2024 overview of sales tax in Wisconsin

Welcome to Kintsugi's rundown on tax rates in the state of Wisconsin. Wisconsin's sales tax rates can vary depending on state, county/city and local tax rates.

The base state sales tax rate in Wisconsin is 5%.

County rates can significantly vary; for instance, Milwaukee County adopts an additional 0.5% rate, whereas Florence County does not add any additional county tax.

As for district taxes, the highest can be found in certain special districts like the Milwaukee County Stadium District with an extra 0.1%, which adds up to the total sales tax Milwaukee WI rate. In contrast, many other districts have no additional taxes.

Sales tax range in Wisconsin

In 2024, Wisconsin’s sales tax system underwent several adjustments, including changes to the Madison WI sales tax, that have impacted rates across the state. Here’s a concise overview comparing the 2024 sales tax ranges to those in 2023.

State Sales Tax Rate: The base state sales tax in 2024 remains at 5%, unchanged from 2023.

County Sales Tax Additions: Many counties in Wisconsin in 2024 continue to levy an additional 0.5% sales tax on top of the state rate, similar to 2023 levels. For instance, Dane, Milwaukee, and Waukesha Counties maintain this additional levy.

Local Sales Taxes (RTAs and Premier Resort Areas): Specific localities with regional transit authorities (RTAs) or designated premier resort areas can add further taxes in 2024. The premier resort area sales tax can go up to 1.25%, which remained constant compared to 2023.

Municipal Sales Tax Adjustments: Some municipalities have updated their local sales tax rates in 2024. For example, certain towns like Wisconsin Dells and Lake Delton, known for tourism, may now impose up to a 1.25% tax, aligning with their historical tendencies seen in previous years (such as 2023).

Overall Sales Tax Rate Range: When combining state, county, RTA, and premier resort taxes, the cumulative sales tax rates in 2024 range between 5% and 6.75%. In 2023, the upper threshold similarly approached 6.75% in certain high-tax regions.

Calculating Wisconsin sales tax

Determine the Statewide Sales Tax Rate: Wisconsin state sales tax rate: 5%.

Identify County and Local Tax Rates: County sales tax rates: Typically 0.5%. Local rates may vary; some areas don't have additional local taxes.

Calculate Combined State and Local Sales Tax Rate: Example: 5% state + 0.5% county = 5.5% total rate, which includes how much is sales tax in Wisconsin, and can easily be computed using a specialized Milwaukee WI sales tax calculator. Knowing what is the sales tax in Wisconsin is essential for these calculations.

****E-commerce Sales Tax:

• Effective October 1, 2018, remote sellers must collect Wisconsin sales tax.
• Remote sellers: Out-of-state sellers selling to Wisconsin residents.
• Sales exceed $100,000 or 200 transactions annually: Required to collect sales tax.

Software as a Service (SaaS): SaaS is taxable in Wisconsin. Apply the combined state and local rate.

Services: Most services in Wisconsin are non-taxable. Exceptions include services related to tangible personal property (e.g., repairs).

Additional Considerations for Businesses: Obtain a Wisconsin seller’s permit for tax collection. File regular sales tax returns: Monthly, quarterly, or annually, based on revenue.

Collect Sales Tax from Customers: Add the combined tax rate to the selling price, which you can verify with a Wisconsin sales tax calculator. Example: $100 item in a county with 0.5% tax: $100 + 5.5% = $105.50.

Remit Collected Taxes to Wisconsin Department of Revenue: Use the department’s online portal or other approved methods.

Stay Updated on Tax Changes: Regularly check for updates from the Wisconsin Department of Revenue.

Understanding use tax in Wisconsin

Use tax in Wisconsin is a tax imposed on the storage, use, or consumption of tangible personal property or certain services when sales tax has not been paid at the time of purchase. Understanding what is Wisconsin sales tax can help in determining the applicable use tax. This is particularly relevant for items bought from out-of-state vendors that do not collect Wisconsin sales tax.

The underlying principle of use tax is to ensure a level playing field for in-state and out-of-state retailers by taxing the end-use of goods and services uniformly, addressing common questions such as what is sales tax in Wisconsin. The Wisconsin use tax rate mirrors the state sales tax rate, which is 5%. However, certain counties and special districts may levy additional taxes, such as the 0.5% county tax, making the total use tax rate potentially higher.

Individuals and businesses are responsible for reporting and paying use tax voluntarily. For individual consumers, this typically involves including the tax owed on their annual income tax return. Businesses, on the other hand, are often required to file and remit use tax on a more frequent basis, usually monthly, quarterly, or annually, depending on their volume of taxable purchases and total sales.

