Wisconsin Sales Tax Guide

🐄🧀 Wisconsin, nicknamed the Badger State, may be famous for dairy, but technically California produces more. While it’s hard to imagine football fans proudly identifying as such, the state does, however, lay claim to being the country’s largest producer of Ginseng!  The birthplace of such famous luminaries as Harry Houdini, Frank Lloyd Wright, and William H. Rehnquist, it is also home to the world’s largest Mustard Museum :). If you’re one of the lucky small business owners who calls Wisconsin home, you’re going to want to be sure your business stays in line with Wisconsin's sales tax laws. Fret not! That’s why we have assembled this all-in-one guide; so that you can readily meet the sales tax compliance requirements for a small business in Wisconsin. 

After reading this guide, you will have learned:

• How to be prepared for your call with the Wisconsin State Department of Revenue.
• How to contact the Wisconsin State Department of Revenue.
• When to charge sales tax in Wisconsin.
• What goods, products, and services are taxable in Wisconsin.
• When you establish a sales tax nexus with the state of Wisconsin, and the nuances of various thresholds.
• How to register for a sales tax license in Wisconsin.
• How to collect sales tax in Wisconsin.
• How to file and pay sales tax in Wisconsin.

If, after reading, you still have any questions to help you determine your tax sales obligations in Wisconsin and how to fulfill them, we are here for your small business bookkeeping needs! 

Wisconsin Sales Tax Contacts

✅  Do you need to get in touch with the Wisconsin State Department of Revenue?

✅  Are you uncertain about whether to visit, call them, or contact them through their website?  

✅ Do you wonder what information you should have ready before you contact them?

If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)

The Wisconsin State Department of Revenue is reachable by phone at (608) 266-2776. 

You can also visit one of their six office locations or ask them a question online. If you are hoping for the fastest response, we always suggest that you call rather than visit in person or sending a message via their web form. 

When you do call the Wisconsin State Department of Revenue, you will want to have some information on hand. It will save time to have the following information easily accessible before you call: 

• Taxpayer Name
• EIN
• Sales & Use Tax ID Number

If you plan on having a third party contact them on your behalf, you’ll want to be sure to have completed a power of attorney form (a-222, PDF). If you don’t have a completed form they won’t be able to assist someone else on your behalf.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

Wisconsin Sales Tax Registration

Are you a new business selling tangible property in Wisconsin? If yes, you are going to want to register your business with the Wisconsin State Department of Revenue so that you can pay your sales tax on time. 

You need not fret as this is a relatively simple process and one for which you’re about to be fully prepared. We are going to outline the steps below so you are totally ready to register for your sales tax license.

Here we go! Remember...

Preparation is key. 

Let’s get started!

How do I register to collect sales tax in Wisconsin?

You can apply or register for a Wisconsin sales tax permit by visiting the Wisconsin MyTaxAccount site and following the instructions provided.

Wisconsin prefers online registration but offers an old school paper based form (PDF) you can print and mail in. We suggest that new businesses who are able to do so register online, as the mail-in version can take six weeks to process.

What information do I need to register for a Wisconsin sales tax permit?

Great question!

Before you sign up for Wisconsin sales tax permit you’ll want the following information on hand:

• Business name
• Business entity type 
• Description of business activities
• Date business activities began or will begin
• Business address and mailing address
• Business contact information
• Associated business entities 
• NAICS code that best matches the business
• Federal Employer Identification Number (FEIN)
• List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Wisconsin MyTaxAccount site. 

How much does it cost to register for a Wisconsin sales tax permit?

Wisconsin charges $20 to register a new business sales tax permit, but nothing to renew an existing one.

Do I need a Federal Tax ID Number or EIN to register for a Wisconsin sales tax permit?

Quite right! For anything but a sole proprietorship, you will most assuredly need one. If you don’t already have one and need to get a new EIN, it’s a painless process. You can register for a Federal EIN right here :). 

Which agencies in Wisconsin do I need to additionally register with?

You may need to check with some of the following agencies or resources: 

• Wisconsin Small Business Guidance
• Department of Natural Resources
• Wisconsin Chamber of Commerce

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply. 

We suggest contacting the Wisconsin State Department of Revenue to verify which additional government agencies you may be required to register with. 

*****

Huzzah!!!

You are now prepared to register for your Wisconsin sales tax permit in Wisconsin. 

Let’s summarize what we have covered:  

• Have all the required information easily accessible before registering online.
• Acquire a tax ID or EIN before registering for a Wisconsin sales tax permit.
• Register online at the Wisconsin MyTaxAccount site.
• Look into what other agencies you may have to additionally register with.

Registering for your Wisconsin sales tax permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (something we’re happy to handle for our customers). 

Wisconsin Sales Tax FAQ 

By now, you may have already contacted the Wisconsin State Department of Revenue and applied for a Wisconsin sales tax permit. 

Once you have a license to collect and remit sales taxes in Wisconsin, you will probably be asking yourself two questions: 

• When do I charge a sales tax in Wisconsin?

• What goods and services are subject to sales taxes in Wisconsin? 

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations. 

