Wisconsin Sales and Use Tax Protest — Petition for Redetermination, Refund Claim, and TAC Appeal

WISCONSIN SALES AND USE TAX PROTEST — PETITION FOR REDETERMINATION, REFUND CLAIM, AND TAC APPEAL

TABLE OF CONTENTS

1. Cover Letter and Authorization
2. Petition for Redetermination of Sales/Use Tax Assessment (Wis. Stat. § 77.59(6))
3. Statement of Facts
4. Grounds for Redetermination — Substantive Issues
5. Affirmative Refund Claim (Wis. Stat. § 77.59(4))
6. Petition for Review — Wisconsin Tax Appeals Commission
7. TAC Issues, Argument Summary, and Relief Requested
8. Verification, Signature, and Certificate of Service
9. Wisconsin Sales/Use Tax Practice Notes
10. Sources and References

1. COVER LETTER AND AUTHORIZATION

[DATE]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED — and —
VIA MY CASE MANAGER PORTAL

Wisconsin Department of Revenue
Resolution Unit — Sales and Use Tax
Mail Stop 5-144
PO Box 8906
Madison, WI 53708-8906

Re: Petition for Redetermination — Sales and Use Tax — Wis. Stat. § 77.59(6)
Taxpayer: [NAME]
FEIN / Wisconsin Tax Account No.: [ID NUMBER]
Notice Number / Letter ID: [NOTICE NO.]
Notice Date: [__/__/____]
Date Received by Taxpayer: [__/__/____]
Tax Periods at Issue: [QUARTER(S) / YEAR(S)]
Amount in Dispute: $[AMOUNT] (tax) + $[AMOUNT] (interest) + $[AMOUNT] (penalty)

Dear Resolution Unit:

Pursuant to Wis. Stat. § 77.59(6) and Wis. Admin. Code § Tax 1.14, Taxpayer respectfully submits this timely Petition for Redetermination of the [Notice of Field Audit Action / Notice of Amount Due / Notice of Refund Denial] referenced above. This Petition is filed within sixty (60) days after receipt of the Notice and is therefore timely.

A duly executed Form A-222 Power of Attorney is enclosed authorizing the undersigned to act on Taxpayer's behalf in this matter.

Respectfully submitted,

[________________________________]

[REPRESENTATIVE NAME]

2. PETITION FOR REDETERMINATION OF SALES/USE TAX ASSESSMENT (WIS. STAT. § 77.59(6))

STATE OF WISCONSIN — DEPARTMENT OF REVENUE

PETITION

Petitioner respectfully petitions the Wisconsin Department of Revenue ("Department") for redetermination of the sales/use tax assessment / refund denial referenced above pursuant to Wis. Stat. § 77.59(6) and Wis. Admin. Code § Tax 1.14.

3. STATEMENT OF FACTS

3.1. Entity and Business. Petitioner is a [DESCRIBE ENTITY, BUSINESS, AND PRINCIPAL OPERATIONS] with [Wisconsin / no Wisconsin] physical presence.

3.2. Wisconsin Activities. During the audit period, Petitioner's contacts with Wisconsin consisted of:

• ☐ Wisconsin-source gross sales: $[AMOUNT] in [YEAR] and $[AMOUNT] in [YEAR].
• ☐ Wisconsin transaction count: [NUMBER] in [YEAR]. (Note: 200-transaction prong eliminated effective 2/20/2021.)
• ☐ Physical nexus indicia: ☐ Inventory in WI ☐ Employees / agents in WI ☐ Real property in WI ☐ None.
• ☐ Marketplace facilitation: Sales were facilitated by [MARKETPLACE] under Wis. Stat. § 77.523.

3.3. Audit History. On [DATE], the Department commenced a sales/use tax audit for the periods [___]. On [DATE], the Department issued a [Notice of Field Audit Action / Notice of Amount Due / Notice of Refund Denial] asserting the following adjustments (the "Disputed Adjustments"):

3.4. Receipt and Timeliness. Petitioner received the Notice on [DATE]. This Petition is filed within sixty (60) days after receipt and is therefore timely under Wis. Stat. § 77.59(6)(a).

