Shipments of Tangible Personal Property - Where Do the Sales Take Place?

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Sales and use taxes are imposed based on the location where the sale takes place (i.e., the location to which the sale is sourced). For sales of tangible personal property, this is generally the location where the purchaser "receives" the property.

"Receive," is defined in sec. 77.522(1)(a)1., Wis. Stats. (2011-12), in part, to mean "taking possession of tangible personal property … 'Receive' does not include a shipping company taking possession of tangible personal property … on a purchaser's behalf."

Therefore, if tangible personal property is delivered to the buyer's location in Wisconsin by a shipping company, the sale takes place in Wisconsin and is taxable to Wisconsin, regardless of whether the buyer or the seller hires the shipping company.

The examples, below, illustrate where the sale of tangible personal property takes place.

Index to Examples:

  • Example 1 - Wisconsin Purchaser Hires Shipping Company to Pick Up Property from Out-of-State Seller
  • Example 2 - Out-of-State Purchaser Hires Shipping Company to Pick Up Property from Wisconsin Seller
  • Example 3 - Out-of-State Seller Hires Shipping Company to Deliver Property to Wisconsin Purchaser
  • Example 4 - Wisconsin Seller Hires Shipping Company to Deliver Property to Out-of-State Purchaser
  • Example 5 - Wisconsin Purchaser's Employee Picks Up Property From Out-of-State Seller
  • Example 6 - Out-of-State Purchaser's Employee Picks Up Property From Wisconsin Seller

Example 1 - Wisconsin Purchaser Hires Shipping Company to Pick Up Property from Out-of-State Seller: Purchaser, located in Wisconsin, purchases office furniture from Seller, located in Minnesota. Purchaser hires Shipping Company to pick up the office furniture from Seller and deliver it to Purchaser's Wisconsin business location. The sale takes place at Purchaser's Wisconsin business location where Purchaser "receives" the office furniture, regardless of whether Shipping Company is a common or contract carrier.

Example 2 - Out-of-State Purchaser Hires Shipping Company to Pick Up Property from Wisconsin Seller: Purchaser, located in Minnesota, purchases office furniture from Seller, located in Wisconsin. Purchaser hires Shipping Company to pick up the office furniture from Seller and deliver it to Purchaser's Minnesota business location. The sale takes place at Purchaser's Minnesota business location where Purchaser "receives" the office furniture, regardless of whether Shipping Company is a common or contract carrier.

Example 3 - Out-of-State Seller Hires Shipping Company to Deliver Property to Wisconsin Purchaser: Purchaser, located in Wisconsin, purchases office furniture from Seller, located in Minnesota. Seller hires Shipping Company to deliver the office furniture from Seller's location in Minnesota to Purchaser's Wisconsin business location. The sale takes place at Purchaser's Wisconsin business location where Purchaser "receives" the office furniture, regardless of whether Shipping Company is a common or contract carrier.

Example 4 - Wisconsin Seller Hires Shipping Company to Deliver Property to Out-of-State Purchaser: Purchaser, located in Minnesota, purchases office furniture from Seller, located in Wisconsin. Seller hires Shipping Company to deliver the office furniture from Seller's location in Wisconsin to Purchaser's Minnesota business location. The sale takes place at Purchaser's Minnesota business location where Purchaser "receives" the office furniture, regardless of whether Shipping Company is a common or contract carrier.

Example 5 - Wisconsin Purchaser's Employee Picks Up Property From Out-of-State Seller: Purchaser, located in Wisconsin, purchases office furniture from Seller, located in Minnesota. Purchaser sends an employee to pick up the office furniture in Minnesota and bring the office furniture to Purchaser's Wisconsin business location. The sale takes place at Seller's Minnesota business location where Purchaser "receives" the office furniture.

Example 6 - Out-of-State Purchaser's Employee Picks Up Property From Wisconsin Seller: Purchaser, located in Minnesota, purchases office furniture from Seller, located in Wisconsin. Purchaser sends an employee to pick up the office furniture in Wisconsin and bring the office furniture to Purchaser's Minnesota business location. The sale takes place at Seller's Wisconsin business location where Purchaser "receives" the office furniture.

July 7, 2014