Let’s start with the first question…

What goods and services are considered taxable in Wisconsin?

The following items are all taxable in the state of Wisconsin: 

• Sales of tangible goods at retail.
• Repairs or alterations of tangible personal property.
• Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
• Selling service warranty contracts.
• Short-term rentals for living accommodations (e.g. motel/hotel, beach houses, condos, timeshares, vacation homes, or RV homes).
• Rental/lease of personal goods (e.g.: machinery, vehicles, equipment, or other property).
• Charges for admission to any place of amusement, sport, or recreation.
• Manufacturing or producing goods for retail sales.
• Operating vending machines or amusement rides.
• Most services are exempted

The bottom line is …

Your business must pay taxes on sales of any non-exempt goods, and some taxable services.

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Let’s now review some of our clients’ frequently asked questions:

• Is Wisconsin an Origin or Destination sales tax State?

• What creates a sales tax nexus in Wisconsin?

• What is the economic threshold in Wisconsin?

• Does Amazon have fulfillment centers in Wisconsin?

• Does Wisconsin have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions. 

 Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.   

Is Wisconsin an origin or destination-based sales tax state?

Wisconsin is a Destination-based sales tax state. This simply means you’ll want to have your Point-of-Sales system configured to track sales tax based on your buyer’s location vs. that of your business.

Protip: Charge sales tax based on your buyer’s location rather than your location

What creates a tax nexus with the state of Wisconsin?  

Having nexus, also known as "sufficient business presence,” with Wisconsin means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Wisconsin because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Wisconsin State Department of Revenue even if you never step foot in Wisconsin.   

A business establishes a nexus in Wisconsin by:

• having a business location in Wisconsin;
• having property stored in Wisconsin;
• employing any person in Wisconsin;
• contracting with a salesperson or other agent in Wisconsin;
• leasing equipment used in Wisconsin;
• performing services in Wisconsin;
• licensing the use of intangible property in Wisconsin, or transporting property in Wisconsin using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse. 

Does Amazon have fulfillment centers in Wisconsin?

Yes, there is one Amazon fulfillment center in Wisconsin. Why does this matter?

This is relevant if you sell your products on Amazon or are recognized as an Amazon FBA (Fulfillment by Amazon) seller. When Amazon stores your products in one of its fulfillment centers in any state, including Minnesota, this triggers a sales tax requirement. If Amazon is storing your products in a warehouse in Minnesota, you have created a taxing connection with the state of Minnesota.

We can help guide your small business through this! We use tools like A2X to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance.

Does Wisconsin have economic nexus?

Yes! As of October 1st, 2018, remote sellers are liable to pay sales tax beyond a certain threshold. This means that even businesses without a physical presence or other traditional nexus can be required to register for, collect, and pay sales taxes.

The threshold for registering is having over $100,000 or 200 transactions in a year to Wisconsin purchasers. Previously there was a minimum transaction threshold and a higher gross revenue requirement, but this was for a small window in 2019; starting in 2020 only the revenue threshold will be required.

For more information see the Wisconsin DOR remote sellers page here.

Does Wisconsin have click-through nexus?

No click-through nexus laws on the books in Wisconsin as yet. This means that if your business makes revenue by referring sales AKA “affiliate marketing” you needn’t worry about a tax liability in Wisconsin.

Is Wisconsin a streamlined sales tax state?

Yep! Since October 2009 Wisconsin has been a full member of Streamlined sales tax.

If you are planning on taking advantage of the Streamlined sales tax as a business, it is recommended that you use a Certified Service Provider though businesses may opt to register themselves without a CSP. Ultimately the aim of streamlined sales tax is to simplify payment to multiple different states of sales and use tax. It isn’t required that you utilize them, but it can significantly reduce the complexity to do so, especially if your business sells in multiple states.

More effectively manage your tax needs by keeping this guide handy. 

You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place or facing an audit by the tax authorities in Wisconsin.

Collecting Sales Tax in Wisconsin

By now you know if you are a business that has established a nexus with Wisconsin. So you have an understanding of whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Wisconsin sales tax obligations. 

• How do I collect Wisconsin sales tax?
• Who is eligible for Wisconsin sales tax exemptions?
• What should I do if my customer is exempt from sales tax in Wisconsin?
• What happens if I lose a Wisconsin nontaxable transaction certificate? 

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Wisconsin.

How do I collect Wisconsin sales tax?

Because Wisconsin is a destination-based sales tax state, your business should charge sales tax at the time of the transaction based on the business location rather than that of the buyer. 

What are the current Wisconsin sales tax rates?   

Wisconsin’s state-wide sales tax rate is 5% at the time of this article’s writing, but local taxes bring the effective rate from 5.5% to 5.6% depending on location. We advise you to check out the Wisconsin State Department of Revenue Tax Rate page which has the current rate and links to lookup specific municipal rates. Any changes will be reflected on that page.

It always helps to be accurate and up-to-date with this type of information! :) 

What is exempt from Wisconsin sales tax?

Here is a sample list of exemptions: 

• Non-prepared food
• purchases for resale
• Industrial Machinery
• Medical supplies

And that’s it! Most items of tangible property are taxable in Wisconsin.

