Do you need to collect and remit sales tax in Wisconsin?
Whether you’re an in-state business or an out-of-state remote seller, you may be required to collect and remit sales tax in Wisconsin. Here’s what you need to know:
In-State Sales Tax Obligations
Any individual or organization that operates a retail outlet in Wisconsin and engages in the sale, leasing, licensing, or renting of taxable products is obligated to secure a seller’s permit from the state of Wisconsin. This permit authorizes them to collect and remit sales tax.
Remote Sales Tax Obligations
If you’re an out-of-state seller and your sales to Wisconsin-based customers surpass certain economic thresholds, you’re obligated to collect and remit sales tax to the state.
What is Taxable?
In Wisconsin, tangible personal property such as clothing, computers, and software are taxable. Certain services are also considered taxable. These include, but are not limited to:
- Event or recreation admissions
- Cable television services
- Landscaping and lawn maintenance services
- Photographic services
What is Tax-Exempt?
Wisconsin law recognizes a variety of tax-exempt products, services, and organizations. If a product or service is non-taxable to everyone, no exemption certificate is necessary. However, if a non-taxable status is conditional, a valid exemption certificate must be presented to the seller.
Here are some examples of non-taxable exemptions that apply to every purchaser:
- Animal ID tags
- Diaper Services
- Prescription Drugs
- Food and food ingredients (excluding candy, soft drinks, dietary supplements, and prepared food)
- Sales by United States government agencies
Do you have sales tax nexus in Wisconsin?
Sales tax nexus is a crucial concept for businesses selling products or services in different states. Understanding whether you have nexus in Wisconsin will determine if you must collect and remit sales tax. The criteria for this nexus could be physical (a tangible presence) or economic (reaching a certain sales threshold).
Physical sales tax nexus in Wisconsin
Physical tax nexus in Wisconsin is established when your business has a tangible presence in the state. This can be in the form of a brick-and-mortar store, office, warehouse, or even a sales rep. In this case, if your business activities involve the lease, license, or retail sale of taxable products within the state of Wisconsin, you’re required to obtain a seller’s permit before collecting sales tax.
Economic sales tax nexus in Wisconsin
Economic nexus is tied to your economic activity within the state, and only applies if your business does not have a physical presence there. If your business is an out-of-state or remote seller, and your sales within Wisconsin exceed $100,000 in the current or previous calendar year, (this includes taxable and non-taxable sales), you have economic nexus. This obligates you to collect and remit sales tax on all taxable sales.
Are marketplace facilitators required to collect and remit sales tax in Wisconsin?
If you’re a marketplace facilitator, you’ll need to pay attention to Wisconsin’s economic nexus threshold just like any other remote seller. In other words, if the combined sales you make in Wisconsin across your platform reach or surpass $100,000, you are required to collect and remit sales tax on behalf of your sellers.
For sellers using a marketplace facilitator registered with Wisconsin, you don’t need to worry about sales tax; the facilitator will handle that for you. However, if you’re also selling via other methods—like through your own website or another sales platform—those sales and others made through the marketplace should be combined when determining whether you’ve reached the economic nexus threshold.
What platforms are marketplace facilitators?
What is a marketplace facilitator?
A marketplace facilitator, sometimes referred to as a Multivendor Marketplace Platform (MMP), is an online platform that allows customers to purchase goods or services from various vendors in one convenient location. These platforms can benefit businesses by increasing product visibility and attracting a larger customer base. Additionally, marketplace facilitators often have the legal responsibility to collect and remit sales tax on behalf of sellers, which can help ease the sales tax burden for businesses.
Filing Wisconsin Sales Tax
Following Wisconsin sales tax laws might seem daunting, especially when starting a business or registering an existing one. To help streamline the process, follow these steps:
Register with the state
If you have found that you have nexus in Wisconsin (economic or physical), your first step towards sales tax compliance is registering with the state.
Determine the right sales tax permit or certificate
Wisconsin has various sales tax permits depending on your business structure and activities. However, for this guide, we focus on two main types: a Seller’s Permit and a Use Tax Certificate.
- A Seller’s Permit is required for businesses with physical nexus in Wisconsin, excluding wholesalers, manufacturers, and other businesses not selling taxable products.
- Out-of-state or remote retailers with economic nexus in Wisconsin must register for a Use Tax Certificate.
Obtain Permits and Certificates
You can acquire permits and certificates by registering online or by completing a paper Application for Business Tax Registration and faxing or mailing it. Registering through Streamlined Sales Tax—which Wisconsin is a member of—can be convenient if you need to register for multiple states at once.
Obtain a Wisconsin Tax Number and Collect
Once you’ve registered, the Wisconsin Department of Revenue will issue a Wisconsin Tax Number and indicate your filing frequency. Now you can start collecting sales tax from your customers. Wisconsin uses a destination tax-based system, meaning you’ll collect sales tax based on the rate of the location where the customer receives the item or service.
Wisconsin requires electronic filing for sales tax returns. If an electronic submission causes undue hardship (e.g., due to a disabling illness or injury), the state may grant a waiver. To file electronically, create a My Tax Account and link it to your business account using your Wisconsin Tax Number.
- Always file your sales tax returns, even if you have no sales or tax to report.
- Filing and paying sales tax on time helps you avoid penalties and interest. Additionally, Wisconsin allows partial compensation, or a retailer’s discount, amounting to 0.5% of the sales tax due.
Let us file for you!
If you’re looking for help with a myriad of sales tax obligations, that’s why we’re here! We are a one-stop-shop for comprehensive sales tax services! Our range of services includes nexus determination, business registration, compliance reviews, audit assistance, and—of course—filing sales and use tax returns. If you don’t see what you need, just let us know and we’ll create a customized solution just for you. Visit our services page to learn more!
When are sales tax returns due in Wisconsin?
As a Wisconsin business taxpayer, you’ll be assigned a specific frequency or reporting period that determines how often you have to file your tax returns. The three reporting periods in Wisconsin are monthly, quarterly, and annually, with most taxpayers assigned the quarterly frequency. Check out the chart below for a detailed breakdown of the periods covered and due dates associated with each reporting period.
|Reporting Period||Period Covered||Due Date|
|Monthly||Previous Month||20th of the month|
|Quarterly||Quarter 1: January – March Quarter 2: April – June Quarter 3: July – September Quarter 4: October – December||Quarter 1: April 20th Quarter 2: July 20th Quarter 3: October 20th Quarter 4: January 20th|
|Annually||Previous Calendar Year||January 20th|
When the regular due date falls on a weekend or legal holiday, the due date is extended to the next business day.