CR_14-006 Revises Chapter Tax 11, relating to sales and use tax provisions.

(b) A business that desires registration for the calendar year in which it begins doing business in this state shall register with the department during the following calendar year.

Example: Business A begins doing business in Wisconsin on March 8, 2014. Business A must register with the department for calendar year 2014 between January 1, 2015, and December 31, 2015.

SECTION 10. Tax 2.99 (1) (Note) is created to read:

Tax 2.99 (1) (Note) Note: Sections 71.07 (3n) , 71.28 (3n) , and 71.47 (3n) , Stats., were revised by 2013 Wis. Act 20 to provide the credit under this section may not be claimed for taxable years beginning on or after January 1, 2014.

SECTION 11. Tax 3.01 (4) (c) 8. (Note) and (e) 4.b. are amended to read:

Tax 3.01 (4) (c) 8. (Note) Financial Accounting Standards Board Interpretation number 48 is available on the Financial Accounting Standards Board's web site at http://www.fasb.org/pdf/fin%2048.pdf www.fasb.org .

(e) 4.b. The Wisconsin economic development surcharge, which is imposed on partnerships and tax-option (S) corporations pursuant to s. 77.93 (1) , (3), and (5) , Stats.

SECTION 12. Tax 3.05 (6) is amended to read:

Tax 3.05 (6) Professional employer organizations . The provisions of s. 461.04 202.24 (4) (b), Stats., apply to this section and ss. 71.05 (6) (b) 47m. , 71.26 (1) (h) , and 71.45 (1) (c) , Stats.

SECTION 13. Tax 3.095 (2) (e) and (4) (a) 21. are created to read:

Tax 3.095 (2) (e) "WHEFA" means "Wisconsin Health and Educational Facilities Authority."

(4) (a) 21. WHEFA bonds or notes, if the bonds or notes are issued for the benefit of a person who is eligible to receive the proceeds of bonds or notes from another entity for the same purpose for which the bonds or notes are issued and the interest income received from the other bonds or notes is exempt from taxation under subch. I of ch. 71 , Stats.

SECTION 14. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.) , Stats.

ADMINISTRATIVE RULES FISCAL ESTIMATE AND ECONOMIC IMPACT ANALYSIS
Type of Estimate and Analysis
X Original ⍽ Updated ⍽ Corrected
Administrative Rule Chapter, Title and Number
Chapters Tax 2 and 3 — Income taxation, returns, records, gross income, deductions, exclusions, and exemptions
Subject
Income and franchise tax provisions
Fund Sources Affected			Chapter 20 , Stats. Appropriations Affected
⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
Fiscal Effect of Implementing the Rule
X No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget ⍽ Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes X No
Policy Problem Addressed by the Rule
The rule does not create or revise policy, other than to reflect current law and department policy.
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
As indicated in the attached fiscal estimate, the proposed rule is intended to reflect and clarify existing law and does not impose any additional fiscal impact. No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals. If the rule is not implemented, Chapters Tax 2 and 3 will be incomplete in that they will not reflect current law or department policy.
Long Range Implications of Implementing the Rule
No long-range implications are anticipated.
Compare With Approaches Being Used by Federal Government
N/A
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
N/A

FISCAL ESTIMATE FORM				2013 Session
X ORIGINAL ⍽ UPDATED	LRB #
	INTRODUCTION #
⍽ CORRECTED ⍽ SUPPLEMENTAL	Admin. Rule #		to be assigned
Subject
Proposed order of the Department of Revenue relating to income and franchise tax provisions
Fiscal Effect
State:   X No State Fiscal Effect   Check columns below only if bill makes a direct appropriation or affects a sum sufficient appropriation   ⍽ Increase Existing Appropriation   ⍽ Increase Existing Revenues   ⍽ Decrease Existing Appropriation   ⍽ Decrease Existing Revenues   ⍽ Create New Appropriation			⍽ I ncrease Costs — May be Possible to Absorb Within Agency's Budget ⍽ Yes ⍽ No   ⍽ Decrease Costs
Local: X No Local Government Costs
1.   ⍽ Increase Costs	3.   ⍽ Increase Revenues		5.   Types of Local Governmental Units Affected:
⍽ Permissive Mandatory	⍽ Permissive Mandatory		⍽ Towns     ⍽ Villages   ⍽ Cities
2.   ⍽ Decrease Costs	4.   ⍽ Decrease Revenues		⍽ Counties ⍽ Others	_______
⍽ Permissive Mandatory	⍽ Permissive Mandatory		⍽ School Districts ⍽ WTCS Districts
Fund Sources Affected ⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S		Affected Ch. 20 Appropriations

Assumptions Used in Arriving at Fiscal Estimate:

The proposed rule makes the following changes:

• Revises s . Tax 2. 32 to reflect that, for taxable years beginning after December 31, 2012, the economic development surcharge does not apply to individuals, estates, trusts, partnerships, and limited liability companies treated as partnerships.

• Revises s . Tax 2. 88 to reflect, effective July 2, 2013, the reduction in the rate of refund interest from 9% to 3%.

• Revises s . Tax 2.9 57 to reflect that the relocated business credit and deduction may not be claimed by a business that relocates to Wisconsin in a taxable year beginning after December 31, 2013.

• Repeals s . Tax 2.9 85 to reflect that the electronic medical records credit may not be claimed for taxable years beginning after December 31, 2013.

• Creates s . Tax 2.9 86 to administer the registration of "qualified Wisconsin businesses" for purposes of the capital gains exclusion in s . 71.05 (2 5), Stats., and the income tax deferral in s . 71.05 (2 6), Stats.

• Revises s . Tax 2. 99 to reflect that the dairy and livestock farm investment credit may not be claimed for taxable years beginning after December 31, 2013.

• Revises s . Tax 3.0 95 to reflect that, effective for taxable years beginning after December 31, 2012, certain interest from bonds issued by the Wisconsin Health and Educational Facilities Authority is exempt.

These changes reflect current law enacted during the 2013-2014 Legislative session. The rules are intended to reflect and clarify existing law and do not impose any additional fiscal impact.

Notice of Hearing

Revenue

CR 14-006

NOTICE IS HEREBY GIVEN That, pursuant to ss. 77.65 (3) and 227.11 (2) (a) , Stats., the Department of Revenue will hold a public hearing to consider permanent rules revising Chapter Tax 11 , relating to sales and use tax provisions.

Hearing Information

Date:   Tuesday, February 11, 2014
Time:   2:00 p.m.
Location:   Events Room
  State Revenue Building
  2135 Rimrock Road
  Madison, Wisconsin 53713

Handicap access is available at the hearing location.

Appearances at the Hearing and Submittal of Written Comments

Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below or to adminrules.wisconsin.gov no later than February 11, 2014 , and will be given the same consideration as testimony presented at the hearing.

Dale Kleven

Department of Revenue

Mail Stop 6-40

2135 Rimrock Road

P.O. Box 8933

Madison, WI 53708-8933

Telephone: [phone]

E-mail: [e-mail]

Analysis by the Department of Revenue

Statutes interpreted

Sections 77.51 (2d) , (10f) , (11m) , (12m) , and (15b) , 77.52 (2) (a) 6. and 11. , 77.522 (4) (a) 9. , and 77.54 (9) (a) , (57) , (57d) , (59) , (60) , and (61) , Stats.

Statutory authority

Sections 77.65 (3) and 227.11 (2) (a) , Stats.

Explanation of agency authority

Section 77.65 (3) , Stats., provides "[t]he department may promulgate rules to administer this section … "

Section 227.11 (2) (a) , Stats., provides "[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute..."

Related statute or rule

There are no other applicable statutes or rules.

Plain language analysis

The rule (1) reflects law changes in 2013 Wisconsin Act 20 , (2) corrects two errors in current rule provisions, and (3) deletes an obsolete reference.

a.   Custom farming services. Reflects the creation of s. 77.51 (2d) , Stats., to provide that "custom farming services" includes services performed by veterinarians to farm livestock or work stock used exclusively in the business of farming. This requires updates to the provisions of ss. Tax 11.12 and 11.61 .

b.   "Drugs." In s. Tax 11.20 (3) (a) 2. , reflects the amendment to s. 77.54 (57) (b) 4. , Stats., to replace "medicines" with "drugs" so the rule correctly reflects the updated exemption.

c.   Health Insurance Risk-Sharing Plan Authority. Reflects the amendment to s. 77.54 (9) (a) , Stats. Due to the dissolution of the Health Insurance Risk-Sharing Plan and Authority, the exemption for sales made to the authority is being rescinded. This requires updates to ss. Tax 11.04 (1) , 11.05 (4) (a) , and 11.49 (2) (b) .

d.   Lump sum contracts. Reflects the creation of the exemption in s. 77.54 (60) , Stats. This provision exempts certain property sold by a contractor as a part of a lump sum contract and deems the contractor the consumer of such property, with exception. Amendments are needed to s. Tax 11.68 (7) (b) and the examples following it.

e.   "Place of primary use." In s. Tax 11.66 (1) (u) , reflects the amendments to s. 77.522 (4) (a) 9. , Stats., so the definition of "place of primary use" in the rule is the same as current law. Removes s. Tax 11.66 (u) 1. and 2. as these are included in the amended definition.

f.   "Prepaid wireless calling service." In s. Tax 11.66 (1) (x) , reflects the amendments to s. 77.51 (10f) , Stats., so the definition of "prepaid wireless calling service" in the rule is the same as current law.

g.   Printing exemptions. Reflects the creation of s. 77.54 (61) , Stats. This requires updates to the provisions of s. Tax 11.56 .

h.   Property transferred incidentally with a taxable service. Amends the first note at the end of s. Tax 11.48 and the first note at the end of s. Tax 11.67 to reference s. 77.52 (21) , Stats.

i.   "Prosthetic device." In ss. Tax 11.08 (4) (a) and 11.45 (3) (a) , reflects the amendments to s. 77.51 (11m) , Stats., so the definition of "prosthetic device" in the rule is the same as current law.

j.   Qualified research and animal raising. Reflects the repeal of s. 77.54 (57) (b) 1. and 2. , Stats., the renumbering of s. 77.54 (57) (a) 1f. , Stats., to s. 77.51 (1c) , Stats., the renumbering of s. 77.54 (57) (a) 1m. , Stats., to s. 77.51 (1d) , Stats., the renumbering of s. 77.54 (57) (a) 4. , Stats., to s. 77.51 (10rn) , Stats., the amending of s. 77.54 (57) (a) 5. and (b) 4. , Stats., and the creation of s. 77.54 (57d) , Stats. This requires updates to the provisions of s. Tax 11.20 .

k.   Self-service laundry machines. Reflects the amendment to s. 77.52 (2) (a) 6. , Stats. Receipts from self-service laundry machines that are operated by tokens and magnetic cards are no longer subject to sales and use tax. This requires an update to s. Tax 11.52 (5) (a) .

l.   Services resulting in advertising and promotional direct mail. Reflects the amendment to s. 77.52 (2) (a) 11. , Stats. The sale of advertising and promotional direct mail became exempt from sales and use tax effective July 1, 2013, pursuant to 2011 Wis. Act 32 . The amendment of s. 77.52 (2) (a) 11. , Stats., provides that the services of producing, fabricating, processing, printing, or imprinting that result in advertising and promotional direct mail are also not taxable. This requires updates to ss. Tax 11.19 (2) (a) , 11.56 (7) (bm) , and 11.70 (2) (e) .

m. "Sales price" and "purchase price."

• In s. Tax 11.26 (3) , reflects the amendments to s. 77.51 (12m) (a) and (15b) (a) , Stats., along with the creation of s. 77.51 (12m) (b) 3m. and (15b) (b) 3m. , Stats., to exclude from "sales price" and "purchase price" taxes imposed on the seller that are separately stated that the seller may, but is not required to, pass on and collect from the user or consumer.

