Wisconsin Sales Tax

Wisconsin Sales Tax At a Glance

Wisconsin Sales Tax State rate: 5%
Maximum combined rate: 5.6%
Sourcing: Destination
Tax Holidays: None
Governing Body: Wisconsin Department of Revenue

Wisconsin sales tax is variable in a number of ways, with both a state rate and local municipal tax rates, as well as a number of exemptions that might apply depending on the service or product being sold by the merchant in the state.

In this guide we will discuss the process for determining if you have sales tax nexus in Wisconsin, the rates that will apply to you if you do business in the state, and specific items to which sales and use tax apply in the state. We will also discuss the process of applying for a permit and paying collected sales tax in the state.

Wisconsin Sales Tax Rates

The following sales and use tax rates apply in Wisconsin at the state and local level:

  • The state sales tax rate in Wisconsin is 5.0%.
  • There is an additional sales tax of between 0.10% and 0.60% depending on where tax is being collected in the state for a maximum rate of 5.6% in certain cities.

The sales tax rates will depend on where you are located and what type of transaction is being completed.

Determining Sales Tax Nexus in Wisconsin

Before proceeding, if you are located outside the State of Wisconsin, you must determine if you have sales tax nexus in the State. Nexus is how the state determines if you have physical presence sufficient to require you to collect and pay sales and use tax. For those who operate solely within the state, this is easy – you have sales tax nexus because this is where you operate.

For merchants located outside of Wisconsin, you will need to consider the following, any of which may mean you have nexus in the state:

  • Any goods or inventory located in a warehouse within the state
  • A physical location or office in Wisconsin
  • An employee who is physically present in the state
  • Any property you own either as a business or individual in the state

Wisconsin provides a detailed description of what constitutes nexus in the state on their website here.

For those that sell their goods through Amazon FBA, there is a single fulfillment center in Wisconsin, located in Kenosha. If your goods are housed in this warehouse, you may have nexus and will be subject to the 5.5% sales tax that applies in Kenosha County.

What Is Eligible for Sales Tax in Wisconsin?

Sales tax in Wisconsin generally applies to all goods and few services, but the state has clearly outlined what this applies to on their website. Here is a brief summary of what that includes.

  • Tangible Personal Property – Physical goods purchased in the state or shipped from locations in the state are subject to the local and state sales tax in that region.
  • Coins and Stamps as Collector’s Items – If sold, leased, rented or traded as collector’s items above face value, these are applicable for sales tax.
  • Certain Digital Goods – Wisconsin charges sales and use tax on the transfer of digital goods, with the exception of sheet music, blank legal forms, web hosting services, webinar or webcast participation, address and phone number lookup websites, and data processing services.
  • Services – Wisconsin charges sales tax on select services including service of tangible property, personal items or goods, cable television, Internet service (Wisconsin is grandfathered out of the ITFA), laundry and dry cleaning services, certain photography services, landscaping and lawn maintenance services, certain parking services, messaging services, towing and hauling services, boat docking and storage services, certain other recreational and amusement services, and some additional specific services which are outlined in full on the Department of Revenue’s website here.
  • Bringing Items in from Outside the State – If you purchase an item from outside the state of of Wisconsin and bring it into the state you may be responsible for paying sales tax on that item directly if it was not collected by the merchant.

Before assuming exception to any of the sales tax applied in Wisconsin, be sure to review the documentation on the Department of Revenue’s website and ensure it does not apply to you in these situations.

Registration

To collect and pay sales tax in the state of Wisconsin, you must first register with the state. The process of registering can be done directly on the Department of Revenue website or through the form provided by the state, both linked below:

The application requires all pertinent business information. There are separate tax permits depending on the circumstances under which you will be collecting sales tax. For in-state sellers, you’ll want a Seller’s Permit, whereas if you are out of state, the Use Tax Certificate will be needed. All permits require a $20 application fee and will be used for application to all cities and municipalities within the state.

Filing

You will pay Wisconsin sales and use tax by:

  • For Those in State – Sales tax collection is Wisconsin is determined by destination. Because of this, in-state sellers must use a calculator to determine the local tax rate the same as would out of state sellers. So if you make a sale to someone in Kenosha, even if your location is elsewhere in the state, the sales tax rate charged will be 5.5%, even if your local rate is 5.0%.
  • Out of State Sellers – If you have sales tax nexus in the state of Wisconsin, you will use the same calculations as above, though the permit used and process to pay those taxes will be slightly different because you are located out of state.
  • Shipping Charges – In Wisconsin, the shipping is taxable only if the items being shipped are taxable. If the goods being shipped include both taxed and untaxed goods, the shipping can be split accordingly to match.
  • Filing Your Return – The Wisconsin Department of Revenue has an online portal through which you can pay your sales tax due here.

You can receive a discount on your total sales tax and use liability if it is is paid on time regularly. Called the retailer’s discount, this is only available to taxes paid on time without an extension. The total discount is 0.5% of the amount due with a limit of $1,000 per reporting period.

Your filing frequency will be determined at the time you receive your permit. It will be related to the total liability you expect to have to the state. The deadlines for each frequency are listed below.

Deadlines

Quarterly: The following deadlines apply to those whose sales tax liability in Wisconsin is between $601 and $1,200 per quarter:

PeriodDue Date
January – March (Q1)April 30
April – June (Q2)July 31
July – September (Q3)October 31
October – December (Q4)January 31

Monthly: The following deadlines apply to those whose sales tax liability in Wisconsin is greater than $1,201 per quarter. There is an early monthly frequency as well in which you will need to remit slightly earlier for all liabilities of $3,601 or more per quarter:

PeriodDue Date
JanuaryFebruary 28
FebruaryMarch 31
MarchApril 30
AprilMay 31
MayJune 30
JuneJuly 31
JulyAugust 31
AugustSeptember 30
SeptemberOctober 31
OctoberNovember 30
NovemberDecember 31
DecemberJanuary 31

Annual: If you owe less than $600 per year in sales tax remittance, you may file annually.

Penalties and Interest for Late Payments

The State of Wisconsin charges a flat $20 late filing fee and an additional 5% penalty on the total sales and use tax due at the time listed above. This penalty is accrued monthly up to a maximum penalty of 25%. There are additional fines for repeat offenses, fraud, or other failures to file properly. If you have a zero return, you must file on time or pay the same fee.

Resources:

Wisconsin Sales Tax Software

If you operate within the State of Wisconsin or if you believe you have sales tax nexus within the State, there are a number of factors to keep in mind when collecting sales tax here. To help streamline this process, TaxTools offers a range of features such as data review and sorting. The TaxTools sales tax software solution is a good fit for those with e-commerce websites or other online or out of state businesses that want to streamline their sales tax collection in a single interface. Contact us today to learn more or to signup for a free trial.