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.
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.
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.
Contact a qualified attorney.