The Village of Ephraim has adopted the Premier Resort Area Tax. The tax will be effective on January 1, 2022. The 0.5% Premier Resort Area Tax applies to sales occurring in the Village of Ephraim.
Questions and Answers Relating to the 0.5 % Premier Resort Area Tax
How Much Money Would the Tax Generate?
Travis Arthur, an Economist with the Wisconsin Dept. of Revenue, estimated the tax would generate approximately
$165,000 on an annual basis in Ephraim.
When Does the Premier Resort Area Tax Become Effective?
The Board of Trustees passed Resolution 05-2020 on December 8, 2020, declaring the intent to impose a Premier Resort Area Tax “PRAT” in the Village and directing the Clerk to hold a referendum on the question.
The residents of the Village of Ephraim voted in the affirmative to pass said referendum on April 6, 2021.
The effective date will be January 1, 2022.
Are There Restrictions on the Use of Funds?
Yes. The proceeds from the tax must be used for infrastructure expenses within the jurisdiction of the premier resort area.
Infrastructure expenses means the costs of purchasing, constructing, or improving parking lots; access ways; transportation facilities, including roads and bridges; sewer and water facilities; exposition center facilities used primarily for conventions, expositions, trade shows, musical or dramatic events, or other events involving educational, cultural, recreational, sporting, or commercial activities; parks, boat ramps, beaches, and other recreational facilities; fire fighting equipment; police vehicles; ambulances; and other equipment or materials dedicated to public safety or public works.
Which Areas Currently Have the Premier Resort Area Tax?
- Village of Sister Bay, effective 2018
- City of Rhinelander, effective 2017
- Village of Stockholm, effective 2014
- City of Eagle River, effective 2006
- Village of Lake Delton, effective 1998
- City of Wisconsin Dells, effective 1998
- City of Bayfield, effective 2003
Which Sales Are Subject to the Premier Resort Area Tax?
Sales subject to Wisconsin sales tax are also subject to the premier resort area tax if both of the following conditions are met:
- The sale, license, lease, or rental takes place in a premier resort area *
- The seller is classified in the Standard Industrial Classification Manual, 1987 edition, under one of the SIC codes referenced in Publication 403, Premier Resort Area Tax.
* Sales through online retailers that meet the classification condition of par. 2 above where the items purchased are delivered to a premier resort area are also subject to the tax.
Will the Department of Revenue Provide a Listing of Businesses Located Within a Premier Resort Area Along With Corresponding SIC Code?
No. Each business has an existing SIC code. However, the Department of Revenue will inform retailers reporting sales tax in the area of the upcoming tax via MTA notice or letter. Retailers are asked to self-identify/register for the tax, if applicable.
How Does a Business Determine its SIC Code?
A business determines its classification within a particular SIC code based on its primary business activity.
- The SIC manual, available online at https://www.osha.gov/data/sic-search, offers a keyword search along with a detailed description of each SIC code.
- A tool to compare a current NAICS code to a 1987 SIC code is available at: https://www.census.gov/eos/www/naics/concordances/concordances.html
How Does a Seller Pay the Premier Resort Area Tax?
If a seller is subject to the premier resort area tax, the seller must register with the department and report the tax on the premier resort area tax return. The premier resort area tax return may be filed and paid electronically using My Tax Account, the department's online filing system, at https://www.revenue.wi.gov/Pages/home.aspx
What Happens if a Business Fails to Pay the PRAT?
The Village President or the employee or Trustee designated will receive a report that summarizes all sales tax and PRAT payments. The report is confidential. If there are businesses not on the report or if a business is on the report and maybe shouldn’t be the DOR can be contacted. If a business fails to pay tax when they should have, the DOR will impose penalties as stated in Publication 403.
Where Can I Find More Information?
- DOR descriptive list of subject businesses - https://www.revenue.wi.gov/Pages/FAQS/pcs-premier.aspx#premier4
- https://www.revenue.wi.gov/DOR%20Publications/pb403.pdf ,Premier Resort Area Tax
- Premier resort area tax common questions at https://www.revenue.wi.gov/Pages/home.aspx (enter keyword "premier resort")
- https://docs.legis.wisconsin.gov/statutes/statutes/66/XI/1113 – Creating a premier resort area
- https://docs.legis.wisconsin.gov/statutes/statutes/77/X/994 – Administering premier resort area tax