1. (1) Motor carriers.

   1. (a) Exemption. Section 77.54 (5) (b), Stats., provides a sales and use tax exemption for motor trucks, truck tractors, road tractors, buses, trailers, and semitrailers, and accessories, attachments, parts, supplies, and materials therefor, sold to common or contract carriers who use such motor trucks, truck tractors, road tractors, buses, trailers, and semitrailers exclusively as common or contract carriers, including the urban mass transportation of passengers as defined in s. 71.38, Stats.

   2. (am) Definitions. For purposes of the exemption in s. 77.54 (5) (b), Stats., and this section:

      1. 1. “Common carrier” has the same meaning as “common motor carrier” in s. 194.01 (1), Stats.
      2. 2. “Contract carrier” has the same meaning as “contract motor carrier” in s. 194.01 (2), Stats.

      3. 3. “Exclusively” means that the motor trucks, truck tractors, road tractors, buses, trailers, and semitrailers are used solely as common or contract carriers to the exclusion of all other uses, except that the sales and use tax exemption for this tangible personal property will not be invalidated by an infrequent and sporadic use other than as a common or contract carrier.

         Note: Under department of transportation rules, a licensed carrier (LC) number is required if a common or contract carrier hauls goods of others for hire. The sales and use tax exemption in par. (a) applies only if the common or contract carrier used the vehicle exclusively for hauling goods of others for hire.

   3. (b) Accessories and attachments. Accessories, attachments, parts, and supplies for exempt vehicles are exempt from the sales and use tax under s. 77.54 (5) (b), Stats. This exemption includes the following items if they are assigned to and carried on vehicles used exclusively as common or contract carriers: dollies, pianoboards, ladders, walkboards, tire chains, fire extinguishers, flares, bug deflectors, engine block heaters, defroster fans, auxiliary heaters and cooling units and their fuel, radios, flag kits including flags and reflectors, cell phones, tracking devices, global positioning system or “GPS” units, on board recorders, and items designed to be used with a vehicle which protect or secure the vehicle’s load including tape, fitted tarpaulins, tarpaulin straps, furniture pads and covers, load holding chains, logistic straps, and shoring beams. This exemption does not include corrugated boxes, containers, and related materials that are transferred to customers in conjunction with the selling, performing, or furnishing of a moving service, as provided in par. (g).

      Note: In a decision dated May 19, 1980 in the case of Leicht Transfer & Storage Co., Inc. vs. Wisconsin Department of Revenue the Dane County Circuit Court reversed the November 23, 1979 decision of the Wisconsin Tax Appeals Commission and held that van equipment and supplies that are exempt under s. 77.54 (5) (b), Stats., include furniture pads, covers, packing supplies, tape, pianoboards, ladders, walkboards, straps, lining paper and corrugated boxes. The Court also stated that “It must be kept in mind that it is undisputed that all of the items are assigned to and carried on the vans.” The Court of Appeals District IV, affirmed the Circuit Court’s decision. Under this interpretation, the only corrugated boxes and packing materials that qualify for exemption under s. 77.54 (5) (b), Stats., are those that are assigned to and carried on an exempt van and that are not transferred to a customer.

   4. (c) Repairs. The sale or furnishing of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance to exempt vehicles shall be exempt.

   5. (d) Exceptions. The exemption shall not apply to the following property used by common or contract carriers:

      1. 1. Automobiles as defined in s. 340.01 (4), Stats., except an automobile registered as a truck.
      2. 2. Self-propelled vehicles for off-highway use, such as road machinery, fork lifts, and other industrial trucks.
   6. (e) Equipment and supplies. Equipment acquired by a carrier for the repair, service, or maintenance of its exempt vehicles is not exempt, including repair tools, welding torches, battery chargers, and grinding discs.
   7. (f) Conversion to private use. If a vehicle purchased without tax is converted to private use, a use tax or sales tax pursuant to s. Tax 11.14 (2) (c) is due. The tax is measured by the sales price of the vehicle to the purchaser.
   8. (g) Packaging materials. The transfer to a customer of corrugated boxes, containers, and related packing materials in conjunction with moving or transporting a customer’s goods is incidental to the selling, performing, or furnishing of the moving or transportation service. The service provider is the consumer of the property and shall pay tax on its purchase of the property to be transferred.

   9. (h) Occasional sales. Motor carriers are not required to register as retailers with the department if the sales price from their sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services are less than $2,000 within a calendar year. Persons who are exempt from registration under this standard shall pay sales or use tax on all purchases of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services not otherwise exempt, including items that may be resold to customers. Persons who exceed the standard shall register with the department and obtain a seller’s permit. Persons who register may purchase tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services for resale without paying tax by issuing to their supplier a properly completed exemption certificate claiming resale or they may pay the tax to their supplier and, if the property is resold, claim a credit for the tax paid against any sales tax due.

      Note: Refer to s. Tax 11.002 for description of permit requirements, how to apply for a permit, and the 15-day time period within which the department is required to act on permit applications.

      Examples: 1) A truck purchased to transport pads and packing materials to and from moving jobs qualifies for the exemption in par. (a).

      2) Cutting down trees, cutting them into logs, and hauling them to a mill as a private business operation voids the exemption in par. (a), even though the trucker also hauls logs as a common or contract carrier for other persons at the same time.

      3) Vehicles of a milk or cheese factory that engage in hauling milk from farms to its plant for processing do not qualify for the exemption under par. (a).

      4) Towing of vehicles to the repair facility of a garage-wrecker operator is part of a private repair business that is not exempt under par. (a).

