Section 11.04. Constructing buildings for exempt entities.

 

(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, 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.

(2)   Taxable sales. Sales of building materials to contractors or subcontractors used in the construction of buildings or structures, or the alteration, repair or improvement of real property for exempt entities, are subject to the tax.

(3)   Purchases presumed taxable. When a contractor and an exempt entity enter into a construction contract to improve real property, and the contract provides that the contractor is to furnish the building materials, it is presumed until the contrary is established, that deliveries of building materials to the contractor are made pursuant to purchases made by the contractor.

(4)   Supplier is contractor. A supplier, who is also the contractor who uses the building materials in the construction of buildings or structures, or the alteration, repair or improvement of real property for an exempt entity, is the consumer of such building materials, not the seller of personal property to the exempt entity. The sale of building materials to the consumer is subject to the tax.

(5)   Exempt sales. A supplier's sales of building materials made directly to an exempt entity are not taxable, even though such tangible personal property or item, property, or good under s. 77.52 (1) (b) , (c) , or (d) , Stats., is used by the contractor in the erection of a building or structure, or in the alteration, repair or improvement of real property for the exempt entity. Suppliers of building materials may presume that a sale is made directly to an exempt entity if the supplier receives a purchase order from the exempt entity, and payment for such building materials is received directly from the exempt entity.

History: Cr. Register, January, 1979, No. 277 , eff. 2-1-79; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, August, 1999, No. 524 ; EmR0924 : emerg. am. (1), (2) (title), (3) and (5), eff. 10-1-09; CR 09-090 : am. (1), (2) (title), (3) and (5) Register May 2010 No. 653 , eff. 6-1-10; CR12-014 : am. (1) Register August 2012 No. 680 , eff. 9-1-12; CR 13-012 : am. (1) Register August 2013 No. 692 , eff. 9-1-13; CR 14-006 : am. (1) Register August 2014 No. 704 , eff. 9-1-14.

Note

Section Tax 11.04 interprets ss. 77.51 (2) and (14) , 77.54 (9a) and 77.55 (1) , Stats. Microsoft Windows NT 6.1.7601 Service Pack 1 The interpretations in s. Tax 11.04 are effective under the general sales and use tax law on and after September 1, 1969, except: 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 . Microsoft Windows NT 6.1.7601 Service Pack 1