• Includes "fees and charges" as an addition to taxes in several parts of the rule to make it clear that taxes, fees and charges are covered under this rule.

• Amends s. Tax 11.26 (2) to include "regardless of whether they are separately stated on the invoice, bill of sale, or other similar document given by the seller to the purchaser," for taxes, fees and charges included in sales price and the purchase price.

• Amends s. Tax 11.26 (2) (c ) to include "and ammunition" after firearms to the list of federal excise taxes.

• Amends the list of taxes, fees, and charges included and excluded from "sales price" and "purchase price" contained s. Tax 11.26 (2 ) and (3 )

n.   Correct error. Corrects an error in Example 1 under s. Tax 11.33 (4) (f) .

o.   Correct error. Amends s. Tax 11.39 (1) (b) , to correct a typographical error. This provision quotes the law and is needed for accuracy.

p.   Delete obsolete reference. Amends the note following s. Tax 11.11 (2m) (b) to delete a reference to s. Tax 12.40 .

Summary of, and comparison with, existing or proposed federal regulation

There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.

Comparison with rules in adjacent states

The department is not aware of a similar rule in an adjacent state.

Summary of factual data and analytical methodologies

2013 Wisconsin Act 20 made numerous changes to Wisconsin's sales and use tax laws. The department has created this proposed rule order to reflect these statutory changes. No other data was used in the preparation of this proposed rule order or this analysis.

Analysis and supporting documents used to determine effect on small business

This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.

Anticipated Costs Incurred by Private Sector

This proposed rule does not have a fiscal effect on the private sector.

Effect on Small Business

This proposed rule does not affect small business.

Agency Contact Person

Please contact Dale Kleven at [phone] or [e-mail] , if you have any questions regarding this proposed rule.

Text of Rule

SECTION 1. Tax 11.04 (1) is amended to read:

Tax 11.04 (1) Definition . In this rule, "exempt entity" means a person qualifying for an exemption under s. 77.54 (9a) or 77.55 (1) , Stats. Section 77.54 (9a) , Stats., provides an exemption for sales to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s. 66.0927 , Stats.; a sewerage commission organized under s. 281.43 (4) , Stats., or a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21 to 200.65 , Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s. 66.0823 , Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s. 613.80 (2) , Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch. II of ch. 229 , Stats.; a local cultural arts district under subch. V of ch. 229 , Stats.; a cemetery company or corporation described under section 501 (c) 13 of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation. Section 77.55 (1) , Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any unincorporated [incorporated] agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States.

SECTION 2. Tax 11.05 (4) (a) is amended to read:

Tax 11.05 (4) (a) Section 77.54 (9a) , Stats., exempts sales to and the storage, use or other consumption of tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., and services by Wisconsin or by any agency of Wisconsin, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s. 66.0927 , Stats.; a sewerage commission organized under s. 281.43 (4) , Stats., or a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21 to 200.65 , Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s. 66.0823 , Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s. 613.80 (2) , Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch. II of ch. 229 , Stats.; a local cultural arts district under subch. V of ch. 229 , Stats.; and a cemetery company or corporation described under section 501 (c) (13) of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation.

SECTION 3. Tax 11.08 (4) (a) and (6) (Note 2) are amended to read:

Tax 11.08 (4) (a) "Prosthetic device" is defined in s. 77.51 (11m) , Stats., to mean a replacement, corrective, or supportive device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.

(6) (Note 2) The interpretations in s. Tax 11.08 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to 1983 Wis. Act 27 ; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to 1985 Wis. Act 29 ; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar levels became exempt March 1, 1989, pursuant to 1987 Wis. Act 399 ; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to 1989 Wis. Act 31 ; (e) The exemption for adaptive equipment for a handicapped person's vehicle became exempt effective June 1, 1990, pursuant to 1989 Wis. Act 238 , renumbered by 1989 Wis. Act 359 ; (f) The exemption for parts and accessories became effective August 15, 1991, pursuant to 1991 Wis. Act 39 ; (g) The exemptions provided in s. 77.54 (14s) and (22), Stats., were repealed effective October 1, 2009, and replaced with the exemptions provided under s. 77.54 (22b), Stats., pursuant to 2009 Wis. Act 2 ; and (h) The exemption in s. 77.54 (28) , Stats., was amended to remove the exemption for apparatus and equipment for the injection of insulin or the treatment of diabetes. These items will still qualify for exemption under s. 77.54 (22b) , Stats., if they are for home use, pursuant to 2009 Wis. Act 2 ; and (i) The clarification that a "prosthetic device" must be a replacement, corrective, or supportive device became effective July 2, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 4. Tax 11.11 (2m) (b) (Note) is amended to read:

Tax 11.11 (2m) (b) (Note) Refer to s. Tax 12.40 for information related to the property tax exemption for industrial waste treatment facilities. For more information regarding the property tax exemption for industrial waste treatment facilities of manufacturers write or call the district office of the Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessments. To locate the district office, write or call Wisconsin Department of Revenue, Bureau of Manufacturing and Telco Assessment, PO Box 8971, Madison WI 53708-8971; telephone [phone]. The web site is www.revenue.wi.gov/contact/slfbmta.html . To ascertain whether a non-manufacturing property would be exempt under s. 70.11(21) , Stats., owners may refer to the Wisconsin Property Assessment Manual or contact the local property tax assessor.

SECTION 5. Tax 11.12 (2) (b) and (7) (d) (Note 1) and (Note 2) are amended to read:

Tax 11.12 (2) (b) "Custom farming services" means the performance of an activity, defined as farming in this section, for a farmer for a fee. The fee may include a cash payment, a share of the harvest or other valuable consideration. "Custom farming services" also includes services performed by a veterinarian to animals that are farm livestock or farm work stock used exclusively in the business of farming.

(7) (d) (Note 1) Section Tax 11.12 interprets ss. 77.51 (2d) , 77.52 (1) and (2) (a) 10. , and 77.54 (3) , (3m) , (27) , (30) , and (33) , Stats.

(Note 2) The interpretations in s. Tax 11.12 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Semen became exempt effective July 22, 1971, pursuant to Chapter 64, Laws of 1971 ; (b) Baling wire and twine became exempt effective December 24, 1975, pursuant to Chapter 146, Laws of 1975 ; (c) The exemption for electricity for residential use and use in farming and for fuel oil, propane, coal, steam or wood for residential use became effective July 1, 1979, pursuant to Chapter 1, Laws of 1979 ; (d) The definition of "feed lot" became effective December 1, 1981; (e) Farm livestock medicine, milk house supplies and animal bedding became exempt effective July 1, 1986, pursuant to 1985 Wis. Act 29 ; (f) The definition of "exclusively used" became effective October 1, 1989, pursuant to 1989 Wis. Act 31 ; (g) The farm machinery exemption was revised effective October 1, 1989, pursuant to 1989 Wis. Act 31 ; (h) The exemption for farm fuel for items other than machines became effective October 1, 1991, pursuant to 1991 Wis. Act 39 ; (i) The exemption for electricity sold for use in farming was expanded to include sales of electricity during the entire year, effective for sales on or after May 1, 2000, pursuant to 1999 Wis. Act 9 ; (j) The expansion of the exemption for tangible personal property consumed in farming and the addition of "silviculture" to the definition of farming became effective July 1, 2007, pursuant to 2005 Wis. Act 366 ; and (k) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (L) The clarification that "custom farming services" includes services performed by veterinarians to farm livestock or work stock used exclusively in the business of farming became effective July 2, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 6. Tax 11.19 (2) (a) is renumbered Tax 11.19 (2) (a) (intro.) and amended to read:

Tax 11.19 (2) (a) (intro.) Section 77.52 (2) (a) 11. , Stats., imposes the sales and use tax on certain services. However, an exemption is provided for the printing or imprinting of tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., furnished by customers, that results in printed materials, catalogs, or envelopes that are exempt under s. 77.54 (25) or (25m), Stats. any of the following:

SECTION 7. Tax 11.19 (2) (a) 1. to 3. are created to read:

Tax 11.19 (2) (a) 1. Printed materials that are exempt under s. 77.54 (25) , Stats.

2. Catalogs or their mailing envelopes that are exempt under s. 77.54 (25m) , Stats.

3. Advertising and promotional direct mailing that is exempt under s. 77.54 (59) , Stats.

SECTION 8. Tax 11.19 (6) (Note 1) and (Note 2) are amended to read:

Tax 11.19 (6) (Note 1) Section Tax 11.19 interprets ss. 77.51 (1fr) , (8) , and (13h) , 77.52 (1) , and (2) (a) 11., 77.54 (2m), (9a), (15), (25), (25m), and (43), and (59), and 77.55 (1), Stats.

(Note 2) The interpretations in s. Tax 11.19 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for printing or imprinting of tangible personal property furnished by customers and used out-of-state in sub. (2) (a) became effective March 1, 1970; (b) The exemption for advertising materials used out-of-state in sub. (4) (a) became effective May 21, 1972; (c) The second class mail standard described in sub. (3) became effective August 1, 1974; (d) The exemption for sales of shoppers guides became effective July 1, 1978; (e) The exemption for ingredients and components of shoppers guides, newspapers and periodicals described in sub. (2) (d) became effective July 2, 1983; (f) The definition of newspaper in sub. (3) (a) and the limitation of the periodical exemption to "periodicals sold by subscription" became effective July 2, 1983; (g) The exemption for controlled circulation publication reflected in subs. (2) (b) and (3) (b) became effective September 1, 1983, pursuant to 1985 Wis. Act 149 ; (h) The provision for foreign publishers described in sub. (2) (e) became effective January 1, 1980 for publishers of books or periodicals or both other than catalogs and January 1, 1990, for all other foreign publishers pursuant to 1989 Wis. Act 336 ; (i) The definition of storage and use for purposes of imposing use tax does not include storing or using raw materials becoming printed materials to be shipped outside Wisconsin effective October 1, 1993, pursuant to 1993 Wis. Act 16 ; (j) The sales and use tax exemption for raw materials becoming printed materials transported and used solely outside Wisconsin became effective December 1, 1997, pursuant to 1997 Wis. Act 27 ; (k) The exemption for periodicals sold by subscription by educational associations and corporations which are exempt under s. 77.54 (9a) (f) , Stats., became effective December 1, 1997 pursuant to 1997 Wis. Act 27 ; (L) The exemption for catalogs became effective April 1, 2009 pursuant to 2007 Wis. Act 20 ; (m) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (n) The definition of "direct mail" became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (o) The definition of "advertising and promotional direct mail" became effective May 27, 2010, pursuant to 2009 Wis. Act 330 ; and (p) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to 2011 Wis. Act 32 ; and (q) Services resulting in advertising and promotional direct mail were excluded from taxable services effective July 1, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 9. Tax 11.20 (1) (cg) and (cr) are created to read:

Tax 11.20 (1) (cg) "Building" has the meaning given in s. 70.111 (10) (a) 1. , Stats.

(cr) "Combined group" has the meaning given in s. 71.255 (1) (a) , Stats.

SECTION 10. Tax 11.20 (1) (h) is amended to read:

Tax 11.20 (1) (h) "Qualified research" means qualified research as defined under section 41 (d) (1) of the Internal Revenue Code , except that it includes qualified research that is funded by a member of a combined group for another member of a combined group .

SECTION 11. Tax 11.20 (2) (a) is repealed and recreated to read:

Tax 11.20 (2) (a) The sales price from the sale of and the storage, use, or other consumption of machinery and equipment, including attachments, parts, and accessories, and other tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., that are sold to any of the following and that are consumed or destroyed or lose their identities while being used exclusively and directly in qualified research is exempt:

1. A person engaged in manufacturing in this state at a building assessed under s. 70.995 , Stats.

2. A person engaged primarily in biotechnology in this state.

3. A combined group member who is conducting qualified research for another combined group member and that other combined group member is a person described under subd. 1. or 2.

