Wisconsin Sales Tax on Services, Installation, etc Wisconsin: Sales Tax Handbook


What purchases are taxable in Wisconsin?

The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Wisconsin sales tax.

Section 1: Taxability of Goods and Services

What transactions are generally subject to sales tax in Wisconsin?

In the state of Wisconsin, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer.

Several exceptions to this tax are burial caskets, prescription medicine, certain types of groceries, medical devices, modular or manufactures homes, certain agricultural items manufacturing equipment, and printed publications.

This means that if you sell books within the state of Wisconsin, you are required to charge sales tax, but if you own a grocery store, not all of your products would be considered taxable.

Are services subject to sales tax in Wisconsin?

The state of Wisconsin does not usually collect sales taxes on the vast majority of services performed. However, some services, like those which have to do with manufacturing or creating products, are generally considered taxable.

This means that a carpenter would not be required to collect sales tax on his services, but the owner of a manufacturing company would be taxed on buying new machinery for the company.

You can find a table describing the taxability of common types of services later on this page.


Are shipping & handling subject to sales tax in Wisconsin?

In the state of Wisconsin, the laws regarding tax on shipping and handling are relatively simple. Essentially, if the item being shipped to the buyer is considered taxable, then the shipping cost is considered taxable as well, and if the item being shipped is not taxable, then the shipping is not considered taxable either. If the item being delivered is delivered using direct mail, and if the shipping charges are stated seperately on the invoice, the shipping charges should not be taxed.

If both taxable and non-taxable items are being shipped together, then the portion of the shipping charge allotted to the taxable items is taxed.


Are drop shipments subject to sales tax in Wisconsin?

"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Wisconsin, drop shipments are generally subject to state sales taxes.


Section 2: Taxability of Various Items in Wisconsin

This table shows the taxability of various goods and services in Wisconsin. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.

Category Exemption Status
Amazon Purchases
Products on Amazon.com TAXABLE *
General Clothing TAXABLE
Food and Meals
Catering TAXABLE *
Grocery Food EXEMPT *
Leases and Rentals
Motor Vehicles TAXABLE *
Tangible Media Property TAXABLE
Manufacturing and Machinery
Machinery EXEMPT
Raw Materials EXEMPT
Utilities & Fuel EXEMPT
Medical Goods and Services
Medical Devices EXEMPT
Medical Services EXEMPT
Medicines TAXABLE *
Newspapers and Magazines
Newspapers EXEMPT
Periodicals EXEMPT *
Occasional Sales
General Occasional Sales EXEMPT *
Motor Vehicles TAXABLE *
Optional Maintenance Contracts
General Optional Maintenance Contracts TAXABLE *
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts EXEMPT
Pollution Control Equipment
General Pollution Control Equipment TAXABLE *
Janitorial Services EXEMPT *
Transportation Services EXEMPT
Software and Digital Products
Canned Software - Delivered on Tangible Media TAXABLE
Canned Software - Downloaded TAXABLE
Custom Software - Delivered on Tangible Media EXEMPT *
Custom Software - Downloaded EXEMPT *
Customization of Canned Software TAXABLE
Digital Products TAXABLE *
General Trade-Ins EXEMPT *
Vending Machine Sales
Merchandise TAXABLE

* See notes in category taxability page for details

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** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/wisconsin/sales-tax-taxability