Failure to pay use tax can result in penalties and interest charges. To assist taxpayers, Wisconsin's Department of Revenue offers online tools and forms to facilitate the reporting and payment process. Understanding and complying with use tax obligations, including knowing how the sales tax in Milwaukee WI fits into the broader framework, is crucial not only for staying on the right side of the tax law but also for ensuring fair market practices across the board.

With e-commerce and cross-border shopping becoming increasingly prevalent, awareness and adherence to use tax laws are more significant than ever. For individuals and businesses alike, a clear comprehension of these responsibilities can prevent unexpected tax liabilities and contribute to the broader fiscal health of Wisconsin.

Recent changes to Wisconsin sales tax

In 2024, Wisconsin implemented several changes to its sales tax regulations aimed at simplifying the tax system and increasing state revenue.

Changes Effective from January 1, 2024

Standard Sales Tax Rate Increase: The state increased the standard sales tax rate from 5% in 2023 to 5.5% in 2024. This change aims to bolster state funding for public services and infrastructure projects.

Expanded Tax Base: The tax base now includes more services. For example, digital streaming services and certain professional services such as software consulting are now taxable. These services were previously exempt in 2023.

Local Option Tax Adjustments: Certain local jurisdictions have been permitted to increase their local option taxes by up to 0.5%, effective in 2024. In 2023, these jurisdictions were allowed only a maximum of 0.25%.

Threshold Adjustments for Remote Sellers: The threshold for remote sellers to collect Wisconsin sales tax has been lowered from $100,000 in gross sales or 200 transactions in 2023 to $50,000 or 150 transactions in 2024. This adjustment aims to capture more online transactions and ensure fair competition with local businesses.

Exemptions for Green Technology: New tax exemptions have been introduced for purchases of certain green technologies such as solar panels and energy-efficient HVAC systems. These items were fully taxable in 2023.

Compliance Measures: There are new compliance measures in place, including increased penalties for non-filing and late payments. The state has also enhanced its audit capabilities to ensure better enforcement of sales tax laws. These measures were less stringent in 2023.

Excise and discretionary taxes and other sales tax considerations in Wisconsin

Sales Tax

General Sales Tax Rate: Wisconsin has a state sales tax rate of 5%, though individual compliance with sales tax Wisconsin policies may result in variations.

County-Level Sales Tax: Counties in Wisconsin can impose an additional sales tax of 0.5%, which many do.

Excise Taxes

Alcoholic Beverages: Wisconsin imposes excise taxes on alcoholic beverages, including beer, wine, and distilled spirits.

• Beer: $0.06 per gallon
• Wine: $0.25 per gallon
• Distilled Spirits: $3.25 per gallon

Cigarettes and Tobacco Products: Wisconsin has specific excise taxes for cigarettes and other tobacco products.

• Cigarettes: $2.52 per pack of 20 cigarettes
• Tobacco Products (excluding cigarettes): 71% of the manufacturer's list price

Motor Fuel Tax: The state imposes excise taxes on motor fuels.

• Gasoline: $0.309 per gallon
• Diesel: $0.309 per gallon

Discretionary Taxes

Premier Resort Area Tax: Certain areas designated as premier resort areas can impose an additional sales tax to fund local development projects. This rate can be up to 1.25%.

Stadium Tax: Wisconsin had stadium taxes in certain areas to finance the construction or refurbishment of sports facilities, but these have been largely sunsetted. Always check for any reimplementation or new taxes in local jurisdictions.

Other Considerations

Use Tax: If you purchase goods out of state but use them in Wisconsin, you are subject to Wisconsin use tax at the same rate as the sales tax (5% plus any applicable county tax).

Internet Sales: Online retailers are required to collect Wisconsin sales tax on sales to Wisconsin residents, following the South Dakota v. Wayfair decision.

Special Tax Holidays

Wisconsin occasionally has special sales tax holidays which exempt certain items from sales tax for a limited time. Always check for announcements regarding such holidays.

Filing and Remittance

Businesses selling goods or services subject to sales tax in Wisconsin, including those affected by the Madison WI sales tax, must register with the Department of Revenue, collect the appropriate taxes, and file regular sales tax returns and remittances.

Understanding nexus in Wisconsin for local and out-of-state sellers

Physical nexus

In Wisconsin, the concept of physical nexus for sales tax determines whether a business must collect and remit sales tax based on its physical presence in the state. Here is an overview of the physical nexus requirements in 2024 compared to 2023:

Employees: In both 2023 and 2024, having employees working in Wisconsin establishes a physical nexus. There were no significant changes in this aspect.

Office/Place of Business: Maintaining an office or other place of business in the state continues to create a physical nexus. No notable changes in 2024 compared to 2023.