4. GROUNDS FOR REDETERMINATION — SUBSTANTIVE ISSUES

4.1. First Ground — [NEXUS / NO COLLECTION DUTY]

4.1.1. The Department asserts that Petitioner was required to register and collect Wisconsin sales/use tax under Wis. Stat. § 77.51(13gm) for the period beginning [DATE].

4.1.2. Under Wis. Stat. § 77.51(13gm), an out-of-state retailer is required to register and collect only if its "annual gross sales into this state" exceeded $100,000 in the previous or current calendar year. The 200-transaction prong, formerly part of the statute, was eliminated effective February 20, 2021 by 2021 Wisconsin Act 1.

4.1.3. Petitioner's gross sales into Wisconsin were $[AMOUNT] in [YEAR] and $[AMOUNT] in [YEAR], both below the $100,000 threshold (see Exhibit A — sales-by-state schedule). Petitioner therefore had no obligation to register or collect.

4.1.4. Imposing a collection duty under these circumstances would also violate the Commerce Clause as construed in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), and Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), because the activity lacks substantial nexus.

4.2. Second Ground — [STATUTORY EXEMPTION APPLIES]

4.2.1. The transactions at issue qualify for exemption under Wis. Stat. § 77.54[(SUBSECTION)], which exempts [DESCRIBE EXEMPTION — e.g., manufacturing machinery (§ 77.54(6)(am)), tangible personal property used in research and development (§ 77.54(57)), property purchased for resale (§ 77.51(13)), occasional sale (§ 77.51(9))].

4.2.2. Petitioner has produced exemption certificates (Form S-211 / S-211E / CES) for each transaction, attached as Exhibit B. Under Wis. Stat. § 77.52(13) and Wis. Admin. Code § Tax 11.14, a properly completed exemption certificate accepted in good faith relieves the seller of liability.

4.2.3. To the extent any certificate is incomplete, Petitioner is entitled to cure under Wis. Admin. Code § Tax 11.14(7) and the Streamlined Sales Tax Agreement standards adopted by Wisconsin.

4.3. Third Ground — [NON-TAXABLE SERVICE OR INTANGIBLE]

4.3.1. The Department reclassified Petitioner's receipts from [DESCRIBE] as taxable sales of tangible personal property or taxable services.

4.3.2. Wisconsin sales tax applies only to enumerated taxable services under Wis. Stat. § 77.52(2). The receipts at issue are for [DESCRIBE — e.g., professional consulting services / non-prewritten custom software / data-processing services not enumerated], which are not enumerated taxable services.

4.3.3. The "true object" of the transaction was the provision of a non-taxable service / intangible, not the sale of tangible personal property. See Wis. Dep't of Revenue v. River City Refuse Removal, 2007 WI 27.

4.4. Fourth Ground — [USE TAX CREDIT / RECIPROCITY]

4.4.1. To the extent use tax is asserted on out-of-state purchases, Petitioner is entitled to credit for sales/use tax paid to another state under Wis. Stat. § 77.53(16).

4.4.2. Documentation of out-of-state tax paid is provided as Exhibit C.

4.5. Fifth Ground — [PENALTY ABATEMENT]

4.5.1. The Department imposed late-filing, negligence, and/or evasion penalties under Wis. Stat. § 77.60.

4.5.2. Petitioner had reasonable cause for any non-collection or non-payment because [reliance on professional advice / good-faith interpretation of statute / first-year compliance with new Wayfair regime / DOR guidance silence].

4.5.3. Wisconsin recognizes reasonable-cause abatement under Wis. Stat. § 77.60(9). The taxpayer's compliance history, prompt remediation, and good-faith effort warrant full abatement.

4.6. Reservation of Additional Grounds

Petitioner reserves the right to assert additional substantive and procedural grounds, present additional documentation, and amend this Petition.

4.7. Relief Requested

WHEREFORE, Petitioner respectfully requests that the Department:

• A. Cancel the assessment in its entirety and treat all returns as filed;
• B. In the alternative, reduce the assessed tax to $[AMOUNT];
• C. Abate all interest and penalties;
• D. Apply offsetting refund credits identified in Section 5; and
• E. Schedule an informal conference under Wis. Admin. Code § Tax 1.14(2).

