Did You Shop Online For the Holidays? You May Owe Use Tax

You may have purchased an item from an e-commerce or mail-order company that did not charge Wisconsin sales tax. Only companies that are engaged in business in Wisconsin are required to collect tax on their sales shipped to Wisconsin addresses. However, this does not mean that your purchase is exempt from tax.

Use tax is due on purchases of taxable products and services when the seller does not collect the tax and no exemption applies. If you purchase taxable products or services from sellers who do not collect the tax, or if you purchase taxable products or services in another state or a foreign country, you owe Wisconsin use tax when you store, use, or consume that product or service in Wisconsin. If you do not pay the use tax, you may be assessed interest and penalties in addition to the tax.

Individuals may report use tax due in either of the following ways:

  1. 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.
  2. On a quarterly Form UT-5, Wisconsin Consumer Use Tax Return.

Businesses may report use tax due on their Wisconsin Sales and Use Tax Return (Form ST-12) or by using the Wisconsin Consumer Use Tax Return (Form UT-5).

Further information is available on the department's website under Common Questions for Use Tax.

February 6, 2018