1. ​​What is the difference between Wisconsin sales tax and use tax?


2. Examples of use tax situations.

1. What is the difference between Wisconsin sales tax and use tax?

   Sales Tax

   Sales tax is imposed on retailers who make taxable retail sales or provide taxable services in Wisconsin (unless an exemption applies). All sales are generally considered retail sales unless the buyer purchases the product or taxable services for the purpose of reselling it. In addition to the 5% state sales tax, a 0.5% county sales tax may apply. Effective January 1, 2024, Milwaukee County sales tax increases from 0.5% to 0.9% and the city of Milwaukee imposes a 2% sales tax.

   For more information see What is Taxable.

   Use Tax

   Use tax is the counterpart of sales tax. Use tax must be paid when Wisconsin sales tax is not charged and no exemption applies. In addition to the 5% state use tax, a 0.5% county use tax may apply. Effective January 1, 2024, Milwaukee County sales tax increases from 0.5% to 0.9% and the city of Milwaukee imposes a 2% sales tax. If you properly paid sales tax in another state, the sales tax paid may be used to offset the Wisconsin use tax due.

   If Wisconsin did not have a use tax, persons could buy items in another state to avoid paying Wisconsin tax on such purchases.

   For more information see Use Tax.

2. Examples of use tax situations.

   Common use tax situations include the following:

   • Property is purchased from an out-of-state internet seller without payment of Wisconsin sales tax and the internet seller ships the property to the purchaser's Wisconsin location.
   • Property is purchased outside Wisconsin and brought into Wisconsin to be used by the purchaser. The property would have been subject to sales tax if purchased in Wisconsin. Note: If the purchaser properly paid sales tax in the other state, the sales tax paid may be used to offset the Wisconsin use tax due.
   • Building materials are purchased by a nonresident contractor from a seller located in another state, the seller either does not charge sales tax or charges tax at a rate less than the applicable Wisconsin rate, and the nonresident contractor uses the materials on a real property job in Wisconsin.
   • Property is purchased for resale (to sell to others) or for a nontaxable use and then is used by the purchaser in a taxable manner. Sales tax was not charged when purchasing the property.
   • Property is purchased outside Wisconsin without payment of the Wisconsin sales tax and is then brought into Wisconsin and given away free. Exception: If a retailer provides an item free of charge with the required purchase of another taxable product, the retailer may purchase the item provided free of charge without tax, for resale.
   • Property is purchased from a supplier outside Wisconsin without payment of Wisconsin sales tax and the supplier ships the property to the purchaser's Wisconsin location at the direction of the purchaser.
   • Property is purchased from a supplier outside Wisconsin without payment of Wisconsin tax and the supplier ships the property to Wisconsin where it is stored by the purchaser until subsequently shipped outside Wisconsin.
     
     

     Exception - Use tax does not apply to certain printing related purchases:

     • Printed advertising materials purchased and stored for transport outside of Wisconsin (see Publication 235, Part 6.)
     
     
     • Raw materials used in printed materials transported outside Wisconsin (see Publication 235, Part 6.)
     
     
     • Certain property sold to commercial printers (see September 2013 Sales and Use Tax Report, Part 5.B.)
     
     

   Credit for tax paid in another state:

   • If tax was first due and paid to another state, the amount of Wisconsin use tax due may be offset by the tax paid in the other state.
   
   

   Additional information about credits for taxes paid in other states is provided in Wisconsin Tax Bulletin 157 (July 2008), beginning on page 28.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of October 22, 2024: secs. 77.52, 77.53, 77.54, 77.55, 77.56 and 77.71, Wis. Stats.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.

The department welcomes your input on our guidance. Submit comments on this guidance document.

Guidance Document Number: 100114

October 22, 2024​