5. AFFIRMATIVE REFUND CLAIM (WIS. STAT. § 77.59(4))

5.1. Statutory Basis

Pursuant to Wis. Stat. § 77.59(4), Petitioner files this Claim for Refund of sales/use tax overpaid for the periods identified below.

5.2. Refund Detail

5.3. Timeliness

Each refund claim is filed within four (4) years of the unextended due date of the Wisconsin income/franchise tax return for the corresponding period (Wis. Stat. § 77.59(4)). See computation table:

5.4. Documentation

Supporting documentation — original invoices, proof of payment, exemption certificates, and reconciliation schedules — is attached as Exhibit D.

5.5. Audit-Restriction Disclosure

Petitioner has ☐ has not ☐ been the subject of a prior field audit covering the refund periods. (Note: under Wis. Stat. § 77.59(2)–(4), refund claims are restricted following a field audit determination unless specific conditions are met.)

5.6. Interest

Petitioner requests interest on the refund as provided by Wis. Stat. § 77.60(1)(a).

6. PETITION FOR REVIEW — WISCONSIN TAX APPEALS COMMISSION

STATE OF WISCONSIN — TAX APPEALS COMMISSION

Docket No.: [____________________] (assigned by TAC upon filing)

PETITION FOR REVIEW

Pursuant to Wis. Stat. § 73.01(5) and Wis. Admin. Code Ch. TA 1, Petitioner petitions the Wisconsin Tax Appeals Commission for review of the Notice of Action on Petition for Redetermination issued by the Wisconsin Department of Revenue on [DATE] concerning sales and use tax determinations under Wis. Stat. Ch. 77, Subch. III–V, and states:

6.1. Petitioner. [NAME, ADDRESS, ENTITY TYPE, FEIN].

6.2. Respondent. Wisconsin Department of Revenue, 2135 Rimrock Road, Madison, WI 53713.

6.3. Jurisdiction. This Commission has jurisdiction under Wis. Stat. § 73.01(4)(a). The Notice of Action was issued [DATE] and received [DATE]; this Petition is filed within sixty (60) days of receipt as required by Wis. Stat. § 73.01(5)(a).

6.4. Filing Fee. ☐ The required $25 filing fee is enclosed pursuant to Wis. Stat. § 73.01(5)(a).

6.5. Small Claims. ☐ Petitioner does ☐ does not elect small-claims procedure under Wis. Stat. § 73.01(4)(am).

7. TAC ISSUES, ARGUMENT SUMMARY, AND RELIEF REQUESTED

7.1. Issues Presented

1. Whether Petitioner had substantial nexus with Wisconsin under Wis. Stat. § 77.51(13gm) and South Dakota v. Wayfair, Inc. during the audit period.
2. Whether the contested transactions qualify for exemption under Wis. Stat. § 77.54.
3. Whether the contested receipts constitute enumerated taxable services under Wis. Stat. § 77.52(2).
4. Whether penalties imposed under Wis. Stat. § 77.60 should be abated for reasonable cause.
5. Whether Petitioner is entitled to refund under Wis. Stat. § 77.59(4).

7.2. Statement of Material Facts

Petitioner incorporates by reference Sections 3 and 5 above and adds:

7.2.1. The Department issued its Notice of Action on [DATE] (Exhibit E) [DENYING / GRANTING IN PART] the Petition for Redetermination.

7.2.2. The Department's Notice fails to address [ISSUE] and misapplies [STATUTE] as set forth below.

7.3. Legal Argument Summary

7.3.1. Nexus. Wisconsin's economic-nexus statute as amended by 2021 Wisconsin Act 1 imposes liability only on retailers exceeding $100,000 in gross Wisconsin sales. Petitioner's sales fell below the threshold; the Commerce Clause as applied in Wayfair prohibits collection imposition without substantial nexus.

7.3.2. Exemption. Wisconsin construes exemptions strictly but reasonably. See Ramrod, Inc. v. Wis. Dep't of Revenue, 64 Wis. 2d 499 (1974). Each contested transaction satisfies the literal terms of Wis. Stat. § 77.54[(__)].

