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Wisconsin Sales Tax Anemic

  • Mar 2, 2012 | Susan McLain

The Wisconsin Taxpayers Alliance (WISTAX) recently released their report, “The Sales Tax: Yesterday, Today, Tomorrow,” on the state of Wisconsin’s sales tax.  According to The Northwoods River News online, “…Wisconsin sales tax collections have been anemic for years.”

Wisconsin’s sales tax rate has not increased or decreased since 1982. At that time, the rate increased from 4% to 5% on what was supposed to be a temporary basis, “…but was made permanent by a new governor and legislature in 1983.” According to the WISTAX report, 30 states have higher rates than Wisconsin, including their neighbors, Illinois, Minnesota, Michigan and Iowa.

Though the sales tax rate has remained stable, the taxable items have not adjusted to the changing economy. WISTAX President Todd A. Berry says, “Our economy has been evolving from a goods-based to a service-based economy.” Goods used to account for more than half of all consumption, but “[t]oday, services represent more than two-thirds of consumption, though they account for only a fraction of taxable items.”

Along with many other states, the WISTAX researchers indicate that “…rising Internet sales are also impacting sales tax revenues.” The estimates for Wisconsin ranges from $60 million to $160 million annually.

Wisconsin has historically relied more on income and property taxes versus sales tax as the main source of revenue with “…both about 25 percent above the national average.” As for sales tax, Wisconsin “…sales tax collections accounted for 28.3 percent of all state taxes in Wisconsin vs. 32 percent nationally.”

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”