When will the new Milwaukee sales tax go into effect, what does it apply to and answers to other questions
Sales taxes are going to go up soon in the city of Milwaukee and Milwaukee County.
It's a move that should help prevent the city from major operational cuts in 2025, and also help head off budget pain at the county level.
While the sales tax won't go into effect right away, there are some things you should know.
What is the sales tax rate in Wisconsin?
Statewide, the sales tax is 5%. Counties can also levy up to a 0.5% sales tax.
What is the current sales tax in Milwaukee County?
For now, the sales tax in Milwaukee County remains the same at 5.5%, which includes the statewide sales tax (5%) and the county's current sales tax (0.5%).
What will the new sales tax be in Milwaukee and Milwaukee County?
The City of Milwaukee voted in June to implement a 2% sales tax.
Milwaukee County will increase its sales tax from 0.5% to 0.9%.
When both are implemented, the total sales tax paid by City of Milwaukee residents will be 7.9%, while the total sales tax for those living in Milwaukee County but not the City of Milwaukee will be 5.9%.
People living in the following communities in Milwaukee County would be 5.9% sales tax on certain items: Bayside, Brown Deer, Cudahy, Fox Point, Franklin, Glendale, Greendale, Greenfield, Hales Corners, Oak Creek, River Hills, Shorewood, South Milwaukee, St. Francis, Wauwatosa, West Allis, West Milwaukee and Whitefish Bay.
Why did Milwaukee and Milwaukee County implement a sales tax?
A looming fiscal cliff at the city and county level prompted Milwaukee-area leaders to push the state to increase the amount of shared revenue returned to communities. They argued the amounts had remained stagnant for many years and that the state should return more to Milwaukee, the state's largest economic engine. The ability to levy sales tax is part of a wider plan to boost funding for communities across the state. Without these changes, local officials warned that severe cuts would come to services, programs and staff.
Do other cities have their own sale taxes?
Yes. According to a study from the Wisconsin Policy Forum, many cities have sales taxes. Cities that have them are Chicago (10.25% with state sales tax), Kansas City, Kan. (9.125% with state sales tax), Kansas City, Mo. (8.85% with state sales tax), Minneapolis (8.025% with state sales tax) and Cleveland (8% with state sales tax).
When will the new sales tax in the city go into effect?
The new city sales tax and the increased county tax will go into effect Jan. 1, 2024, pending a review by the state Department of Revenue.
More: What to know about the Milwaukee council's vote for a 2% sales tax
What does the sales tax apply to?
Nothing would change regarding what the sales tax is and is not applicable to. Taxable items include, but are not limited to,
Clothing
Motor vehicles
Electronics like computers, printers, and TVs
Office equipment
Furniture
Home appliances like dishwashers, washing machines and dryers (with exceptions)
Electricity (with exceptions)
Gas (with exceptions)
Water (with exceptions)
Certain services like laundry and dry cleaning, boat docking, and parking for motor vehicles and aircraft
What does the sales tax exclude?
The exemptions for the proposed sales tax change would be no different than those exempt from the current sales taxes.
Items include, but are not limited to:
Food and food ingredients except candy, soft drinks, dietary supplements, and prepared food; Food for direct consumption on the premises, such as meals sold in restaurants, cafes, and cafeterias, is taxable; dried fruit
Bottled water, water sold through public water mains
Meals furnished by institutions of higher education
Fuel and electricity for residential use, biomass used for residential fuel; deer and other cervids sold to hunting preserves
Motor fuels; vegetable oil and animal fats converted to exempt vehicle fuels
Fuel and electricity used in manufacturing
Fuels converted to electric energy, gas or steam by utilities
Waste treatment facilities and machinery and equipment used in recycling
Mobile and manufactured homes
Newspapers, subscription periodicals and shoppers guides; catalogs and catalog envelopes
Caskets and burial vaults
United States of America and State of Wisconsin flags
Self-service laundry and dry cleaning services (list here)
Prescription drugs (excluding insulin), insulin for the treatment of diabetes and supplies for blood sugar testing
Commercial vessels and barges
Containers, labels, sacks, cans, boxes, and other packaging and shipping materials
Restaurant employee meals
Servers and computers used in commercial printing
Amusement devices-video and electronic games
Tournament or league entrance fees
There is a full list of exempt items on the state Department of Revenue website as well as more information.
More: Republican bill would eliminate sales taxes on diapers and other child care products
What state has the highest sales tax?
Louisiana has the highest sales tax in the country at 9.55%, according to Tax Foundation. With them at the top are Tennessee (9.548%), Arkansas (9.46%), Alabama (9.25%) and Oklahoma (8.98%).
What state has the lowest sales tax?
There are five states with no sales tax at the state level. They are: Alaska, Delaware, Montana, New Hampshire and Oregon. Alaska allows municipalities to impose a sales tax. The other four do not allow a sales tax at any level.
How much money would the sales taxes generate if implemented?
If the sales taxes were implemented with a Jan. 1, 2024, start date, the Department of Revenue estimated that the additional city sales tax (2%) would generate $193.6 million in revenue and the additional county sales tax (0.4%) would generate an additional estimated $82.2 million in revenue on top of the 0.5% tax already in place in the first year.
The county received $96.3 million in sales tax revenue in 2022, $90.1 million in 2021 and $79.9 million in 2020, according to state Department of Revenue data on county sales tax distributions.
Alison Dirr, D.L. Davies, Vanessa Swales and Nathaniel Rosenberg contributed to this report.
Drew Dawson can be reached at ddawson@jrn.com or 262-289-1324.
This article originally appeared on Milwaukee Journal Sentinel: Sales tax in Milwaukee, Wisconsin 2023, what you need to know
