Wisconsin Sales Tax Handbook

RATE OF SALES TAX:

5.00%

LOCAL & COUNTY MAXIMUM RATES:

1.75%

What are the taxable goods and services?

The first step in sales tax compliance is determining if the items or services your firm offers are taxable in Wisconsin.

Traditional Products and Services

Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in Wisconsin.

Prescription drugs, food, and fuel are all free from sales tax.

In Wisconsin, certain services are subject to sales tax. View the Wisconsin Department of Revenue’s comprehensive list of taxable services here.

Digital Products and Services

A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.

Wisconsin law mandates companies to collect sales tax on digital products and services.

How to Register for Sales Tax in Wisconsin

If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.

This enables your company to collect sales tax on behalf of the municipal and state governments.

You will need the following information to register:

The purpose of your application
Basic business knowledge
Your company’s nature (sole proprietorship, corporation, etc.)
The nature of your business (dry cleaner, limousine, food and beverage, etc.)
The day you will begin collecting sales tax.
Other entrepreneurs

A Resale Certificate might help you save money.

When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.

Sales Tax Collection

After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.

When computing sales tax, consider the following types of transactions:

Store Sales Shipping Within-State Sales Outside-State Sales

Retail Sales

For conventional company owners who sell products or services on-site, calculating sales tax is simple: all sales are taxed at the rate determined by the store’s location.

Here’s an illustration of how this situation may look:

In Appleton, Wisconsin, Mary owns and operates a bookshop. Because books are taxable in Wisconsin, Mary charges her clients a 5.00% flat-rate sales tax on all transactions. This includes Wisconsin’s 5.00% sales tax.

Sales inside the state

Wisconsin has a strategy known as destination-based sales taxation. This implies that long-distance transactions inside Wisconsin are taxed based on the buyer’s address. This regulation applies to sales taxes levied by the state, county, and city.

Consider the following scenario:

Steve operates his own eBay electronics company from his home in Appleton, Wisconsin. A buyer from La Crosse discovers Steve’s eBay website and buys a $350 set of headphones. Steve uses the Wisconsin State sales tax rate of 5.0% when computing the sales tax for this transaction. As a result, the total amount of sales tax is $17.50.

Out-of-State Purchases

Wisconsin firms must only pay sales tax on out-of-state sales if they have a presence in other states.

Nexus indicates that the company has a physical presence in another state.

Common nexus types include:

A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.

Submit Your Sales Tax Return

You’re ready to submit your sales tax return now that you’ve obtained your Wisconsin seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.

How to File a Claim

Businesses in Wisconsin are required to file sales tax forms and make sales tax payments online.

How Frequently Should You File?

Annual filing: If your company receives less than $900.00 in sales tax each month, you must submit returns annually.
Quarterly filing: If your company receives between $900.01 and $7200.00 in sales tax each month, you need submit quarterly returns.
Monthly filing: If your company receives more than $7200.00 in sales tax each month, you must submit monthly returns.

Deadlines for Filing

With one exception, returns must be submitted by the last day of the month after the end of the reporting period. Early monthly sales tax payers must file by the 20th of the month after the reporting period’s conclusion. Even if no tax is owed for that time, a return must be submitted. The following are the filing deadlines for this year:

Penalties for Filing Late

Wisconsin imposes a $20.00 late filing penalty, plus 5.00% interest per month on the total amount payable, up to a maximum of 25.00%.