SECTION 12. Tax 11.20 (2) (b), (Example 2), (Example 3), (c), (d) (Example 1) to (Example 5), and (e) (L) (Example) and (3) (a) 2. and (b) are amended to read:

Tax 11.20 (2) (b) For purposes of determining whether a person is engaged primarily in manufacturing or biotechnology in this state under par. (a), only activities in Wisconsin are considered. When a person conducts activities in Wisconsin in addition to manufacturing or biotechnology, the person must allocate its activities between its manufacturing and biotechnology activities and its other activities using a reasonable and consistent method. If a person's manufacturing and biotechnology activities in Wisconsin are more than 50% of its total activities in Wisconsin, the person is engaged primarily in manufacturing or biotechnology in this state.

(Example 2) Company B performs research and development services at locations outside of Wisconsin that constitute biotechnology . Company B also manufactures tangible personal property at a location building in Wisconsin , assessed under s. 70.995 , Stats . The manufacturing activity does not constitute biotechnology. This is Company B's only activity in Wisconsin. The products manufactured in Wisconsin are used by Company B in performing its research and development services at locations outside of Wisconsin. Company B is not engaged primarily in manufacturing biotechnology in Wisconsin since but is engaged in manufacturing is its only activity in Wisconsin at a building assessed under s. 70.955 , Stats .

(Example 3) Company X manufactures machinery at a plant outside of Wisconsin. Company X operates a facility in Wisconsin that is devoted solely to research and development relating to the products Company X manufactures. Although Company X's activities in Wisconsin are research and development activities that constitute qualified research, its activities in Wisconsin are not biotechnology. The research and development activities are Company X's only activities in Wisconsin. Therefore, Company X is not neither engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats., or nor engaged primarily in biotechnology in Wisconsin.

(c) For purposes of determining whether an activity is qualified research under par. (a) 1. or 2. , the regulations under Treas. Reg. section 1.41-4 apply , except that qualified research that is funded by a member of a combined group for another member of a combined group shall remain qualified research for purposes of this subsection .

(d) (Example 1) Company A is engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Company A purchases a machine that it will use directly in conducting qualified research at its manufacturing plant in Wisconsin and purchases it exempt from Wisconsin sales tax claiming the exemption in par. (a). After completing the qualified research and having made no use of the machine other than direct use in qualified research, Company A begins using the machine exclusively and directly in its manufacturing operation, which is another exempt use under s. 77.54 (6) (a) , Stats . Company A does not owe Wisconsin sales or use tax on its purchase of the machine since it only used uses the machine only in an exempt manner.

(Example 2) Company B is engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Company B purchases a machine that it will use directly in conducting qualified research at its manufacturing plant in Wisconsin. More than 5% of Company B's total use of this machine will be for conducting research and development projects that do not meet the definition of qualified research. Company B's purchase of the machine is taxable because it is not used exclusively in qualified research.

(Example 3) Company C is engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Company C develops a new product in an activity that is qualified research. Company C purchases a variety of raw materials. Some of these materials are used exclusively and directly and destroyed in qualified research. Once the qualified research is completed, Company C consumes the remaining raw materials in activities that are not qualified research. Company C's purchases of the raw materials that it uses exclusively and directly and destroys in qualified research are exempt under par. (a) 2. Company C's purchases of the raw materials that it uses in activities that are not qualified research do not qualify for this exemption under par. (a) .

(Example 4) Manufacturer P is engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Manufacturer P contracts with Company D to produce a prototype that is tangible personal property. Manufacturer P's primary objective in this transaction is to obtain the prototype, rather than a research and development service. Company D may purchase the materials used to construct the prototype without tax for resale. Manufacturer P will use the prototype exclusively and directly in one of its research and development activities that constitutes qualified research and may claim the exemption under par. (a) on its purchase of the prototype.

(Example 5) Manufacturer F is engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Manufacturer F contracts with Company E to perform research services. Manufacturer F and Company E are not members of the same combined group. Company E will provide a prototype that is tangible personal property to Manufacturer F along with these services. Manufacturer F's primary objective in this transaction is to obtain the research and development services. Company E's primary activity in Wisconsin is the provision of professional engineering services that do not involve biotechnology , and Company E is not a manufacturer . Company E may not claim the exemptions under par. (a), since Company E is not neither engaged primarily in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats., or nor engaged primarily in biotechnology in Wisconsin. In addition, Company E cannot purchase the materials without tax for resale that it uses to construct the prototype, because Company E uses the prototype in performing its research services. The prototype is transferred to Manufacturer F incidental to the research services.

(e) (L) (Example) This example illustrates records that are generally acceptable as adequate to document the exemptions under par. (a).

Company A is primarily engaged in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats . Company A attempts to make a new and improved widget. Upon approval of a project, Company A documents the scope and goals of the project, the uncertainties that exist in accomplishing these goals, and the processes by which Company A hopes to eliminate the uncertainties. In addition, contemporaneously with conducting the research project, Company A documents: (1) the location or locations at which the research is conducted, (2) the machinery and equipment used in the project and the manner used, (3) the various materials and supplies used in attempting to produce the improved widget, the purpose and manner in which such items were used, (4) the processes applied, (5) the results achieved throughout the research process, and (6) the point at which Company A either abandons the research project or achieves the goal of eliminating the uncertainties involved with the development of the new widget. Company A purchased various machinery and equipment, and supplies and materials used in conjunction with development of the new widget without tax claiming the purchases are exempt under par. (a). In general, contemporaneous records kept in the manner and detail described will be accepted and used by the department in making its determinations regarding whether the taxpayer is entitled to claim the exemptions under par. (a).

(3) (a) 2. Seeds for planting, plants, feed, fertilizer, soil conditioners, animal bedding, sprays, pesticides and fungicides, breeding and other livestock, poultry, farm work stock, baling twine and baling wire, containers for fruits, vegetables, grain, hay, silage and animal wastes, plastic bags, plastic sleeves and plastic sheeting used to store or cover hay or silage, medicines drugs , semen for artificial insemination, fuel, and electricity, that are used exclusively and directly in raising such animals.

(b) For purposes of determining whether an activity is qualified research under par. (a), the regulations under Treas. Reg. section 1.41-4 apply , except that qualified research that is funded by a member of a combined group for another member of a combined group shall remain qualified research for purposes of this subsection .

SECTION 13. Tax 11.20 (4) (e) 2. (Note 1) and (Note 2) are created to read:

Tax 11.20 (4) (e) 2. (Note 1) Note: Section Tax 11.20 interprets ss. 77.51 (1c) , (1d) , and (10rn) and 77.54 (57) and (57d) , Stats.

(Note 2) Note: The interpretations in s. Tax 11.20 are effective beginning January 1, 2012, pursuant to 2009 Wis. Act 28 , except for the following amendments effective July 2, 2013, pursuant to 2013 Wis. Act 20 : (a) "Qualified research" was amended to include research funded by one member of a combined group for another member of a combined group; (b) The exemption for property used in qualified research by persons engaged primarily in manufacturing in Wisconsin was amended to apply to property used in qualified research by a person engaged in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats.; (c) The exemption for property used in qualified research was amended to include use by one member of a combined group who is conducting qualified research for another combined group member who is either engaged in manufacturing in Wisconsin at a building assessed under s. 70.995 , Stats., or is primarily engaged in biotechnology; and (d) The change of the term "medicines" to "drugs."

SECTION 14. Tax 11.26 (title), (1) (a) and (b), and (2) (title), (intro.), (c), and (h) are amended to read:

Tax 11.26 (title) Other taxes , fees, and charges in taxable sales price and purchase price.

(1) (a) Tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., sold at retail are subjected to many direct and indirect taxes , fees, and charges prior to reaching a retailer. The taxes , fees, and charges are commonly included in the price the retailer pays for the property and are not separately identifiable as taxes , fees, and charges . Occasionally, however, a tax , fee, or charge is either separately passed on to a retailer or is imposed at the retail level of activity, but is different from and in addition to the sales tax. The tax , fee, or charge may be imposed by Wisconsin, the federal government, or a municipality.

(b) In determining the sales price or purchase price used to compute Wisconsin sales or use taxes, the treatment of a tax , fee, or charge for sales tax purposes is identical to the treatment that applies for use tax purposes. The same taxes , fees, and charges that are included or excluded from the sales price are also included or excluded from the purchase price.

(2) (title) Taxes , fees, and charges included as part of sales price and purchase price.

(intro.) The following taxes , fees, and charges are included in the sales price and the purchase price, regardless of whether they are separately stated on the invoice, bill of sale, or other similar document given by the seller to the purchaser, except as provided in sub. (3):

(c) Any federal stamp tax and manufacturer's or importer's excise tax not imposed directly on the purchaser. Federal excise taxes include excise taxes on alcohol, tobacco, motor and aviation fuel except motor fuel taxes refunded, tires, firearms and ammunition , sporting goods, and air or ship transportation.

(h) The federal gas guzzler tax imposed under s. 4064 of the internal revenue code Internal Revenue Code .

SECTION 15. Tax 11.26 (2) (i) to (s) are created to read:

Tax 11.26 (i) The federal excise tax imposed on the first retail sale of heavy trucks and trailers under s. 4051 of the Internal Revenue Code.

(j) The federal medical device excise tax imposed under s. 4191 of the Internal Revenue Code.

(k) The federal universal service fund fee.

(L) The dry cleaning fee imposed under s. 77.9961 , Stats.

(m) The dry cleaning products fee imposed under s. 77.9962 , Stats.

(n) The PUC fee imposed under s. 196.85 , Stats.

(o) The telephone relay service surcharge imposed under s. 196.858 , Stats.

(p) The telecommunications utility trade practices surcharge imposed under s. 196.859 , Stats.

(q) The state-issued video service franchise fee imposed under s. 66.0420 (7) , Stats.

(r) The petroleum inspection fee imposed under s. 168.12 , Stats.

(s) The motor fuel taxes imposed under s. 78.01 , Stats.

SECTION 16. Tax 11.26 (3) (title) and (intro.) are amended to read:

Tax 11.26 (3) (title) Taxes , fees, and charges excluded from sales price or purchase price.

(intro.) Section 77.51 (12m) (b) 3. and (15b) (b) 3. , Stats., exclude from the sales price and purchase price any taxes legally imposed directly on the purchaser that are separately stated on the invoice, bill of sale, or similar document that the seller gives to the purchaser. Section 77.51 (12m) (b) 3m. and (15b) (b) 3m. , Stats., exclude from the sales price and purchase price taxes imposed on the seller that are separately stated on the invoice, bill of sale, or similar document that the seller gives to the purchaser if the law imposing or authorizing the tax provides that the seller may, but is not required to, pass on to and collect the tax from the user or consumer. Therefore, the following taxes , fees, and charges are excluded from the sales price or the purchase price if they are separately stated on the invoice, bill of sale, or similar document given to the purchaser:

SECTION 17. Tax 11.26 (3) (ac) to (ax) are created to read:

Tax 11.26 (3) (ac) The room taxes imposed under s. 66.0615 , Stats., which municipalities or local exposition districts impose on persons furnishing lodging to transients.

(ag) The county and stadium sales and use taxes imposed under s. 77.71 , Stats.

(aL) The local exposition district food and beverage and rental car taxes imposed under ss. 77.98 and 77.99 , Stats.

(ap) The premier resort area taxes imposed under s. 77.994 , Stats.

(at) The state rental vehicle fee imposed under s. 77.995 , Stats.

(ax) The federal luxury tax imposed under ss. 4001 to 4007 of the Internal Revenue Code.

SECTION 18. Tax 11.26 (3) (b) and (Example 1) to (Example 7) are repealed.