2. (2) Railway rolling stock.

   1. (a) Section 77.54 (12), Stats., provides a sales and use tax exemption for the sales price from the sales of and the storage, use, or other consumption in this state of rail freight or passenger cars, locomotives, or other rolling stock used in railroad operations, or accessories, attachments, parts, lubricants, or fuel therefor.

   2. (b) The exemption for rolling stock includes:

      1. 1. The sale or furnishing of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance to exempt rolling stock.
      2. 2. Purchases of any equipment that is operated on railroad rails, including an industrial firm’s switching locomotives used to switch freight cars on its own property, except vehicles that may also be used on a highway.
      3. 3. Fuel used to heat a caboose or run a compressor that cools a railway car.
      4. 4. A utility’s coal cars used to haul coal from mines to the utility.

   3. (c) The exemption does not apply to:

      1. 1. Rails, crossties, and other road building and maintenance materials. However, sales of crossties to a common or contract carrier are exempt if they are shipped wholly or in part by way of the purchasing carrier under a bill of lading, whether the freight is paid in advance or the shipment is made freight charges collect, to a point outside Wisconsin if the property is transported outside Wisconsin for use by the carrier in the conduct of its business as a carrier. The exemption will not be invalidated because of interruption of the shipment for storage, drying, processing, or creosoting of the crossties in Wisconsin.
      2. 2. Bracing materials, rough lumber, and dunnage materials.
      3. 3. Ice to refrigerate a railway car.

3. (3) Commercial vessels.

   1. (a) Section 77.54 (13), Stats., provides a sales and use tax exemption for the sales price from the sales of and the storage, use, or other consumption in this state of commercial vessels and barges of 50-ton burden or over primarily engaged in interstate or foreign commerce or commercial fishing, and the accessories, attachments, parts, and fuel therefor.

   2. (b) The exemption for commercial vessels applies to:

      1. 1. Vessels and barges primarily engaged in interstate or foreign commerce or commercial fishing that are documented under the laws of the United States showing a net volumetric tonnage of 50 tons or more.
      2. 2. Items that become a component part of the exempt commercial vessel.
      3. 3. The sale or furnishing of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance of exempt commercial vessels.

   3. (c) The exemption does not apply to consumable supplies or furnishings that are not attached to the vessel, such as bedding, linen, table and kitchenware, tables, chairs, lubricants, work clothes, acetylene gas, nets, fishing tackle, lumber for dry docking, bracing, blocking and dunnage materials and other materials not incorporated into the vessel.

      Note: Section Tax 11.16 interprets ss. 77.51 (9), 77.54 (5) (b), (7) (a), (12), and (13), 77.55 (2m), and 77.57, Stats.

      Note: The interpretations in s. Tax 11.16 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The sale of packing materials to a service provider became taxable effective September 1, 1983, pursuant to 1983 Wis. Act 27; (b) The exemption for certain railroad crossties became effective July 20, 1985, pursuant to 1985 Wis. Act 29; (c) Section 340.01 (61), Stats., which defined “station wagon” was repealed pursuant to 1999 Wis. Act 80; (d) In Freight Lime and Sand Hauling, Inc. v. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, November 20, 2002 (CCH 400-646), trucks hauling property of others for hire were found to qualify for exemption, even though the property being hauled had no value; (e) Section 77.57, Stats., was amended to remove the portion of the statute that allowed a purchaser to use the lesser of the cost or fair market value of an item that was purchased exempt and whose first taxable use occurred more than 6 months after it was purchased, pursuant to 2009 Wis. Act 2; (f) 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; (g) The definition of “common motor carrier” was amended, pursuant to 2013 Wis. Act 364, which first applies to motor carrier operations occurring on April 25, 2014; 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.

History

History: Cr. Register, November, 1978, No. 275, eff. 12-1-78; am. (1) (a) and (d), (3) (b) 1., Register, November, 1981, No. 311, eff. 12-1-81; am. (3) (b) 1., Register, January, 1983, No. 325, eff. 2-1-83; am. (1) (b), (d) and (2) (b) 2., r. and recr. (1) (e), cr. (1) (h) and (i), Register, December, 1983, No. 336, eff. 1-1-84; am. (1) (f) and (3) (b) 1., Register, July, 1987, No. 379, eff. 8-1-87; am. (1) (e) and (3) (b) 1., Register, April, 1990, No. 412, eff. 5-1-90; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1990, No. 412; am. (1) (a) and (d) and (2) (c) 1., r. (1) (g), renum. (1) (h) to be (g) and (1) (i) to be (h), Register, June, 1991, No. 426, eff. 7-1-91; EmR0924: emerg. am. (1) (a), (b), (c), (f), (h), (2) (a), (b) 1. to 3., (3) (a) and (b) 3., renum. (1) (d) to be (1) (d) (intro.) and am., cr. (1) (d) 1. and 2., eff. 10-1-09; CR 09-090: am. (1) (a), (b), (c), (f), (h), (2) (a), (b) 1. to 3., (3) (a) and (b) 3., renum. (1) (d) to be (1) (d) (intro.) and am., cr. (1) (d) 1. and 2. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (1) (a), (am), (b), (e), (g), (2) (a), (c) 1., 2., (3) (a) Register November 2010 No. 659, eff. 12-1-10; CR 16-053: am. (1) (am) (title), renum. (1) (am) to (1) (am) 3., cr. (1) (am) (intro.), 1., 2., am. (1) (b) Register June 2018 No. 750, eff. 7-1-18; CR 20-018: am. (1) (h) Register July 2021 No. 787, eff. 8-1-21.