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Wisconsin: How to Tax Your Teacher


 How Wisconsin sales tax applies to educational goods and services.

There are many ways to teach these days, from traditional classes to webinars and live online classes. Likewise, there are many types of educational products, including traditional textbooks, digital materials, and videos.

In response to the changing face of education, the Wisconsin Department of Revenue has updated information on sales tax treatment of various educational goods and services. Some are exempt from Wisconsin sales tax; some are taxable.

Taxable

  • Sales of tangible personal property, such as books, video tapes, CDs and DVDs (unless a specific exemption applies).
  • Sales of certain digital goods, such as digital audio works, digital audiovisual works, and digital books (unless a specific exemption applies). If the non-digital equivalent is subject to sales tax, so is the digital form of a good.

Generally, the sale of a pre-recorded webinar is subject to sales tax. However, a pre-recorded webinar or similar digital good may be exempt “if the purchaser is receiving an educational service and the pre-recorded webinar is transferred to the purchaser incidentally to the educational service.”

Exempt

  • Sales of live in-person educational services are exempt from Wisconsin sales tax. This includes in-person training seminars or classes furnished at a college or technical school.
  • Sales of live digital educational services, such as live educational webinars, online classes or seminars, are exempt in Wisconsin.
  • Charges for a service provider’s mandatory training materials sold in conjunction with sales of a live digital educational service are exempt.

However, tax is owed (by service provider) on training materials supplied incidentally by the service provider along with nontaxable (live in-person or live digital) educational services.

Bundled transactions

When taxable and nontaxable goods are sold together for one nonitemized price, the sale is taxable when “the value of the taxable products or services is 10% or more….”

However, sellers with excellent records “may report and remit tax on the portion of the sales price attributable to the taxable products or services….” In order to do so, the seller must “show in his books and records the portion of the sales price attributable to the taxable and nontaxable products or services.”

Additional information is available on the department of revenue webpage, Sales Tax Treatment of Educational Products, Goods and Services.

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photo credit: Charlottes Photo Gallery via photopin cc


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.