Wisconsin: The Taxation of Aircraft, ATVs and Virtual Money
- May 2, 2014 | Gail Cole
The Wisconsin Department of Revenue periodically posts news for tax professionals on its website. Topics range from the taxation of take and bake pizza to virtual currency. All changes to Wisconsin taxes should eventually find their way to this list.
Recent topics include the following:
- Aircraft parking;
- Aircraft purchased by nonresidents;
- Huber law fees;
- Snowmobiles, ATVs, UTVs, and similar property sold to nonresidents; and
- Virtual currency.
Do you park your aircraft in Wisconsin? If so, you may owe Wisconsin sales or use tax on those parking fees. Sales or use tax is due on aircraft parking charges” when an aircraft is available for use without requiring a substantial expenditure of time or effort to make it operational. If substantial time or effort is required to prepare the aircraft for flight (as when an aircraft is stored with wings removed), sales or use tax is not due on parking charges.
- Storage of aircraft available for immediate use is taxable.
- Storage of aircraft not available for immediate use is exempt.
- T hangar and tie-down parking, both indoor and outdoor, is a taxable service.
- Apron charges are not taxable “when the fee includes use of gates and terminals and the airlines use the apron space typically to load and unload passengers and cargo, lavatory servicing, maintenance, cleaning, fueling,” and similar services.
Specific examples are available in the news article.
Aircraft purchased by nonresidents
Aircraft that is purchased in another state is exempt from Wisconsin use tax if the owner or lessee paid all of the sales and use taxes imposed in the state in which it was purchased and if the owner or lessee is:
- A corporation,
- A partnership,
- A limited liability company,
- An individual, or
- An estate, trust cooperative or unincorporated cooperative association.
Go to the news article to read the fine print that accompanies each of the above. And remember, sales or use tax may apply to aircraft parking charges.
Snowmobiles, ATVs, UTVs, and similar property sold to nonresidents
The Wisconsin Department of Revenue updated this news article on April 28, 2014. Under current law, when the sale takes place in Wisconsin and the buyer takes possession of the property in Wisconsin, dealers and other retailers are “required to collect and remit Wisconsin sales or use tax on sales of tangible personal property in Wisconsin, including:
- Non-motorized campers
- Off-road motorcycles
- Boats and personal watercraft and
- Recreational vehicles as defined in sec. 340.01(48r), Wis. Stats.”
Wisconsin sales tax is due even when the buyer is a resident of another state.
However, there is an exemption for motor vehicles designed or used primarily for transporting persons or property on a public highway “that are sold to a nonresident whose only use of the motor vehicle is in the removal of the property from Wisconsin.” This exemption does not apply to sales of ATVs, etc.
Finally, private sales (between individuals) of ATVs, UTVs, snowmobile, or other motorized vehicle are not subject to sales tax. When the buyer is a resident of Wisconsin, he or she will owe Wisconsin use tax at the time of registration. There are also instances when Wisconsin sales or use tax may apply to nonresident purchasers.
While the topic of virtual currency such as bitcoin is contentious enough to start a barroom brawl, the Wisconsin Department of Revenue keeps it simple:
- Sales of virtual money are exempt from sales tax because virtual money is intangible;
- Sales of tangible taxable goods (such as an admission to an amusement event, digital music or other digital goods) and services purchased with virtual money are taxable.
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