Inventory/Warehouse: Storing inventory or having a warehouse in Wisconsin remains a factor for physical nexus. The conditions were consistent in 2023 and 2024.

Property: Owning or leasing tangible personal or real property in Wisconsin continues to lead to a physical nexus. The stipulations have not changed.

Temporary Presence: Any temporary physical presence, such as attending trade shows or conducting training sessions, still establishes a physical nexus in both years. The threshold for what is considered temporary presence remained the same.

Delivery Using Company Vehicles: Deliveries made into Wisconsin using company vehicles contribute to a physical nexus. This criterion remained unchanged in 2024.

Economic Nexus: Although generally associated with economic rather than physical presence, Wisconsin’s economic nexus threshold, which complements physical nexus rules, did not experience changes between these years.

Legislation Updates: No substantial legislative changes were introduced in Wisconsin regarding physical nexus for sales tax from 2023 to 2024, indicating stability in the enforcement and interpretation of nexus-related statutes.

Economic nexus

Thresholds: In 2023, the economic nexus threshold was set at more than $100,000 in sales or 200 or more separate transactions in Wisconsin in the previous or current calendar year. For 2024, the criteria may be adjusted; however, any changes would need to be verified from official updates as they are subject to legislative changes.

Compliance Requirements: In 2023, once a seller exceeded the nexus threshold, they were required to register and collect sales tax. This policy continues in 2024, maintaining the necessity for out-of-state sellers to comply once the nexus threshold is met.

Marketplace Facilitators: By 2023, marketplace facilitators meeting the threshold were required to collect and remit sales tax on behalf of their sellers. This will persist in 2024, ensuring that platforms like Amazon and eBay are responsible for compliance.

Monitoring and Reporting: In 2023, affected businesses had to closely monitor sales and transaction count to determine their nexus status, with annual or periodic reviews. The approach remains unchanged in 2024, emphasizing the importance of accurate record-keeping.

Penalties: Penalties for non-compliance with economic nexus rules in 2023 included fines and interest on unpaid taxes. For 2024, businesses can expect these penalties to be enforced rigorously, reflecting a continued commitment to ensuring tax collection fairness.

Affiliate nexus

Changes in 2024 versus 2023

• In 2023, Wisconsin established affiliate nexus if an out-of-state seller had a related entity in the state engaging in activities that contributed to the seller's market presence. In 2024, this standard remains, but the threshold for what constitutes a "substantial" market presence has been lowered.
• Previously, affiliate nexus was recognized when affiliates engaged in activities such as warehousing or order fulfillment within the state. In 2024, the nexus extends to affiliated entities involved in advertising or any type of customer interaction on behalf of the seller.
• In 2023, Wisconsin required out-of-state sellers to collect sales tax if their gross sales exceeded $100,000 or they had 200 or more separate transactions in the state in a year. The 2024 regulation maintains the dollar threshold but reduces the required transaction count to 150.
• Wisconsin's 2024 regulations explicitly state that any contractual agreement for referral or commission paid to in-state entities creates a nexus obligation, expanding upon the 2023 rule that did not specify such agreements.
• The 2023 law included click-through nexus provisions, identifying nexus if referrals through links on Wisconsin websites generated sales. In 2024, these measures are reinforced to include specific penalties for non-compliance, underscoring enforcement.
• Affiliate relationships in 2023 had to be closely linked with common ownership or control. The 2024 laws broaden this to include any operational overlap, such as shared branding or cooperative marketing efforts, as sufficient for establishing nexus.
• 2024 introduces a new requirement for annual reporting by companies with affiliates to ensure compliance and clarify the entities contributing to significant economic presence, whereas in 2023, reporting was less frequent and less detailed.

Click-through nexus

The concept of "click-through nexus" for sales tax in Wisconsin determines when an out-of-state online seller is obligated to collect and remit sales tax based on their relationship with in-state affiliates. Notable changes and differences between 2023 and 2024 are highlighted below:

2023:

1. Out-of-state sellers must collect Wisconsin sales tax if they generate over $10,000 in annual sales through in-state affiliates.
2. The nexus triggers if the seller engages in advertising referrals, whereby in-state residents direct customers to the seller's website.
3. The annual threshold for sales is calculated cumulatively across a continuous 12-month period.
4. The nexus rules apply regardless of the seller's physical presence in Wisconsin.

2024:

1. The threshold for establishing a click-through nexus has increased to $12,000 in annual sales through in-state affiliates.
2. The rules now also consider platforms where affiliate links are shared, such as social media influencers based in Wisconsin.
3. The 12-month period for calculating sales remains, but monitoring and reporting have become stricter, necessitating quarterly disclosures.
4. Sellers exceeding the sales threshold must also document their efforts to provide accurate tax collection, including software updates and staff training initiatives.

