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What type of retirement income qualifies for the new retirement income subtraction?
Section 71.05(6)(b)54m., Wis. Stats., provides that retirement income eligible for the income subtraction includes payments or distributions received each year from a qualified retirement plan under the Internal Revenue Code or from an individual retirement account (IRA) established under
26 USC 408.
Note: Not all payments reportable on federal Form 1099-R are from qualified retirement plans or IRAs (e.g., payments from commercial annuities, life insurance contracts, and charitable gift annuities).
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Can income from an inherited individual retirement account (IRA) qualify for the new retirement income subtraction?
Yes, income from an inherited IRA may qualify for the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., as long as the individual recipient is at least 67 years of age before the close of the taxable year to which the claim relates.
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If an individual has retirement income from converting a traditional individual retirement account (IRA) to a Roth IRA, is that income eligible for the new retirement income subtraction?
Yes, if the taxpayer is at least 67 years of age at the end of the tax year, the income may be eligible for the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats.
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If an individual has retirement income from required minimum distributions (RMD), is that income eligible for the new retirement income subtraction?
Yes, if the taxpayer is at least 67 years of age at the end of the tax year, the income may be eligible for the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats.
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If qualified retirement income is already excluded from Wisconsin taxable income, is that income eligible for the new retirement income subtraction?
No, the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., cannot be taken on qualified retirement income that is already excluded or exempt from Wisconsin taxable income.
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If one spouse of a married couple is not age 67, can the married couple still get up to $48,000 subtraction for the new retirement income subtraction?
No, sec.
71.05(6)(b)54m., Wis. Stats., provides that both spouses must be at least 67 years of age before the close of the taxable year (and file a joint return) to claim a subtraction up to $48,000. The married couple would be limited to a subtraction up to $24,000 based solely on the qualified retirement income received by the spouse that is at least 67 years of age before the close of the taxable year.
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When claiming the new retirement income subtraction, if both spouses are 67 and one spouse has $48,000 of retirement income and the other spouse has $0, can they claim the full $48,000 subtraction provided under sec.
71.05(6)(b)54m., Wis. Stats.?
If a married couple files a joint return, they may be eligible to claim the full $48,000 subtraction.
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Can any credits be claimed if an individual claims the new retirement income subtraction?
No, sec.
71.05(6)(b)54m., Wis. Stats., provides that an individual who claims the retirement income subtraction for a taxable year may not claim any credit listed under sec
71.10(4), Wis. Stats., for the same taxable year. Section
71.10(4), Wis. Stats., provides a complete list of all the credits available to individuals.
Note: If a credit is unable to be claimed in a tax year, it
cannot be carried forward to future tax years.
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If an individual claims the new retirement income subtraction, can they claim withholding tax and estimated tax payments even though they are listed under sec.
71.10(4)(i), Wis. Stats.?
Yes, withholding tax and estimated tax payments are not treated as credits and may be claimed even if the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., is claimed.
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If an individual claims the new retirement income subtraction, can they claim credits carried forward from prior tax years?
No, credits carried forward from prior tax years cannot be used to offset tax in the tax year the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., is claimed. The credit carry forwards may be used to offset tax in a later tax year if the credit carry forward period has not expired, and the retirement income subtraction is not claimed in that tax year.
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If the new retirement income subtraction eliminates all taxable income to Wisconsin, does the individual still have a Wisconsin income tax filing requirement?
The retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., does not reduce an individual's gross income for determining if they have a Wisconsin income tax filing requirement.
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If an individual claims the new retirement income subtraction, will they receive a higher Wisconsin standard deduction because their Wisconsin income is lower?
It depends. If the individual's Wisconsin income does not exceed the income phaseout threshold for their filing status after claiming the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., then the individual will have a higher standard deduction.
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Does the new retirement income subtraction decrease or phase out based on the individual's overall income?
No, the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., does not have an overall income limitation or phase out.
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Can estates and trusts claim the new retirement income subtraction?
No, the retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., is only available for individuals.
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If an individual claims the new retirement income subtraction, does it reduce income for purposes of qualifying for the $5,000 retirement income subtraction under sec.
