What Wisconsin Farmers Need to Know About Sales Tax
- Jan 21, 2014 | Gail Cole
There is new information regarding taxable sales of food and food ingredients by farmers in Wisconsin. New information regarding taxable sales of services by farmers has also been released. If you are a farmer in Wisconsin, or if you do business with Wisconsin farmers, now is a good time to review pertinent sales tax information.
Unless the buyer is eligible for an exemption (and has a valid exemption certificate to prove it), sales by farmers of tangible personal property and items, property and goods are subject to sales tax. Many services provided by farmers are also subject to sales tax; however, some services provided by farmers are exempt.
Taxable tangible personal property
Items subject to sales tax when sold by farmers include, but are not limited to:
- Flowers, decorative trees, plants and shrubs, and Christmas trees;
- “Food and food ingredients for human consumption that are candy, soft drinks, dietary supplements, or prepared food” (additional information available in Publication 220);
- Horses for show or for use in racing or pleasure riding; and
- Llamas used to herd sheep, and llamas that are pack animals or pets.
Exempt tangible personal property
Items exempt from sales tax when sold by farmers include, but are not limited to:
- Animals as food for human consumption;
- Food and food products for human consumption (meat, fruits, vegetables, grain), except candy, soft drinks, dietary supplements and prepared food; and
- Livestock and poultry sold to other farmers for exclusive use in farming.
The following services are subject to sales tax unless the buyer provides the seller with a valid exemption certificate:
- Repairs to licensed motor vehicles;
- Boarding, grooming or horseshoeing horses used for racing, pleasure or show;
- Breeding or artificial insemination of animals other than farm livestock or farm workstock; or
- Sales of admissions to amusement, athletic, entertainment or recreational events or places (think corn mazes, hay rides, etc).
According to the Wisconsin Department of Revenue, certain items classified as real property are considered for tax purposes to be tangible personal property when services are performed to them. Additional information is available on Publication 201, Part X.B.9.
Interested in knowing more? Read Farm Suppliers and Farmers: How Do Wisconsin Sales and Use Taxes Affect Your Operations?
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