How Much Is Tax in Wisconsin? A Breakdown of Tax Rates and Tiers
Understand Wisconsin's tax system with a breakdown of income, sales, property, and excise taxes, including rates, tiers, and key factors that impact taxpayers.
Taxes in Wisconsin affect residents and businesses through income, sales, property, and excise taxes. Understanding these costs is essential for financial planning, whether you’re a resident or considering a move.
Wisconsin’s tax system includes multiple income tax brackets, a statewide sales tax, and varying local property tax rates. Excise taxes on goods like gasoline and alcohol add to the overall tax burden.
Individual Income Tax Tiers
Wisconsin has a progressive income tax system, meaning higher earnings are taxed at higher rates. In 2024, the state has four tax brackets, with rates ranging from 3.5% to 7.65%, varying by filing status.
For single filers, income up to $14,320 is taxed at 3.5%. The next bracket, covering earnings from $14,321 to $28,640, is taxed at 4.4%. Income between $28,641 and $315,210 falls under the 5.3% rate, while earnings above $315,210 are taxed at 7.65%. Married couples filing jointly have doubled thresholds, with the highest rate of 7.65% applying to income above $630,420.
Local governments cannot impose additional income taxes, so these rates apply statewide. However, deductions and credits can reduce tax burdens. The Wisconsin Earned Income Credit benefits lower-income workers, while the Homestead Credit provides property tax relief for homeowners and renters.
Sales Tax Structure
Wisconsin has a statewide sales tax of 5%, with most counties adding an optional 0.5%, bringing the total to 5.5% in many areas. Some counties do not impose the additional tax, so rates vary.
Certain items are exempt from sales tax, including most groceries, prescription medications, and medical equipment. However, prepared foods, restaurant meals, and soft drinks are taxable, as are clothing, electronics, and household goods.
Online and out-of-state purchases are taxed under Wisconsin law, following the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc.. This ruling allows states to require online retailers to collect sales tax even without a physical presence in the state. Wisconsin enforces this, meaning major e-commerce platforms typically charge sales tax at checkout. Small sellers may be exempt if their sales fall below Wisconsin’s economic nexus threshold of $100,000 in revenue or 200 transactions annually.
Businesses selling taxable goods or services must collect and remit sales tax to the Wisconsin Department of Revenue. Noncompliance can result in fines and interest charges. Retailers must maintain records for audits and file sales tax returns monthly, quarterly, or annually, depending on sales volume.
Property Tax Factors
Wisconsin relies on property taxes to fund local services, including public schools, fire departments, and infrastructure. Unlike income or sales taxes, property tax rates vary by location, as municipalities, counties, and school districts set their own rates. These are expressed as a mill rate, representing the amount owed per $1,000 of assessed property value. A town with a mill rate of 20 and a home assessed at $250,000 would generate an annual property tax bill of $5,000.
Local assessors determine property values based on market conditions, recent sales, and improvements. Homeowners who believe their assessment is too high can appeal through the local Board of Review using comparable sales data or appraisals. Wisconsin law requires assessments to be fair and uniform.
Beyond standard property taxes, homeowners may face special assessments for infrastructure projects like road repairs or sewer upgrades. These charges apply to properties that directly benefit from the improvements.
Several credits help reduce property tax burdens. The School Levy Tax Credit lowers the effective tax rate by applying state funds to local school district levies. The Lottery and Gaming Credit provides additional relief to homeowners using their property as a primary residence.
Excise Taxes
Wisconsin imposes excise taxes on specific goods and activities, often targeting products associated with public health concerns or infrastructure funding. Unlike general sales taxes, excise taxes are levied per unit or as a percentage of the product’s price.
Motor fuel taxes are a key source of transportation funding. As of 2024, Wisconsin taxes gasoline and diesel at 30.9 cents per gallon. This tax is included in the pump price and funds road maintenance. Unlike some states, Wisconsin does not automatically adjust fuel taxes for inflation, so rates remain fixed unless changed by legislation. Commercial trucking companies may face additional surcharges based on miles driven under the International Fuel Tax Agreement (IFTA).
Alcohol and tobacco products also carry excise taxes. Beer is taxed at 6.5 cents per gallon, while liquor is taxed at $3.25 per gallon. Cigarettes are taxed at $2.52 per pack, and other tobacco products are taxed at 71% of the manufacturer’s list price. These taxes influence retail pricing and contribute to state health programs aimed at reducing smoking and excessive alcohol consumption.