Learn more about keeping your business compliant with sales tax requirements.
In Wisconsin a tax is imposed on all retailers for the privilege of selling, leasing or renting tangible personal property. The tax is also imposed on the following services:
Leases. In Wisconsin the lease or rental of tangible personal property at retail in Wisconsin is subject to sales tax. Tax is due on rental receipts for any period of time leased property is in Wisconsin. The lease is considered a continuing sale for the duration of the lease while the leased property is situated in the state.
Sales and use tax rate. The Wisconsin sales and use tax rate is 5 percent. In addition, make sure you contact your local governments in Wisconsin because they are allowed to assess a local sales and use tax.
In Wisconsin the sales tax is imposed on retailers and persons providing taxable services. However, the retailer, service provider, or the Department of Revenue can collect the sales tax from the consumer or user.
Absorbing sales tax is illegal. It is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
The Wisconsin Department of Revenue will issue a permit for each place of operation in the state to any person who requests one and who holds a valid business registration certificate. The permit is valid indefinitely.
Wisconsin has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Wisconsin sales tax. Resale exemptions and blanket exemptions are two of the most important exceptions to sale tax liability. You'll want to check and see if you are exempt from the sales tax.
An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself.
In Wisconsin, the sales tax does not apply to sales or purchases of tangible personal property or services for resale.The buyer must provide a resale certificate to the seller to document a transaction is exempt under the resale exemption.
Resale exemption certificate. Buyers may use the Department of Revenue Form S-205 (Resale certificate), or a substitute exemption certificate. A resale certificate must contain the following information to relieve a seller from proving a sale is not taxable:
Wisconsin refers to blanket certificates as continuous resale certificates. Sellers may accept blanket certificates from a purchaser who repeatedly purchases the same type of property or service for processing or resale. However, blanket certificates may not be used to purchase property or services not covered by a blanket certificate. Continuous resale certificates do not expire and they do not need to be renewed at any prescribed interval. If a seller has not accepted a blanket certificate in good faith, liability for the tax does not shift from the seller to the purchaser.
Wisconsin has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within Wisconsin. To determine if you have physical presence, ask yourself the following:
The bracket system may be followed by sellers in computing the sales tax. The 5 percent state tax is computed on each dollar and/or fraction of a dollar according to the following table:
|Amount of Sale||Tax|
|$0.00 to $0.09||no tax|
|0.10 to 0.29||$0.01|
|0.30 to 0.49||0.02|
|0.50 to 0.69||0.03|
|0.70 to 0.89||0.04|
|0.90 to 1.09||0.05|
|and so forth|
An excise tax (use tax) is imposed on the storage, use or other consumption in Wisconsin of tangible personal property or taxable services purchased from any retailer. The use tax is a complementary tax and does not apply in situations where the sales tax is collected. Thus, property brought into Wisconsin on which a sales or use tax has been paid in another state equal to or in excess of the Wisconsin tax is not subject to tax in Wisconsin.
The use tax is imposed on any person who stores, uses, or otherwise consumes tangible personal property or taxable services in Wisconsin. However, this liability is extinguished with a receipt from a retailer showing that the tax has been paid.
You may file a refund claim within four years of the due date of your corresponding Wisconsin income or franchise tax return. Gross receipts subject to tax doesn't include sales refunded as a result of property returned or adjustments in the sales price after sales have been completed. In order to deduct amounts refunded from gross receipts, you must have: