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Wisconsin Consumer Tax Laws

Consumer taxes tend to be higher for goods or services that the government believes consumers should avoid, like liquor and cigarettes. But other goods, like gasoline, can carry a heavy dose of taxes as well. Gasoline taxes generally fund highway construction and maintenance, while sales tax revenue usually goes into the state's general fund. The actual amount of the tax per gallon varies based on a statutory formula. Generally speaking, Wisconsin consumer tax laws place a relatively high tax rate on cigarettes, which is used to raise money for state-wide uses.

The basic provisions of Wisconsin consumer tax laws are listed below:

Sales Tax 5% §§77.52
Cigarette Tax 38.5 mills per cigarette §139.31(1)
Gasoline Tax per Gallon Varies annually according to formula §§78.01,.015, .017
Use Tax 5% §77.53
Liquor Tax Beer $2 per barrel; Wine <14% 6.605¢per liter, 14-21% 11.89¢ per liter; All other 85.86¢ per liter; administrative fee on all beverages >21% 3¢ per gal.; Other intoxicating liquor 85.86¢ per liter §§139.02, 03
Gambling Tax Racetrack admission 50¢/person; 1-82/3% total amount wagered §§562.08, 562.065

Here the term "mills" means one one-thousandth of a dollar, so 10 mills = 10 one-thousandths of a dollar, or .01.

Note: State laws are constantly changing -- contact a local attorney or conduct your own legal research to verify the state law(s) you are researching.

Purpose of Consumer Sales Tax

Unlike income taxes, consumer taxes are directed at how people spend their money rather than how much money they make. Consumer taxes in Wisconsin are a flat percent, not a graduated scale like income tax. This means that everyone pays the same percent, regardless of how much they spend. However, there are different tax percentages depending on the sale or item taxed. In addition to revenue raising, Wisconsin imposes taxes on certain items to discourage their purchase, and to pay for costs associated with that item.

Types of Consumer Taxes

There are two general forms of consumer taxes in Wisconsin. The type most people are familiar with is sales tax. Sales tax applies to most consumer sales in the state. However, there are some exceptions. The other form of consumer tax is an excise tax. This is a tax on a specific item. The tax can be a flat rate per item or it can be a percentage of the price, like a sales tax. Excise taxes are used to either discourage purchasing or using an item, or to help pay for expenses that are associated with it.

Sales Tax in Wisconsin

Illinois charges a 5% sales tax for sales within the state. Note that counties and cities may have their own sales tax on top of the Wisconsin state sales tax.

Use Tax

If you want to avoid paying taxes on an expensive item, like a car, you may try to purchase the car in a state that does not charge sales tax. However, Wisconsin will charge a use tax at the same rate as a sales tax, once you register the car in the state.

If you would like to know more about consumer taxes, there are many experienced Wisconsin tax attorneys who may be able to help. In addition to informing you about the law, they may be able to advise you about methods to avoid paying unnecessary taxes, while still staying within the bounds of the law.

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