71.05(6)(b)54., Wis. Stats.?
No, eligibility to claim the $5,000 retirement income subtraction under sec.
71.05(6)(b)54., Wis. Stats., is based on the individual’s federal adjusted gross income. The new retirement income subtraction under sec.
71.05(6)(b)54m., Wis. Stats., does not reduce an individual's federal adjusted gross income for purposes of determining if they qualify for the $5,000 subtraction under sec.
71.05(6)(b)54., Wis. Stats.
Note: The federal adjusted gross income threshold for the $5,000 retirement subtraction under sec.
71.05(6)(b)54., Wis. Stats., is $15,000 for single and head of household filers and $30,000 for married filing joint filers. If married filing separate, the sum of both spouses’ federal adjusted gross income must be less than $30,000.
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Why is the department sending bills to individuals that claimed a retirement income exclusion for qualified charitable distributions (QCDs)?
The department initiated a 1099-R project to send notices to individuals that may have incorrectly reported their retirement income on their Wisconsin income tax return. Examples of errors include not reporting taxable distributions, not reporting penalties on early withdrawals, excluding income as nontaxable QCDs even though the person was not age 70 ½, excluding income as a nontaxable QCD and claiming a charitable itemized deduction credit for such distribution, etc. The project scope is much broader than QCDs. If you or your client receive a notice from the department, you must appeal the notice within 60 days and provide documentation supporting the correct treatment on the individual income tax return. Taxpayers that receive more than one notice for multiple years may submit one appeal for all such notices. Instructions on how to appeal are provided with each notice.
Tax treatment of QCDs: Federal law (sec. 408(d)(8), of the Internal Revenue Code (IRC)) allows individuals who are age 70½ or older to exclude from their gross income up to a certain amount in distributions made directly from their individual retirement plan to a qualified charity. Such distributions must be made directly by the trustee of the plan to a qualified charity described in sec. 170(b)(1)(A), IRC. The exclusion from income is not eligible for distributions from non-IRA plans such as a 401(k) or 457(b) plan or from an IRA that is a simplified employee pension (SEP) or a simple retirement account (SRA).
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Are depreciation schedules required to be attached to tax returns, including electronically filed tax returns?
In general, depreciation schedules are not a department-prescribed form and are not required to be attached to the Wisconsin income or franchise tax return. However, taxpayers filing a Wisconsin income or franchise tax return must include a complete copy of their federal income tax return, including all supporting schedules that were submitted to the IRS with the federal return. In addition, the department may contact the taxpayer requesting additional documentation to verify certain information reported or omitted on a return.
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Is the additional child and dependent care credit still available for 2025 and 2026?
Yes, the additional child and dependent care credit is available for taxable years 2025 and 2026 as provided in sec.
71.07(9g)(b)2., Wis. Stats.
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Are there any scheduled shut-down days in which the department will not accept electronically filed individual income tax returns?
Most electronically filed individual income tax returns go to the Internal Revenue Service (IRS) first and must pass acceptance by the IRS before they are forwarded to the Wisconsin Department of Revenue. The department begins accepting returns at the same time as the IRS.
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Has the department had any issues or does the department foresee any issues with receiving IRIS-formatted information returns?
The department is aware of the following limitations for tax year 2025:
- The department does not support Form 1099-DA electronically. This form is in the IRIS schema, but we are not ready to support it yet. 2025 Form 1099-DA must be filed on paper with the department.
Note: Form 1099-DA is only required to be filed with the department if Wisconsin taxes were withheld. - The department does not support Forms 1099 that contain Excess Golden Parachute payments. These forms must be filed on paper with the department for tax year 2025.
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Do recipients of Schedules 2K-1, 3K-1, or 5K-1 need to attach these schedules to their tax return if there are no credits or withholding taxes shown (i.e., only income/losses and adjustment modifications pass through on the schedules)?
If there are Wisconsin adjustment modifications on Schedules 2K-1, 3K-1, or 5K-1, the recipient must include the schedule with their Wisconsin income or franchise tax return.
