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.
Contents1.) Taxability of Goods and Services
- General Wisconsin taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
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.Top
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.
|Products on Amazon.com||TAXABLE *|
|Food and Meals|
|Grocery Food||EXEMPT *|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||EXEMPT|
|Medical Goods and Services|
|Newspapers and Magazines|
|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 *|
|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|
* See notes in category taxability page for details
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