What the statutes mean

State law requires chiropractors to collect sales tax on all tangible items that are sold to a patient. The easy way to determine if an item is taxable is to ask whether the patient is physically taking the item out of the office. If the answer is yes, as in the case of supplements, vitamins, pillows, etc. the item is taxable. Services provided by the chiropractor such as adjustments, x-rays and physical therapy modalities are not taxable.

For purposes of this law, your practice is defined as a retailer. You pay tax (you are responsible for collecting the 5% state tax and any county tax) on the total amount of the purchase regardless how the patient pays for the items. If you rent or lease equipment to a patient, or sell memberships in a health club, these are also items for which you must collect sales tax.

You are not allowed to tell a patient, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by you or that it will not be added to the selling price of the item that is sold. You are also not allowed to refund any portion of the sales tax. Violations of this law are misdemeanors.

You must have a sellers permit for each location of your practice before you begin practice in that location. A permit is not assignable and is valid only for the person in whose name it is issued and for the specific location for which it was issued. The sellers permit must be conspicuously displayed at all times.

Penalties

If you fail to collect sales tax or are delinquent in reporting the sales tax you have collected the state will give you 10 days written notice specifying the time and place for a hearing. At the hearing you will be required to show cause why your sellers permit should not be revoked or suspended. If your seller permit is suspended or revoked, you will not be allowed to sell any taxable item until it is restored. If a doctor sells taxable items without collecting the sales tax as required, they would be guilty of a misdemeanor.

Statute excerpts

77.51 Definition of business for sales tax purposes
77.51(3) Definition of retailer for sales tax purposes
77.51(14) Definition of a sale for tax purposes
77.51(15)(a) Definition of sales price for sales tax purposes
77.52 Sales tax defined
77.52(4) Sales tax may not be absorbed
77.52(7) Sellers permit required
77.52(9) Sellers permit for each location
77.52(11) Penalties

Definition of business for sales tax purposes

77.51(1) “Business” includes any activity engaged in by any person or caused to be engaged in by any person with the object of gain, benefit or advantage, either direct or indirect, and includes also the furnishing and distributing of tangible personal property or taxable services for a consideration by social clubs and fraternal organizations to their members or others.

Definition of retailer for sales tax purposes

77.51(13) “Retailer” includes:

77.51(13)(a) Every seller who makes any sale of tangible personal property or taxable service.

Definition of a sale for tax purposes

77.51(14) “Sale”, “sale, lease or rental”, “retail sale”, “sale at retail”, or equivalent terms include any one or all of the following: the transfer of the ownership of, title to, possession of, or enjoyment of tangible personal property or services for use or consumption but not for resale as tangible personal property or services and includes:

Definition of sales price for sales tax purposes

77.51(15)(a) “Sales price” means the total amount for which tangible personal property is sold, leased or rented, valued in money, whether paid in money or otherwise, without any deduction.

Sales tax defined

Imposition of retail sales tax.

77.52(1) For the privilege of selling, leasing or renting tangible personal property, including accessories, components, attachments, parts, supplies and materials, at retail a tax is imposed upon all retailers at the rate of 5% of the gross receipts from the sale, lease or rental of tangible personal property, including accessories, components, attachments, parts, supplies and materials, sold, leased or rented at retail in this state.

Note: You are also responsible for collecting any applicable county taxes.

Sales tax may not be absorbed

77.52(4) It is unlawful for any retailer to advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the retailer or that it will not be added to the selling price of the property sold or that if added it, or any part thereof, will be refunded. Any person who violates this subsection is guilty of a misdemeanor.

Sellers permit required

77.52(7) Every person desiring to operate as a seller within this state who holds a valid certificate under s. 73.03 (50) shall file with the department an application for a permit for each place of operations. Every application for a permit shall be made upon a form prescribed by the department and shall set forth the name under which the applicant intends to operate, the location of the applicant’s place of operations, and the other information that the department requires. The application shall be signed by the owner if a sole proprietor; in the case of sellers other than sole proprietors, the application shall be signed by the person authorized to act on behalf of such sellers. A nonprofit organization that has gross receipts taxable under s. 77.54 (7m) shall obtain a seller’s permit and pay taxes under this subchapter on all taxable gross receipts received after it is required to obtain that permit. If that organization becomes eligible later for the exemption under s. 77.54 (7m) except for its possession of a seller’s permit, it may surrender that permit.

Sellers permit for each location

77.52(9) After compliance with sub. (7) and s. 77.61 (2) by the applicant, the department shall grant and issue to each applicant a separate permit for each place of operations within the state. A permit is not assignable and is valid only for the person in whose name it is issued and for the transaction of operations at the place designated in it. It shall at all times be conspicuously displayed at the place for which it was issued.

Penalties

77.52(11) If any person fails to comply with any provision of this subchapter relating to the sales tax or any rule of the department relating to the sales tax adopted under this subchapter, is delinquent in respect to any tax imposed by the department or fails timely to file any return or report in respect to any tax under ch. 71, 72, 76, 77, 78 or 139 after having been requested to file that return or report, the department upon hearing, after giving the person 10 days’ notice in writing specifying the time and place of hearing and requiring the person to show cause why the permit should not be revoked or suspended, may revoke or suspend any one or more of the permits held by the person. The department shall give to the person written notice of the suspension or revocation of any of the permits. The notices required in this subsection may be served personally or by mail in the manner prescribed for service of notice of a deficiency determination. If the department suspends or revokes a permanent permit under this subsection, it may grant a temporary permit that is valid for one month and may then grant additional temporary permits if the person pays all amounts owed under this chapter for the month for which the previous temporary permit was issued. Persons who receive a temporary permit waive the notice requirement under s. 77.61 (2). The department shall not issue a new permanent permit after the revocation of a permit unless it is satisfied that the former holder of the permit will comply with the provisions of this subchapter, the rules of the department relating to the sales tax and the provisions relating to other taxes administered by the department.

77.52(12) A person who operates as a seller in this state without a permit or after a permit has been suspended or revoked or has expired, unless the person has a temporary permit under sub. (11), and each officer of any corporation, partnership member, limited liability company member or other person authorized to act on behalf of a seller who so operates, is guilty of a misdemeanor. Permits shall be held only by persons actively operating as sellers of tangible personal property or taxable services. Any person not so operating shall forthwith surrender that person’s permit to the department for cancellation. The department may revoke the permit of a person found not to be actively operating as a seller of tangible personal property or taxable services.