Knowing whether your company is subject to Wisconsin sales tax is crucial if you own a business in the state of Wisconsin. Whether or not your company has a nexus in Wisconsin is an important consideration. Whether Wisconsin is a nexus state and what it means to have a nexus in Wisconsin will be discussed in this article. We will also go over the Wisconsin sales tax exemptions, whether Wisconsin collects sales tax on purchases made outside of the state, and Wisconsin’s sales tax rate.
A business that has a physical presence in a state, such as an office, a warehouse, or workers, is said to have a nexus state. A company is required to collect and send sales tax on sales made to clients within a state if it has nexus there. Wisconsin is a state with a nexus. This implies that you must collect and remit sales tax on purchases made to clients within Wisconsin if your company has a physical presence in Wisconsin, such as a storefront or a warehouse.
Economic connection means that if a company hits certain sales thresholds, it may be obligated to collect and pay sales tax on transactions made to clients within Wisconsin even if it has no physical presence there.
Businesses in Wisconsin that have annual sales of $100,000 or more are deemed to have economic nexus and are obligated to collect and remit sales tax on purchases made from consumers located within Wisconsin.
Certain items are exempt from the sales tax in Wisconsin. Examples include:
– Prescription medications
– Items bought for resale
– Specific medical and assistance devices
– Farm machinery and equipment
Does Wisconsin Collect Sales Tax on Purchases Made Outside of the State?
Wisconsin has a use tax, which is levied on goods bought there but not subject to the state’s sales tax. This includes things bought from stores outside the state. You must pay use tax if you buy something from a shop outside of Wisconsin who does not charge sales tax on purchases made there.
In Wisconsin, the sales tax rate is 5%. Local sales taxes, however, can also be applicable based on the location of the sale. It is crucial to confirm the local sales tax rate in the region where the sale will take place because it might range from 0.5% to 1.75%.
In conclusion, as Wisconsin is a nexus state, companies with a physical presence there are obligated to collect and remit sales tax on purchases made from customers located there. If a company hits certain sales thresholds, it may still be obligated to collect and return sales tax on transactions made to clients inside Wisconsin even if it has no physical presence there. The state of Wisconsin imposes a use tax on out-of-state purchases and some items are exempt from sales tax. Local sales taxes might potentially be imposed in addition to Wisconsin’s 5% state sales tax.