Wisconsin State Taxes: Everything You Need to Know

Kelly Hernandez  | 

In 1911, the Wisconsin Department of Revenue (DOR) created an individual income tax system with 13 tax brackets. The state imposed an individual income tax in addition to federal income tax so it could obtain funding for government activities.

Since 1911, the individual income tax structure has changed drastically. This progressive system includes five tax brackets and has been adjusted for inflation numerous times, with the latest adjustments affecting the 2013 tax year.

In 2015, the Wisconsin DOR reported that 3.03 million tax returns were filed in the state. The average tax rate was 4.3%. In 2011, the average tax liability for all Wisconsin income tax filers was $2,205. The state also funds its local governments with help from property taxes, sales taxes, and other types of taxes.

Wisconsin Personal Income Taxes

When you earn income, you must pay federal income taxes on your earnings. If you’re a Wisconsin resident or nonresident who earned income in the state, you must also file a state income tax return. The tax rate you pay varies between 3.86% and 7.65%. The bracket you’re in depends on your filing status and the amount of income you earned.

Single Filers

If you’re a single filer, the following tax brackets apply to your income:

Income Earned Taxes Owed
$0 to $11,760 3.86% of total income
$11,761 to $23,520 $453.94 plus 5.04% of the amount over $11,760
$23,521 to $258,950 $1,046.64 plus 6.27% of the amount over $23,520
Over $258,950 $15,808.10 plus 7.65% of the amount over $258,950

Married/Filing Jointly

If you’re married and file a joint state income tax return with your spouse, you owe the following based on your income:

Income Earned Taxes Owed
$0 to $15,680 3.86% of total income
$15,681 to $31,360 $605.25 plus 5.04% of the amount over $15,680
$31,361 to $345,270 $1,395.52 plus 6.27% of the amount over $31,360
Over $345,270 $21,077.68 plus 7.65% of the amount over $345,270

Married/Filing Separately

As a married taxpayer choosing to file separately from your spouse, you owe the following taxes based on income earned:

Income Earned Taxes Owed
$0 to $7,840 3.86% of total income
$7,841 to $15,680 $302.62 plus 5.04% of the amount over $7,840
$15,681 to $172,630 $697.76 plus 6.27% of the amount over $15,680
Over $172,630 $10,538.53 plus 7.65% of the amount over $172,630

Head of Household

If you file your state income taxes as the head of household, you’re considered a single filer. The tax brackets for single filers apply to your income earned throughout the year.

Wisconsin Sales Tax

The Wisconsin state sales tax is 5% and applies to most sales and service transactions in the state. The tax is imposed on the sale or lease of real and personal property or the purchase of services.

In addition to the 5% statewide sales tax, 68 counties also include their own county tax of 0.5%, making the total sales tax for each transaction 5.5%. Some of the counties that charge this added county sales tax include the following:

  • Ashland;
  • Buffalo;
  • Columbia;
  • Green Lake;
  • Lincoln.

While this sales tax applies to most goods and services sold and leased in the state, there are exemptions. The following items are exempt from sales tax:

  • Aircraft parts and repair;
  • Animal identification tags;
  • Caskets and burial vaults;
  • Copies of some records, including medical;
  • Diaper services;
  • Drugs;
  • Medical equipment and prosthetic devices;
  • Food;
  • Fuel and electricity;
  • Insurance;
  • Manufactured and modular homes;
  • Motor vehicle and alternative fuel;
  • Printed publications;
  • Low-income assistance fees;
  • Samples;
  • Tournament and league entry fees (if they’re used as prize money);
  • U.S and Wisconsin state flags;
  • Federal government sales;
  • Water delivered to consumers through mainlines.

Those engaging in occasional sales and not identified as retailers may also conduct transactions without charging sales tax.

Wisconsin Personal and Real Property Taxes

Personal property is that which can be moved, such as goods and merchandise. Real property is fixed property that can’t be moved, such as land or its attached buildings. Wisconsin imposes property taxes on the real property its residents own and on the personal property used for business purposes.

The DOR assesses properties to create equalized values, which are based on full market values. With these assessments, local counties or municipalities set tax rates based on the funding they need.

Your tax bill reflects the equalized value of properties in your area and tax rate in your location. Your property tax due date depends on your local government. Some municipalities allow you to pay in installments while others require one payment within a specific deadline.

Wisconsin Inheritance and Estate Taxes

An inheritance tax is a tax a person must pay when they inherit property or money from a deceased person. An estate tax is a tax on the property or assets of a person who has passed away.

The passing of the American Taxpayer Relief Act of 2012 eliminated Wisconsin’s estate tax. The 1987 Wisconsin Act 92 phased out the inheritance tax and residents who passed away after 1992 are exempt from the tax.

Other Wisconsin Taxes

Wisconsin Cigarette Tax

Wisconsin charges an additional tax on cigarettes. The tax rate is 12.6 cents per cigarette and $2.52 per pack of cigarettes.

Wisconsin Mobile Home Tax

Mobile homes that are used as dwellings may qualify for a 35% sales tax exemption at the time of purchase. However, the other 65% of the transaction total is subject to the full sales tax rate.

Wisconsin Gas Tax

Motor vehicle fuel is taxed differently than other purchases in the state. There is an excise tax of 30.9 cents per gallon of gas for motor vehicles.

Whether you’re hoping to file for a tax refund or you owe income taxes, it’s important to understand the tax brackets set by the Wisconsin DOR. After reviewing the specific tax rates, tax credits, and different regulations related to Wisconsin taxes, you’ll have a better idea of how much you may owe if you live in the state.

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