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The Wisconsin sales and use tax is 5 percent for sales of tangible personal property and certain services. The state also allows counties to add a 0.05 percent sales and use tax, and it also has several excise taxes that businesses must collect.
Types of taxes
Before a business opens, it must be ready to collect sales and use tax, plus any additional excise taxes pertaining to the business’s industry. Businesses must also collect Wisconsin’s local sales taxes.
Sales and use tax for sales of goods and services
Wisconsin’s sales tax rate of 5 percent is the same as the use tax rate. Business taxpayers must pay the use tax if they purchase taxable tangible personal property and do not resell it but instead use it or store it.
Individuals must also pay the use tax if they purchase taxable goods and do not pay the tax on them. This is a common occurrence if a person buys something from a marketplace seller or another online store that does not meet the physical or financial nexus for taxable retail sales in Wisconsin.
Alcoholic beverage taxes
Wisconsin has an alcoholic beverage tax, though most consumers do not “see” the tax because it is paid by:
- Wholesalers importing distilled spirits and wine from a foreign country.
- Shippers from out of state who ship distilled spirits and wine into Wisconsin.
- Manufacturers or rectifiers in Wisconsin who produce or bottle distilled spirits and wine.
- Direct shippers who ship wine to consumers in Wisconsin.
The tax is as follows:
- Intoxicating liquor (distilled spirits): 85.86 cents per liter, plus an administrative fee of 2.90 cents per liter.
- Wine 14 percent or less alcohol by volume: 6.605 cents per liter.
- Wine more than 14 percent alcohol by volume: 11.89 cents per liter.
- Cider 7 to 14 percent alcohol by volume: 6.605 cents per liter.
- Cider more than 14 percent alcohol by volume: 11.89 cents per liter.
- Cider less than 7 percent alcohol by volume: 1.71 cents per liter.
Automobile rental surcharge tax
Wisconsin imposes a 5-percent fee for the lease or rental of a vehicle. Additionally, sales from providing a limousine service are taxed at 5 percent.
- Vehicles without drivers rented to or provided to those having their vehicles repaired.
- Rentals that are not in Wisconsin.
- Rentals to the U.S. Government, nonprofit organizations holding an exemption certificate, and public or private elementary or secondary schools.
Wisconsin has a beer tax (fermented malt beverage tax). Breweries and brewpubs in the state must pay the tax. Additionally, wholesalers importing beer from a foreign country and out-of-state shippers shipping into Wisconsin must pay the tax.
The fermented malt beverage tax is $2.00 on every 31-gallon barrel. However, if a brewer produces less than 300,000 barrels per year, the brewer is eligible for a tax credit of $1.00 per barrel for the first 50,000 barrels.
Coin-operated amusement tax
If a business operates a coin-operated amusement device, it must pay sales tax on receipts from consumers using the device. For example, if the business took in $2,000 from a coin-operated pool table and the combined county and state sales tax rate is 5.5 percent, the sales tax due is $110. Do not subtract payouts or commissions to the owner of the establishment.
Coin-operated amusements also have a franchise tax. The operator reports income and expenses to figure the franchise tax. For example, the gross receipts are $2,000. The operator can deduct:
- The sales tax of $110.
- Payouts to winning players.
- Repairs and maintenance.
- Travel expenses.
Net receipts after deducting sales tax are $1,890. If the deductions add up to $1,870, then the operator pays $20 for the franchise tax ($2,000 minus $110 equals $1,890. Then subtract expenses of $1,870 for a total of $20).
Franchise and income tax
Wisconsin has a franchise tax and an income tax it imposes on businesses. A business pays one or the other – not both. At the state level, the tax provisions are almost the same. It is at the federal level that the tax is different.
The franchise tax of 7.9 percent applies to domestic corporations that have nonexempt income and businesses not organized under Wisconsin law (foreign corporations).
The only exception to the franchise tax, other than paying income tax, is where taxation is exempted by statute or barred by federal law.
The income tax is also 7.9 percent levied on foreign corporations that are not subject to the franchise tax and own property in Wisconsin. The income tax also applies to businesses that have exclusively foreign or interstate commerce.
Motor fuel taxes
Suppliers of motor vehicle fuel pay the tax on terminal receipts or imports of motor vehicle fuel into Wisconsin by means other than a marine vessel or pipeline. An unlicensed blender using untaxed fuel products where the products would normally be taxed is also subject to the motor fuel taxes. For example, when a consumer blends kerosene with diesel in the tank of a licensed motor vehicle to make the vehicle easier to start, that person must pay the tax.