In general, if there are no Wisconsin adjustment modifications, credits, or withholding taxes, the recipient is not required to include the Schedule 2K-1, 3K-1, or 5K-1 with their Wisconsin income or franchise tax return.
Note: Taxpayers filing a Wisconsin income or franchise tax return must include a complete copy of their federal income tax return, including all supporting schedules that were submitted to the IRS with the federal return.
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Does the department accept "superseded" tax returns (not amended returns) similar to the IRS?
The department does not recognize superseded versus amended returns. However, the department accepts returns filed after an initial return has been filed.
If the amended return check box is not checked, our system identifies it as a "duplicate" return for the same period and it gets added to a work list for an employee to manually review. Upon review, if the employee can identify the changes made, the return gets processed without any correspondence with the taxpayer. In some instances, however, the department may ask the taxpayer for additional information to show and explain the differences (e.g., request Schedule AR,
Explanation of Amended Return, from the taxpayer).
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Is the department going to require direct deposit of income tax refunds similar to the Internal Revenue Service (IRS)?
No, the department currently does not intend to require direct deposit of income tax refunds.
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How come Form 1-ES,
Estimated Income Tax Voucher, payments are getting applied as return payments instead of estimated payments?
If there was an issue with the scan line on a printed voucher, the payment could have ended up in a manual review queue and been misapplied. This shouldn't be a common occurrence. If you are experiencing this issue, please contact the department at
DORBusinessTax@wisconsin.gov or (608) 266-2776 with an example so that we can look further into the situation.
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How come when I submit Form 1-ES,
Estimated Income Tax Voucher, for an estate and check the box for estate on the voucher, and then file the Form 2,
Wisconsin Fiduciary Income Tax for Estates and Trusts, for the estate, I get a notice from the department that does not acknowledge the estimated payments made for the estate?
This issue was corrected and resolved in April 2025. If you are experiencing this issue, please contact the department using the contact information provided in the notice issued or at
DORBusinessTax@wisconsin.gov or (608) 266-2776 with an example so that we can look further into the situation.
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When is a payment considered to be made timely? For mailed check payments, is the date of postmark or the date the check is received by the department considered the payment date?
Wisconsin law (sec.
71.80(18), Wis. Stats.) provides that returns and payments that are mailed are timely made if postmarked by the due date and actually received by the department within 5 days of the due date. Electronically submitted returns and payments are timely if they are received by the due date. Additional requirements for timely electronic payments are provided in sec.
Tax 1.12, Wis. Adm. Code.
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What date does the department show as the payment date in My Tax Account?
The date shown in My Tax Account is the effective date of the payment.
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How come my corporate tax account in My Tax Account (MTA) does not show all of the estimated payments I've made for the taxable year? And how come sometimes MTA does not match what is shown in the
Estimated Payment Lookup?
The corporate tax account period in MTA only shows estimated payments if the payment was submitted in MTA directly to a period. Payments made in unregistered MTA do not show up in the period until the return is fully processed. Credit carryforwards do not show up in MTA until the return is fully processed. However, all types of payments (including credit carryforwards) do show up in the
Estimated Payment Lookup.
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Does the department allow individuals to pre-pay their next year's income tax liability and claim zero withholding from their employer? If so, what form and/or payment voucher should be submitted?
Yes, the department allows individuals to prepay their next year's income tax liability. Individuals may file a Form A-115,
Prepayment Voucher. The payment may be made electronically using
My Tax Account, or mailed with a check to the following address:
Wisconsin Department of Revenue
Exceptions Review Unit
PO Box 8966
Madison WI 53708-8966
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When electronically filing an income tax return for a decedent, and a person other than the personal representative of the estate is requesting the refund (i.e., submitting Form 804,
Claim for Decedent’s Wisconsin Income Tax Refund, with the decedent's income tax return), is the electronic signature on Form 804 sufficient from the requestor, or does the department need a copy of a handwritten signature attached to the return?
In general, the department accepts the electronic signature on Form 804. However, a Form 804 with a handwritten signature should be kept in case the department requests the signature to verify and process the Form 804 refund request.
