Minimum Sales Rate Tax for 2024
| 5% | Column content | Column content | Column content | Column content | |
| 0% | Column content | Column content | Column content | Column content | |
| 0.5% | Column content | Column content | Column content | Column content | |
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| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 5.5% | Column content | Column content | Column content | Column content |
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| Economic sales nexus threshold | $100,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | N/A | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | Last day of the month following the reporting period | Column content | Column content | Column content | Column content |
The base state sales tax rate in Wisconsin is 5.0%, but since the city-specific tax rate is 0% and the Dane County tax rate is 0.5%, the minimum sales tax rate for Madison is 5.5%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In Madison, businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for Madison
In Wisconsin, groceries and prescription drugs are exempt from sales tax. Gasoline is subject to an additional 32.9 cents per gallon at the pump, which includes a 30.9-cent-per-gallon state excise tax and a 2-cent petroleum cleanup program fee, though gas itself is exempt from sales tax. Starting January 1, 2024, the state will repeal its personal property tax.
For alcohol, consumers pay both state and local sales taxes on beer, wine, and liquor. In addition to these taxes, the state imposes excise taxes on alcohol, which are typically paid by the vendor but may be included in the retail price. The excise tax on liquor is 85.86 cents per liter, plus an administrative fee of 2.906 cents per liter. Beer is taxed at 0.065 cents per gallon, while wine is taxed between 6.605 and 11.89 cents per liter, depending on the alcohol content. Cider is taxed between 1.71 and 11.89 cents per liter, also depending on the alcohol percentage.
Services
Typically not taxable
Goods
Most items, such as appliances, vehicles, furniture, sporting goods, and electronics, are subject to sales tax.
Clothing
Generally taxable
Electronics
Taxable
SaaS
Taxable
Digital Products
Subject to sales tax.
Software
Pre-written software is taxable but custom software might not be taxable.
Freight/Shipping
Generally taxable if the item you’re selling is taxable
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