7.3.3. True Object / Service Classification. The "true object" doctrine and the limited list of enumerated services under § 77.52(2) preclude taxation of the receipts at issue.

7.3.4. Penalties. Reasonable cause exists; the records and good-faith reliance establish ordinary business care and prudence.

7.4. Relief Requested

WHEREFORE, Petitioner respectfully requests that the Commission:

• A. Reverse the Department's Notice of Action;
• B. Cancel the sales/use tax assessment in its entirety, or alternatively reduce it to $[AMOUNT];
• C. Order issuance of refund of $[AMOUNT] plus statutory interest;
• D. Abate all penalties; and
• E. Grant such other relief as is just and proper.

8. VERIFICATION, SIGNATURE, AND CERTIFICATE OF SERVICE

8.1. Verification

STATE OF WISCONSIN

COUNTY OF [COUNTY]

I, [NAME], being first duly sworn, state that I am [Petitioner / an officer of Petitioner authorized to verify this Petition]; I have read the foregoing Petition; and the facts stated are true to the best of my knowledge, information, and belief.

[________________________________]

[NAME], [TITLE]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public, State of Wisconsin

(My Commission Expires: [_______________])

8.2. Signature of Counsel

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Wis. State Bar No. [#######]

Counsel for Petitioner

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

8.3. Certificate of Service

I hereby certify that on [DATE], I served a copy of the foregoing Petition by certified mail, return receipt requested, upon:

Wisconsin Department of Revenue
Office of General Counsel
2135 Rimrock Road
Madison, WI 53713

[________________________________]

[ATTORNEY NAME]

9. WISCONSIN SALES/USE TAX PRACTICE NOTES

• Economic-nexus threshold (Wis. Stat. § 77.51(13gm)). $100,000 in annual gross sales into Wisconsin in the previous or current calendar year. The 200-transaction prong was eliminated effective February 20, 2021 (2021 Wisconsin Act 1 / Assembly Bill 2). "Gross sales" includes both taxable and non-taxable sales. Track Wisconsin sales monthly to identify threshold-crossing dates.
• Marketplace facilitator collection. Wis. Stat. § 77.523 makes marketplace facilitators (e.g., Amazon, eBay, Etsy) liable for collecting and remitting tax on facilitated sales. Sellers should reconcile facilitator-collected tax to avoid double assessment.
• 60-day petition deadline (Wis. Stat. § 77.59(6)(a)). Jurisdictional. Petition must be received by DOR within 60 days, OR postmarked before midnight of the 60th day in a properly addressed, postage-prepaid envelope and received within 5 business days. Use USPS certified mail; private couriers do not satisfy the postmark rule.
• Six-month redetermination period. DOR has 6 months to issue a redetermination on a properly filed petition. The 60-day TAC clock then runs from the date of receipt of DOR's Notice of Action.
• Refund-claim deadline (Wis. Stat. § 77.59(4)). Generally 4 years from the unextended due date of the income/franchise return for the year in which the sale or purchase was completed. Refund claims of less than $50 must be sought from the seller.
• Audit/refund interaction (Wis. Stat. § 77.59(2)–(4)). A field-audit determination of a seller may bar subsequent refund claims for the audited period; office-audit determinations of buyers without tax adjustment may also restrict refund claims. Always check audit history before filing affirmative refund claims.
• Exemption certificates (Wis. Stat. § 77.52(13)). A properly completed exemption certificate accepted in good faith relieves the seller of liability. Wisconsin uses Form S-211 (Sales and Use Tax Exemption Certificate); exempt entities may obtain a CES (Certificate of Exempt Status). Wisconsin participates in the Streamlined Sales Tax Agreement and accepts SSUTA-compliant certificates.
• Penalties (Wis. Stat. § 77.60). Late-filing, late-payment, negligence (25%), and evasion (50%) penalties may apply. Reasonable-cause abatement is available under Wis. Stat. § 77.60(9). Interest accrues at the rate set by Wis. Stat. § 77.60(1) (typically 12% per annum on deficiencies; 3% on refunds — verify current rates).
• County and stadium-district taxes. Wisconsin counties may impose 0.5% county tax (Subch. V); the Milwaukee-area baseball stadium district tax has expired but verify any current professional-football or transit district taxes. Premier Resort Area taxes (e.g., Bayfield, Eagle River, Lake Delton, Wisconsin Dells, Stockholm) impose additional 0.5%–1.25% under Subch. VIII.
• Recordkeeping (Wis. Stat. § 77.61(4); Wis. Admin. Code § Tax 11.92). Retain sales and use tax records for at least 4 years (longer for fraud / unfiled). Records must include invoices, exemption certificates, purchase records, and tax computations.
• Voluntary Disclosure Program. For unregistered remote sellers, Wisconsin offers a Voluntary Disclosure Program with a typical 4-year look-back and waiver of penalties. Strongly consider before audit notice issues.
• Streamlined Sales Tax. Wisconsin is a full member of SSUTA; sellers may register through the Streamlined Sales Tax Registration System. Member-state simplification standards apply to Wisconsin determinations.
• Wayfair litigation strategy. Document gross sales by state monthly. Distinguish between taxable and exempt sales (the threshold counts gross sales, taxable plus non-taxable). Maintain customer-location data to defend nexus determinations.