Who are eligible for Wisconsin sales tax exemptions?

At this point, you should know what products are exempt from sales tax in Wisconsin. You also want to know who may be exempt. 

Under Wisconsin law, the type of buyer or the way the goods will be used can qualify can buy for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

• Government agencies
• Non-profit organizations
• Religious groups
• Out-of-state buyers (should their business not have nexus in their home state).

Note that a non-profit status doesn’t instantly confer tax exemption.

What should I do if my customer is exempt from sales tax in Wisconsin?

Purchasers who are tax-exempt must have completed exemption certificates and must present their completed exemption certificates at the time of purchase. It is then incumbent upon the seller to hold on to this exemption certificate. Failure to do so may leave you unable to justify tax-exempt sales.

Remember, you always want to collect and file a copy of the exemption certificate. Such certificates must be produced upon request to justify tax-exempt sales in the event of an audit.

What happens if I lose a Wisconsin sales tax exemption certificate?

Obviously, this issue is best to be avoided! Imagine finding out you’ll be audited and discovering you cannot produce an exemption certificate for a buyer... That nightmare scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This is a bad scene and can be avoided by taking proper care of your paperwork... Which happens to be one of our areas of expertise! :) 

Does Wisconsin have a sales tax holiday?

Nope! No break from sales tax in Wisconsin at this time. Boo!

***** 

We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Wisconsin state. 

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper! 

Filing and Paying Sales Tax in Wisconsin

It is time to talk about filing and paying your sales taxes in Wisconsin. In this section, We are going to cover the following frequently asked questions from our clients:

• When is Wisconsin sales tax due?
• What are the Wisconsin sales tax thresholds?
• What if a Wisconsin sales tax filing date falls on a weekend or holiday?
• How do I file a Wisconsin sales tax Return?
• How do I correct a Wisconsin sales tax return?
• What happens if I don’t collect sales tax?
• What happens if I file or pay my sales tax return late?
• Do I need to file a return if I don’t collect any sales tax in Wisconsin?
• If I close my business, do I need to file a final sales tax return?
• Does the Wisconsin State Department of Revenue offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Wisconsin sales tax.

When is Wisconsin sales tax due?

Wisconsin sales tax payments are due based on the filing interval and type. Filing intervals are based on the company’s tax liability [detailed ahead, be patient! :p] and the type refers to paper vs. online.

The state of Wisconsin requires payment by no later than the 20th day of the month following the reporting period for paper and electronic filing.

What are the Wisconsin sales tax filing interval thresholds?

The thresholds for filing intervals are based on the expected or actual tax liability owed:

*anticipated if new business, actual if existing company

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated. 

Don't worry though! The state will let you know when your due dates change. :) 

Keep an eye out for notices in your mail from the State of Wisconsin so that you don't miss any shift in deadlines.

What if a Wisconsin sales tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;). 

How do I file a Wisconsin sales tax return?

Paper: Fill out form s-012f (PDF) and mail it to the address on the form. 

Electronic: File online via Wisconsin MyTaxAccount site and submit payment via EFT.

How do I correct a Wisconsin sales tax return?

Paper: Fill same forms as above but check the “Filing an Amended Return” option on the first page, and mail them to the address on the form.

Electronic: Amend the return within the Wisconsin MyTaxAccount site.

What happens if I don’t collect sales tax?

If you were required to collect sales taxes and failed to do so for whatever reason, that’s a major no-no! Ultimately the business would be held liable for the due tax. Always be sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time-consuming and most likely unsuccessful. 

Protip: You are still responsible for remitting sales taxes even if you failed to collect them. 

What happens if I file or pay my sales tax return late?

Wisconsin's Department of Taxation charges penalties for late filing and late payment:

Late filing of any kind induces a $20 penalty plus anywhere from 5-25% of tax due, depending on how late it is. 

Do I need to file a return if I don’t collect any sales tax in Wisconsin?

Yep! Wisconsin requires businesses to file a “Zero-Tax” return even when they have no sales during a taxing period.

If I close my business, do I need to file a final sales tax return?

Yes, Wisconsin requires businesses to file a “Final sales tax” return when closing their doors.

Does the Wisconsin State Department of Revenue offer a discount for filing on time?

Yes indeed! A retailer discount of .5% is available to early filers, with a maximum of $1,000 per filing period.

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Now that we have covered all our bases for filing and paying sales taxes in the state of Wisconsin, you should feel more at ease about the process.

Some things to remember:

• Due dates are important. If anything, file and pay your taxes early.
• There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
• You can file and pay your taxes electronically or by mail
• If you need to amend a return, you may do so electronically or by paper.
• If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Wisconsin.
• You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
• Even if you collect no sales tax, you still need to file a return.
• You need to file a “Final sales tax report” when you close your business.

Now, you are ready to file and pay your sales tax in Wisconsin. If you have any more questions, feel free to contact us.

Please note: This blog is for informational purposes only and the information is accurate as of 11/26/2019. If you want legal advice on sales tax law for your business, please contact a sales tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.