What You Need to Know: Changes to Wisconsin's Construction Tax Exemption Rules

Effective January 1, 2016, contractors will be able to directly purchase construction materials on behalf of many of their tax exempt and local government customers without being subject to sales or use tax.

Previously, a construction contractor who both furnished and installed the building materials in the performance of a real property construction activity was not permitted to make purchases of building materials exempt from sales and use tax on behalf of an exempt end-customer.

The new law provides an exemption from sales and use tax for property sold to a construction contractor who, in fulfillment of a real property activity or performance of an improvement to real property, transfers the property to a qualifying exempt entity.

This change can be confusing, and we have received many questions about the new law. That is why ABC of Wisconsin has put together an easy-to-understand informational pamphlet. The below linked document contains answers to many of the questions you may have about the changes to the law.

If you still have a questions, please contact the staff at ABC of Wisconsin at 608-244-5883 or 800-236-2224.

Click the image below to open the PDF with Frequently Asked Questions about the tax exemption law changes: