Wisconsin Remote Seller Economic Nexus Rule Takes Effect October 1

Wisconsin’s s remote seller economic nexus rule for sales and use tax is effective beginning October 1, 2018. The emergency rule expires February 27, 2019. The rule is consistent with the U.S. Supreme Court’s Wayfair decision.

Nexus Thresholds for Remote Sellers

The rule contains nexus thresholds for retailers that sell to Wisconsin customers but have no physical presence in Wisconsin.

Generally, remote retailers must register and collect Wisconsin sales or use tax if, in the previous or current year, their:

  • annual sales into Wisconsin exceed $100,000; or
  • annual number of sales transactions into Wisconsin is 200 or more.

“Year” refers to the retailer’s taxable year for federal income tax purposes.

Annual Threshold Amounts

The annual amounts include both taxable and taxable sales. In addition, an out-of-state retailer’s annual amounts include all sales into Wisconsin by:

  • the retailer on behalf of other persons; and
  • another person on the retailer’s behalf.

Periodic Lease or License As Sale

Each required periodic payment of a lease or license is a separate sale transaction.

Advance Deposits

Deposits made in advance of a sale are not sale transactions.

Voluntary Collection

Remote sellers who are not required to collect Wisconsin tax can elect to collect use tax for their customers’ convenience. These sellers can apply to the department for a use tax registration certificate.

Retailers that hold a use tax registration certificate must:

  • collect the use tax from Wisconsin customers;
  • give receipts; and
  • report and pay the use tax.

Local Tax Collection

Retailers that have to register and collect Wisconsin sales or use tax must also collect and remit applicable local taxes.

Registration and Collection Dates

Wisconsin has already announced registration and collection dates for remote sellers.

Rule Sec. Tax 11.97, Wisconsin Department of Revenue, effective as noted

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All stories by: CCHTaxGroup