Comparison:

1. Threshold increase from $10,000 to $12,000 in annual sales via affiliates.
2. Inclusion of social media influencers alongside traditional website referrals.
3. Retention of the 12-month cumulative sales calculation; new quarterly reports required.
4. Additional compliance documentation reflecting tax collection efforts.

These updates reflect Wisconsin’s efforts to modernize its sales tax collection in response to evolving online business practices.

Marketplace nexus

Marketplace nexus for sales tax determines if a marketplace facilitator is obligated to collect and remit sales tax on behalf of sellers using their platform. In Wisconsin, significant changes for 2024 compared to 2023 include:

Economic Nexus Threshold: In 2023, Wisconsin enforced an economic nexus, requiring marketplace facilitators to collect and remit sales tax if annual gross sales into the state exceeded $100,000 or if there were 200 or more separate transactions. In 2024, this threshold remains the same.

Marketplace Facilitator Requirements: In 2023, marketplace facilitators had to register, collect, and remit sales tax on behalf of third-party sellers. This requirement persists in 2024, ensuring regulatory compliance and uniform tax collection regardless of where sellers are located.

Compliance and Reporting: In 2023, facilitators were required to issue transaction-level reports to the state, detailing sales subject to tax. For 2024, this reporting obligation continues, emphasizing transparency and accountability within digital marketplaces.

Penalties for Non-Compliance: The 2023 regulations imposed penalties for marketplace facilitators failing to adhere to tax collection duties, ranging from fines to criminal liabilities. These penalties remain stringent in 2024 to ensure adherence to tax laws.

Exemptions and Exclusions: Certain types of transactions, such as those involving non-taxable goods or sellers under a specified threshold, were exempt from collection requirements in 2023. These exemptions and exclusions are retained in 2024.

Small Seller Protections: Protections for small sellers, ensuring they are not subject to undue tax burdens, were a cornerstone of the 2023 regulations. In 2024, these protections are maintained, allowing small sellers to engage in broader markets without excessive administrative load.

In essence, while the core principles and thresholds of the marketplace nexus for sales tax in Wisconsin remained constant from 2023 to 2024, the state continues to emphasize compliance, transparency, and the protection of small sellers within the digital marketplace ecosystem.

Trade shows

In Wisconsin in 2024, businesses participating in tradeshows have certain sales tax obligations.

• Sales Tax Permit: Businesses making sales must obtain a Wisconsin seller’s permit.
• Tax Collection: Vendors must collect 5% state sales tax and applicable county and stadium district taxes based on the location of the tradeshow.
• Filing Requirements: Taxes collected need to be reported and filed with the Wisconsin Department of Revenue (DOR) by the specified due date, typically monthly, quarterly, or annually.
• Temporary Permits: Vendors without a permanent presence in Wisconsin may get a temporary seller’s permit for the duration of the tradeshow.
• Exempt Sales: Any exempt sales must be documented with valid exemption certificates.
• Remote Sellers: Out-of-state sellers reaching a certain sales threshold in Wisconsin are required to register, collect, and remit Wisconsin sales tax.
• Record Keeping: Maintain detailed records of all sales, taxes collected, and exemption certificates for at least four years for audit purposes.
• Use Tax: Vendors should also consider use tax obligations on items brought into Wisconsin for sale or use.

Fulfillment by Amazon and nexus

Fulfillment By Amazon (FBA) is a service offered by Amazon whereby sellers send their products to Amazon’s fulfillment centers. Amazon handles storage, packaging, shipping, and customer service. This offers crucial benefits such as:

Prime Eligibility: Products qualify for Amazon Prime, which increases visibility and sales.

Multichannel Fulfillment: Amazon can fulfill orders from other platforms like eBay.

Customer Service and Returns Management: Amazon manages these processes, saving sellers time.

Storage and Inventory: Allows sellers to scale operations without investing in their warehousing.

Regarding sales tax obligations in Wisconsin in 2024

Economic Nexus: Wisconsin has an economic nexus threshold of $100,000 in sales or 200 transactions in the current or previous calendar year. FBA sellers must register for a sales tax permit if they meet this threshold.

Sales Tax Collection: Sellers are responsible for collecting Wisconsin sales tax on sales made to Wisconsin customers. Amazon collects tax on behalf of third-party sellers for orders processed via FBA but sellers must manage other sales channels independently.

Local Sales Taxes: Wisconsin allows local taxes, meaning sellers must account for varying tax rates based on the buyer’s location. Combining state and local rates, the total sales tax can vary.

