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.
The following sales and use tax rates apply in Wisconsin at the state and local level:
The sales tax rates will depend on where you are located and what type of transaction is being completed.
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:
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.
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.
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.
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.
You will pay Wisconsin sales and use tax by:
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.
Quarterly: The following deadlines apply to those whose sales tax liability in Wisconsin is between $601 and $1,200 per quarter:
|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:
Annual: If you owe less than $600 per year in sales tax remittance, you may file annually.
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.
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.