Use Tax

  1. What is the Wisconsin use tax?
  2. What is taxable?
  3. What is the use tax rate?
  4. What must I do if I buy taxable goods or services from an out-of-state mail-order company, television shopping channel, Internet seller, or Internet auction service and no Wisconsin tax is charged by the vendor?
  5. Can an out-of-state business such as a mail-order company collect Wisconsin use tax on taxable goods that are mailed or delivered into Wisconsin?
  6. Is there a convenient way to keep track of my taxable purchases during the year?
  7. On what amount should the use tax be calculated?
  8. How do I pay use tax?
  9. What will happen if I don't pay the use tax I owe?
  1. What is the Wisconsin use tax?

    Use tax is the counterpart of sales tax. It must be paid on all taxable items purchased from retailers who do not collect Wisconsin sales tax and all taxable items brought into Wisconsin.* It applies to purchases made in foreign countries as well as other states. Use tax only applies when Wisconsin sales tax is not charged.

    *Wisconsin allows a credit against the use tax due for the combined state and local sales taxes properly paid to another state. For additional information about this credit, see the tax release titled "Credit for Sales and Use Taxes Paid to Other States and Their Local Units of Government" published in Wisconsin Tax Bulletin #157 (July 2008) for information about how to compute the tax due.

  2. What is taxable?

    All goods, services, and merchandise that are taxable under Wisconsin's sales tax law are also subject to the use tax. Use tax applies to, but is not limited to, mail-order catalog and television shopping or auctions, toll-free "800" purchases, Internet auctions, and purchases made over the Internet.

    Examples of taxable items include automobiles, appliances, clothing, furniture, jewelry, cameras, DVDs, computers, and computer software. Some taxable services include repair services to your television, motor vehicle, or computer; landscaping services; and reupholstering services for furniture.

  3. What is the use tax rate?

    In general, the use tax rate for purchases of taxable goods or services is 5%. If you use, store, or consume taxable goods or services in a county that imposes a county and/or stadium sales and use tax, then you must also pay an additional 0.5% and/or 0.1% tax. For example, if you have a camera shipped to your home in Dane County, the use tax rate is 5.5% (5% state tax plus 0.5% Dane County tax).

    See the total sales and use tax rate for each county and more information on the county and stadium sales and use taxes.

  4. What must I do if I buy taxable goods or services from an out-of-state mail-order company, television shopping channel, Internet seller, or Internet auction service and no Wisconsin tax is charged by the vendor?

    If you buy the goods or services for use in Wisconsin, you must report and pay the use tax as explained in Question 8 below.

  5. Can an out-of-state business such as a mail-order company collect Wisconsin use tax on taxable goods that are mailed or delivered into Wisconsin?

    Yes. If the business has registered to collect Wisconsin use tax, it must collect the tax from you. If the business is not registered, then you must report and pay the tax yourself.

  6. Is there a convenient way to keep track of my taxable purchases during the year?

    Yes. The Wisconsin Department of Revenue has developed a free Use Tax Calculator (in an Excel spreadsheet) to help individuals and businesses track and calculate use tax owed to Wisconsin. The spreadsheet can be used by persons who have some type of spreadsheet software on their computers (Excel, Lotus, QuatroPro, etc.). If you don't have the Microsoft Excel software, you can download a free viewer.

  7. On what amount should the use tax be calculated?

    Calculate the use tax by multiplying the total cost of the taxable goods or services purchased, including separately stated charges such as shipping and handling, by the tax rate.

  8. How do I pay use tax?

    Individuals have two options for paying Wisconsin use tax.

    • Individuals can pay use tax on their Wisconsin income tax return (Form 1, 1A, WI-Z, or 1NPR). A line entitled "Sales and use tax due on out-of-state purchases" on Wisconsin income tax returns allows individuals to report their annual use tax liability, or
    • Individuals can report and pay use tax quarterly on the Wisconsin Form UT-5, Consumer Use Tax Return.

    Businesses have two options for paying Wisconsin use tax.

    • A business can pay use tax on its Wisconsin sales and use tax return, or
    • A business can report and pay use tax quarterly on a Wisconsin Form UT-5, Consumer Use Tax Return.
  9. What will happen if I don't pay the use tax I owe?

    If you don't pay the use tax you owe, you may be subject to interest and penalties in addition to the use tax.

    The Department audits businesses and enters into agreements with other states to ensure that use tax owed by individuals and businesses on out-of-state purchases is remitted to the Department.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
P.O. Box 8902, Mail Stop 5-77
Madison, WI 53708-8902
Phone: (608) 266-2776
Fax: (608) 267-1030
E-Mail Additional Questions

Last updated January 23, 2012