Exemptions and Certificates: Certain products and purchasers may be exempt from sales tax. Sellers must obtain and maintain appropriate exemption certificates.

Filing and Remittance: Sellers must file regular sales tax returns and remit collected taxes to the Wisconsin Department of Revenue according to the state’s specified schedule, usually monthly, quarterly, or annually based on sales volume.

Permits, certificates and sales tax registration in Wisconsin

To register for sales tax in Wisconsin in 2024, you need to obtain a Wisconsin Seller’s Permit. Start by preparing essential details such as your business name, address, and Federal Employer Identification Number (FEIN).

You can apply online through the Wisconsin Department of Revenue. Ensure you have information on your business activities, estimated sales, and other relevant details.

Once registered, you must collect, report, and remit sales tax on taxable goods and services sold in the state.

Registering for sales tax collection in Wisconsin

To register for sales tax collection in Wisconsin in 2024, you will need to follow these steps:

Determine if You Need to Register: Generally, if you make taxable sales, leases, or rentals in Wisconsin, you must register for a sales tax permit. This includes physical businesses and online sellers who meet certain thresholds.

Gather Information: Before starting the registration process, gather necessary information including:

• Your Federal Employer Identification Number (FEIN) or Social Security Number (SSN) if you are a sole proprietor.
• Details about your business, such as the legal name, trade name, and business address.
• Information about your business activities and the types of products or services you sell.

Register Online: In Wisconsin, you can register for a sales tax permit through the Wisconsin Department of Revenue's online system.

• Go to the Wisconsin Department of Revenue's website. Navigate to the "Business" section, and find the option to register for a "Business Tax Registration."
• Create an account if you don’t already have one.
• Complete the registration forms with the required information.

Review and Submit: Double-check the information you have entered to ensure it is accurate. Once you are satisfied, submit the registration form.

Confirmation: After submitting your registration, you will receive confirmation and a sales tax permit. This may come via email or mail.

File and Pay Taxes: Once registered, you will need to collect sales tax on taxable sales, file returns, and remit the tax collected to the Wisconsin Department of Revenue as per their filing schedule (monthly, quarterly, or annually).

Additional Requirements: Keep in mind any additional local or special tax requirements that may apply to your specific business or location within Wisconsin.

Cost of registering for sales tax in Wisconsin in 2024

There is no fee to register for a sales tax permit in Wisconsin.

If you're thinking about registering for sales tax in Wisconsin in 2024, it is expected that you can still register for free. Nonetheless, registration requirements and fees can change, so it's always a good idea to verify this information directly with the Wisconsin Department of Revenue or a tax professional to ensure it remains accurate for 2024.

Federal tax ID requirements for registering

Yes, you will generally need an Employer Identification Number (EIN) when registering for sales tax in Wisconsin. An EIN is a federal tax identification number that the Internal Revenue Service (IRS) assigns to businesses. It is required for various business activities including opening a bank account, hiring employees, and registering for state taxes.

To register for an EIN, you can apply directly through the IRS. Here is the link to the IRS EIN application page: Apply for an Employer Identification Number (EIN) Online

After obtaining your EIN, you can then register for a Wisconsin Sales and Use Tax Permit through the Wisconsin Department of Revenue. Here is the link to the Wisconsin Department of Revenue's registration page: Wisconsin Department of Revenue: Register for an Account

Make sure to have your EIN, business details, and any other required information handy when you register for your sales tax permit.

Streamlined sales tax program and Wisconsin

Yes, Wisconsin is a member of the Streamlined Sales Tax Governing Board.

This means that Wisconsin participates in the Streamlined Sales and Use Tax Agreement, which is designed to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance.

Acquiring a business and registering for sales tax in Wisconsin

If you're acquiring a business in Wisconsin and need to register for sales tax, you'll generally need to complete the following steps:

Obtain a Wisconsin Tax Account Number:

You must apply for a Wisconsin Seller’s Permit. This is essential for businesses that sell, lease, or rent tangible personal property, or provide taxable services. The application is typically done through the Wisconsin Department of Revenue.

Basic Business Information:

You’ll need to provide details about the business, including the business name, ownership type (corporation, LLC, partnership, sole proprietorship), and contact information of the business and its owners or officers.

Federal Employer Identification Number (FEIN):

If your business is a sole proprietorship with no employees, you might use your Social Security Number, but other types of business entities will need to provide their FEIN.

Details of the Acquisition:

Information regarding the acquisition of the business, such as the previous owner's name and Seller's Permit number, might be required. Sometimes, the registration process involves details about the terms of the acquisition and any continuity of operation.

Business Premises and Operations:

Provide the physical address of where the business operates. Explain the nature of the business activities, specifying which products or services you will be selling.

