• The Emergency Rule goes into effect starting October 1st, and the state plans to begin enforcement at that time, and it expires on February 27, 2019, which should allow sufficient time for a regular "Administrative Rule"  with the same language to go through the required public & legislative processes for permanent adoption.
• An out-of-state retailer that sells taxable products or services into Wisconsin is engaged in business in this state and shall register and collect Wisconsin sales or use tax, noting that physical presence in the state is not necessary to create the required substantial "nexus" in the state.
• There are, however, minimum thresholds for this to apply (consistent with the Supreme Court ruling). If the out-of-state retailer has either of the following activities, they must collect & remit the taxes:

1.  the retailers annual gross sales into Wisconsin exceeds $100,00
2.  the retailers annual number of separate sales transactions into Wisconsin is at least 200

• The DOR has provided clarifications on both activity thresholds, such as the annual amounts include both taxable and nontaxable sales, and deposits made in advance of a sale are not sale transactions - which could impact overnight sales thresholds.

• This is important, because starting October 1, the large online platforms such as Airbnb will now need to collect and remit the same taxes on sales as the rest of the lodging industry. This makes  progress toward leveling the playing field and ensuring these rentals are also paying local room tax, contributing their part in funding local tourism promotion.
• The DOR has already initiated notifications to the large out-of-state online rental platforms, advising them that they must register and start collecting/remitting
• All levels of taxes should soon experience gains in revenue generated - with local tourism promotion funding benefitting too!

• The DOR does not have the authority to apply penalties for those that do not comply.
• In their zest to notify potential Lodging Marketplaces, we have already learned of one large property who processes rentals of individually owned condo units on their property who was notified they must register, however the WH&LA contacted the DOR to explain, and they property was able to send a written notice that they are not eligible as they are affiliated with the condo units through their management contract (thus are not "unaffiliated"). Should any other members see such a notice, just contact us at pugal@wisconsinlodging.org for the process to get removed from the list.
• There are some concerns over the logistics of how some of the online platforms will determine what each local room tax percentage applies and which municipality it must pay, however, this will be the obligation of the platform to establish their own methodology to comply with the law, similar on a smaller scale to how companies with multiple lodging properties must comply with local room tax and property tax requirements for each property location. Airbnb will soon, if not already, be facing these demands for jurisdictions around the country, so if their technology is not currently compatible, they will need to invest in changes.