SECTION 19. Tax 11.26 (3) (c) (Note 2) is amended to read:

The interpretations in s. Tax 11.26 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exclusion for federal and Wisconsin motor vehicle excise taxes refunded became effective December 1, 1997, pursuant to 1997 Wis. Act 27 ; (b) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (c) the regional transit authority taxes were authorized by 2009 Wis. Act 28 and repealed by 2011 Wis. Act 32 ; and (d) The definitions of "purchase price" and "sales price" were amended to provide when taxes are not included in the "purchase price" or "sales price," pursuant to 2013 Wis. Act 20 .

SECTION 20. Tax 11.26 (3) (d) to (h) are created to read:

Tax 11.26 (3) (d) The police and fire protection fee imposed under s. 196.025 (6) , Stats.

(e) The low-income assistance fees imposed under s. 16.957 (4) and (5) , Stats.

(f) The landline 911 charge imposed under s. 256.35 (3) , Stats.

(g) The wireless 911 charge imposed under s. 256.35 (3m) , Stats.

(h) The state USF fee imposed under s. 196.218 , Stats.

SECTION 21. Tax 11.33 (4) (f) (Example 1) is amended to read:

Tax 11.33 (4) (f) (Example 1) If the sales price from a person's garage and rummage sales, lawn maintenance services, bait sales to fishermen, sales of books, charges for parking and other normally taxable receipts are less than $1,000 during the calendar year, that person's receipts are deemed exempt occasional sales under par. (g) (f) . However, purchases by the seller of the tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., which are sold are taxable.

SECTION 22. Tax 11.39 (1) (b) is amended to read:

Tax 11.39 (1) (b) "Plant" as defined in s. 77.51 (10b) , Stats., means a parcel of property or adjoining parcels of property, including parcels that are separate separated only by a public road, and the buildings, machinery, and equipment that are located on the parcel, that are owned by or leased to the manufacturer. Plant inventory does not include unsevered mineral deposits as provided in s. 77.51 (10c) , Stats.

SECTION 23. Tax 11.45 (3) (a) and (6) (Note 2) are amended to read:

Tax 11.45 (3) (a) "Prosthetic device" is defined in s. 77.51 (11m) , Stats., to mean a replacement, corrective, or supportive device, including the repair parts and replacement parts for the device, that is placed in or worn on the body to artificially replace a missing portion of the body; to prevent or correct a physical deformity or malfunction; or to support a weak or deformed portion of the body.

(6) (Note 2) The interpretations in s. Tax 11.45 are effective under the general sales and use tax law, on and after September 1, 1969, except: (a) Charges for oxygen equipment became exempt September 1, 1983, pursuant to 1983 Wis. Act 27 ; (b) Charges for motorized wheelchairs and scooters became exempt September 1, 1985, pursuant to 1985 Wis. Act 29 ; (c) Charges for apparatus or equipment for the injection of insulin or the treatment of diabetes and supplies used to determine blood sugar level became exempt March 1, 1989, pursuant to 1987 Wis. Act 399 ; (d) Charges for antiembolism elastic hose and stockings prescribed by a physician became exempt October 1, 1989, pursuant to 1989 Wis. Act 31 ; (e) Sales of parts and accessories for certain medical items became exempt effective August 15, 1991, pursuant to 1991 Wis. Act 39 ; (f) The definitions of "drug," "durable medical equipment," "mobility-enhancing equipment," and "prosthetic devices" and the exemptions for these items became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (g) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (h) The clarification that a "prosthetic device" must be a replacement, corrective, or supportive device became effective July 2, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 24. Tax 11.48 (3) (c) (Note 1) and (Note 2) are amended to read:

Tax 11.48 (3) (c) (Note 1) Section Tax 11.48 interprets ss. 77.51 (13) (n) , 77.52 (1) , (2) (a) 1. , 2. , and 9. , and (2m), and (21), and 77.54 (36), Stats.

(Note 2) The interpretations in s. Tax 11.48 are effective under the general sales and use tax law on and after September 1, 1969, except : (a) The provisions of sub. (1) (c) 1. are effective on or after August 9, 1989, pursuant to 1989 Wis. Act 31 ; and (b) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (c) The clarification that a service provider who transfers tangible personal property, or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., incidentally with a taxable service is the consumer of such property, items, or goods became effective July 2, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 25. Tax 11.49 (2) (b) is amended to read:

Tax 11.49 (2) (b) Sales made directly to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town, or school district in this state; a county-city hospital established under s. 66.0927 , Stats.; a sewerage commission organized under s. 281.43 (4) , Stats., or a metropolitan sewerage district organized under ss. 200.01 to 200.15 or 200.21 to 200.65 , Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s. 66.0823 , Stats.; any corporation, community chest fund, foundation, or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s. 613.80 (2) , Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member, or corporation; a local exposition district under subch. II of ch. 229 , Stats.; a local cultural arts district under subch. V of ch. 229 , Stats. Sales to a cemetery company or corporation described under section 501 (c) (13) of the Internal Revenue Code, are exempt from sales and use tax if the cemetery company or corporation uses the items exclusively for the purposes of the company or corporation. Section 77.55 (1) , Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. Sales to employees of these entities are not exempt, even though the entity may reimburse the employee for the expenditure.

SECTION 26. Tax 11.52 (5) (a) and (7) (c) (Note 2) are amended to read:

Tax 11.52 (5) (a) Laundry, dry cleaning and pressing machines when the service is performed by the customer through the use of coin-operated, self-service machines.

(7) (c) (Note 2) The interpretations in s. Tax 11.52 are effective under the general sales and use tax law on and after September 1, 1969, except : (a) the The definitions of "candy," "dietary supplement," "food and food ingredient," and "soft drink," the exemption for food and food ingredients, the change of the term "gross receipts" to "sales price," and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 and (b) Receipts from all self-service laundry, dry cleaning, pressing, and dyeing machines, including those that are not coin-operated, are not taxable effective October 1, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 27. Tax 11.56 (7) (bm) and (8) (Note 1) and (Note 2) are amended to read:

Tax 11.56 (7) (bm) Section 77.52 (2) (a) 11. , Stats., provides that the tax does not apply to the service of printing or imprinting tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., that results in printed material, catalogs, or envelopes that are exempt under s. 77.54 (25) , or (25m), or (59), Stats.

(8) (Note 1) Section Tax 11.56 interprets ss. 77.51 (7h) , (8) , (11) , and (14) (h) , 77.52 (1) and (2) (a) 11. , and 77.54 (2) , (2m) , (6) (a) and (b) , (25) , (25m) , (30) (a) 6. , and (43), (59), and (61), Stats.

(Note 2) The interpretations in s. Tax 11.56 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Sales of typeset material shall first be considered sales of tangible personal property on April 1, 1983; (b) The exemption in sub. (3) (b) 2. for ingredients of publications became effective July 2, 1983, pursuant to 1983 Wis. Act 27 ; (c) The definition of storage and use for purposes of imposing use tax does not include storing or using raw materials becoming printed materials to be shipped outside Wisconsin effective October 1, 1993, pursuant to 1993 Wis. Act 16 ; (d) The sales and use tax exemption for raw materials transported and used solely outside Wisconsin became effective December 1, 1997, pursuant to 1997 Wis. Act 27 ; (e) The exemption for fuel and electricity consumed in manufacturing became effective January 1, 2006, pursuant to 2003 Wis. Act 99 ; (f) The exemption for catalogs and the envelopes in which they are mailed became effective April 1, 2009 pursuant to 2007 Wis. Act 20 ; (g) The requirement that property and items which qualify for exemption under s. 77.54 (2) and (2m) , Stats., be consumed exclusively and directly by a manufacturer in manufacturing property and items destined for sale became effective August 1, 2009 pursuant to 2009 Wis. Act 28 ; (h) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (i) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to 2011 Wis. Act 32 ; (j) Services resulting in advertising and promotional direct mail were excluded from taxable services effective July 1, 2013, pursuant to 2013 Wis. Act 20 ; and (k) The additional printing exemptions under s. 77.54 (61) , Stats., became effective October 1, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 28. Tax 11.56 (9) is created to read:

Tax 11.56 (9) Additional exemptions for printing industry. (a) Definitions . In s. 77.54 (61) , Stats., and this subsection:

1. "Commercial printing, except screen printing and book printing, without publishing, except grey goods printing" means activities described in 2012 North American Industry Classification 323111.

2. "Copies of the product" means finished artwork in a digital form that is generated, furnished, and used for the purpose of printing; represents the object, such as a book, catalog, pamphlet, or magazine, as it is to appear in a printed form; and includes files containing instructions or other information required by the printer for printing the product, such as instructions for plate-making or setting ink-levels at the printing press, whether these instructions or other information are furnished to the printer or derived by the printer from the finished art files.

3. "Finished artwork" has the meaning given in s. 77.51 (3rm) , Stats.

4. "Prepress and postpress services in support of printing activities" means activities described in 2012 North American Industry Classification 323120.

5. "Primarily" means more than 50 percent.

6. "Printing or printing and binding of books and pamphlets without publishing" means activities described in 2012 North American Industry Classification 323117.

7. "Sent to a printing press" includes transferring a copy of the product, either electronically or through the use of a tangible storage media, to printing presses, ink-jet printers, plate-making machines, and similar machines or to storage devices devoting to serving such machines.

8. "Stored" has the meaning of the term "storage" as defined in s. 77.51 (18) , Stats.

9. "Used" has the meaning of the term "use" as defined in s. 77.51 (22) , Stats.

(b) Exemptions . Section 77.54 (61) , Stats., provides exemptions for purchases of computers and servers that are used to store copies of the product that is sent to a printing press and for purchases from out-of-state sellers of items that are temporarily stored, remain idle, and are not used in this state for not more than 180 days and that are then delivered and used outside this state, provided the purchaser is primarily engaged in any of the following:

1. Commercial printing, except screen printing and book printing, without publishing, except gray goods printing.

2. Printing or printing and binding books and pamphlets without publishing.

3. Performing prepress and postpress services in support of printing activities.

Examples: (1) Newspaper publishes a daily edition of a newspaper. Newspaper operates its own printing plant. The printing plant prints Newspaper's publications as well as printing under contract for third parties. More than 50 percent of Newspaper's sales are from sales of its newspaper and advertising revenues associated with sales of its newspaper. Newspaper's primary activity is described by NAICS code 511110: Newspaper Publishers . Newspaper does not qualify for the exemption under s. 77.54 (61) , Stats.

(2) Insurance Company operates its own printing plant. Insurance Company's primary source of revenues is insurance premiums. Insurance Company's primary NAICS code is described within NAICS subsector code 524: Insurance Carriers and Related Activities. Insurance Company does not qualify for the exemption under s. 77.54 (61) , Stats.

(3) Business is engaged in screen printing of T-shirts, caps, and jackets. This is Business' only activity and source of revenue. Business' primary activity is described by NAICS code 323113: Commercial Screen Printing. Business does not qualify for the exemption under s. 77.54 (61) , Stats.

(4) Company is primarily engaged in the business of printing on fabric grey goods. Company's primary activity is described by NAICS code 313310: Textile and Finishing Mills. As such, Company does not qualify for the exemption under s. 77.54 (61) , Stats.

SECTION 29. Tax 11.61 (2) (c) (Note 1) is amended to read:

Tax 11.61 (2) (c) (Note 1) Section Tax 11.61 interprets ss. 77.51 (2d) , (3pj) , and (13) (m) and (o) , 77.52 (2) (a) 10. , and 77.54 (3) , (33) , and (42) , Stats.

SECTION 30. Tax 11.66 (1) (u) is repealed and recreated to read:

Tax 11.66 (1) (u) "Place of primary use" means the residential street address or the primary business street address of the customer. In the case of mobile telecommunications services, "place of primary use" means a street address within the licensed service area of the home service provider.

