Ingredients Used in Home-Brewing Kits May Qualify for Food Exemption in Wisconsin

Friday, April 6th, 2012

 
 
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The Wisconsin Department of Revenue (DOR) recently issued guidance explaining the taxability of items commonly found in home beer brewing kits. Wisc. News for Tax Practitioners: Home Beer Brewing Ingredients, Equipment, and Supplies (Dept. of Revenue Mar. 26, 2012). Wisconsin exempts "food and food ingredients" from sales and use tax. Wis. Stat. Ann. sec. 77.54(20n)(a). Examples of exempt food items commonly found in home beer brewing kits include the following: malts, grains, hops, priming sugars, lactose, brewing yeast, fruit juice that is more than 50% fruit juice by volume, and distilled water. Home beer brewing kits also may contain taxable equipment and supplies, such as brewing pots, thermometers, bottles and caps, beer labels and cleaners. The DOR explained that when a beer brewing kit contains a combination of taxable and exempt items sold for a single non-itemized price, whether the kit is taxable depends on the what makes up the majority of the kit. If more than 50% of the kit is made up of taxable items, the entire charge will be subject to tax, but if 50% or more of the kit is made up of exempt items, the entire charge will be exempt from tax. See Wis. Admin. Code Tax sec. 11.985.


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