Sales Tax in Wisconsin: Rates, Exemptions, and Compliance

Wisconsin is one of the Midwest’s most important business hubs. The state's wealth is generated mainly by the manufacturing industry, besides retail and services, so the business owners, as well as the users, have to understand the way sales taxes in Wisconsin work.

If you are in Milwaukee for shopping, or if you are running an online store from Madison, or even if you are providing some services in all parts of the state, one thing you can’t overlook is understanding the Wisconsin sales tax system, how the local sales tax in Wisconsin works and what items come under the Wisconsin sales and use tax system for compliance and planning purposes.

This guide offers a comprehensive 2025 breakdown of Wisconsin’s sales tax system, including county variations, service taxation rules, and strategies to stay compliant.

Basic explanation of Sales Tax in Wisconsin

Sales tax is a consumption tax imposed by state and local governments on the sale of goods and certain services. In Wisconsin, businesses are responsible for collecting the tax from customers at the point of sale and remitting it to the state.

Wisconsin uses a combined sales and use tax system:

• Sales Tax: Is the one that is levied on the sale of goods and services in Wisconsin that are subject to tax.
• Use Tax: Is the one which is applicable to the goods that are purchased without charging Wisconsin sales tax and are meant for use in Wisconsin (for example, buying online from another state).

In this way, Wisconsin ensures that it collects its due share of revenue in a just manner, even if purchases are made from other states.

Sales tax is a consumption tax imposed by states and governments

Wisconsin Sales Tax Rate (update 2025)

As of 2025, the statewide Wisconsin sales tax rate is 5%. This applies uniformly across the state on most taxable sales.

However, certain local jurisdictions add additional sales taxes, creating variation across counties. That’s why business owners and consumers must consider both the state rate and the local sales tax in Wisconsin.

Wisconsin Sales and Use Tax Explained

The Wisconsin sales and use tax system has two sides:

1. Sales Tax:
   • Applied to most retail sales of tangible goods.
   • Businesses collect it from customers at the time of purchase.
2. Use Tax:

• Applied when Wisconsin residents or businesses buy goods from outside the state without paying Wisconsin sales tax.
• Example: Ordering $1,000 worth of equipment online from a vendor in another state without sales tax. You’re responsible for remitting the equivalent 5% Wisconsin use tax.

This system prevents consumers from avoiding Wisconsin taxes by shopping out of state.

Wisconsin sales and use tax system

Wisconsin Sales Tax by County

While the base Wisconsin sales tax rate is 5%, many counties, though not all, have adopted an additional 0.5% local sales tax, bringing the total rate in those areas to 5.5%.

Examples of County Sales Tax Rates:

• Milwaukee County: 5.5% (5% state + 0.5% local)
• Dane County (Madison): 5.5%
• Waukesha County: 5.5%
• Counties without local tax: Remain at 5%

This variation is why it’s essential for businesses to check Wisconsin sales tax by county to ensure correct collection and compliance.

Local Sales Tax in Wisconsin

The local sales tax in Wisconsin applies only in counties that have adopted the additional 0.5% tax.

Key points:

• The tax is collected in the county where the buyer takes possession of the goods.
• For shipped items, the county of delivery determines the tax rate.
• Businesses must track customer addresses to apply the correct rate.

Failing to apply the right local sales tax in Wisconsin can lead to compliance issues and penalties.

Local sales tax in Wisconsin applies only in counties

Sales Tax on Services in Wisconsin

One of the more complex areas of taxation is determining which services are taxable in Wisconsin. Most services in Wisconsin are not subject to sales tax, and only specific types of services are taxable. Determining whether a service is taxable can be complex, so it’s important to review the state’s list of taxable services carefully.

However, Wisconsin does impose sales tax on certain services, such as:

• Lodging (hotels, motels, short-term rentals)
• Admissions to events (concerts, amusement parks, athletic events)
• Repair and maintenance of tangible personal property
• Landscaping and lawn services
• Certain personal services (e.g., tanning, cable television)

Professional services (like legal, medical, accounting, consulting) are generally exempt from the sales tax on services in Wisconsin.

For business owners, it’s critical to check whether your service falls under Wisconsin’s taxable category before billing customers.

Exemptions from Sales Tax in Wisconsin

Not all transactions are taxable. Wisconsin provides exemptions for:

• Groceries: Most unprepared food items are exempt.
• Prescription medications and medical equipment.
• Certain farm equipment and manufacturing machinery.
• Resale purchases: Goods purchased for resale are exempt if proper resale certificates are provided.

Knowing exemptions helps businesses avoid over-collecting and ensures consumers aren’t overcharged.

Knowing exemptions from Sales tax in Wisconsin

Filing and Paying Sales Tax in Wisconsin

Businesses that sell taxable goods or services in Wisconsin must:

1. Register for a Wisconsin seller’s permit with the Department of Revenue.
2. Collect the correct sales tax (state + local).
3. File returns (monthly, quarterly, or annually depending on sales volume).
4. Remit tax collected to the Wisconsin Department of Revenue.

Wisconsin allows electronic filing and payment through its My Tax Account system.

Remote Sellers and Online Sales Tax in Wisconsin

Since the U.S. Supreme Court’s 2018 Wayfair v. South Dakota decision, Wisconsin requires remote sellers (out-of-state businesses with no physical presence) to collect sales tax if they exceed $100,000 in annual sales or 200 separate transactions delivered into Wisconsin.

This ensures online retailers follow the same rules as brick-and-mortar businesses, keeping competition fair.

Penalties for Sales Tax in Wisconsin Non-Compliance

Failing to collect or remit sales tax in Wisconsin can result in:

• Interest on unpaid balances
• Civil penalties
• Potential criminal charges for willful non-compliance

For business owners, compliance is not optional; it’s essential to avoid costly mistakes.

Penalties for Sales Tax Non-Compliance

Sales Tax Planning for Businesses in Wisconsin

To manage sales tax efficiently:

• Use tax automation software to handle multiple counties.
• Regularly review Wisconsin sales tax by county for updates.
• Train employees to apply tax exemptions properly.
• Monitor service rules to determine if your offerings are taxable.

Tax planning ensures smooth operations and helps avoid penalties.

Get Professional Help with OneIBC USA

Managing sales tax can be overwhelming, especially if your business operates across multiple counties, sells online, or provides taxable services. This is where OneIBC USA can step in.

OneIBC USA provides sales tax services in Wisconsin and all states in the United States, helping businesses:

• Register for sales and use tax permits
• Ensure the correct collection of Wisconsin sales tax by county
• File and remit tax returns on time
• Stay updated with changes in Wisconsin sales tax rate or exemptions
• Manage compliance for both in-state and out-of-state transactions

With expert support from OneIBC USA, you can reduce compliance risks, save time, and focus on growing your business while ensuring your tax filings meet all state of Wisconsin requirements.

Conclusion

For every consumer purchasing goods and services or a business owner dealing with management and compliance, sales tax knowledge in Wisconsin is a must-have skill. Understanding the Wisconsin sales tax rate, sales and use tax rules, and the differences in sales tax by county, the whole system can be a bit complex, but it is based on the same principles.

Businesses that successfully determine the local sales tax in Wisconsin and figure out whether their services are taxable are the ones that go a long way without a stumbling block in the form of a penalty. Consumers who are aware of sales tax on services in Wisconsin and exemptions, so they have a clear picture of what they are paying for.