Effective January 1, 2016, Wisconsin sales and sales and use tax law for construction contractors performing projects for non-profit entities and tax exempt government entities changed. Eligible contracts are those entered into, on, or after that date.
Now you can purchase materials for projects owned by those entities without paying sales or use tax. To qualify, the materials must be transferred to the exempt entity (which is normal anyway). The materials must become part of a “facility” in Wisconsin. Exempt entities would be a county government, municipality, school district, or nonprofit organization. “Facility” means any:
- parking lot
- parking garage
- athletic field
- athletic park
- storm sewer
- water supply system or sewerage and waste water treatment
- BUT NOT highways, streets or roads
This simplifies purchasing and administration for the contractor and the customer. Local governments and nonprofits already qualified for the exemption, but only if they purchased the materials directly.
Please contact Michael Radtke, 262-522-8246, to discuss how to take advantage of this benefit for your company.
Written by Mike Radtke, CPA, Tax Principal
Posted in Tax