Sales and Use Tax Treatment of Summer Camps Revised

The Wisconsin sales and use tax treatment of summer camps was affected by 2009 Wisconsin Act 2, effective October 1, 2009. See the article titled "Summer Camps," for information explaining the proper Wisconsin sales and use tax treatment of sales and purchases by summer camps both prior to and on or after October 1, 2009.

Sales Prior to October 1, 2009

For sales occurring prior to October 1, 2009, the proper amount of Wisconsin sales and use tax must be paid to the department based on the information provided in the article titled "Summer Camps".

Sales From October 1, 2009 Through November 30, 2010

The Department of Revenue has found that many summer camps were not aware of how 2009 Wis. Act 2 affected the Wisconsin sales and use tax due on their sales and purchases. This may have resulted in the summer camp collecting and remitting more sales tax on their charges to campers to attend the camps than was due and/or paying less Wisconsin sales or use tax on their purchases than what was due. As a result of this, the Department of Revenue is providing the following guidelines that summer camps may follow with respect to their sales and purchases made between October 1, 2009 and November 30, 2010.

If you treated your sales and purchases from October 1, 2009 through November 30, 2010 in a manner consistent with how summer camps were supposed to treat their sales and purchases prior to October 1, 2009, as described in the article titled "Summer Camps," you have two options:

  1. Do nothing. The department will not adjust your sales and use tax liability for these items as long as both your sales and purchases were treated consistently with these provisions.
  2. File a claim for refund for the amount of tax you may have charged your customer in error. However, you would owe Wisconsin use tax based on your purchase price of the taxable property, items, goods, and services you used in operating your summer camp (i.e., your purchases of candy, soft drinks, etc.).

    Caution: If you collected the sales tax for which you are requesting a refund from your buyers, you must return the tax and related interest refunded by the Department of Revenue to the buyers from whom the tax was collected, except that you can reduce the taxes and interest you are required to return to the buyer for the amount of tax subsequently due and owing on your purchases of the property, items, goods, and services you transferred to the buyers. If are unable to return the tax and interest to the buyer, you must return the tax and interest to the department.

If you did not tax any part of the charges to attend to your summer camp from October 1, 2009 through November 30, 2010 and paid Wisconsin sales or use tax on your purchases of the property, items, and goods used to operate your camp, you do not have to do anything since you treated the items consistent with the law changes that were made effective October 1, 2009.

Example 1 - In June of 2010, Summer Camp A charged Camp Attendee B $4,000 for a 4-week (28 nights) camp program. The $4,000 charge included the camp program and all meals and lodging. The cost of the food, food products, and beverages and labor to make the meals was $200. Summer Camp A charged Camp Attendee B Wisconsin sales tax on $140 relating to the lodging they provided (28 nights times $5 per night) and $220 related to the meals they provided ($200 cost plus 10 percent ($20)). Summer Camp A did not pay any Wisconsin sales or use tax on its purchases of the food, food products, and beverages used to make the meals.

Since Summer Camp A treated their charge to Camp Attendee B and related purchases consistent with the information provided in the article titled "Summer Camps" for sales and purchases occurring prior to October 1, 2009, Summer Camp A may either:

  1. Do nothing. The Department of Revenue will not assess use tax on Summer Camp A's purchases of taxable food and food ingredients since they charged Camp Attendee B sales tax on these products; or
  2. File a refund claim for the $18 of sales tax ($360 times 5 percent tax equals $18) charged in error to Camp Attendee B. However, if Summer Camp A files a claim for refund on its sale of the lodging and meals to Camp Attendee B, Summer Camp A is deemed the consumer of the food and food ingredients used to provide the meals and would owe Wisconsin use tax on its cost of the taxable food and food ingredients. In addition, Summer Camp A would be required to refund the net sales tax along with the related interest refunded to them to Camp Attendee B. If they could not return the tax and interest to Camp Attendee B, they would be required to return it to the Department of Revenue.

Example 2 - Same as Example 1, except that Summer Camp A did not charge Wisconsin sales tax on any part of the $4,000 charge to Camp Attendee B and Summer Camp A properly paid Wisconsin sales or use tax on its purchases of taxable food and food products.

Since Summer Camp A treated the transaction in a manner consistent with the law changes effective October 1, 2009, Summer Camp A does not have to do anything.

Sales On or After December 1, 2010

For sales occurring on or after December 1, 2010, the proper amount of Wisconsin sales and use tax must be paid to the department based on the information contained in the article titled "Summer Camps." In particular, see sections I.C.2. and II.D.2. of the article.

July 29, 2010