Wisconsin Administrative Code › Department of Revenue › Chapter Tax 11 - Sales And Use Tax › Subchapter IV - Sales Price › Section Tax 11.32 - "Sales price" and "purchase price

Current through June 24, 2024
(1) GENERAL. The
				amount to which the sales and use tax rate is applied is the "sales price" for
				sales tax and the "purchase price" for use tax. Both "sales price" and
				"purchase price" mean the total amount of the consideration for the sale,
				license, lease or rental from retail sales of tangible personal property or
				items, property, or goods under s.
				77.52(1) (b), (c), or
				(d), Stats., or taxable services, valued in
				money, whether received in money or otherwise.
(2) DELIVERY, HANDLING AND SERVICE CHARGES. A
				retailer's charges for customer alterations, handling services, small orders,
				returned merchandise, restocking, split shipments, shipping, postage, crating,
				packing, fuel surcharges, and similar charges for services related to retail
				sales, are included in the sales price derived from the sale of taxable
				tangible personal property, items, property, or goods under s.
				77.52(1) (b), (c), or
				(d), Stats., or taxable services. Cancelled
				order charges are not taxable if there is no transfer of merchandise to a
				customer. For orders that include property and items that are subject to tax
				and property and items that are not subject to tax, the amount of the delivery
				charge that the seller allocates to the property and items subject to tax shall
				be based either upon the total sales price of property and items that are
				subject to tax as compared to the total sales price of all of the property and
				items included in the shipment or on the weight of the property and items
				subject to tax compared to the total weight of all of the property and items
				included in the shipment.
(3) CASH
				DISCOUNTS OR PRICE REBATES.
(a) Cash
				discounts, term discounts and coupons that are not reimbursed by a third party
				and which are allowed by a retailer directly to customers reduce the sales
				price subject to the tax. The customer must receive the discount for the
				retailer to exclude it from the sales price.
Example:
A payment made to a nonprofit
				  organization based on a percentage of the purchases made by the group's members
				  is not a cash discount for sales and use tax purposes.
(b) A retail cooperative's rebates to
				members, which are made after the net profit is determined at the end of a
				year, are patronage dividends rather than cash discounts, and are not
				deductible from the cooperative's sales price.
(c) A manufacturer's cash rebate to a person
				who purchases tangible personal property, items, property, or goods under s.
				77.52(1) (b), (c), or
				(d), Stats., or taxable services from a
				retailer is not a reduction in the retailer's sales price or purchase price for
				the item, regardless of whether the rebate is paid in cash or is used to reduce
				the selling price.
Example:
An automobile is sold for a sticker
				  price of $18,000. The manufacturer offers a $1,500 rebate with the purchase.
				  Regardless of whether the customer pays the retailer $18,000 and later receives
				  $1,500 from the manufacturer or the customer pays the retailer $16,500 ($18,000
				  sticker price less $1,500 rebate), the retailer shall report a taxable sales
				  price of $18,000 from the sale.
(d) "Sales price" and "purchase price"
				include consideration paid by third parties if all of the following apply:
1. The seller actually receives consideration
				from a third party other than the purchaser and the consideration is directly
				related to a price reduction or discount on the sale.
2. The seller is obligated to pass the price
				reduction or discount to the purchaser.
3. The amount of the consideration that is
				attributable to the sale is a fixed amount and the seller is able to determine
				that amount at the time of the sale to the purchaser.
4. One of the following applies:
a. The purchaser presents a coupon,
				certificate or other documentation to the seller to claim the price reduction
				or discount, if the coupon, certificate or other documentation is authorized,
				distributed or granted by a third party with the understanding that the third
				party will reimburse the seller for the amount of the price reduction or
				discount.
b. The purchaser
				identifies himself or herself to the seller as a member of a group or
				organization that may claim the price reduction or discount.
c. The seller provides an invoice to the
				purchaser, or the purchaser presents a coupon, certificate or other
				documentation to the seller that identifies the price reduction or discount as
				a third party price reduction or
				discount.