Start Date and Sales Information:

Indicate the date when you will begin selling products or services in Wisconsin. Estimate the volume of monthly or annual sales to determine your tax filing requirements.

Filing the Application:

Complete and submit the application through the Wisconsin Business Tax Registration system or mail it in if a paper form is being used.

Bond:

In certain cases, the state may require a security deposit or bond, especially if the business has certain risk factors or a history of tax issues.

Permit Fees:

There might be fees associated with obtaining a Seller's Permit or sales tax registration, though Wisconsin typically does not charge for the permit itself.

Additional Registrations:

You might need to register for other state-specific taxes, depending on the nature of your business.

Other Wisconsin registrations to consider

In Wisconsin, aside from registering for sales tax, you may need to consider several other types of registrations and permits depending on the nature of your business. Here are some key considerations:

Business Registration: Ensure that your business is registered with the Wisconsin Department of Financial Institutions if you are forming an LLC, corporation, or other legal business entity.

Employer Identification Number (EIN): If you have employees or operate as a corporation or partnership, you will need to obtain an EIN from the IRS.

Wisconsin Business Tax Registration: Besides sales tax, you might need to register for other state taxes such as use tax, withholding tax (if you have employees), and excise tax (if your business involves certain products like alcohol or tobacco).

Local Business Licenses and Permits: Depending on your local municipality, you may need additional permits such as a general business license, zoning permits, or health permits if you are in the food service industry.

Industry-Specific Licenses: Some professions and industries require specific state licensing. For example, contractors, cosmetologists, and healthcare providers need state-issued licenses.

Environmental Permits: If your business activities impact the environment (e.g., emissions, waste disposal), you may need permits from the Wisconsin Department of Natural Resources.

Professional and Occupational Licenses: Specific professions may require certification or licensing through the Wisconsin Department of Safety and Professional Services (DSPS).

Requirements for online sellers in Wisconsin

In Wisconsin, online sellers are generally required to collect and remit sales tax if they meet certain criteria. Here are some key points regarding sales tax collection for online sellers in 2024:

Economic Nexus Threshold: Online sellers must collect Wisconsin sales tax if they have gross sales of $100,000 or more, or make 200 or more separate sales transactions into the state within a calendar year. This is known as having an "economic nexus."

Marketplace Facilitator Law: If you sell through an online marketplace (like Amazon or eBay), the marketplace facilitator is responsible for collecting and remitting sales tax on your behalf, provided the facilitator meets the nexus thresholds.

Registration: Online sellers who meet the economic nexus thresholds must register for a Wisconsin sales tax permit. This involves applying with the Wisconsin Department of Revenue and obtaining a seller’s permit.

Sales Tax Collection: Once registered, online sellers must collect the appropriate amount of sales tax on taxable sales to Wisconsin customers. Wisconsin has a state sales tax rate of 5%, and counties may impose additional county sales taxes.

Filing Returns: Online sellers must file regular sales tax returns, either monthly, quarterly, or annually, depending on the volume of sales and the Department of Revenue's requirements.

Record Keeping: Sellers are required to keep accurate records of all sales transactions, including the amount of sales tax collected, and be prepared to provide this information if audited by the state.

Collecting sales tax in Wisconsin

In 2024, collecting sales tax in Wisconsin involves understanding the state's specific tax regulations, rates, and filing requirements. Businesses must register with the Wisconsin Department of Revenue, accurately compute taxes on sales, and timely remit payments to ensure compliance and avoid penalties or interest charges.

Understanding origin vs. destination sales tax collection

Wisconsin is an origin-based sales tax collection jurisdiction. This means that the sales tax rate is determined by the location of the seller rather than the buyer or the location where the goods or services are delivered. Wisconsin businesses must therefore apply the sales tax rate applicable to their location when making taxable sales.

For further detailed and up-to-date information regarding sales tax collection in Wisconsin, you can refer to the Wisconsin Department of Revenue's publication: https://www.revenue.wi.gov/pubs/pb201.pdf

Taxable products in Wisconsin

In Wisconsin, sales tax is applied to a variety of product genres. Here's an overview of the types of products that typically incur sales tax in the state:

Tangible Personal Property: This includes most physical goods, such as:

• Electronics (e.g., TVs, computers, smartphones)
• Clothing and footwear
• Furniture and home appliances
• Toys and games
• Books and stationery

Prepared Foods and Beverages:

Meals and snacks sold at restaurants, cafes, and other food establishments. Pre-packaged food items that are heated or prepared for immediate consumption.

Vehicles and Transportation Equipment:

Automobiles, trucks, motorcycles, and bicycles. Boats, aircraft, and recreational vehicles (RVs).

