Wis. Admin. Code Department of Revenue Tax 11.33

Current through September 30, 2024

Section Tax 11.33 - Occasional sales

(1) SCOPE. This section describes the general rules for exempt occasional sales.

(2) GENERAL. Sales of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., and taxable services are not taxable if they are exempt "occasional sales." However, if the number, scope and character of the sales are such that they exceed the standards in the statutes and this section, a taxable sale occurs.

(3) STATUTES.

(a) "Occasional sale" is defined in s. 77.51(9), Stats.

(b) Section 77.54(7), Stats., exempts most occasional sales from the sales and use taxes.

(4) SALES WHICH ARE EXEMPT OCCASIONAL SALES. Sales which are exempt occasional sales include:

(a) The sale of a motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01(48r), Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin is an exempt occasional sale only if one of the following applies:

1. The sale is to a spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law, of the transferor provided the property has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling this type of property.

2. The item is a motor vehicle and the transferor sells the motor vehicle to a corporation owned solely by the transferor or the transferor's spouse, provided the motor vehicle has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling motor vehicles. Transferor for purposes of this subdivision means a natural person.

3. The motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01(48r), Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft is sold by a nonprofit organization meeting the requirements in s. Tax 11.35(4).

(b) Any sale of a boat that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin or under the laws of the United States, is an exempt occasional sale only if one of the following applies:

1. The sale is to a spouse, parent, stepparent, father-in-law, mother-in-law, child, stepchild, son-in-law, or daughter-in-law, of the transferor provided the property has been previously registered or titled in Wisconsin in the name of the transferor, if required to be registered or titled, and the transferor is not engaged in the business of selling boats.

2. The boat is sold by a nonprofit organization meeting the requirements in s. Tax 11.35(4).

(c) Except as provided in pars. (a) and (b), five or fewer auctions that are the sale of personal farm property or household goods and that are held by the same auctioneer at the same location during the year. For indoor locations, "location" means a building, except that in the case of a shopping center or shopping mall, "location" means a store.

Note: Refer to s. Tax 11.50(4) and (5) regarding exempt occasional sales at auction of personal farm property and household goods.

(d) Except as provided in pars. (a) and (b), sales of tangible personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., by an individual who operates a sole proprietorship and who holds or is required to hold a seller's permit, which have not been used in the course of the person's business and the sales are not the type of property, items, or goods sold in the course of the person's business. However, all tangible personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., sold by a corporation or partnership which holds or is required to hold a seller's permit shall be considered to be used or sold in the course of the organization's business activities and are taxable.

Example: A taxpayer operates a service station as a sole proprietor and holds a seller's permit for the purpose of selling cigarettes and repairing motor vehicles. The sales price from selling a refrigerator and stove used in the taxpayer's residence are not subject to the sales tax. However, the sales price from the sale of a desk and refrigerator which were used in the service station's business activities are subject to the sales tax.

(e) Except as provided in pars. (a) and (b), the sale of a business or business assets, not including inventory held for sale, previously used by a seller to conduct its trade or business at a location after that person has ceased actively operating in the regular course of business as a seller of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services at that location.

Note: Refer to s. Tax 11.34 regarding the occasional sales exemption for the sale of a business or business assets.

(f) Except as provided in pars. (a) and (b), sale of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services by a person who does not hold and is not required to hold a seller's permit, if the total taxable sales price from sales of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., and taxable services are less than $2,000 during the calendar year. However, purchases of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services which when resold are exempt under this paragraph, are taxable purchases by that person. This paragraph does not apply to nonprofit organizations.

Examples:

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 $2,000 during the calendar year, that per- son's receipts are deemed exempt occasional sales under par. (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.

2) Sales of soft drinks by employee groups are not taxable if the sales price from soft drink sales are less than $2,000 per year. These groups are deemed consumers and the supplier's sales to them are taxable retail sales

(g) Sales by nonprofit organizations meeting the requirements in s. 77.54(7m), Stats.

Note: Refer to s. Tax 11.35 regarding the occasional sales exemption for nonprofit organizations.

