Section Tax 11.64 - Background music(1) GENERAL. Persons in the business of providing background music commonly utilize one or both of the methods set forth below. The sales and use tax consequences depend upon the method used.(2) MUSIC PLAYED AT CENTRAL STUDIO. The receipts from the furnishing of background music to business, industry, and others from a central studio over telephone circuits or by FM radio are subject to the sales or use tax as a digital audio work. The persons who provide such service are the consumers of the tapes, tape players, transmitters, and other tangible personal property and items, property, and goods under s. 77.52(1) (b), (c), and (d), Stats., used to provide the service, and their purchases of these items, as well as telecommunication services from the telephone company, are taxable. In addition, the receipts from equipment leased or rented to the customer as part of providing this service are taxable. An exemption for resale may be claimed on the purchase of such leased or rented equipment, if the equipment is used exclusively for lease or rental and if the customer has the option of receiving the digital audio work from the retailer, without also being required to purchase, lease, or rent the equipment from that same retailer.(3) MUSIC PLAYED BY CUSTOMER. The lease, rental, hire or license to use all tangible personal property and items, property, and goods under s. 77.52(1) (b), (c), and (d), Stats., comprising a background music system are taxable when the system is operated by the customer. Any charge for installing the system is taxable. The sale of the tapes, equipment, and other tangible personal property and items, property, and goods under s. 77.52(1) (b), (c), and (d), Stats., to the person providing the system (e.g., the lessor or licensor) is exempt as a sale for resale, if the equipment is used exclusively for lease, license, or rental.Wis. Admin. Code Department of Revenue Tax 11.64
Cr. Register, September, 1977, No. 261, eff. 10-1-77; EmR0924: emerg. am. (2) and (3), eff. 10-1-09; CR 09-090: am. (2) and (3) Register May 2010 No. 653, eff. 6-1-10. Section Tax 11.64 interpretss. 77.51(3pa), (14) (intro) and (j), and (17x) and 77.52(1) (d), Stats.
The interpretations in s. Tax 11.64 are effective under the general sales and use tax law on and after September 1, 1969, except that 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.