Sales Tax Exemption
Your business in Wisconsin or Michigan could qualify for tax exemption on electric or natural gas bills.
Do you have one of the following types of businesses?
Wisconsin
- Agricultural Production
- Commercial Customer with Residential Energy Use
- Manufacturing
- Governmental Agency
- Nonprofit Organization
Michigan
If you have questions about whether an exemption applies to your business, your tax accountant is your best resource. If you have questions about your current tax status with WPS, please contact us.
Wisconsin
Commercial Customer with Residential Energy Use
- Commercial customers with residential electric or natural gas use are tax-exempt from November through April for the portion of energy used for residential purposes (such as apartment "house meters," stores or restaurants with living quarters, etc.).
- Send a certificate of exemption and/or certificate of previous purchases, to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
- On the certificate, be sure to include the percentage of energy use claimed for residential use.
Manufacturing
- Beginning January 1, 2006, a sales tax exemption will be available for electricity and natural gas used in manufacturing.
- To qualify for this exemption, manufacturers must provide electricity and natural gas suppliers with a sales tax exemption certificate.
- The new exemption will replace the current law, which states that "income tax credit for sales tax paid on electricity and fuel consumed in manufacturing tangible personal property." The problem with the current law is that the income tax credit often exceeded the income tax liability of the manufacturer. This resulted in the income tax credit being carried forward (or expiring if not used in 15 years). Beginning January 1, 2006, any unused income tax credits being carried forward will be phased out.
- Wisconsin Public Service suggests manufacturers work closely with their tax advisors to specify the amount of electricity or natural gas that will be used in manufacturing and to complete an exemption certificate.
- While a tax advisor can help define the scope of your manufacturing process (which machines or processes meet the "manufacturing" definition), WPS's Energy Monitoring service can help you measure the actual energy use by those machines or processes.
- Send a certificate of exemption and/or certificate of previous purchases, to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
Governmental Agency
- Governmental agencies in Wisconsin are tax-exempt year-round for electric and natural gas use.
- New governmental accounts should send a certificate of exemption and/or certificate of previous purchases, to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
Nonprofit Organization
- Nonprofit organizations in Wisconsin are tax-exempt year-round for electric and natural gas use. This includes any corporation, community chest fund, foundation or association that is organized and operated exclusively for religious, charitable, scientific or educational purposes or for the prevention of cruelty to children or animals.
- Send a certificate of exemption and/or certificate of previous purchases, information can be sent to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
- On the certificate, be sure to indicate the tax-exemption number issued by the state.
Michigan
Agricultural Production
- Commercial businesses in Michigan are tax-exempt for electricity used in agricultural production.
- They are also exempt from sales tax on the Customer Charge if they have no use.
- Send aMichigan Sales Tax Certificate to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
- On the certificate, be sure to include the percentage of energy use claimed
for agricultural production. Here's a guideline to help you determine that
percentage if you have a dual-use meter (for residential and agricultural use):
If your total electric use exceeds 1,500 kilowatt-hours per month, or 2,500 kilowatt-hours where a home has electric heat from November to March, the excess usage will be considered exempt.
Industrial Processing
- Businesses in Michigan are tax-exempt year-round for electric and natural gas used
in industrial processing. Qualifying activities include:
- production
- patent, experimentation, development, engineering inspection and quality control
- planning, scheduling and production control
- design, construction and maintenance of factory machinery, equipment and tooling
- disposal of production scrap and waste
- production supervision
- production material handling
- Send aMichigan Sales Tax Certificate to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.
- On the certificate, be sure to include the percentage of energy use claimed for industrial processing.
Nonprofit Organizations
- Nonprofit organizations in Michigan are tax-exempt year-round for electric use. This includes any corporation, community chest fund, foundation or association that is organized and operated exclusively for religious, charitable, scientific or educational purposes or for the prevention of cruelty to children or animals.
- Send aMichigan Sales Tax Certificate to Wisconsin Public Service Business Solutions Center, P.O. Box 19001, Green Bay, WI 54307-9001 or fax it to 800-305-9754.