Sales Tax State Activity Update - March 2009

Wisconsin - Garbage In – Exemption Out

The Wisconsin Department of Revenue has issued a private letter ruling to determine the taxability of purchases of a front-end loader, a small back-hoe, and eight roll-off containers by a recycled waste sorting facility. Since these kinds of equipment are not used exclusively and directly in waste reduction and recycling activities, they do not qualify for exemption under sec. 77.54(26m). Hand sorting of recyclable materials is the only function performed at the facility. After sorting, the recyclable materials are transported to other locations where recycling activities are performed by other parties.

The front-end loader and back-hoe are used to load and unload recyclable materials to and from trucks and to move the materials throughout the facility and therefore are not used directly in waste reduction or recycling activities, as required for the exemption.

Finally, the roll-off containers are not exempt as they are used to separate the recyclable materials at the point of collection and then used to bring the waste to the facility. The containers may also be used to separate the waste at the facility, and to transport the sorted materials to other parties' recycling facilities. This equipment is used prior to the waste reduction or recycling activities.

This ruling may be viewed at the Wisconsin Department of Revenue.

Private Letter Ruling No. W 0848002, Wisconsin Department of Revenue, September 5, 2008, released January 2009.

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