Qualified Research Exemption Discussed in Wisconsin

Friday, July 6th, 2012


The Wisconsin Department of Revenue recently issued updated guidance regarding the new sales and use tax exemption for purchases of property used exclusively and directly in qualified research. Wis. Fact Sheet: Sales and Use Tax Exemption for Qualified Research (Dept. of Revenue May 18, 2012). Persons engaged primarily in manufacturing or biotechnology may take advantage of this exemption. For purposes of the exemption, "primarily" means that more than 50% of their business centers around manufacturing or biotechnology.

Items that qualify for the exemption include (1) tangible personal property, including fuel and electricity, and certain other property consumed or destroyed or that loses its identity while being used exclusively and directly in qualified research; and (2) machinery and specific processing equipment, including attachments, parts, and accessories, used exclusively and directly in qualified research.

"Qualified research" means research undertaken for the purpose of discovering information that is technological in nature; the application of which is intended to be useful in the development of a new or improved business component of the taxpayer; and substantially all of the activities of which constitutes elements of a process of experimentation relating to a new or improved function, performance, reliability, or quality.

For further information regarding the exemption, please see Wis. Stat. Ann. sec. 77.54(57) and Wis. Admin. Code Tax sec. 11.20.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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