The tax is 30.9 cents per gallon.
Premier resort area tax rate
The Wisconsin Department of Revenue also administers the premier resort area tax, which is a local retail sales tax. The tax is used to pay for infrastructure expenses in the jurisdiction. Jurisdictions that have the premier resort area tax include:
- Village of Ephraim: 0.5 percent.
- Village of Sister Bay: 0.5 percent.
- Village of Stockholm: 0.5 percent.
- Village of Lake Delton: 1.25 percent.
- City of Rhinelander: 0.5 percent.
- City of Eagle River: 0.5 percent.
- City of Bayfield: 0.5 percent.
- City of Wisconsin Dells: 1.25 percent.
Local exposition taxes
The City of Milwaukee’s Local Exposition District, called the Wisconsin Center Tax District, imposes a tax to fund exposition center facilities. While the Wisconsin Department of Revenue administers the taxes, they go to the city. The taxes include:
- Basic room tax: 3 percent.
- Additional room tax for the City of Milwaukee only: 7 percent.
- Food and beverage tax: 0.5 percent.
- Rental car tax: 3 percent.
Anyone selling lodging, renting automobiles, or selling food and beverages in any municipality that is partially or wholly in Milwaukee County must collect and remit the tax.
Dry cleaning facility license fee
Dry cleaners must pay a license fee of 2.8 percent of their gross receipts from the previous three months. The fee only applies to dry cleaning apparel and household fabrics, not formal wear that the dry cleaning facility rents to the general public.
Dry cleaners also have to pay a dry cleaning products fee of $5 per gallon of perchloroethylene sold and $0.75 per gallon for any dry cleaning product sold that is not perchloroethylene.
The tax on cigarettes is at the distributor level. The distributor pays the tax and affixes a tax stamp to the cigarettes. The tax is included in the price to the retailer. The cigarette tax is 12.6 cents per single cigarette and $2.52 per pack.
Tobacco products tax
The tobacco products tax is paid by manufacturers who manufacture tobacco products in Wisconsin. However, anyone in the state who purchases tobacco products for sale or resale from someone without a valid distributor license must also pay the tax. And anyone outside of Wisconsin who ships tobacco to consumers and businesses in the state and does not hold a distributor permit from Wisconsin must also pay the tax.
The tax is 71 percent of the manufacturer’s list price to distributors for tobacco products. Moist snuff has a 100 percent tax based on the manufacturer’s list price. The tax on cigars is 71 percent of the manufacturer’s list price or $0.50 per cigar, whichever is lower.
Discretionary sales tax rates
Sixty-eight Wisconsin counties elected to adopt a 0.5-percent county tax that applies to retail sales, leases, licenses, and rentals of tangible personal property. The tax is in addition to the state tax.
The counties subject to the 0.5-percent tax are listed by the Wisconsin Department of Revenue and include
- Eau Claire
- La Crosse
- St. Croix
Businesses and consumers can find a complete list of counties that charge the 0.5-percent county tax by visiting the Wisconsin Department of Revenue and should always check the tax to ensure that their point-of-sale terminals are always updated. As with any other tax, the county tax could change from year to year.
Registering for and fling Wisconsin’s taxes
Wisconsin sales tax holiday
Wisconsin does not have a sales tax holiday.
Remote and marketplace sellers
Remote sellers and marketplace facilitators must register for a Wisconsin sales tax account if their gross receipts for the previous year were $100,000 or more or if they had 200 or more individual sales into Wisconsin.
Small sellers are exempt by law, but many collect sales tax as a convenience for their customers. If a business does not collect Wisconsin sales tax, the consumer must pay the use tax.
Wisconsin’s sales tax is 5 percent. Additionally, several counties have a 0.5 percent sales tax rate. The state also has several specialty taxes and excise taxes.
Wisconsin calls the resale certificate a “seller’s permit.” You must apply for the permit. Additionally, the state could charge up to a $15,000 “security deposit” for the permit. Businesses must apply for the permit at least three weeks before starting the business. Register online for the permit or submit Form BTR-101 Application for Wisconsin Business Tax Registration.
Yes, you must still file a sales tax return.
Yes, but only if the sale takes place on the reservation and the person is a member of the reservation.