Beginning October 1, 2025, a new Wisconsin sales and use tax exemption will apply to many types of information products purchased and used by insurance companies and agencies in Wisconsin. Enacted as part of the 2025 Budget Bill (Wisconsin Act 15), this new statutory exemption brings clarity and potential cost savings for the insurance industry in Wisconsin.

What businesses may benefit from this exemption?

The new exemption applies to information products containing reports, statistics, records, or other data that are used exclusively by an insurance company or insurance agency licensed to operate in Wisconsin. Certain affiliates of insurance companies that purchase information products may also claim the exemption, provided the exclusive use requirement is met by the insurance company affiliate of the purchaser.

To qualify, the information products must be used for purposes of quoting, underwriting, determining insurability, assessing risks, setting rates, or adjusting claims. The exemption applies regardless of whether the information products are transferred in tangible or digital form and regardless of whether the charges to the product are made on a per-transaction basis or through a license, subscription, or similar type of fee for access to the information.  

New exemption resolves prior uncertainty regarding taxability of these products.

Prior to the enactment of this exemption, there had been uncertainty as to the taxability of many types of digital information products used by insurance companies and agencies in Wisconsin, particularly as to whether these types of products constituted taxable “additional digital goods.” The new exemption should resolve much of the uncertainty surrounding these types of products used by insurance companies and agencies, particularly given the broad scope of the exemption that covers many types of information products and methods of charging users for access to information.

What can insurance companies and agencies do to prepare?

To prepare for the October 1 effective date, insurance companies and agencies should review their existing contracts, licenses, and subscriptions to identify which information products are eligible for the exemption. Entities eligible for the exemption should work with their vendors to ensure that the exemption is properly taken into account by the vendor beginning on the October 1 effective date. Eligible insurance companies and agencies may want to proactively provide vendors with an exemption certificate to claim the exemption. Although the Wisconsin Department of Revenue has not yet updated its Form S-211 exemption certificate to reflect the new exemption, an eligible purchaser may fill in the exemption by noting it on the “other” line of the form. In the case of vendors collecting sales taxes on sales of these products on or after October 1, insurance company and agency purchasers eligible for the exemption should consider seeking refunds for any overpaid taxes.

If you have any questions regarding how this exemption impacts your business, please contact Tim Smith or Zach Bemis.