SECTION 31. Tax 11.66 (1) (x) and (6) (Note 3) are amended to read:

Tax 11.66 (1) (x) "Prepaid wireless calling service" means a telecommunications service that provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content, and ancillary services, and that is paid for prior to use and sold in predetermined dollar units whereby the number of units declines or dollars that decrease with use in a known amount.

(6) (Note 3) The interpretations in s. Tax 11.66 are effective under the general sales and use tax law on or after September 1, 1969, except: (a) Chapter 39, Laws of 1975 , effective July 31, 1975, expanded the telephone services subject to the tax to include "telephone services of whatever nature"; (b) Chapter 317, Laws of 1981 , imposed the tax on interstate telegraph and telephone service, effective May 1, 1982; (c) "911" service became exempt on August 1, 1987, pursuant to 1987 Wis. Act 27 ; (d) Telecommunications services originating in Wisconsin and charged to a subscriber in Wisconsin became taxable October 1, 1989, pursuant to 1989 Wis. Act 31 ; (e) Telecommunications services originating in Wisconsin and charged to a service address in Wisconsin became taxable October 1, 1991, pursuant to 1991 Wis. Act 31 ; (f) The repeal of the exemption for equipment in central offices of telephone companies became effective September 1, 1995, pursuant to 1995 Wis. Act 27 ; (g) Telecommunications services paid for by the insertion of coins in a coin-operated telephone became taxable August, 1, 1996, pursuant to 1995 Wis. Act 351 ; (h) Certain telecommunications message services became taxable December 1, 1997, pursuant to 1997 Wis. Act 27 ; (i) Telecommunications services originating outside Wisconsin, terminating in Wisconsin and charged to a service address in Wisconsin, except certain services obtained by means of a toll-free number, became taxable December 1, 1997, pursuant to 1997 Wis. Act 27 ; (j) Credit for sales tax properly paid to another state on interstate telecommunications services became effective October 14, 1997, pursuant to 1997 Wis. Act 27 ; (k) Sales of rights to purchase telecommunications services became taxable August 1, 1998, pursuant to 1997 Wis. Act 237 ; (L) The exemption for interstate private line services no longer applies, effective December 1, 2002; (m) The definitions of air-to-ground radio telephone service, ancillary services, call-by-call basis, communications channel, conference bridging service, customer, customer channel termination point, detailed telecommunications billing services, directory assistance, eight hundred service, end user, fixed wireless service, home service provider, international telecommunications services, internet access services, interstate telecommunications services, intrastate telecommunications services, mobile telecommunications service, nine hundred service, paging service, place of primary use, postpaid calling service, prepaid calling service, prepaid wireless calling service, private communications service, radio service, radiotelegraph service, radiotelephone service, service address, telecommunications service, value-added nonvoice data service, vertical service, and voice mail service became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (n) The specific imposition of tax on ancillary services and interstate, intrastate, and international telecommunications services became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (o) The sourcing provisions related to telecommunications services became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (p) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (q) The definition of "primary place of use" was amended to replace the reference to federal law with specific language, and the definition of "prepaid wireless calling service" was amended, pursuant to 2013 Wis. Act 20 .

SECTION 32. Tax 11.67 (3) (m) (Note 1) and (Note 2) are amended to read:

Tax 11.67 (3) (m) (Note 1) Section Tax 11.67 interprets ss. 77.51 (1f) , (12) , (12m) , (13) , (14) (intro.) and (h) , (15a) , (15b) , (20) , and (22) (a) and (b) and 77.52 (1) , (2) (a) , (2m) (a) and (b) , and (20), and (21), Stats.

(Note 2) The interpretations in s. Tax 11.67 are effective under the general sales and use tax law on and after September 1, 1969, except that (a) The fees paid to architects performing landscaping planning became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981 ; (b) The definition of bundled transactions became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (c) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (d) The clarification that a service provider who transfers tangible personal property, or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., incidentally with a taxable service is the consumer of such property, items, or goods became effective July 2, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 33. Tax 11.68 (7) (b) is repealed and recreated to read:

Tax 11.68 (7) (b) 1. In this paragraph, "lump sum contract" means a contract to perform real property construction activities and to provide tangible personal property, items or property under s. 77.52 (1) (b) or (c) , Stats., or taxable services and for which the contractor quotes the charge for labor, services of subcontractors, tangible personal property, items and property under s. 77.52 (1) (b) and (c) , Stats., and taxable services as one price, including a contract for which the contractor itemizes the charges for labor, services of subcontractors, tangible personal property, items and property under s. 77.52 (1) (b) and (c) , Stats., and taxable services as part of a schedule of values or similar document.

2. A contractor's sales price of a lump sum contract is exempt from tax if the total sales price of all taxable products and services sold by the contractor as a part of the lump sum contract is less than 10 percent of the total amount of the lump sum contract. Except as provided in subd. 3., the contractor is the consumer of such taxable products and must pay tax on its purchase of the taxable products.

3. If the lump sum contract is entered into with an entity that is exempt from taxation under s. 77.54 (9a) , Stats., the contractor is the consumer of all taxable products used by the contractor in real property construction activities, but the contractor may purchase without tax, for resale, tangible personal property, items and property under s. 77.52 (1) (b) and (c) , Stats., and taxable services that are sold by the contractor as part of the lump sum contract with the entity and that are not consumed by the contractor in real property construction activities.

SECTION 34. Tax 11.68 (13) (e) (Note 1) and (Note 2) are amended to read:

Tax 11.68 (13) (e) (Note 1) Section Tax 11.68 interprets ss. 77.51 (2) , (12m) (b) 7. , (14) (intro.) , (15a) (b) 1. and 4. , (15b) (b) 7. , 77.52 (2) (a) 10. , 11. , and 20. , 77.53 (1) , 77.54 (5) (d) , (6) (a) , (26) , (26m) , (31) , and (41), and (60), 77.71 (3), and 77.77 (3), Stats.

(Note 2) The interpretations in s. Tax 11.68 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) Vault doors were not considered personal property until August 1, 1975; (b) Service station equipment such as underground tanks, gasoline pumps and hoists installed in or securely attached to their owner's land was real property, but the property was personal property if the personal property and land were owned by different persons prior to August 1, 1975; (c) Advertising signs were real property if erected on and securely attached to the owner's land prior to August 1, 1975; (d) Landscaping services became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981 ; (e) The exemption for waste reduction and recycling machinery and equipment became effective July 1, 1984, pursuant to 1983 Wis. Act 426 ; (f) The exemption for mobile units used for mixing and processing became effective July 20, 1985, pursuant to 1985 Wis. Act 29 ; (g) The credit for local sales taxes paid to other states became effective April 1, 1986, pursuant to 1987 Wis. Act 27 ; (h) The exemption for safety attachments for manufacturing machines became effective June 1, 1986, pursuant to 1985 Wis. Act 149 ; (i) The exemption of 35% of the selling price of new mobile homes and 100% of the selling price of used mobile homes became effective January 1, 1987, pursuant to 1985 Wis. Act 29 ; (j) The exemption for property used in constructing professional sports and home entertainment stadiums became effective October 1, 1991, pursuant to 1991 Wis. Act 37 ; (k) The 35% reduction in gross receipts for new mobile homes transported in 2 unattached sections became effective October 1, 1991, pursuant to 1991 Wis. Act 39 ; (L) Tangible personal property purchased outside Wisconsin, stored in Wisconsin and subsequently used outside Wisconsin became taxable October 1, 1991, pursuant to 1991 Wis. Act 39 ; (m) Raw materials purchased outside Wisconsin, manufactured, fabricated or otherwise altered by the contractor outside Wisconsin and used in real property construction by the contractor in Wisconsin became subject to use tax effective August 12, 1993, pursuant to 1993 Wis. Act 16 ; (n) In Tom Kuehne Landscape Contractor, Inc. vs. Wisconsin Department of Revenue, Wisconsin Court of Appeals, District IV, No. 86-1813, October 29, 1987 (CCH 202-919), highway signs, sign bridges, delineator posts and guardrails were found to remain tangible personal property after installation; (o) The stadium tax on building materials became effective January 1, 1996, pursuant to 1995 Wis. Act 56 ; (p) The change to the definition of "real property construction activities" to include only those activities that take place at a site where tangible personal property is affixed to real property became effective for sales of property pursuant to contracts entered into on or after December 1, 1997, pursuant to 1997 Wis. Act 27 ; (q) The clarification of the tax treatment of the original installation or complete replacement of certain deemed items became effective on October 1, 2001, pursuant to 2001 Wis. Act 16 ; (r) The changes in the use of the terms mobile homes and manufactured homes became effective January 1, 2008, pursuant to 2007 Wis. Act 11 ; (s) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; and (t) The exemption for modular homes and manufactured homes used in real property construction activities outside Wisconsin became effective September 1, 2011 pursuant to 2011 Wis. Act 32 ; and (u) The exemption for lump sum contracts first applied to contracts entered into on or after October 1, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 35. Tax 11.70 (2) (e) and (7) (b) (Note 2) and (Note 3) are amended to read:

Tax 11.70 (2) (e) Producing, fabricating, processing, printing, or imprinting tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., for clients for a consideration, even though the client may furnish the materials used in producing, fabricating, processing, printing, or imprinting the property, items, or goods. However, the tax does not apply to the printing or imprinting of tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., that results in printed material, catalogs, or envelopes that are exempt under s. 77.54 (25) , or (25m), or (59), Stats.

(7) (b) (Note 2) Section Tax 11.70 interprets ss. 77.51 (1f) , (1fr) , (3rm) , (14) (intro.) and (h) , 77.52 (1) and (2) , 77.522 , 77.54 (2) , (2m) , (6) (b) , (25) , (25m) , and (43), and (59), and 77.585 (8), Stats.

(Note 3) The interpretations in s. Tax 11.70 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for printing or imprinting of tangible personal property furnished by customers and used out-of-state for advertising became effective March 1, 1970; (b) The exemption for printed advertising material used out-of-state became effective May 21, 1972; (c) The exemption for ingredients or components of shoppers guides, newspapers, and periodicals became effective July 7, 1983; (d) The sales and use tax exemption for raw materials for printed materials transported and used solely outside Wisconsin became effective December 1, 1997, pursuant to 1997 Wis. Act 27 ; (e) The exemption for catalogs and their mailing envelopes became effective April 1, 2009, pursuant to 2007 Wis. Act 20 ; (f) The provision that items must be consumed exclusively and directly by a manufacturer in manufacturing property or items destined for sale became effective August 1, 2009, pursuant to 2009 Wis. Act 28 ; (g) The definitions of bundled transaction and finished artwork became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (h) The change of the term "gross receipts" to "sales price" and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b) , Stats., certain leased property affixed to real property under s. 77.52 (1) (c) , Stats., and digital goods under s. 77.52 (1) (d) , Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2 ; (i) The definition of "direct mail" became effective October 1, 2009 pursuant to 2009 Wis. Act 2 ; (j) The definition of "advertising and promotional direct mail" became effective May 27, 2010, pursuant to 2009 Wis. Act 330 ; and (k) The sales and use tax exemption for advertising and promotional direct mail became effective July 1, 2013, pursuant to 2011 Wis. Act 32 ; and (L) Services resulting in advertising and promotional direct mail were excluded from taxable services effective July 1, 2013, pursuant to 2013 Wis. Act 20 .

SECTION 36. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.) , Stats.

