Generally, Wisconsin sales tax is a 5% state sales tax on the purchase of tangible personal property (including certain coins and stamps, leased property affixed to real property, digital goods, and some services), and the sale of admission to amusement, athletic, entertainment, or recreational places or events. There are also some services that are taxable when provided in or to Wisconsin residents, such as laundry and dry cleaning services, delivery charges, certain data processing services, and address and phone number lookup websites. Generally, a business that makes more than $2,000 in taxable sales in the state must register, collect, and remit sales tax.
In addition, Wisconsin charges a sales tax on shipping and handling. This includes charges for transportation, freight, and postage. If a shipment contains both taxable and non-taxable items, the retailer must determine which portion of the total charge is for taxable goods and charge tax accordingly. Separately stated, shipping charges for direct mail are not taxable.
In the past, a business would only be required to collect and remit sales taxes in Wisconsin if it had a physical presence in the state. However, in June 2018, the Supreme Court of the United States overruled this rule with its decision in South Dakota v. Wayfair, Inc. Now, states can require businesses to collect and remit sales tax based on their economic and virtual connections to the state, which is called economic nexus.
Wisconsin Sales and Use Tax Permit
Companies with nexus in the state must register for sales tax and file returns. Nexus is determined by a commercial connection to the state, and it can include anything from having inventory in the state (including merchandise held by Fulfillment by Amazon merchants who store their products at warehouses in Wisconsin) to attending a trade show.
Once registered, a retailer is assigned a filing frequency. This can be monthly, quarterly, or yearly and is based on the state’s sales volume. In most cases, larger retailers are required to file more frequently. Having an experienced sales tax professional on your side is important to ensure you are collecting and remitting the right amount of tax. If you have any disagreements with the Department of Revenue, you have 60 days to appeal the decision to the Wisconsin Tax Commission.
How to Pay Wisconsin Sales Tax?
The state of Wisconsin has a variety of ways to file and pay sales tax. The most common way is to file online using the Department of Revenue’s MyTax Account website. In addition, it’s possible to use an autofile service that handles filing and payments for a single fee. Most states require retailers to file and remit monthly, quarterly, or annually sales taxes. The frequency of filing depends on the number and volume of taxable sales made in the state. Retailers with more taxable sales will be required to file more frequently.
Regardless of filing frequency, all retailers are required to keep accurate and complete records of their business activities. This includes starting and ending inventories, purchases, sales, canceled checks, receipts, invoices, bills of lading, and other books and documents related to business transactions. The state also requires that retailers collect and remit sales tax on shipping charges. This requirement applies to both domestic and international shipments. A retail sales tax discount is available for those who regularly file and remit their sales taxes.