1. (1) Definitions. In this section:

   1. (a) “Utility facilities” include telephone, telegraph, and television lines; electrical, water, and gas transmission and distribution lines; and poles, transformers, and towers, including pipes, conduits, sleeves, risers for cable television lines, or other property by which lines are supported or in which they are contained or connected.
   2. (b) “Real property” includes underground utility facilities; lines, poles, foundations, towers, gravel, and any buildings of a substation located on a utility’s own land; and concrete foundations, anchors, crushed rock, and backfill whether or not on land owned by the utility.
   3. (c) “Tangible personal property” includes overhead utility facilities and circuit breakers and other equipment, but not their foundations, installed to control the flow of electricity. It also includes other overhead property by which lines are supported or in which they are contained or connected if erected or installed under an easement or license, including authorizations under ss. 86.16 and 182.017, Stats., on land owned by a person other than the utility.

2. (2) General.

   1. (a) The sales price from the installation, license, lease, rental, repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d), Stats., is subject to sales tax.

   2. (b) Materials used in construction or forming of real property are taxable when purchased by the contractor.

      Examples: 1) The charges by a contractor for the construction and installation of an overhead utility facility, or a portion of an overhead utility facility, and from a sale “in place” of the facility, if installed under an easement on land owned by a person other than the utility, are taxable. Materials used in the construction or installation of the property may be purchased without tax for resale.

      2) The charges by a utility for the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of an overhead utility facility, or a portion of an overhead facility of another utility are taxable. Materials used in the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, maintenance, or installation may be purchased without tax for resale.

      3) Charges for the installation, sale, license, lease, rental, repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance and removal of underground utility facilities are not subject to sales or use tax. However, the materials used in the construction or installation of the underground utility facilities cannot be purchased for resale and are subject to tax at the time of purchase unless otherwise exempt.

      4) X-ray testing of weld joints in the pipe as part of the construction of an underground utility pipeline is part of the construction process and the charges are not subject to sales or use tax. However, materials used in the X-ray testing of the underground utility pipeline cannot be purchased for resale and are subject to tax at the time of purchase unless otherwise exempt.

3. (3) Related expenses. The taxable receipts from the performance of a lump sum contract for the construction of an overhead utility facility, which is tangible personal property, may not be reduced by expenses in performing the contract, such as payments for crop damage, site preparation, restoration work, tree trimming, line clearing, relocating existing lines, engineering and design work, surveying, purchasing a right-of-way, and unloading and hauling materials.

   Note: The related expenses described in sub. (3) are costs of performing the contract and do not affect the amount of taxable receipts.

4. (4) Equipment charges.

   1. (a) The taxable receipts from a contract to construct or repair an overhead utility facility which is tangible personal property may not be reduced by the amount of hourly charges for the use of equipment.

   2. (b) The charges for the rental of equipment used in the construction or repair of a utility line to a utility are taxable.

      Note: See s. Tax 11.29 (5) for more information.

5. (5) Nontaxable services.

   1. (a) The sales price received from tree and shrub trimming services for a utility for the purpose of keeping the overhead transmission and distribution lines free from interference from nearby trees and shrubs or inaccessible to children is not taxable under s. 77.52 (2) (a) 20., Stats.
   2. (b) The sales price received under a separate contract for tree trimming and line clearing in connection with the construction of a new utility line is not taxable.
   3. (c) The sales price received from a separate charge for removing an existing utility line is not taxable.

   4. (d)

      1. 1. The sales price received for a service provided by an electric cooperative to another electric cooperative, or by a telecommunications utility to another telecommunications utility, for disaster relief work performed during a disaster period.

      2. 2. In this paragraph:

         1. a. “Disaster period” has the meaning given in s. 77.54 (68) (b) 2., Stats.
         2. b. “Disaster relief work” has the meaning given in s. 77.54 (68) (b) 3., Stats.
         3. c. “Electric cooperative” has the meaning given in s. 76.48 (1g) (c), Stats.
         4. d. “State of emergency” has the meaning given in s. 77.54 (68) (b) 4m., Stats.
         5. e. “Telecommunications utility” has the meaning given in s. 196.01 (10), Stats.
      3. 3. The exemption in this paragraph does not apply to materials and supplies used in performing exempt disaster relief services.

6. (6) Landscaping services. The sales price received from landscaping and lawn maintenance services is taxable. Except as provided in sub. (5) (a) and (b), landscaping and lawn maintenance services include:

   1. (a) Landscape planning and counseling.
   2. (b) Lawn and garden services, such as planting, mowing, spraying, and fertilizing.
   3. (c) Shrub and tree services.

   4. (d) Spreading topsoil and installing sod or planting seed where trenches have been dug or sump pump, transmission, and distribution lines have been buried in residential, business, commercial, and industrial locations, cemeteries, golf courses, athletic fields, stadiums, parking lots, and other areas, and along highways, streets, and walkways.

      Note: Section Tax 11.86 interprets ss. 77.51 (20), 77.52 (2) (a) 10., 11. and 20., 77.54 (68), 86.16 and 182.017, Stats.

      Note: The interpretations in s. Tax 11.86 are effective on and after September 1, 1969, except: (a) Underground utility facilities were determined not to be tangible personal property, effective September 1, 1970; (b) Landscaping services described in sub. (6) became taxable effective May 1, 1982, pursuant to Chapter 317, Laws of 1981; (c) The Wisconsin Tax Appeals Commission decision in Capital City Tree Experts, Inc., dated June 19, 1987, later modified by stipulation and order of the Circuit Court of Dane County dated September 21, 1987, held that the service of trimming trees on a utility right-of-way to prevent interference and to make inaccessible to children is not a taxable landscaping service; d) 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 (e) The exemption for services performed during a disaster period became effective January 1, 2017, pursuant to 2017 Wis. Act 290.

History

History: Cr. Register, November, 1978, No. 275, eff. 12-1-78; am. (4) (a) and cr. (5), Register, September, 1984, No. 345, eff. 10-1-84; r. and recr., Register, June, 1991, No. 426, eff. 7-1-91; emerg. r. and recr. (6), eff. 5-18-97; r. and recr. (6), Register, October, 1997, No. 502, eff. 11-1-97; correction in (6) made under s. 13.93 (2m) (b) 1., Stats., Register, May, 1999, No. 521; EmR0924: emerg. am. (1) (a), (b), (2) (a), (3), (4), (5), (6) (intro.), (b) and (d), eff. 10-1-09; CR 09-090: am. (1) (a), (b), (2) (a), (3), (4), (5), (6) (intro.), (b) and (d) Register May 2010 No. 653, eff. 6-1-10; CR 20-018: cr. (5) (d) Register July 2021 No. 787, eff. 8-1-21.