Sales and Use Tax

Wisconsin’s sales tax touches almost everything you buy, but its rules have quirks worth knowing: the rate changes at county lines, the grocery rules hinge on flour and milk, and a second tax quietly covers what you buy from out of state.

The rates

The state sales tax is 5%, charged on retail sales of tangible goods, certain digital goods, and a list of taxable services. Most counties add their own 0.5% county tax: seventy of Wisconsin’s 72 counties have adopted one ¹. Waukesha and Winnebago are the holdouts, with no county tax at all, while Manitowoc and Racine counties only added theirs in 2025 ¹.

Milwaukee is the exception. Under 2023 Wisconsin Act 12, a law aimed at raising more money for local government services, Milwaukee County raised its tax from 0.5% to 0.9%, and the City of Milwaukee adopted a new 2% city sales tax, both starting January 1, 2024 ². Milwaukee is the only city in the state with its own sales tax, so a purchase there carries 7.9% ¹. A few tourist towns also charge small “premier resort area” taxes on certain sales ³.

The rate that applies depends on where the sale takes place, and a retailer registered in Wisconsin must collect the county and city tax for sales that take place in those areas, wherever the retailer itself is located. Buy a car or boat and the tax follows the county where it will be kept ¹.

What gets taxed

Food you take home to eat is exempt, except for four categories that are taxed: candy, soft drinks, dietary supplements, and prepared food. The definitions are precise ³:

• Candy is something sweetened combined with chocolate, fruit, nuts, or flavorings in bars, drops, or pieces, but nothing containing flour and nothing that needs refrigeration counts as candy. So a plain chocolate bar is taxable, while a chocolate-covered wafer or cookie bar is untaxed food.
• Soft drinks are sweetened, nonalcoholic beverages, but not drinks containing milk (or soy or rice milk) or more than 50% fruit or vegetable juice. Soda is taxed; chocolate milk and most real juices aren’t.
• Prepared food includes food sold hot, most items the store mixes or combines for sale as a single item, and food sold with utensils the store hands you. A hot rotisserie chicken from the deli is taxable; a raw one from the meat case isn’t.

Prescription drugs are also exempt ³.

The use tax

What if you buy something taxable and no Wisconsin sales tax is charged, from an out-of-state website, a catalog, or on a trip to a state with no sales tax? Then you owe use tax, the counterpart of sales tax, at the same rate that would apply where you use the item: 5% state plus any county and city tax ⁴. Without it, anyone could avoid sales tax simply by shopping across the border ³.

A camera shipped to your home in Dane County, with no tax charged, owes 5.5% use tax ⁴. If you properly paid another state’s sales tax, you get credit for it against the Wisconsin use tax, though not for foreign taxes or customs duties ⁴.

Individuals can pay it once a year on the use tax line of the Wisconsin income tax return (“Sales and use tax due on internet, mail-order, or other out-of-state purchases”), or quarterly on Form UT-5. Unpaid use tax can draw interest and penalties ⁴. For businesses, failing to report use tax is the most common error the department finds in audits ³.

Try it

Pull out a recent grocery receipt and find the items marked taxable. Can you sort them into candy, soft drinks, supplements, and prepared food? Then think back over the last year: did you buy anything taxable from a small out-of-state seller who didn’t charge Wisconsin tax? That belongs on the use tax line of your next return.