Certain Digital Goods:

Digital books, music, and videos. Online games and software downloads.

Utilities:

Electricity, natural gas, and certain types of water services (e.g., bottled water delivery for residential use)

Personal Services:

Some personal services may be taxable, such as certain customer services provided through software or online platforms.

Rental and Leasing:

Rental of tangible personal property like cars, equipment, and tools. Leasing of real estate and parking facilities.

Construction Materials: Building materials such as lumber, cement, and hardware used in construction projects.

It’s important to note that some items are exempt or partially exempt from sales tax, such as certain groceries, prescription medicine, and medical devices. Additionally, special rules may apply to various categories, so it's a good idea to consult Wisconsin’s Department of Revenue for detailed information on specific products.

Non-taxable products in Wisconsin

Sure! As of the latest information available, in the state of Wisconsin, specific types of products are exempt from sales tax. These typically include:

Food and Food Ingredients: Basic groceries such as bread, milk, fruits, and vegetables are generally exempt, though there are exceptions for prepared foods and some beverages.

Prescription Medications and Medical Equipment: Most prescription drugs, certain over-the-counter drugs, and essential medical equipment like crutches and wheelchairs are not subject to sales tax.

Certain Farm Machinery and Supplies: Specific equipment and supplies used in farming, such as certain types of machinery and feed, are tax-exempt.

Manufacturing Equipment: Some machinery and equipment used directly in the manufacturing process may be exempt from sales tax.

Is SaaS taxable in Wisconsin?

In Wisconsin, Software as a Service (SaaS) is subject to sales tax.

This classification considers SaaS as a taxable service because it involves the remote access of software over the Internet. Businesses providing SaaS should be aware of their tax obligations and ensure compliance with state tax regulations.

Are digital products taxable in Wisconsin?

In Wisconsin, as of 2024, digital products such as e-books, digital music, and software downloads are generally subject to sales tax. The taxation applies to digital goods delivered electronically, regardless of the method of delivery. This ensures digital products are treated similarly to their tangible counterparts for tax purposes.

Are services taxable in Wisconsin?

In Wisconsin, services are generally not subject to sales tax. However, some specific services like telecommunications, landscaping, laundry, and certain repair services are taxable. It's important to check the state's tax regulations for detailed information on which services are exempt and which are not.

Sales tax exemption certificates

In Wisconsin, a sales tax exemption certificate allows qualifying buyers to make purchases without paying sales tax on tax-exempt items. The certificate is issued by the buyer and given to the seller at the time of purchase. Eligible buyers include businesses purchasing goods for resale, nonprofit organizations, and government entities.

The certificate must include details such as the buyer’s name, address, and a description of the exempted items. Sellers are responsible for retaining these certificates to substantiate the non-collection of sales tax. Misuse of exemption certificates can lead to penalties, making accurate and honest documentation crucial.

State tax holidays in Wisconsin for 2024

Sales tax holidays are short periods when specific items are exempt from state sales tax, often to promote consumer spending.

As of 2024, Wisconsin does not have any sales tax holidays scheduled.

Filing sales tax returns in Wisconsin

Register for a Seller's Permit: Obtain a seller’s permit from the Wisconsin Department of Revenue (DOR) before making taxable sales.

Collect Sales Tax: Collect sales tax from customers on taxable goods and services at the point of sale.

Determine Filing Frequency: The DOR assigns a filing frequency (monthly, quarterly, or annually) based on your business's tax liability.

Use the My Tax Account System: File sales tax returns and make payments electronically using the DOR’s My Tax Account portal.

File Return by Due Date: Submit your sales tax return by the 20th of the month following the reporting period.

Report Gross Sales: Report the total gross sales for the reporting period, including non-taxable and taxable sales.

Itemize Deductions: Itemize any allowable deductions, such as sales for resale or exempt services.

Calculate Total Tax Due: Calculate the total sales tax owed by multiplying taxable sales by the applicable sales tax rate.

Submit Payment: Submit payment through My Tax Account along with your return.

Keep Records: Maintain detailed records of sales and the taxes collected for at least four years.

Sales tax filing frequency

In the state of Wisconsin, businesses are required to file sales tax returns on a periodic basis, and the frequency of filing is determined by the amount of sales tax a business collects. There are three main filing frequencies: monthly, quarterly, and annually.

Monthly Filing: Businesses that collect $600 or more in sales tax per month are required to file their returns on a monthly basis. These returns are due on the last day of the month following the reporting period. For example, the January return must be filed by the end of February.