(5) SALES WHICH ARE NOT EXEMPT OCCASIONAL SALES. Sales which are not exempt occasional sales, except as provided in sub. (4), include:

(a) Sales by a person who holds or is required to hold a seller's permit.

Example: Sales of used equipment by a retail store or vending machine retailer are not occasional sales and would be subject to sales or use tax.

(b) Sales of a business or the assets of a business when the seller holds or is required to hold a seller's permit. The tax applies to the portion of the sales price reasonably attributable to the taxable personal property such as equipment, furniture and fixtures.

(c) Sales of motor vehicles, aircraft, boats, recreational vehicles as defined in s. 340.01(48r), Stats., snowmobiles, trailers, semitrailers, all-terrain vehicles, utility terrain vehicles, and off-highway motorcycles. Unless exempt, a use tax or sales tax pursuant to s. Tax 11.14(2) (c) shall be paid by the purchaser at the time the motor vehicle, aircraft, boat, recreational vehicle as defined in s. 340.01(48r), Stats., snowmobile, trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, or off-highway motorcycle is registered or titled within Wisconsin.

(d) Sales made by persons who hold themselves out to the public as engaged in business, even though their sales may be few and infrequent. This includes the sales of works of art, handmade articles, antiques or used property by artists or others who are pursuing a vocation or part-time business as a seller of this property.

(e) Sales of bingo supplies to players or the sale, rental or use of regular bingo cards, extra regular cards and special bingo cards.

(f) Sales by persons engaged primarily in the business of making nontaxable sales of tangible personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., such as manufacturers and wholesalers. Since these persons are in the business of selling tangible personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., the mere fact that only a small fraction of their total sales are taxable retail sales does not make these sales exempt occasional sales.

Note: Section Tax 11.33 interprets ss. 77.51(9), 77.52(1) and (2) (a) 2 and 77.54(7) and (7m), Stats.

Wis. Admin. Code Department of Revenue Tax 11.33

Cr. Register, June, 1991, No. 426, eff. 7-1-91; am. (2), (4) (c) and (g), Register, April, 1993, No. 448, eff. 5-1-93; am. (4) (a) and (g), Register, August, 1999, No. 524, eff. 9-1-99; EmR0924: emerg. am. (2), (4) (a) to (d), (f), (g), (5) (b) to (d) and (f), eff. 10-1-09; CR 09-090: am. (2), (4) (a) to (d), (f), (g), (5) (b) to (d) and (f) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (4) (c) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: r. and recr. (4), am. (5) (title), cr. (5) (b) (Example) Register August 2012 No. 680, eff. 9-1-12; CR 14-006: am. (4) (f) (Example 1) Register August 2014 No. 704, eff. 9-1-14.

Amended by, CR 16-053: am. (4) (a) (intro.), 3., (5) (c) Register June 2018 No. 750, eff. 7/1/2018

Amended by, CR 19-112: am. (4) (a) (intro.), 3., (5) (c) Register June 2020 No. 774, eff. 7/1/2020

Amended by, CR 20-018: am. (4) (f), (Example 1), (Example 2) Register July 2021 No. 787, eff. 8/1/2021

The interpretations in s. Tax 11.33 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption in sub. (3) (b) became effective March 1, 1979; (b) Non-retailer sales of all-terrain vehicles as described in sub. (4) (c) became taxable and the sale of an all-terrain vehicle as described in sub. (3) (c) and (d) became exempt effective September 1, 1987, pursuant to 1987 Wis. Act 27; (c) The exemption for the sale of a business or business assets in sub. (3) (e) became effective May 17, 1988, pursuant to 1987 Wis. Act 399; (d) The exemption for transfers of motor vehicles, boats, etc., to in-laws became effective August 15, 1991, pursuant to 1991 Wis. Act 39; (e) The occasional sales exemption for 5 or fewer auctions became effective January 1, 2000, pursuant to 1999 Wis. Act 9; (f) The term "mobile home" was changed to "recreational vehicle, as defined in s. 340.01(48r), Stats." effective January 1, 2008, pursuant to 2007 Wis. Act 11; (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 threshold for exempt occasional sales was changed to less than $2,000 in annual sales, effective for sales beginning January 1, 2018, pursuant to 2017 Wis. Act 59.