ADMINISTRATIVE RULES FISCAL ESTIMATE AND ECONOMIC IMPACT ANALYSIS
Type of Estimate and Analysis
X Original ⍽ Updated ⍽ Corrected
Administrative Rule Chapter, Title and Number
Chapter Tax 11 — Sales and use tax
Subject
Sales and use tax provisions
Fund Sources Affected			Chapter 20 , Stats. Appropriations Affected
⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
Fiscal Effect of Implementing the Rule
X No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget ⍽ Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes X No
Policy Problem Addressed by the Rule
The rule does not create or revise policy, other than to reflect current law and department policy.
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
As indicated in the attached fiscal estimate, the proposed rule is intended to reflect law changes and clarify the tax treatment of certain items. Since the fiscal impact of the statutory changes has already been reflected, the proposed rule has no fiscal effect. No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals. If the rule is not implemented, Chapter Tax 11 will be incomplete in that it will not reflect current law or department policy.
Long Range Implications of Implementing the Rule
No long-range implications are anticipated.
Compare With Approaches Being Used by Federal Government
N/A
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
N/A

FISCAL ESTIMATE FORM				2013 Session
X ORIGINAL ⍽ UPDATED	LRB #
	INTRODUCTION #
⍽ CORRECTED ⍽ SUPPLEMENTAL	Admin. Rule #		Tax 11: 2013-15 budget
Subject
Proposed order of the Department of Revenue related to sales tax
Fiscal Effect
State:   X No State Fiscal Effect   Check columns below only if bill makes a direct appropriation or affects a sum sufficient appropriation   ⍽ Increase Existing Appropriation   ⍽ Increase Existing Revenues   ⍽ Decrease Existing Appropriation   ⍽ Decrease Existing Revenues   ⍽ Create New Appropriation			⍽ I ncrease Costs — May be Possible to Absorb Within Agency's Budget ⍽ Yes ⍽ No   ⍽ Decrease Costs

Local: X No Local Government Costs
1.   ⍽ Increase Costs	3.   ⍽ Increase Revenues		5.   Types of Local Governmental Units Affected:
⍽ Permissive ⍽ Mandatory	⍽ Permissive ⍽ Mandatory		⍽ Towns     ⍽ Villages   ⍽ Cities
2.   ⍽ Decrease Costs	4.   ⍽ Decrease Revenues		⍽ Counties ⍽ Others
⍽ Permissive ⍽ Mandatory	⍽ Permissive ⍽ Mandatory		⍽ School Districts ⍽ WTCS Districts
Fund Sources Affected ⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S		Affected Ch. 20 Appropriations

Assumptions Used in Arriving at Fiscal Estimate:

The proposed rule updates Chapter TAX 11 of the Administrative Code, pertaining to the sales and use tax, to reflect certain sales tax changes contained in 2013 Wisconsin Act 20 , the 2013-15 Budget Bill.

The proposed rule modifies the administrative code to reflect law changes and clarify the tax treatment of certain items.

The proposed rule includes:

• A sales and use tax exemption for certain property sold by a contractor as part of a lump sum contract.

• Repeal of the sales tax imposition on receipts from self-service laundry machines that are operated by tokens and magnetic cards.

• A sales and use tax exemption for services resulting in advertising and promotional direct mail.

• A sales and use tax exemption for certain products used by commercial printers.

• Updates and clarifications to reflect changes to sales and use tax statutes.

• Dissolution of the Health Insurance Risk-Sharing Plan and Authority.

The fiscal effect of the exemptions created under 2013 Wisconsin Act 20 has already been reflected under general fund condition statements subsequent to 2013 Wisconsin Act 20 . Since the fiscal impact of the statutory changes has already been reflected, the proposed rule has no fiscal effect.

Notice of Hearing

Safety and Professional Services —
Board of Nursing

CR 14-002

NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Board of Nursing in ss. 15.08 (5) (b) and 441.01 (3) , Wis. Stats., and interpreting ss. 441.04 , 441.05 , 441.06 , 441.0,8 and 441.10 , Wis. Stats., the Board of Nursing will hold a public hearing at the time and place indicated below to consider an order to repeal and recreate Chapters N 2 and 3 , relating to nurse licensure and examining councils.

Hearing Information

Date:   Thursday, February 13, 2014
Time:   8:05 a.m.
Location:   1400 East Washington Avenue
  Room 121A
  Madison, Wisconsin

Appearances at the Hearing

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8366, Madison, Wisconsin 53708. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.

Place where Comments are to be Submitted and Deadline for Submission

Comments may be submitted to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8935, or by email to [e-mail] . Comments must be received at or before the public hearing to be held on February 13, 2014 , to be included in the record of rule-making proceedings.

Copies of Rule

Copies of this proposed rule are available upon request to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, P.O. Box 8366, Madison, Wisconsin 53708, or by email at [e-mail] .

Analysis Prepared by the Department of Safety and Professional Services

Statutes interpreted

Sections 441.04 , 441.05 , 441.06 , 441.08 , and 441.10 , Wis. Stats.

Statutory authority

Sections 15.08 (5) (b) and 441.01 (3) , Wis. Stats.

Explanation of agency authority

The board shall promulgate rules for its own guidance and for the guidance of the profession and define and enforce professional conduct and unethical practices not inconsistent with the law relating to the profession.

Specifically, the board may also establish rules to prevent unauthorized persons from practicing professional nursing. It shall approve all rules for the administration of ch. 441 , Wis. Stats.

Related statute or rule

Sections 441.04 , 441.05 , 441.06 , 441.08 and 441.10 , Wis. Stats.

Plain language analysis

This proposed rule updates the licensure process.

Section 1 repeals and recreates ch. N 2 . The first subsection is licensure by examination. The qualifications for professional nurse licensure are graduating from a high school or equivalent, does not have an arrest or conviction record related to the practice of nursing, graduated from a school of nursing and passes the NCLEX exam. The qualifications for practical nurse licensure are 2 years of high school, does not have an arrest or conviction record related to the practice of nursing, graduated from a school of nursing and passes the NCLEX exam. The application procedure is submitting an application, paying the fee, submitting proof of graduation, passing the NCLEX, and submitting all relevant information relating to criminal charges, convictions of crimes or any acts which would constitute unprofessional conduct. If the nurse is a graduate from a U.S. territory or outside the United States, the education credentials need to be evaluated by the Commission on Graduates of Foreign Nursing Schools.

The second subsection is licensure by endorsement. An applicant holding a current license from a compact state shall submit a completed application, pay the fee, declare Wisconsin as the primary state, and submit all relevant information relating to criminal charges, convictions of crimes, any acts which would constitute unprofessional conduct or discipline taken by another state. An applicant holding a current license from another U.S. state, territory or Canada shall submit evidence of initial licensure including graduation from an approved nursing school and passage of the NCLEX or evidence of educational qualifications and licensure examination. In addition, a applicant shall submit a completed application, pay the fee, verification from the state of initial licensure and current licensure, documentation of employment history, and submitting all relevant information relating to criminal charges, convictions of crimes, any acts which would constitute unprofessional conduct or discipline taken by another state. An applicant who does not have current nursing education or been employed in a position that requires a nursing license may apply for a limited license to complete a nurse refresher course.

The third subsection is temporary permits. A nurse who has graduated from an approved or comparable school may apply for a temporary permit upon submission of a completed application, payment of fee and verification of graduation from a nursing school. A graduate nurse may use the title of G.N. for graduate nurse or G.P.N. for graduate practical nurse. The holder of a temporary permit may only work under direct supervision unless the person holds a nursing license in another state. The temporary permit is valid for a period of three months or the receipt of results indicating failing the NCLEX. A temporary permit may be renewed once and may be renewed subsequently on the basis of hardship. A temporary permit may be denied or revoked for providing false information on the application, misrepresentation of title without a valid permit or for unprofessional conduct.

Section 2 repeals and recreates chapter N 3. The examining councils serve the Board in an advisory capacity. The section states the appointment process and composition of the two nursing examining councils.

Summary of, and comparison with, existing or proposed federal regulation

None

Comparison with rules in adjacent states

Illinois: In Illinois an applicant is eligible for nurse licensure by examination if the applicant completes an application, pays the fee, submits to a criminal background check and graduates from an approved school. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools. A nurse is eligible for licensure if the applicant completes and application, pays the fee, submits to a criminal background check, graduates from an approved school, submits verification of licensure status from the jurisdiction of original licensure, the current state of licensure and all states the applicant has directly practiced in within the last 5 years. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools.

Iowa: In Iowa an applicant is eligible for nurse licensure by examination if the applicant graduated from high school or the equivalent, completes an application, pays the fee, graduated from an approved program and passes NCLEX. If the person has a criminal conviction history or prior disciplinary action, the applicant must receive Board approval. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools. A nurse from a compact state shall submit a completed application, pay the fee, declare Iowa as the primary state. A nurse is eligible for licensure by endorsement from a non-compact state if the applicant completes an application, pays a fee, has verification of original licensure and nursing program transcripts and submits a criminal background check. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools. If the person has a criminal conviction history or prior disciplinary action, the applicant must receive Board approval.

Michigan: In Michigan an applicant is eligible for nurse licensure by examination if the applicant completed an application, pays the fees, completed approved nursing education program and passes NCLEX. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools. A nurse is eligible for licensure by endorsement if the applicant completes an application, pays the fee, graduated from an approved school of nursing and was first licensed in another state pursuant to passage of NCLEX.

Minnesota: In Minnesota a nurse is eligible for licensure by examination if the applicant completes an application, pays the fee, graduated from an approved school and passes NCLEX. If educated outside of the United States, the education is to be evaluated by the Commission on Graduates of Foreign Nursing Schools. A nurse is eligible for licensure by endorsement if the applicant completes an application, pays the fee, shows verification of licensure in another jurisdiction, has passed an examination acceptable to the board and answers questions related to any prior disciplinary actions. If the applicant has not engaged in acceptable nursing practice within the 2 years of application, the applicant must complete one contact hour of continuing education for each month that the applicant was not engaged in acceptable practice for a maximum of 60 hours and if the person has not practiced for more than 5 years, the applicant must compete a nurse refresher course. Minnesota does issue privilege to practice nursing in Minnesota licenses to border state applicants upon meeting certain requirements.

Summary of factual data and analytical methodologies

The Board reviewed the National Council of State Board of Nursing's model rules and the licensing requirements in our neighboring states.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis

The rule was posted for economic comments for a period of 14 days and none were received. This rule is related to an individual's eligibility for licensure and does not effect small business.

Fiscal Estimate and Economic Impact Analysis

The Fiscal Estimate and Economic Impact Analysis is attached.

Initial Regulatory Flexibility Analysis or Summary

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1) , Stats.

Agency Contact Person

Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, Wisconsin 53708; telephone [phone]; email at [e-mail] .

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)	Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis

1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
N 2, 3
3. Subject
Nurse Licensure
4. Fund Sources Affected			5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   X PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S			20.165(1)(g)
6. Fiscal Effect of Implementing the Rule
⍽ No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		X Increase Costs X Could Absorb Within Agency's Budget ⍽ Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   X No
9. Policy Problem Addressed by the Rule
This rule updates and creates clarity regarding the process of obtaining a nurse license. There has not been a review of these chapters since 1984.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
This rule was posted for economic comments for a period of 14 days and no comments were received.
11. Identify the local governmental units that participated in the development of this EIA.
None.
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
None.
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
The benefit is to create clarity and bring the process in line with current technologies.
14. Long Range Implications of Implementing the Rule
The long range implication is an updated licensure procedure.
15. Compare With Approaches Being Used by Federal Government
None
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
Our neighboring states require graduation from an approved school and passage of the NCLEX. Both Illinois and Iowa require fingerprint criminal background checks. All of the neighboring states require a person educated outside of the U.S. to have their education evaluated by the Commission on Graduates of Foreign Nursing Schools. The endorsement requirements of our neighboring states include verification of licensure in the other jurisdiction(s) and consideration of past disciplinary actions. Illinois and Iowa require fingerprint criminal background checks. Minnesota requires nursing practice within 2 years of the application.
17. Contact Name				18. Contact Phone Number
Sharon Henes				[phone]

This document can be made available in alternate formats to individuals with disabilities upon request.

