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Learn the fundamentals of sales tax
Do you need to collect sales tax in Wisconsin?
You’ll need to collect sales tax in Wisconsin if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Wisconsin?
Wisconsin considers a seller to have physical nexus if you have any of the following in the state:
- An office or place of business
- An employee present in the state
- Goods in a warehouse
- Ownership of real or personal property
You can click here to find out exactly what the Wisconsin Department of Revenue has to say about what constitutes sales tax nexus in Wisconsin. (Search for section 11.97(3).)
Do you have economic nexus in Wisconsin?
Effective February 2021, Wisconsin considers vendors who make more than $100,000 in sales in the state in the previous or current calendar year to have economic nexus. (This is an update of Wisconsin’s original economic nexus laws, which went into effect October 1, 2018.) This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Wisconsin’s economic nexus guidance for sellers here.
Is what you’re selling even taxable?
Services in Wisconsin are generally not taxable, with some exceptions. However – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products. You can see the services that are taxable in Wisconsin here.
Tangible products are taxable in Wisconsin, with a few exceptions. These exceptions include burial caskets, certain groceries, prescription medicine and medical devices, printed publications, modular or manufactured homes, manufacturing equipment, and some agricultural items.
Is SaaS taxable in Wisconsin?
SaaS is non-taxable in Wisconsin. (Source)
What is use tax?
If you make a purchase and Wisconsin sales tax is not charged on that taxable item, use tax must be paid. Businesses can pay use tax on its Wisconsin sales and use tax return, or it can report and pay use tax quarterly on a Wisconsin Form UT-5 (Consumer Use Tax Return). For more details on use tax in Wisconsin, consult the Department of Revenue’s site.
A sales and use tax exemption certificate – which are signed by purchasers and given to sellers to verify that a transaction is exempt – are available on the Wisconsin Department of Revenue site.
How to get a sales tax permit in Wisconsin
To register for a sales tax permit in Wisconsin, you have two options. The best option is to do it online at the Wisconsin Business Tax Registration website.
Your other option is to fill out the BTR-101, the Application for Wisconsin Business Tax Registration.
After you do, send it to:
Wisconsin Department of Revenue
PO Box 8902
Madison, WI 53708-8902
FAX: (608) 264-6884
You need this information to register for a sales tax permit in Wisconsin:
- Reason for your application
- Basic business information
- Your business type (sole proprietorship, corporation, etc.)
- The type of business you run (dry cleaner, limousine, food and beverage, etc.)
- The start date you’ll begin collecting sales tax
- Other business owners
It costs $20 to register, but only your first time applying. Other business registration fees may apply.
Collecting Sales Tax
Wisconsin is a destination-based sales tax state. So if you live in Wisconsin, collecting sales tax is not very easy. You must collect sales tax at the tax rate where the item is being delivered. This is the same whether you live in Wisconsin or not. It is also the same if you will use Amazon FBA there.
You can look up the local sales tax rate with TaxJar’s Sales Tax Calculator.
Should you collect sales tax on shipping charges in Wisconsin?
In Wisconsin, if the item that you are shipping is taxable and you charge your buyer shipping, then those charges are taxable. If you have both taxable and non-taxable items shipping, you will need to determine the portion of the shipping charge that is for the taxable items and charge tax on that portion.
Read a full explanation of sales tax on shipping in Wisconsin here.
When are Returns Due?
When you file and pay Wisconsin sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Wisconsin?
States assign retailers a filing frequency when you register for your sales tax permit. In most states, how often retailers file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Wisconsin, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Wisconsin sales tax returns are almost always due the last day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Important Note: Some high-volume Wisconsin sales tax filers will be assigned “prepayments” which are due the 20th of the month following the taxable period (as opposed to the last day of the month following the taxable period.) You can read more about Wisconsin prepayments here.
Filing Sales Tax
When it comes time to file sales tax in Wisconsin you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Wisconsin
Calculating how much sales tax you should remit to the state of Wisconsin is easy with TaxJar’s Wisconsin sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Wisconsin sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Wisconsin
You have a few options for filing and paying your Wisconsin sales tax:
- File online – File online at the Wisconsin Department of Revenue. You can remit your payment through their online system.
- File by mail – Fill out Wisconsin form ST-12 and mail it in
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.