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Are legal business entities required to enter their Department of Financial Institutions (DFI) number on Wisconsin's income or franchise tax returns?
Beginning with 2025 tax returns, the Wisconsin Department of Revenue is asking businesses to enter their DFI number. The department will not reject a return if the DFI number is missing. However, the department may change course in future years. It might be best to start the conversation with your clients this year.
Note: Certain types of businesses must register with the Wisconsin Department of Financial Institutions (DFI). For information on registering with DFI, visit DFI's website at
DFI Business Entity Frequently Asked Questions. You can search for your DFI number on DFI's website at
WI Corporate Records Search.
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Has the department considered increasing the estimated tax payment threshold for estates or trusts that have taxable income of $20,000 or more?
Wisconsin law provides that estates or trusts with taxable income of $20,000 or more must make quarterly estimated tax payments equal to 25% of 90% of the tax for the taxable year (sec.
71.09(13)(c), Wis. Stats.). A change to the $20,000 threshold requires a law change and the department has not requested such a change.
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Does Wisconsin follow the federal One Big Beautiful Bill Act changes to information return (Form 1099) reporting thresholds?
No, on the date of this guidance, the threshold under Wisconsin law remains $600 for certain Form 1099s required to be filed with the department. A change to Wisconsin law is required to match the thresholds under federal law (section 70433 of Public Law 119-21).
See
Publication 117,
Guide to Wisconsin Wage Statements and Information Returns, for reporting requirements for Wisconsin.
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If a taxpayer amortized their Research and Experimental (R&E) expenditures over 5 years for both federal and Wisconsin, and the taxpayer amends their federal returns to deduct the R&E expenditures in the years incurred (as allowed under the federal OBBB), is the taxpayer required to continue amortizing the expenditures for Wisconsin?
No, the taxpayer must also amend the Wisconsin tax return for the same tax year because Wisconsin requires the taxpayer to use the same method of accounting elected for federal tax purposes if that accounting method is allowed for Wisconsin. For tax years 2017 through 2025, Wisconsin allows either method of accounting for R&E expenditures under sec. 174 of the Internal Revenue Code: (1) deduct in year incurred or (2) capitalize and amortize.
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Can employers that receive the federal Employer Retention Credit deduct the full amount of wages paid to the employees, even though the deductible wages were reduced for federal purposes as a result of claiming the federal credit?
Yes, for Wisconsin purposes, the employer can deduct the full amount of wages paid to the employees. See article,
Making a Different Federal Election for Wisconsin, in
Wisconsin Tax Bulletin 214 (July 2021), page 8.
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If I am listed as the third-party designee on the Wisconsin income or franchise tax return, do I need a Power of Attorney (POA) to discuss the return with the department?
Yes, the department requires a POA on file in order to discuss a taxpayer’s Wisconsin income or franchise tax return. Submit
Form A-222,
Power of Attorney, to show your authorization.
A third-party designee is authorized to do the following:
- Discuss questions that may arise during the processing of the taxpayer’s return.
- Provide the department with information missing from the taxpayer’s return.
- Inquire about the processing of the taxpayer’s return or the status of the taxpayer’s refund or payments.
- Respond to certain department notices about math errors, offsets, and return preparation.
A third-party designee is
not authorized to receive any refund check, bind a taxpayer to anything (including any additional tax liability), or otherwise represent a taxpayer before the department.
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What is the allowable subtraction amount for contributions made to a Wisconsin state-sponsored college savings account for 2026?
The allowable subtraction amounts for the 2026 tax year are $5,280 for single or married filing joint and $2,640 for married filing separate.
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Do veterans and surviving spouses need to get recertified by the Wisconsin Department of Veterans Affairs (WDVA) to show their eligibility to claim the veterans and surviving spouses property tax credit?
If the certification for eligibility ended in the prior tax year, the veteran or surviving spouse must request recertification from WDVA. Eligibility end dates are found on the WDVA certificate or can be verified by contacting WDVA at (800) 947-8387.
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Does Wisconsin automatically follow the Internal Revenue Service for disaster areas?
On the date of this guidance, Wisconsin follows sec.