Notice of Hearing

Safety and Professional Services —
Board of Nursing

CR 14-004

NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Board of Nursing in ss.15.08 (5) (b) and 441.01 (3), Wis. Stats., and interpreting ss. 441.01 (3) and (4) and 441.12 , Wis. Stats., the Board of Nursing will hold a public hearing at the time and place indicated below to consider an order to repeal and recreate Chapter N 1 , relating to school approval.

Hearing Information

Date:   Thursday, February 13, 2014
Time:   8:00 a.m.
Location:   1400 East Washington Avenue
  Room 121A
  Madison, Wisconsin

Appearances at the Hearing

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8366, Madison, Wisconsin 53708. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.

Place where Comments are to be Submitted and Deadline for Submission

Comments may be submitted to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8935, or by email to [e-mail] . Comments must be received at or before the public hearing to be held on February 13, 2014 to be included in the record of rule-making proceedings.

Copies of Rule

Copies of this proposed rule are available upon request to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, P.O. Box 8366, Madison, Wisconsin 53708, or by email at [e-mail] .

Analysis prepared by the Department of Safety and Professional Services

Statutes interpreted

Sections 441.01 (3) and (4) and 441.12 , Wis. Stats.

Statutory authority

Sections 15.08 (5) (b) and 441.01 (3) , Wis. Stats.

Explanation of agency authority

The board shall promulgate rules for its own guidance and for the guidance of the profession to which it pertains.

Specifically, the board may establish minimum standards for schools for professional nurses and schools for licensed practical nurses, including all related clinical units and facilities, and make and provide periodic surveys and consultations to such schools. It may also establish rules to prevent unauthorized persons from practicing professional nursing. It shall approve all rules for the administration of chapter 441, Wis. Stats.

Related statute or rule

Sections 441.01 (3) and (4) and 441.12 , Wis. Stats.

Plain language analysis

The proposed rule repeals and recreates the nursing school approval process chapter. The chapter has not been updated since 1989 and the school approval process has evolved since that time.

There are three stages to the approval process. The first stage is the authorization to plan a school of nursing. The institution will provide to the board the name and address of the controlling institution, accreditation status, statement of intent including the academic and licensure levels; evidence of the availability of clinical facilities, plan to recruit an educational administrator and faculty and the proposed timeline. The board will review the application and make a decision within two months of the completed application. The second stage is the authorization to admit students. The school of nursing will provide to the board verification of employment of an educational administrator, evidence of faculty, the school's philosophy and objectives, an overview of the curriculum, verification of student policies, the ability for the students to acquire clinical skills and an updated timeline. The board will review the materials and make a decision with two months. The last stage is approval of the school of nursing. A school may apply for approval upon graduation of the first class, but no later than graduation of the third class (class is defined as a 12 month period). The board may conduct a site survey. The decision on the application will occur within two months of the completed site survey or the completed application whichever is later. The board may grant approval, conditional approval or deny approval. If the board grants conditional approval, the board will state the basis and the school of nursing may not admit any new students into the school until the board meets the standard and receives full approval. If the school of nursing is denied approval, the school will receive a notice of denial and will take steps to close the school. The school may request a hearing and the closure of the school may be postponed during the appeals process.

Out of state schools operating in the state of Wisconsin will be approve and continual to be approved if the school is approved by the board of the state where the school is located and the school has approved nursing accreditation.

A school of nursing must receive national nursing accreditation within 3 years of school approval and all schools which already have approval as of July 1, 2014, must have accreditation by July 1, 2017. Failure to maintain nursing accreditation will result in loss of school approval.

School of nursing standards include:

•   The institution shall have legal responsibility for overall conduct of the school of nursing.

•   The educational administrator will have a license or privilege to practice nursing in Wisconsin, a graduate degree with a major in nursing, knowledge of learning principles for adult education or 2 years experience as an instructor in a nursing education program within the last 5 years and current knowledge of nursing practice.

•   Faculty will have a license or privilege to practice nursing in Wisconsin. Professional nursing faculty members will have a graduate degree with a major in nursing; practical nursing faculty members will have a baccalaureate degree with a major in nursing.

•   If a school of nursing is unable to have faculty whom meeting the standards, the school may apply to the board for a faculty exception.

•   Curriculum will enable to student to develop the knowledge, skills and abilities necessary for competent nursing practice expected at the level of licensure. It will be revised as necessary to reflect advances in health care and its delivery.

•   There will be clinical learning experiences in a variety of clinical or simulated settings.

•   Preceptors will be approved by the faculty of the school of nursing and have clear roles and responsibilities. The preceptors will have an unencumbered license or privilege to practice in Wisconsin.

•   The school of nursing will implement a plan for ongoing evaluation.

The national council licensure exam (NCLEX) pass rate standards for the school is one of the following

•   A minimum of 80% of first time test takers within 6 months of graduation

•   A minimum of 80% of all students taking the NCLEX and a plan to meet the first time test taker standard.

Failure to meet the standard will result in a warning letter and school of nursing to submit an institutional plan for improvement of the NCLEX pass rate. The school of nursing will submit progress reports until the standard is met.

A school of nursing will submit annual self-evaluation reports, all documents submitted to or received from nursing accreditation agencies and notify the board if there is a change in accreditation status. Failure to maintain nursing accreditation will result in loss of school approval. The board may review the school of nursing to determine whether the standards are being met in the following situations:

•   Change in accreditation status

•   Nursing accreditation reports indicate accreditation standards are not being met

•   Complaints received regarding the school

•   Failure to meet NCLEX pass rate standard for more than 2 consecutive years

•   Violation of any rules under this chapter.

The review of the school may include a site survey, self-study report or a progress report. If standards are not being met, the school of nursing shall submit a plan and progress reports as requested. The board may withdraw board approval if the school continues to not meet standards.

Closure of a school of nursing involves providing a placement for students and indicating where the academic records and transcripts will be stored and how access to those records will be maintained.

Nurse refresher courses are designed for nurses who have been out of practice for more than five years. The course will contain theory, skills labs and clinical experience. The board will review nurse the curriculum for inclusion on a listing of approved courses. The student who participates in a non-approved course may submit curriculum for approval.

Summary of, and comparison with, existing or proposed federal regulation

None

Comparison with rules in adjacent states

Illinois: Illinois program approval process includes: a letter of intent, a feasibility study, hiring of a nurse administrator, submission of a curriculum proposal, and a site survey. Continued approval is based upon annual evaluation reports, full routine site visits and maintaining a NCLEX pass rate of 75% of first time test takers. Major and minor curricular changes are reported to the board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications (allows for variances to faculty standards) and student standards.

Iowa: Iowa program approval process includes: first step involves an application with information regarding the controlling institution and needs assessment; second step involves verification of employment of the head of program, submission of program's philosophy and objectives, curriculum plan, letter of intent from clinical facilities, evidence of provision of faculty, proposed budget and timeframe for implementation; next step is interim approval based upon program proposal and site visit; final approval is upon graduation of first class and NCLEX pass rate results. Provisional approval may be granted to program until standards are met. Change of controlling institution and changes in administrative personnel in the program. The program shall submit annual reports. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications, student standards and evaluation of the program. NCLEX pass rate standard is a minimum of 95% of the national passing percentage based upon first time test takers within 6 months of graduation.

Michigan: Michigan program approval process includes: the first step requires submission of a letter of intent, evidence of funding and other support, copy of Michigan Department of Career Development approval (if necessary), evidence of availability of clinical experiences, proposed number of students, proposed first date of admission, plans for recruiting director of the program and faculty and a site visit; initial approval involves a self-student report and annual progress reports; full approval is after the graduation of the 2 nd class, but no later than graduation of the 4 th class (a class for each 12 month period) and requires submission of a self-study report and a site visit. Every 4 years the school shall submit a self-study report and accredited schools shall follow the schedule of the accrediting agency. Program changes shall be submitted to the board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications (allows for variances to faculty standards), student standards, and evaluation of the program. NCLEX pass rate standard is 75% of first time test takers.

Minnesota: Minnesota program approval process includes: Phase 1 requires letter of intent including institution information, timetable for development and implementation, documentation of availability of academic facilities, impact on nursing programs in the area; Phase II involves a site visit and documentation of compliance with educational standards in order to be granted initial approval; Phase III is full approval and continual approval based upon meeting the minimum first time NCLEX success rate and acquiring national nursing education accreditation. Minnesota requires surveys of all schools on a periodic basis to maintain approval. NCLEX pass rate standard is 75% of first time test takers. All schools must be accredited by 2016. Annual reports shall be submitted to the Board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, clinical standards, nurse administrator and faculty qualifications, student standards, and evaluation of the program. The curriculum standard is the program must provide diverse learning activities that are consistent with program outcomes. Minnesota has an approval process for schools applying for innovative approaches which may require exemption from certain rules.

Summary of factual data and analytical methodologies

The Board considered the National Council of State Boards of Nursing's model practice rules and the rules and processes of our neighboring states.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis

The rule was posted for 14 days for economic impact comments and none were received.

Fiscal Estimate and Economic Impact Analysis

The Fiscal Estimate and Economic Impact Analysis is attached.

Initial Regulatory Flexibility Analysis or Summary

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1) , Stats.

Agency Contact Person

Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, Wisconsin 53708; telephone [phone]; email at Sharon.Henes@wisconsin .gov .

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)	Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis

1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
N 1
3. Subject
School of Nursing Approval
4. Fund Sources Affected			5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   ⍽ PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S			20.165(1)(g)
6. Fiscal Effect of Implementing the Rule
⍽ No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		X Increase Costs X Could Absorb Within Agency's Budget ⍽ Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   ⍽ No
9. Policy Problem Addressed by the Rule
This rule updates the school of nursing approval process. The current rules have been in place since 1985 and are not adequately addressing the changes in education.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
This rule was posted for economic comments for a period of 14 days and no comments were received.
11. Identify the local governmental units that participated in the development of this EIA.
None
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
This rule will not have an economic or fiscal impact on specific businesses, business sectors, public utility rate payers, local governmental units or the state's economy as a whole.
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
The benefit is to provide clarity and updates to the school of nursing approval process. The proposed rules also decrease the duplication between approval and national nursing school accreditation.
14. Long Range Implications of Implementing the Rule
The benefit is to provide clarity and updates to the school of nursing approval process. The proposed rules also decrease the duplication between approval and national nursing school accreditation.
15. Compare With Approaches Being Used by Federal Government
None
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
Illinois: Illinois program approval process includes: a letter of intent, a feasibility study, hiring of a nurse administrator, submission of a curriculum proposal, and a site survey. Continued approval is based upon annual evaluation reports, full routine site visits and maintaining a NCLEX pass rate of 75% of first time test takers. Major and minor curricular changes are reported to the board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications (allows for variances to faculty standards) and student standards.
Iowa: Iowa program approval process includes: first step involves an application with information regarding the controlling institution and needs assessment; second step involves verification of employment of the head of program, submission of program's philosophy and objectives, curriculum plan, letter of intent from clinical facilities, evidence of provision of faculty, proposed budget and timeframe for implementation; next step is interim approval based upon program proposal and site visit; final approval is upon graduation of first class and NCLEX pass rate results. Provisional approval may be granted to program until standards are met. Change of controlling institution and changes in administrative personnel in the program. The program shall submit annual reports. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications, student standards and evaluation of the program. NCLEX pass rate standard is a minimum of 95% of the national passing percentage based upon first time test takers within 6 months of graduation. Michigan: Michigan program approval process includes: the first step requires submission of a letter of intent, evidence of funding and other support, copy of Michigan Department of Career Development approval (if necessary), evidence of availability of clinical experiences, proposed number of students, proposed first date of admission, plans for recruiting director of the program and faculty and a site visit; initial approval involves a self-student report and annual progress reports; full approval is after the graduation of the 2 nd class, but no later than graduation of the 4 th class (a class for each 12 month period) and requires submission of a self-study report and a site visit. Every 4 years the school shall submit a self-study report and accredited schools shall follow the schedule of the accrediting agency. Program changes shall be submitted to the board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, curriculum standards, clinical standards, nurse administrator and faculty qualifications (allows for variances to faculty standards), student standards, and evaluation of the program. NCLEX pass rate standard is 75% of first time test takers Minnesota: Minnesota program approval process includes: Phase 1 requires letter of intent including institution information, timetable for development and implementation, documentation of availability of academic facilities, impact on nursing programs in the area; Phase II involves a site visit and documentation of compliance with educational standards in order to be granted initial approval; Phase III is full approval and continual approval based upon meeting the minimum first time NCLEX success rate and acquiring national nursing education accreditation. Minnesota requires surveys of all schools on a periodic basis to maintain approval. NCLEX pass rate standard is 75% of first time test takers. All schools must be accredited by 2016. Annual reports shall be submitted to the Board. Closure of the school involves responsibility for assisting students in transferring and notification of location of records storage. The standards for the school include institutional requirements, clinical standards, nurse administrator and faculty qualifications, student standards, and evaluation of the program. The curriculum standard is the program must provide diverse learning activities that are consistent with program outcomes. Minnesota has an approval process for schools applying for innovative approaches which may require exemption from certain rules.
17. Contact Name				18. Contact Phone Number
Sharon Henes				[phone]

This document can be made available in alternate formats to individuals with disabilities upon request.

