Section Tax 11.34 - Occasional sales exemption for sale of a business or business assets(1) SCOPE. This section describes the exemption under s. 77.54(7) (a), Stats., for the occasional sale of a business or business assets as described in s. 77.51(9) (a) and (am), Stats.(2) GENERAL. (a) The sale of business assets, consisting of tangible personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., by a person who holds or is required to hold a seller's permit at the time of the sale is subject to sales tax, except as provided in sub. (3) (c).(b) Except as provided in sub. (3) (c), the tax applies if the business assets are sold as: 1. A disposition of surplus assets of a continuing business.2. A single transaction or series of transactions prior to termination of a business.3. Piecemeal sales, whether part of a continuing business or prior to termination.(c) The tax does not apply to merchandise inventory sold to another retailer who purchases it for resale and sells it in the regular course of that retailer's business.(3) EFFECT OF HOLDING A SELLER'S PERMIT.(a) Pursuant to s. 77.51(9) (a) and (am), Stats., a person holding or required to hold a seller's permit at the time of disposition of business assets may not claim that a sale of a business asset is an occasional sale, except as provided in par. (b).(b) A sale, other than a sale described in par. (bg) or (br), is exempt from sales and use tax as an occasional sale if all of the following conditions are met: 1. The sale is of personal property or items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., other than inventory held for sale, previously used by a person to conduct a trade or business at a location.2. The sale occurs after the person ceased actively operating in the regular course of business as a seller of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services at that location. (bg) A sale of a motor vehicle, snowmobile, recreational vehicle as defined in s. 340.01(48r), Stats., trailer, semitrailer, all-terrain vehicle, utility terrain vehicle, off-highway motorcycle, or aircraft that is registered or titled in Wisconsin or required to be registered or titled in Wisconsin, is subject to tax unless s. Tax 11.33(4) (a) 1. or 2. apply. Example: A business has four business locations in Wisconsin and has ceased all of its business activities at one location. All of the business assets at the location where the business has ceased operating, including one motor vehicle that it used in its business, are being sold. The business is required to continue to hold a seller's per- mit for its other three locations. The motor vehicle is sold, but the purchaser is not a person described in s. Tax 11.33(4) (a) 1. or 2. The sale of the motor vehicle is not an exempt occasional sale of a business asset and the seller is required to collect tax on its sale of the motor vehicle.
(br) A sale of a boat that is registered or titled or required to be registered or titled in Wisconsin or under the laws of the United States is subject to tax unless s. Tax 11.33(4) (b) 1. applies.(c) A sale meeting the conditions in par. (b) is exempt from sales or use tax even though the person holds a seller's permit for one or more other locations.(d) The holder of a seller's permit shall wait until ceasing business before requesting the inactivation of the permit because a person may not continue regular business operations without a permit.(4) INACTIVATION OF SELLER'S PERMIT.(a) A permit holder may request that the department inactivate its seller's permit by providing the department with the permit holder's name, address, seller's permit number, and the date the permit holder ceased business. The request may be made in any one of the following ways:1. A permit holder may make a written request for seller's permit inactivation. The department shall presume that the request was made at 12:01 a.m. on the postmark date of a postpaid properly addressed envelope, if the envelope and its contents are actually received by the department. If the retailer desires assurance that the department has received the request, the permit holder may use certified mail, return receipt requested. Note: A person making a written request for seller's permit inactivation should send its request to Wisconsin Department of Revenue, P.O. Box 8902, Madison, WI 53708-8902.
2. A permit holder may make a request for seller's permit inactivation by telephone. The department shall presume that the request was made at 12:01 a.m. on the day the department received the telephone call. Note: A person requesting seller's permit inactivation by telephone should call (608) 266-2776.
3. A permit holder may make a request for seller's permit inactivation by electronic mail. The department shall presume that the request was made at 12:01 a.m. on the day the department received the electronic mail message. Note: A person requesting seller's permit inactivation by email should send its request to dorsalesanduse@wisconsin.gov.
4. A permit holder may make a request for seller's permit inactivation in person at one of the department's income, sales and excise tax division offices. The department shall presume that the request was made at 12:01 a.m. on the day the department received the request.(b) A person who has requested inactivation of its seller's permit may not qualify for the occasional sale exemption if the person contemplates resumption of those activities which would require that the person hold a seller's permit, unless the person qualifies for exemption under sub. (3) (b).(c) The fact that a business ceases operating and no longer conducts its day-to-day sales of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services does not result in the automatic inactivation of its seller's permit.(5) CANCELLATION OF SELLER'S PERMIT.(a) Although a seller's permit may be deemed to have been delivered and canceled on a postmark date under sub. (4), cancellation shall not be effective prior to the postmark date.(b) If a permit is delivered to the department for cancellation, the permittee shall immediately qualify for the occasional sales exemption, even though the person contemplates a subsequent sale of fixtures or equipment. The person shall not qualify for the occasional sale exemption if the person contemplates resumption of those activities which would require that person to hold a seller's permit.(c) The fact that a business ceases operating and no longer conducts its day-to-day sales of tangible personal property, items, property, or goods under s. 77.52(1) (b), (c), or (d), Stats., or taxable services may not result in the automatic cancellation of a seller's permit. Note: Refer to s. Tax 11.33 regarding the general occasional sales exemption. Refer to s. Tax 11.35 regarding the occasional sales exemption for nonprofit organizations.
Note: Section Tax 11.34 interprets ss. 77.51(9) (a) and (am) and (14g) (h), 77.52(12) and 77.54(7), Stats.
Wis. Admin. Code Department of Revenue Tax 11.34
Cr. Register, June, 1991, No. 426, eff. 7-1-91; am. (2) (b) 2., 3. and (5) (c), r. (3) (b) 3., Register, April, 1994, No. 460, eff. 5-1-94; EmR0924: emerg. am. (2) (a), (3) (b) 1., 2., (4) (a) and (5) (c), eff. 10-1-09; CR 09-090: am. (2) (a), (3) (b) 1., 2., (4) (a) and (5) (c) Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (3) (d), r. and recr. (4) Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (1), (3) (a), (b) (intro.), cr. (3) (bg), (br) Register August 2012 No. 680, eff. 9-1-12.Amended by, CR 16-053: am. (3) (bg) Register June 2018 No. 750, eff. 7/1/2018Amended by, CR 19-112: am. (3) (bg) Register June 2020 No. 774, eff. 7/1/2020Amended by, correction in (4) (a) 3. (Note) made under s. 35.17, Stats., Register July 2021 No. 787, eff. 8/1/2021 The interpretations in s. Tax 11.34 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The procedure in sub. (3) became effective May 4, 1976, and reflects the Wisconsin supreme court's decision in Three Lions Supper Club, Ltd. vs. Dept. of Revenue (May 4, 1976), 72 Wis. 2d 546; (b) The exemption described in sub. (2) (b) became effective May 17, 1988, pursuant to 1987 Wis. Act 399; (c) The requirement that a person surrender its seller's permit within 10 days after the last sale of tangible personal property for the sale of business assets to qualify as an occasional sale was repealed effective August 12, 1993, pursuant to 1993 Wis. Act 16; and (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.