7508A of the Internal Revenue Code as of December 31, 2022.
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Is WisTax e-filing available for individuals?
WisTax is available to file 2025 returns once the IRS opens e-filing for the season:
https://www.revenue.wi.gov/Pages/WisTax/home.aspx.
Note: WisTax is designed for taxpayers to file their own returns and not designed for preparers/third parties to file on behalf of taxpayers.
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When can an individual get their Wisconsin identity protection PIN for filing their 2025 Wisconsin income tax return?
Identity Protection PINs for the upcoming filing season are issued in January. When a new PIN is issued, the taxpayer receives an email with instructions to retrieve their PIN in
My Tax Account. Additional information is available in the department's
WI Identity Protection PIN common questions.
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If a taxpayer has a Wisconsin identity protection PIN, can they change their mind and cancel out of it?
Yes, a taxpayer may cancel their identity protection PIN. Instructions are in the department's
WI Identity Protection PIN common questions, number 3.
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What does "residential use" mean for purposes of qualifying for the exemption for electricity and natural gas sold for residential use (sec.
77.54(30(a)2., Wis. Stats.)?
The definition of "residential use" is found in sec.
Tax 11.57(2)(q)2., Wis. Adm. Code., and provides:
"Residential use" means use in a structure or portion of a structure that is a person's permanent principal residence. Use in a residence includes heating or cooling the premises, heating water, operating fans or other motors, providing lighting, and other ordinary uses by the purchaser in a residence. Residential use includes use in single-family homes, duplexes, townhouses, condominiums, mobile homes, rooming houses, apartment houses, nursing homes, and farmhouses, if the structure is used as a person’s permanent principal residence. Residential use includes use in apartment houses, nursing homes, and farm houses even though they are on a commercial or rural meter.
"Non-residential use" is use other than "residential use," and includes any use in the conduct of a trade, business or profession, whether the trade, business or profession is carried on by the owner of the premises or some other person. It includes use in secondary residences, motor homes not used as a permanent principal residence, travel trailers, other recreational vehicles, and transient accommodations. "Transient accommodations" include hotels, motels, inns, travel homes, tourist houses, summer cottages, apartment hotels, or resort lodges or cabins, and any accommodation which is rented for a continuous period of less than one month.
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How do utility companies know that a residential property is not a person's permanent principal residence for purposes of the exemption?
Utility providers are responsible for collecting tax on the sale of fuel and electricity unless an exemption applies. Normally this involves the utility company receiving an exemption certificate from their customer. For purposes of the exemption for electricity and natural gas sold for residential use, the utility company is not required to obtain an exemption certificate from their customer; however, the utility company must maintain adequate records to identify which of its sales are exempt. The department does not prescribe the type of record the utility company must keep to prove such sales are exempt.
An indication that residential property is not a person's permanent principal residence is often when the customer mailing/billing address is different than the property address to which the utilities are provided. In this instance, a utility provider must maintain additional records to substantiate the sale is exempt.
Additional guidance is provided on pages 11-12 of
Wisconsin Tax Bulletin 195 (October 2016).
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If I own a residence in one location and a summer home in another location, do I now get the sales tax eliminated from both monthly bills for the entire year?
No. The exemption for sales of electricity and natural gas for residential use only applies to a person's permanent principal residence and does not include secondary residences.
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How many data centers have been certified for the sales and use tax exemption?
On the date of this guidance, four data centers have been certified. Any additional certifications are added to the
Qualified Data Center Exemption common questions webpage as soon as the department is notified by the Wisconsin Economic Development Corporation.
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I have seen an increase in requests for sales and use tax filing extensions being denied. Is there a reason? What reason do I have to give to get an extension?
An extension request must explain the reason an extension is needed. The department may extend the time to file for good cause. When a taxpayer requests multiple extensions for multiple periods, the department reviews each request for each period. We cannot grant extensions without good cause. Extensions must be requested before the filing due date and no earlier than 30 days before the due date.
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Where do online sales take place for purposes of determining which county or city sales tax is due?