Notice of Hearing

Safety and Professional Services —
Pharmacy Examining Board

CR 14-003

NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Pharmacy Examining Board in s.15.08 (5) (b), 450.19 (2), and 961.31, Wis. Stats., and interpreting s. 450.19 , Wis. Stats., the Pharmacy Examining Board will hold a public hearing at the time and place indicated below to consider an order to repeal sections Phar 18.04 (3) (intro) , 18.04 (3) (k) , 18.11 (3) , 18.11 (4) , 18.11 (9) (a) , 18.11 (9) (b) , and 18.11 (9) (c) ; to renumber and amend section Phar 18.04 (2) ; to amend sections Phar 18.02 (8) (a) , 18.02 (9) , 18.02 (15) (intro) , 18.02 (17) , 18.04 (title), 18.04 (3) (L) , 18.04 (3) (m) , 18.04 (3) (n) , 18.04 (4) , 18.05 (1) , (1) (note) , (2) (note) , (3) (b) (note) , and (4) , 18.06 (2) , (3) (b) (note) , (6) (b) (note) , and (8) , 18.07 , 18.08 (1) (a) and (b) (note) , 18.09 , 18.10 (1) (intro) , (2) (intro.) and (b) , (3) , (6) , and (7) , 18.11 (6) (intro) and (10) (c) (note) , 18.12 (4) , and 18.14 (1) (intro) ; and to create sections Phar 18.02 (11m) , (15g) , and (15r) , 18.04 (2) (gg) and (gr) , relating to the prescription drug monitoring program.

Hearing Information

Date:   Wednesday, February 12, 2014
Time:   9:00 a.m.
Location:   1400 East Washington Avenue
  Room 121A
  Madison, Wisconsin

Appearances at the Hearing

Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8366, Madison, Wisconsin 53708. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.

Place where Comments are to be Submitted and Deadline for Submission

Comments may be submitted to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8935, or by email to [e-mail] . Comments must be received at or before the public hearing to be held on February 12, 2014 to be included in the record of rule-making proceedings.

Copies of Rule

Copies of this proposed rule are available upon request to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, P.O. Box 8366, Madison, Wisconsin 53708, or by email at [e-mail] .

Analysis prepared by the Department of Safety and Professional Services

Statutes interpreted

Section 450.19 , Wis. Stats.

Statutory authority

Sections 15.08 (5) (b) , 450.19 (2) , and 961.31 , Wis. Stats.

Explanation of agency authority

The board has authority to promulgate rules for the guidance of the profession and to interpret the provisions of the statutes it enforces. The board also has authority to promulgate rules relating to the manufacture, distribution and dispensing of controlled substances within Wisconsin.

Specifically, the legislature directs the board to establish to govern the prescription drug monitoring program.

Related statute or rule

Section 450.19 , Wis. Stats. and ch. Phar 18 , Wis. Admin. Code.

Plain language analysis

This proposed rule modifies the ch. Phar 18 to improve the efficiency of the Prescription Drug Monitoring Program (PDMP) by ensuring consistency between the language of the rule and how PDMP functions.

Sections 1, 2, 3, 4, 5, and 6 clarify and simplify definitions. A dispenser is a pharmacy. Dispenser delegate is a managing pharmacist or an agent or employee of a practitioner who has the delegated responsibility for data compilation and submission to PDMP. Managing pharmacist, pharmacist and practitioner definitions are identical to definitions in the statutes. Pharmacist delegate is an agent of a pharmacist who has been delegated access to PDMP information.

Section 7 clarifies the title of s. Phar 18.04 to "compilation of dispensing data".

Section 8 changes the "he or she" to dispenser. It also becomes an introduction paragraph to the items currently listed under s. Phar 18.04 (3) (intro) .

Section 9 repeals the introduction section. Therefore all of the times currently listed under it are now under new introduction paragraph created by Section 8.

Section 10, 11, 12 amends the dispensing data. The classification codes for payment type and refill number are added. The quantity prescribed is no longer required data. There is clarification of how to record an animal patient's name, address and birthdate.

Sections 13, 17, and 21 adds dispenser delegate as subject to discipline for failing to compile required dispensing data.

Section 14 clarifies the rule that unless exempt, a dispenser shall electronically submit data.

Sections 15, 16 , 19, 20, 24, and 35 update the P.O. Box number for the Department in all the notes in ch. Phar 18 which reference the Department's address.

Section 18 clarifies that the dispenser shall submit a zero report for each 7 day period which the dispenser did not dispense a monitored prescription drug.

Section 22 clarifies if incorrect dispensing data had been submitted, the dispenser shall submit the correct information within 7 days.

Section 23 removes the "he or she" reference and inserts "dispenser".

Sections 25, 26, 27, 29, and 30 remove "dispenser" and "dispenser delegate" throughout ss. Phar 18.09 and 18.10 (1) (intro) , (2) (b) , (3) , (6) , and (7) and replace with the terms "pharmacist" and "pharmacist delegate".

Section 28 requires a specific statute or rule to be given when requesting a review.

Section 31 repeals the requirement for board to disclose PDMP information to staff of a relevant agency in another state who are authorized to access confidential patient health care records under ss. 146.82 and 450.19 , Stats. It also repeals the requirement to disclose minimum amount of PDMP information necessary to health care facility staff committees or accreditation or health care services review organizations.

Section 32 adds that the board will disclose the minimum amount of PDMP information necessary to staff who are investigating pharmacists and pharmacist delegates.

Section 33 clarifies that the board may disclose de-identified PDMP information which does not identify any patient upon request.

Section 34 repeals the requirements for a researcher to obtain PDMP information.

Section 36 adds pharmacist and pharmacist delegate to the list of people which the board maintains a log for their access to PDMP information.

Section 37 clarifies relevant agencies in other jurisdictions with prescription drug monitoring programs by adding the word "state."

Summary of, and comparison with, existing or proposed federal regulation

None. Prescription drug monitoring programs are operated by the state jurisdictions.

Comparison with rules in adjacent states

Illinois: The statutes and administrative rules governing the Illinois Prescription Monitoring Program require dispensers to submit to a database similar information regarding the prescribing and dispensing of controlled substances. Dispensers are required to submit the method of payment the patient used for a prescription. See 720 Illinois Compiled Statutes 570/316-21 and Illinois Administrative Code Title 77, Chapter X, Subchapter e, Part 2080. Dispensers are not required to submit refill information.

Iowa: The statutes and administrative rules governing the Iowa Prescription Monitoring Program require dispensers to submit to a database similar information regarding the prescribing and dispensing of controlled substances. Dispensers are required to submit refill information and the method of payment the patient used for a prescription. See Iowa Code § 124.551 -58 and Iowa Administrative Code Title 657, Chapter 37 .

Michigan: The statutes, administrative rules, and requirements for the Michigan Automated Prescription System require dispensers to submit to a database similar information regarding the prescribing and dispensing of controlled substances. Dispensers are required to submit refill information and the method of payment the patient used for a prescription. See Michigan Public Health Code § 333.7333 and Michigan Administrative Code R. 338.471, and "List of Required Fields," Michigan Automated Prescription System (MAPS). See also http://www.michigan.gov/documents/lara/lara_MAPS_ASAP2009_ListofRequiredFields_365562_7.pdf , accessed on Dec. 17, 2013.

Minnesota: The statutes governing the Minnesota Prescription Monitoring Program require dispensers to submit to a database similar information regarding the prescribing and dispensing of controlled substances on a daily basis. Dispensers are not required to submit refill information or the method of payment the patient used for a prescription. See Minnesota Statute 152.126.

Summary of factual data and analytical methodologies

The Board received feedback while developing and deploying the prescription drug monitoring program and gained considerable expertise in ways to improve it once it became fully operational.

The Board is aware that currently there are some provisions which create inefficiencies and ambiguities that the PDMP has to overcome to be as effective of a tool to combat prescription drug misuse and abuse as it can be. This proposed rule corrects and updates those provisions.

All the modifications are based on feedback from stakeholders and the prescription drug monitoring program uses as well as other information obtained while developing and deploying the prescription drug monitoring program.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis

This rule was posted for economic impact comments for 14 days and none were received.

Fiscal Estimate and Economic Impact Analysis

The Fiscal Estimate and Economic Impact Analysis is attached.

Initial Regulatory Flexibility Analysis or Summary

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1) , Stats.

Agency Contact Person

Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, Wisconsin 53708; telephone [phone]; email at [e-mail] .

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)	Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis

1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
Phar 18
3. Subject
Prescription Drug Monitoring Program updates
4. Fund Sources Affected			5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   X PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S			20.165(1)(g) and 20.165(1)(hg)
6. Fiscal Effect of Implementing the Rule
⍽ No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		X Increase Costs X Could Absorb Within Agency's Budget ⍽ Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   X No
9. Policy Problem Addressed by the Rule
The Board is aware that currently there are provisions which create inefficiencies and ambiguities that the prescription drug monitoring program has to overcome to be as effective of a tool to combat prescription drug misuse and abuse as it can be. This proposed rule corrects and updates those provisions.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
Economic impact comments were solicited by posting on Department and Administrative Rules websites for 14 days and no comments were received. Stakeholders had provided feedback during the implementation of changes which should be made to the current rules.
11. Identify the local governmental units that participated in the development of this EIA.
None
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
This rule will not have an economic or fiscal impact on specific businesses, business sectors, public utility rate payers, local governmental units or the state's economy as a whole.
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
The Board received feedback while developing and deploying the prescription drug monitoring program (PDMP) and gained considerable expertise in ways to improve it once it became fully operational. The benefit to implementing the rule is to make those changes. The alternative is to not make the modifications, which would not enable the Board to improve the PDMP based on information obtained while developing and deploying the PDMP and the feedback of stakeholders and PDMP users.
14. Long Range Implications of Implementing the Rule
The long range benefit is to have an effective prescription drug monitoring program.
15. Compare With Approaches Being Used by Federal Government
None
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota )
Our neighboring states require dispensers to submit to a database similar information regarding the prescribing and dispensing of controlled substances.
17. Contact Name				18. Contact Phone Number
Sharon Henes				[phone]

This document can be made available in alternate formats to individuals with disabilities upon request.