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Sales Tax State Activity Update - August 2007

Reality Bytes – Wisconsin Serves Up FAQ on Computer Related Services

The Wisconsin Department of Revenue in a Frequently Asked Questions (FAQ) publication distinguishes between taxable and nontaxable computer related services. Listed below are some of the enumerated services listed in the publication.

Taxable Services

• The repair, service, alteration, fitting, cleaning, painting, coating, towing, maintenance, and inspection of tangible personal property is also subject to Wisconsin sales or use tax
• Installation and setup of computer hardware and canned software
• Installation of computer hardware devices including printers, hard drives, modems, monitors, etc.
• Configuration of canned software
• Online or on-site troubleshooting hardware and canned software
• Setting up hardware and canned software on network
• Making adjustments to computer software, except canned software via modem
• Inspections of hardware and canned software
• Consulting and design services provided in connection with the sale of computer hardware and canned software
• Internet access services that originate or terminate in Wisconsin and are charged to a service address in Wisconsin.

Nontaxable Services

• Writing custom programs
• Contract programming
• Installing and updating custom programs
• Training people on how to use software or hardware
• Writing queries of databases
• Designing screens, forms, reports, or menus
• Reformatting data
• Data migration, conversion, and recovery
• Making backups of data files
• Network assessment services that consist of network analysis and evaluation unrelated to a specific hardware or software problem and unrelated to the sale of computer hardware or computer software
• Hosting web sites (that is, the storing of data on a computer)
• Designing web sites and home pages (no tangible personal property transferred)
• Web site design is not among the services subject to Wisconsin sales tax if no tangible personal property is transferred

The full text can be viewed on the Wisconsin Department of Revenue Website.

(Wisconsin Department of Revenue, FAQ, Computer Hardware, Software and Services, July 5, 2007)

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