Wisconsin Administrative Code › Department of Revenue › Chapter Tax 11 - Sales And Use Tax › Subchapter III - Exemptions › Section Tax 11.16 - Common or contract carriers

Current through June 24, 2024
(1) MOTOR CARRIERS.
(a)
Exemption.
Section
				77.54(5)
				(b), Stats., provides a sales and use tax
				exemption for motor trucks, truck tractors, road tractors, buses, trailers, and
				semitrailers, and accessories, attachments, parts, supplies, and materials
				therefor, sold to common or contract carriers who use such motor trucks, truck
				tractors, road tractors, buses, trailers, and semitrailers exclusively as
				common or contract carriers, including the urban mass transportation of
				passengers as defined in s.
				71.38, Stats.
(am)
Definitions.
For purposes of the exemption in s.
				77.54(5)
				(b), Stats., and this section:
1. "Common carrier" has the same meaning as
				"common motor carrier" in s.
				194.01(1),
				Stats.
2. "Contract carrier" has
				the same meaning as "contract motor carrier" in s.
				194.01(2),
				Stats.
3. "Exclusively" means that
				the motor trucks, truck tractors, road tractors, buses, trailers, and
				semitrailers are used solely as common or contract carriers to the exclusion of
				all other uses, except that the sales and use tax exemption for this tangible
				personal property will not be invalidated by an infrequent and sporadic use
				other than as a common or contract carrier.
Note:
Under department of transportation rules,
				  a licensed carrier (LC) number is required if a common or contract carrier
				  hauls goods of others for hire. The sales and use tax exemption in par. (a)
				  applies only if the common or contract carrier used the vehicle
exclusively
for hauling goods of others for hire.
(b)
Accessories
				and attachments.
Accessories, attachments, parts, and supplies for
				exempt vehicles are exempt from the sales and use tax under s.
				77.54(5)
				(b), Stats. This exemption includes the
				following items if they are assigned to and carried on vehicles used
				exclusively as common or contract carriers: dollies, pianoboards, ladders,
				walkboards, tire chains, fire extinguishers, flares, bug deflectors, engine
				block heaters, defroster fans, auxiliary heaters and cooling units and their
				fuel, radios, flag kits including flags and reflectors, cell phones, tracking
				devices, global positioning system or "GPS" units, on board recorders, and
				items designed to be used with a vehicle which protect or secure the vehicle's
				load including tape, fitted tarpaulins, tarpaulin straps, furniture pads and
				covers, load holding chains, logistic straps, and shoring beams. This exemption
				does not include corrugated boxes, containers, and related materials that are
				transferred to customers in conjunction with the selling, performing, or
				furnishing of a moving service, as provided in par. (g).
Note:
In a decision dated May 19, 1980 in the
				  case of Leicht Transfer & Storage Co., Inc. vs. Wisconsin Department of
				  Revenue the Dane County Circuit Court reversed the November 23, 1979 decision
				  of the Wisconsin Tax Appeals Commission and held that van equipment and
				  supplies that are exempt under s.
				  77.54(5)
				  (b), Stats., include furniture pads, covers,
				  packing supplies, tape, pianoboards, ladders, walkboards, straps, lining paper
				  and corrugated boxes. The Court also stated that "It must be kept in mind that
				  it is undisputed that all of the items are assigned to and carried on the
				  vans." The Court of Appeals District IV, affirmed the Circuit Court's decision.
				  Under this interpretation, the only corrugated boxes and packing materials that
				  qualify for exemption under s.
				  77.54(5)
				  (b), Stats., are those that are assigned to
				  and carried on an exempt van and that are not transferred to a
				  customer.
(c)
Repairs.
The sale or furnishing of repair, service,
				alteration, fitting, cleaning, painting, coating, towing, inspection, and
				maintenance to exempt vehicles shall be exempt.
(d)
Exceptions.
The
				exemption shall not apply to the following property used by common or contract
				carriers:
1. Automobiles as defined in s.
				340.01(4),
				Stats., except an automobile registered as a truck.
2. Self-propelled vehicles for off-highway
				use, such as road machinery, fork lifts, and other industrial trucks.
(e)
Equipment and
				supplies.
Equipment acquired by a carrier for the repair, service, or
				maintenance of its exempt vehicles is not exempt, including repair tools,
				welding torches, battery chargers, and grinding discs.
(f)
Conversion to private
				use.
If a vehicle purchased without tax is converted to private use, a
				use tax or sales tax pursuant to s.
				Tax
				11.14(2) (c) is due. The tax is
				measured by the sales price of the vehicle to the purchaser.
(g)
Packaging materials.
The
				transfer to a customer of corrugated boxes, containers, and related packing
				materials in conjunction with moving or transporting a customer's goods is
				incidental to the selling, performing, or furnishing of the moving or
				transportation service. The service provider is the consumer of the property
				and shall pay tax on its purchase of the property to be transferred.
(h)
Occasional sales.
Motor
				carriers are not required to register as retailers with the department if the
				sales price from their sales of tangible personal property, items, property,
				and goods under s.
				77.52(1) (b), (c),
				and (d), Stats., and taxable services are
				less than $2,000 within a calendar year. Persons who are exempt from
				registration under this standard shall pay sales or use tax on all purchases of
				tangible personal property, items, property, and goods under s.
				77.52(1) (b), (c),
				and (d), Stats., and taxable services not
				otherwise exempt, including items that may be resold to customers. Persons who
				exceed the standard shall register with the department and obtain a seller's
				permit. Persons who register may purchase tangible personal property, items,
				property, and goods under s.
				77.52(1) (b), (c),
				and (d), Stats., and taxable services for
				resale without paying tax by issuing to their supplier a properly completed
				exemption certificate claiming resale or they may pay the tax to their supplier
				and, if the property is resold, claim a credit for the tax paid against any
				sales tax due.
Note:
Refer to s.
				  Tax
				  11.002 for description of permit requirements, how to
				  apply for a permit, and the 15-day time period within which the department is
				  required to act on permit applications.
Examples:
1) A truck
				purchased to transport pads and packing materials to and from moving jobs
				qualifies for the exemption in par. (a).
2) Cutting down trees, cutting them into
				logs, and hauling them to a mill as a private business operation voids the
				exemption in par. (a), even though the trucker also hauls logs as a common or
				contract carrier for other persons at the same time.
3) Vehicles of a milk or cheese factory that
				engage in hauling milk from farms to its plant for processing do not qualify
				for the exemption under par. (a).
4) Towing of vehicles to the repair facility of a garage-wrecker
				operator is part of a private repair business that is not exempt under par.
				(a).