Wisconsin Tax Law
Among the financial responsibilities you have to budget for—from car insurance to rent or mortgage—one of the most important is paying your taxes. Some of the taxes you pay are automatic, like sales taxes or taxes on utilities. The more important taxes, however, require you to save money for when it's time to pay up on Tax Day.
Every citizen in the United States has both a federal and a state tax burden. Wisconsin happens to be one of the top 10 states in which citizens have the highest tax burdens, according to Wallet Hub. You can expect to contribute most of your tax money to income, property and sales taxes.
Whether you live in Milwaukee, Madison or Green Bay, you'll need to account for the various state and federal taxes in your budget, including everyday sales and gasoline taxes. It can be easy to get lost in all of the taxes you'll owe, so use the information in LawInfo's Wisconsin tax law articles to become familiar with them and to avoid penalties.
Wisconsin Progressive Income Taxes
Wisconsin has four income tax rates—one each for specific taxable income ranges. However, taxpayers whose taxable income is higher than the first income range bracket (regardless of filing status) must pay more income tax than previous brackets.
For the three highest tax brackets, taxpayers would pay the bracket's tax rate on the excess income over the previous bracket's maximum income amount plus a flat dollar amount. For instance, say that you and your spouse are filing jointly with a combined taxable income of $298,000 in 2016. You would place into the third income tax bracket ($29,640 to $326,330). To calculate your income tax, you would:
- Subtract $29,640 from $298,000 to get $268,360, the excess over the previous bracket's maximum income amount.
- Multiply the excess with your bracket's rate of 6.27 percent (0.0627) to get $16,826.17.
- Add your bracket's flat dollar tax of $1,458.29 to the previous total to get $18,284.46, your joint income tax.
Your income tax may be lower than this base calculation when you factor in exemptions and credits, such as dependents, disability or age.
Wisconsin Sales and Use Taxes
Whenever you purchase, rent or lease goods from retailers, you will typically pay Wisconsin's state sales tax of five percent on the total price. If the retailer doesn't collect the sales tax upon the purchase, the buyer is required to pay the Wisconsin use tax of five percent for the use, consumption or storage of the product in the state.
Sixty-four counties in Wisconsin collect a half (0.5) percent sales and use tax in addition to the state tax, totaling to 5.5 percent. Five counties also charge a 0.1 percent tax on the sale of tangible goods at stadiums. Counties that charge both the county and stadium sales taxes charge a total of 5.6 percent in sales tax.
Wisconsin Sin Taxes
“Sin” taxes are levied on consumer products like alcohol and tobacco wherever these things are legalized. They act as additional sales taxes (a.k.a. excise taxes) for products or services that are culturally perceived as vices. Sin taxes are meant to dissuade consumers from purchasing or using the taxed products or services without making them illegal.
Wisconsin charges the following sin taxes:
- $0.126/cigarette or $2.52/pack of 20 cigarettes.
- Either $0.50/cigar or 71 percent of the manufacturer's price for cigars, whichever is less.
- 100 percent of the manufacturer's price for moist snuff.
- 71 percent of the manufacturer's price for other tobacco products.
- $2/barrel (31 gallons) of fermented malt beverage (i.e. beer).
- $0.06605/liter of wine with less than 14 percent alcoholic volume.
- $0.1189/liter of wine with more than 14 percent alcoholic volume.
- $0.0171/liter of cider with less than seven percent alcoholic volume.
- $0.88766/liter of liquor.