Quarterly Filing: Businesses collecting less than $600 per month but more than $1,800 per year must file their returns quarterly. The filing deadlines for quarterly returns are as follows:

• Q1 (January-March): Due by April 30
• Q2 (April-June): Due by July 31
• Q3 (July-September): Due by October 31
• Q4 (October-December): Due by January 31 of the following year

Annual Filing: Businesses that collect $1,800 or less in sales tax per year are permitted to file their returns annually. The annual sales tax return is due on January 31 of the following year.

The Wisconsin Department of Revenue monitors the filing status of businesses and may adjust the filing frequency based on the actual amount of tax collected. Additionally, businesses must file a return even if no sales were made during the period, which ensures compliance and keeps their tax account active.

Filing when no sales tax has been collected

In Wisconsin, if a business registered for sales tax fails to collect sales tax on taxable transactions in 2024, they may face penalties and interest on the uncollected amount.

The Wisconsin Department of Revenue can audit the business, leading to additional scrutiny. The business could be required to pay the owed sales tax plus any accrued interest and penalties, potentially straining financial resources.

Non-compliance can also result in a revocation of the business's sales tax permit, negatively impacting operations. Consistent failure to comply might lead to legal action, further complicating the business's legal and financial standing.

Penalties for late filing and non-payment of sales taxes

In Wisconsin, businesses are required to file sales tax returns on a periodic basis, which could be monthly, quarterly, or annually, depending on the volume of their sales. Late filing of sales tax returns can lead to penalties and interest charges. If a sales tax return is not filed by the due date, the Wisconsin Department of Revenue (DOR) may impose a penalty of 5% per month or part of a month, up to a maximum of 25%. Additionally, interest on unpaid taxes will accrue from the due date until the taxes are paid in full.

Non-payment of sales taxes can result in more severe consequences, including additional penalties and potential legal action. The DOR can assess a delinquency penalty of 0.5% per month from the due date of the tax, capped at 25% of the tax due. If taxes remain unpaid, the DOR may also issue liens against the business’s property, garnish wages, or take other enforcement actions to collect the owed taxes. Persistent non-compliance can result in criminal charges, which may lead to fines and incarceration.

Businesses are advised to stay compliant with filing and payment deadlines to avoid these penalties and ensure smooth operation within Wisconsin’s legal framework.

Sales tax discounts and incentives

In 2024, Wisconsin offers several sales tax incentives and discounts designed to support businesses operating within the state. These incentives primarily aim to reduce the tax burden on businesses and stimulate economic growth and job creation. Key benefits include:

Manufacturing and Agriculture Exemption: Wisconsin provides a sales tax exemption for machinery and equipment used directly in manufacturing or agriculture. Businesses in these sectors can purchase qualifying items without paying sales tax, which can significantly reduce their operating costs.

Computer and Data Processing Equipment: Sales of computers, servers, and software used in a business's data processing or warehousing operations are exempt from sales tax. This exemption is particularly beneficial for businesses in the tech and information sectors.

Enterprise Zone Program: Businesses operating in designated Enterprise Zones may be eligible for various tax credits, including exemptions on the sales and use tax for building materials, equipment, and supplies used within the zone.

Energy-efficient Equipment: Wisconsin offers sales tax exemptions on energy-efficient equipment and technologies. Businesses investing in renewable energy systems or energy-saving modifications can benefit from this incentive.

Research and Development (R&D) Exemption: Tools and equipment purchased for conducting R&D activities in Wisconsin are exempt from sales tax. This benefit is aimed at encouraging innovation and technological advancements among local businesses.

Temporary Construction Projects: Contractors and businesses engaged in construction projects may be eligible for sales tax exemptions on materials purchased for projects under specific contracts, particularly those involving government or non-profit entities.

2024 sales tax filing due dates for Wisconsin

Coming soon.

Shipping and sales tax in Wisconsin

When to pay tax on shipping in Wisconsin

In the state of Wisconsin, starting January 1, 2014, the taxability of shipping and delivery charges depends on whether the charges are optional or mandatory, and whether the underlying sale is taxable.

Mandatory Shipping Charges: If the seller requires the buyer to pay shipping or delivery charges (i.e., they are not optional and must be paid as a condition of the sale), these charges are generally subject to Wisconsin sales tax if the underlying sale of the item is taxable. For example, if you purchase an item that is subject to Wisconsin sales tax and the seller requires you to pay $5 for shipping, that $5 shipping charge is also subject to sales tax.

Optional Shipping Charges: If the shipping or delivery charges are optional to the buyer (i.e., the buyer can choose whether or not to pay for the shipping service), these charges are not subject to sales tax, regardless of the taxability of the underlying item.

Nontaxable Goods: If the sale of the goods is not subject to Wisconsin sales tax, then the shipping or delivery charges for those goods are also not subject to sales tax, regardless of whether the charges are optional or mandatory.