10. SOURCES AND REFERENCES

• Wis. Stat. Ch. 77, Subch. III (Sales tax) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii
• Wis. Stat. § 77.51 (Definitions, including § 77.51(13gm)) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/51
• Wis. Stat. § 77.52 (Imposition of sales tax) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/52
• Wis. Stat. § 77.53 (Imposition of use tax) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/53
• Wis. Stat. § 77.54 (Exemptions) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/54
• Wis. Stat. § 77.59 (Deficiency and refund determinations) — https://docs.legis.wisconsin.gov/document/statutes/77.59
• Wis. Stat. § 77.60 (Interest and penalties) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/60
• Wis. Stat. § 77.61 (Administrative provisions) — https://docs.legis.wisconsin.gov/statutes/statutes/77/iii/61
• Wis. Stat. § 73.01 (Tax Appeals Commission) — https://docs.legis.wisconsin.gov/statutes/statutes/73/01
• Wis. Stat. § 73.03(60) (Taxpayer Bill of Rights) — https://docs.legis.wisconsin.gov/statutes/statutes/73/03/60
• Wis. Admin. Code Ch. Tax 11 (Sales/use tax) — https://docs.legis.wisconsin.gov/code/admin_code/tax/11
• Wis. Admin. Code § Tax 1.14 (Petition for redetermination) — https://docs.legis.wisconsin.gov/code/admin_code/tax/1
• Wis. Admin. Code Ch. TA 1 (TAC procedure) — https://docs.legis.wisconsin.gov/code/admin_code/ta/1
• 2021 Wisconsin Act 1 / Assembly Bill 2 (eliminating 200-transaction prong) — https://docs.legis.wisconsin.gov/2021/related/acts/1
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977)
• DOR Publication 201 (Wisconsin Sales and Use Tax Information) — https://www.revenue.wi.gov/DOR%20Publications/pb201.pdf
• DOR Publication 216 (Filing Claims for Refund of Sales or Use Tax) — https://www.revenue.wi.gov/DOR%20Publications/pb216.pdf
• DOR Publication 506 (Taxpayers' Appeal Rights) — https://www.revenue.wi.gov/DOR%20Publications/pb506.pdf
• DOR Publication 507 (How to Appeal to the Tax Appeals Commission) — https://www.revenue.wi.gov/DOR%20Publications/pb507.pdf
• DOR Form S-220 (Buyer's Claim for Refund) — https://www.revenue.wi.gov/DORForms/s-220.pdf
• Wisconsin Tax Appeals Commission — https://taxappeals.wi.gov/
• Sales Tax Institute — Wisconsin economic nexus update — https://www.salestaxinstitute.com/resources/wisconsin-removes-economic-nexus-transaction-threshold

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Wisconsin sales and use tax law is highly technical, and Wayfair-era nexus rules continue to evolve. An attorney licensed in Wisconsin must review and customize this document before filing. Verify every citation, threshold, and deadline against the current Wisconsin Statutes, Wisconsin Administrative Code, and DOR/TAC publications before use.