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Wisconsin Department of Revenue

 Sales and Use Tax
Difference Between Wisconsin Sales Tax and Use Tax

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

    Sales Tax

    The Wisconsin state sales tax is a 5% tax imposed on the gross receipts of retailers who sell or lease tangible personal property or taxable services at retail in Wisconsin. The sales tax applies to retail sales. All sales are generally considered retail sales unless the buyer purchases the tangible personal property or taxable service for the purpose of reselling it. The 0.5% county sales tax, 0.1% baseball stadium sales tax, and/or 0.5% football stadium sales tax may also apply.

    Use Tax

    The Wisconsin state use tax is a 5% tax imposed on the sales price of tangible personal property or taxable services that are used, stored, or consumed within Wisconsin, upon which a Wisconsin sales or use tax has not previously been paid. The 0.5% county use tax, 0.1% baseball stadium use tax, and/or 0.5% football stadium use tax may also apply.

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

  2. When is use tax due?

    Use tax is due on the total purchase price of tangible personal property or taxable services that are used, stored, or consumed within Wisconsin, upon which Wisconsin sales or use tax was not previously paid.

    Common use tax situations include the following:

    • Property to be used in Wisconsin is purchased outside the state (e.g. Internet, mail order, catalog, etc.) and the property would have been subject to sales tax if purchased in Wisconsin.
    • 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 a tax at a rate less than the applicable Wisconsin rate (5.0%, 5.1%, 5.5%, or 5.6%), 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.
    • Property is purchased from a supplier outside Wisconsin without payment of the Wisconsin sales tax and the supplier ships the property to the purchaser's Wisconsin locations at the direction of the purchaser.
    • Property (other than advertising material and raw materials incorporated into printed materials) is purchased from a supplier outside Wisconsin without payment of the Wisconsin tax and the supplier ships the property to Wisconsin where it is stored by the purchaser until subsequently shipped outside Wisconsin.

    Credit for tax paid in another state: If tax was properly paid in another state on the purchase of the property, 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 will be published in a future issue of the Wisconsin Tax Bulletin.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Customer Service and Education Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2776
Fax: (608) 267-1030
E-Mail Additional Questions

Last updated January 2, 2008