Limousine Fee

Limousine service, which includes the use of a limousine with a driver, is a transportation service that is not subject to Wisconsin sales or use tax. A 5% limousine fee is, however, imposed on the charge for providing a limousine with a driver in Wisconsin.

What types of vehicles are subject to the limousine fee?

"Limousine" means a passenger automobile for which all of the following apply:

"Limousine" does not include any of the following:

Examples:

When is the service provided in Wisconsin?

A limousine with driver is considered provided in Wisconsin if the customer is picked up by the limousine provider in Wisconsin.

Example 1: Company is hired to pick up a customer at his home in Madison, Wisconsin and take him by limousine to O'Hare International Airport in Chicago. The charge for limousine service from Madison to Chicago is subject to the 5% limousine fee.

Example 2: Company is hired to pick up a customer at O'Hare International Airport in Chicago and take him by limousine to his home in Madison, Wisconsin. The charge for limousine service from Chicago to Madison is not subject to the 5% limousine fee.

Example 3: Company is hired to pick up a customer at her home in Milwaukee, Wisconsin, take her by limousine to a theater performance in Chicago, Illinois, and after the performance, return her to her home in Wisconsin. The charge for limousine service is subject to the 5% limousine fee.

When is limousine service provided on an hourly basis?

A limousine whose service is subject to the fee is a passenger vehicle that is operated for hire on an hourly basis. An hourly basis may include a flat fee that is based on knowledge of how long a trip will take. A service in which the fee is based solely on mileage is not taxable, if all of the following apply:

  1. The service provider does not know the destination before the trip;
  2. There is no minimum number of hours for rental; and
  3. The customer controls whether the vehicle is driven or not (i.e., customers may have the vehicle parked for unlimited periods of time, with no mileage or other charges applying during such time).

Example 1: Company owns a limousine that it provides with a driver at the request of Customer. Customer hires Company to provide limousine service for four hours for Customer's wedding. Company will bring the wedding party to the wedding, to the dinner, and then to the reception, and Company will wait at each location for the wedding party. Company will not be available to other customers during these four hours. Company is providing limousine service on an hourly basis and subject to the 5% fee.

Example 2: Company owns a limousine that it provides with a driver at the request of Customer. Rather than charging a per hour fee, a customer with a known destination is charged a flat fee. The flat fee has been determined, in part, based on experience of how long the trip will take. Company is providing limousine service on an hourly basis and subject to the 5% fee.

Example 3: Company owns a limousine that it provides with a driver at the request of a customer. Customer hires Company to take her shopping. Company charges Customer solely based on mileage (i.e., number of miles driven times a set mileage rate). Company does not charge based on the length of time it takes to travel the miles, nor does Company charge Customer for waiting while Customer shops. Company is not providing limousine service on an hourly basis and is not subject to the 5% fee.

What charges are subject to the limousine fee?

The amount of a limousine service's charge that is subject to the 5% limousine fee includes the total amount received for the services. Mandatory charges for fuel, fuel surcharges, parking, and gratuities are included in the amount that is subject to the fee. A gratuity or tip provided by a customer to an employee that is entirely voluntarily, solely at the customer's discretion, is not subject to the fee.

Mandatory cleaning fees are also subject to the fee. However, additional charges for cleaning and repairs for excessive damage are not subject to the limousine fee if the cleaning and/or repairs occur after the limousine service is provided.

Are there exemptions that apply to the limousine fee?

Rentals to the following are exempt from the limousine fee:

  1. The federal government.
  2. A federally recognized American Indian Tribe or Band in Wisconsin.
  3. A Wisconsin state agency, county, city, village, town, public school, or school district (CAUTION: This exemption does not apply to a state agency, county, city, village, town, public school, or school district from another state.
  4. A nonprofit organization that is organized and operated exclusively for religious, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals and holds a Certificate of Exempt Status (CES) issued by the Wisconsin Department of Revenue.*

Limousine services must support their exempt sales with one of the following:

  1. Obtaining a purchase order or similar written document from the exempt entity identifying the exempt entity as the purchaser.
  2. Obtaining a fully completed exemption certificate from the exempt entity (for example, Form S-211 or Form S-211-SST).
  3. Recording the exempt entity's Certificate of Exempt Status (CES) number on the invoice.*

*A Wisconsin nonprofit organization in 4. may not claim the exemption without a CES number. An out-of-state organization that is organized and operated exclusively for religious, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals, qualifies for exemption on its purchases to the same extent that a Wisconsin organization would qualify. The out-of-state organization does not need a Wisconsin CES number; however, it must provide the seller with a fully completed exemption certificate (Form S-211 or Form S-211-SST) indicating that it qualifies for exemption under sec. 77.54(9a)(f), Wis. Stats.

April 25, 2013