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The Northwoods River News | Rhinelander, Wisconsin

Flanders Realty Group

home : opinions : letters to the editor August 16, 2017

7/29/2017 7:29:00 AM
Reader shares PRAT experience

To the Editor:

I've been reading reporter Jamie Taylor's informative work on Rhinelander's Premier Area Resort Tax with interest. I've had a personal experience with the PRAT tax that I think may be of interest to some of your readers. I recently bought a motor vehicle from a Central Wisconsin auto dealer. The purchase involved a financing contract which I read with some care.

The sales contract detailed an item for sales taxes which were described as being calculated as the sales price times five percent. Since I had penciled out the cost, I was surprised to discover that the amount listed for this calculation on the contract seemed to be in error. Back calculating, I discovered that the tax amount listed on the sales contract was actually six percent of the price and not five.

Though this purchase was completed in Marathon County, the central Wisconsin dealer's sales representative informed me that because I was a Rhinelander resident the dealership was obliged to collect from me both a county sales tax and a Rhinelander PRAT tax in addition to the state sales tax. For convenience the dealership had just combined these tax amounts into a single sum without itemizing the full calculations.

I contacted the Wisconsin Department of Revenue. In an age in which government and government agencies are routinely derided as being unresponsive, inefficient and untrustworthy, I am pleased to report that Department of Revenue employees were helpful, courteous, and very well versed on the arcana of sales taxes.

Wisconsin DOR employees informed me by phone and email that while auto dealerships around the state were obliged to collect county sales taxes levied in neighboring counties, they told me that auto dealerships do not have one of the "Standard Industrial Classification" (SIC) numbers which require a retailer to collect PRAT taxes. The dealership in Marathon County was correct in collecting an Oneida County sales tax but not correct in collecting a Rhinelander PRAT tax. The total sales taxes I was being asked to pay should have been five and a half percent and not the six listed on my auto sales purchase contract.

I shared this information with the central Wisconsin auto dealership and was told that their legal counsel assured them that they were obliged to collect the Rhinelander PRAT tax. I contacted the Wisconsin Department of Revenue representative to report this and the DOR representative took it upon himself to contact the manager of the dealership to confirm that collecting the PRAT tax was not required because auto dealerships were not retailers required to collect the PRAT tax.

The Marathon County auto dealership eventually conceded its mistake and has refunded to me the Rhinelander PRAT tax collected from me in error.

I don't know if others of your readers will encounter this problem but I would suggest that they check the math on their auto sales financing contracts with care. I know of at least one other Rhinelander resident who has asked for and received a refund of a Rhinelander PRAT tax mistakenly collected by the central Wisconsin dealership.

Best regards,

Mark Nienstaedt


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