Generally, the location of a sale is where the purchaser receives product; makes first use of services; or takes possession or makes first use of taxable digital goods, whichever comes first. To determine the tax rates that apply to a location, see the
Wisconsin State and Local Sales Tax Rate Lookup. Exceptions to this treatment are explained in
Publication 201,
Wisconsin Sales and Use Tax Information, Part 18.D.(2) through (5).
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Does a retailer that sells taxable goods in a store in Waukesha have to collect the city of Milwaukee sales tax if the sale is to a Milwaukee resident?
If the retailer's store is
not located in the city of Milwaukee
and the purchaser takes possession of the taxable goods at the retailer’s store, the retailer should not charge city of Milwaukee sales tax. If the retailer ships taxable goods to the purchaser’s location in the city of Milwaukee, the city of Milwaukee sales tax is due, in addition to state and county tax as applicable and noted in the
Wisconsin State and Local Sales Tax Rate Lookup.
Note: Special county and city tax rules apply to construction materials, titled items, and certain purchases by nonresidents. Refer to
Fact Sheet 2104,
Wisconsin Use Tax, for more information.
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If a person sells taxable goods for only one day at an event in the city of Milwaukee, do they have to collect the city of Milwaukee sales tax?
A seller must collect tax, including city of Milwaukee tax, on their taxable sales unless an exemption applies.
Note: A seller who has less than $2,000 in Wisconsin sales of taxable products or services in a calendar year and does not hold a Wisconsin seller's permit may qualify for the occasional sale exemption. See the department's
Occasional Sale Exemption common questions for additional information.
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I don’t have any taxable sales in the city of Milwaukee; I only report taxable purchases. Why do I have to answer the question of whether I have taxable sales in the city of Milwaukee if I have zero taxable sales on my return?
An improvement may be coming in 2026 to address situations like yours in which there is a valid reason for not reporting sales tax. Currently you are asked the question because you have a seller’s permit, a location within the city, and did not report city sales tax.
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When I create a payment voucher for sales tax in My Tax Account (MTA), it shows the amount due as the total after the retailer’s discount, but the amount that displays in MTA as the tax due is the gross amount before reduction for the discount. How come?
The retailer's discount is not displayed in MTA until the tax return and payment are fully processed by the department. The reason for this is because the retailer's discount is not allowed unless the tax due for the period is timely paid (i.e., paid on or before the due date of the return).
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Are credit card transaction fees taxable if I am selling nontaxable products or services?
No. Credit card transaction fees charged to purchasers on the sale of nontaxable products or services are not taxable. See the article in
Wisconsin Tax Bulletin 229 (April 2025),
Sales Tax Treatment of Credit Card Fees Charged by Retailers.
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For sales tax on credit card fees, if the transaction is partially exempt and partially taxable, allocating the taxable portion of the fee isn't necessarily done at the register – the card machine is charging the fee after the sale is done. How do we deal with that?
Sellers must work with their software vendors and credit card processors to show the amount of sales tax charged and collected from a purchaser. If a seller cannot show the amount of sales tax to the purchaser, the seller may include a statement that the "price includes sales tax." A seller is liable for the tax regardless of any limitations in their business software.
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If the seller does not charge the credit card fee, but the credit processing company charges the customer the credit card fee, does the seller have to pay the sales tax on the credit card fee when the fee is not on invoices given to customer?
Yes. Credit card fees charged on the sale of taxable products or services are included in the seller's "sales price" of the taxable product or service. Section
77.51(15b), Wis. Stats., provides "sales price" cannot be reduced by costs or other expenses of the seller (i.e., the seller's costs of credit card processing).
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Can retailers charge a debit card processing fee to customers that choose to pay with a debit card instead of a credit card?
This question is outside the department's scope of administration. Wisconsin tax laws do not prevent retailers from charging debit card fees to consumers. However, other federal and state laws, and/or contracts the retailer has with their payment processor, may prohibit the retailer from charging debit card processing fees to consumers.
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What are the possible new premier resort areas in 2026?
Potentially the city of Sturgeon Bay and town of Minocqua (if they deliver an ordinance to the Department of Revenue) may declare themselves a premier resort area and impose the premier resort area tax.