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What is the Wisconsin use tax?
Use tax is the counterpart of sales tax. Use tax must be paid when Wisconsin sales tax (state, county, and/or city) is not charged and no exemption applies. If you purchase taxable items from retailers who do not collect Wisconsin sales tax or bring taxable items into Wisconsin from other states or foreign countries, you owe use tax.
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What if I already paid tax in another state?
Wisconsin allows a credit, for sales tax properly paid in another state, against use tax due. If you properly paid sales tax in another state, the sales tax paid may be used to offset the Wisconsin use tax due. See Wisconsin Tax Bulletin
#157, page 28 for further information.
Note: Foreign taxes and customs duty charges are not eligible for this credit.
What is taxable?
All goods and services that are taxable under Wisconsin's sales tax law are also subject to use tax. Use tax only applies when sales tax is not paid. The following types of purchases are subject to use tax: out-of-state, mail-order catalog, television shopping, auction, toll-free "800" and internet purchases.
Examples of
taxable items include automobiles, appliances, clothing, cigarettes, furniture, jewelry, DVDs, ring tones, computers, prewritten computer software, and music or video downloads. Examples of taxable services include repair services to your motor vehicle, television, or computer.
What is the use tax rate?
The state use tax rate is 5% and if the item purchased is used, stored or consumed in a county and/or city that imposes county and/or city tax, you must also pay an additional county and/or city tax. See the total
sales and use tax rate for each county and city.
| Rate Boundary | Tax Rate |
|---|
|
Rate Boundary |
Tax Rate |
| State | 5.0% |
| County | 0.5% - 0.9% |
| City of Milwaukee | 2.0% |
Example: 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).
For more information, see
county sales and use tax.
Note: The new city of Milwaukee and Milwaukee County tax increases are effective January 1, 2024. The new city of Milwaukee rate is 2% and the county of Milwaukee rate increases from 0.5% to 0.9%. See
Wisconsin Tax Bulletin 223 and
Fact Sheet 2414,
Milwaukee Sales and Use Taxes, for more information and transitional provisions.
What are the special county and city tax rules?
Generally, if an item is purchased in a county that has not adopted the county tax or a city that has not adopted the city tax and is later brought to a taxable county or city where it is used, stored, or consumed, the purchase is not subject to the county or city use tax.
Exceptions: Construction materials, titled items and certain purchases by nonresidents:
Construction materials purchased in a county that has not adopted the county tax that are later used to improve real property in a county that has adopted the county tax, are subject to county use tax unless an exemption applies. For more information, see
Wisconsin Tax Bulletin 157 or
Publication 207,
Sales and Use Tax Information for Contractors.
Construction materials purchased in a city that has not adopted the city tax that are later used to improve real property in a city that has adopted the city tax are subject to the city use tax unless an exemption applies.
Purchases of motor vehicles, boats, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats., and aircraft are taxed, for county and city sales and use tax purposes, based on the county and city in which the item is customarily kept.
Purchases of snowmobiles, trailers, semi-trailers, all-terrain vehicles, utility terrain vehicles, and off highway motorcycles are taxed, for county and city sales and use tax purposes, based on where the buyer receives possession of the items.
Sales of motor vehicles, aircraft and truck bodies (including semitrailers) to nonresidents who do not use the property other than to remove it from Wisconsin, are exempt from Wisconsin sales and use tax.
Sales of boats, recreational vehicles as defined in sec. 340.01(48r), Wis. Stats., snowmobiles, trailers, all-terrain vehicles, utility terrain vehicles, and off-highway motorcycles to nonresidents are subject to Wisconsin state sales and use tax, if possession transfers in Wisconsin, county and/or city taxes may apply.
For more information, see
Fact Sheet 2113,
Sales and Use Tax on Sales of Motor Vehicles, Boats, Snowmobiles, RVs, Trailers, Semitrailers, ATVs, UTVs, Off-Highway Motorcycles, and Aircraft.
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 11 below.
Can an out-of-state business such as an internet seller 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 use tax yourself.
- Prior to October 1, 2018 - When an out-of-state retail business has a physical presence (such as a store or warehouse) in Wisconsin, it is required by law to register and collect Wisconsin tax. However, mail order and Internet companies and others who advertise in Wisconsin, but do not have a physical presence in Wisconsin, may not be required to register and collect Wisconsin tax. Some out-of-state businesses register and collect use tax as a courtesy to their customers.
- October 1, 2018 and thereafter - Wisconsin requires out-of-state sellers without a physical presence in Wisconsin (remote sellers) to collect and remit sales or use tax on sales of taxable products and services in Wisconsin. However, a remote seller whose only activity is making sales into Wisconsin is not required to register and collect Wisconsin tax if the remote seller meets the small seller exception. The small seller exception applies to remote sellers that have (1) gross sales of $100,000 or less, and (2) less than 200 separate sales transactions, in both the previous and current year.
- Effective February 20, 2021, the small seller exception was amended (2021 Wis. Act 1) to eliminate the 200-transaction threshold. As a result, a remote seller is only required to collect and remit sales or use tax if its gross sales into Wisconsin exceed $100,000 in the previous or current year.
Note: The purchaser must report and pay use tax on purchases of taxable products or services if the remote seller does not charge tax.
For additional information, see the department's web page for
Remote Sellers – Wayfair Decision.
- January 1, 2020 and thereafter - A marketplace provider that facilitates a retail sale on behalf of another seller by listing or advertising for sale, in any manner, the seller's taxable products or services, and who directly or indirectly process the payment of the purchaser, is required to collect and remit sales and use tax on behalf of the marketplace seller.
For additional information, see the department's web page for
Marketplace Providers and Sellers.
Is a taxable service performed in another state subject to use tax?
It can be. For example, a Wisconsin resident sends a watch to another state for repair. The watch is repaired and shipped back to the Wisconsin resident. The retailer does not charge tax. The Wisconsin resident owes use tax on the total repair charge (including shipping charges billed by the retailer). Although the repair was performed outside of Wisconsin, the Wisconsin resident made first use of the taxable service in Wisconsin.
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, QuatroPro, etc.).
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.
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 or 1NPR). A line entitled "Sales and use tax due on internet, mail-order, or other 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.
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.