsin Department of Revenue Publication 239, Campgrounds, for a list (not all-inclusive) of taxable products and services.
Q: Should I charge my customer tax on pump out fees?
A: Charges to a customer to dispose of waste in sewage holding tanks are not subject to Wisconsin sales tax.
Q: If I hire someone to build a deck on my building, is the labor subject to sales tax?
A: The campground’s purchase of decking materials without installation is taxable.
The installation of a deck that is attached to real property (i.e., a building) is a real property construction activity. Charges (including materials and labor) by the contractor for a real property construction activity are not taxable. Charges by a contractor for labor only (campground supplied the materials) to install a deck attached to real property is the sale of a service to real property and is not taxable.
The construction of a deck that is free-standing or attached to tangible personal property (e.g., camping cabin not affixed to the land or a park model) is the sale of tangible personal property and is taxable. The charges by a contractor for materials and labor to build a free-standing deck are taxable.
Q: If I have an employee build a deck on my building, do I owe sales tax on that labor?
A: Wages paid to an employee are not subject to Wisconsin sales tax. The campground’s purchases of materials that will be installed by its own employee are taxable.
Q: Should I charge tax on donuts that I sell in the snack shack?
A: The taxability of donuts depends on whether the items meet the definition of “prepared food.”
See Wisconsin Department of Revenue Publication 236, Restaurants and Bars, and Appendix I: Are You Selling “Prepared Food”? in Publication 220, Grocers, for more information about food sales such as donuts.
Q: Am I liable if someone does work and should charge me sales tax but didn’t?
A: Yes, you are liable for use tax on your purchases of taxable products and services, unless an exemption applies.
See Part 2.B., Wisconsin Department of Revenue Publication 201, Wisconsin Sales and Use Tax Information.
Q: If someone drives over an electrical pedestal (real property) and an electrician fixes it is there sales tax on the labor?
A: No, the electrician is performing a real property construction activity.
Q: If the soft serve supplier makes a repair to my ice cream machine, do I pay tax on that labor?
A: Yes, the charge (includes parts and labor) for the repair of an ice cream machine or other tangible personal property is taxable.
Q: Should I pay tax for purchases of marketing design work on websites?
A: Charges for website design services are generally not taxable. However, some aspects of the website design may be taxable if the charges for taxable items are separate and optional from the charge for website design.
See Part 6.D., Wisconsin Department of Revenue Publication 235, Advertising Companies.