How the Milwaukee Sales Tax Increase Will Impact Me and My Business
Starting January 1, 2024, residents and businesses in Milwaukee County and the City of Milwaukee will experience a noticeable change in their financial landscape. The sales tax rates in these areas are set to increase, bringing about potential implications for both individuals and enterprises. In this article, we’ll delve into the details of this sales tax hike and explore its impact on you and your business.
Understanding the Sales Tax Changes
The forthcoming sales tax increase is a result of a decision made by the Wisconsin Legislature. Under this agreement, both Milwaukee County and the City of Milwaukee will see adjustments to their respective sales tax rates. Currently, the sales tax rate in the City of Milwaukee is 5.5%, but it will rise to 7.9%. For areas outside the city but still within Milwaukee County, the rate will climb from 5.5% to 5.9%.
Navigating the New Tax Environment
It’s important to recognize that the sales tax increase won’t apply to all purchases uniformly. Certain exemptions and nuances exist within this framework. The sales tax applies to items purchased within the affected jurisdictions, including purchases made by visitors to the area. One significant point of distinction is vehicle purchases. In Wisconsin, the sales tax on automobile purchases is determined based on the buyer’s residence, rather than the location of the purchase.
Local Exposition Taxes
The “Wisconsin Center Tax District,” established by the City of Milwaukee, was designed to oversee the procurement and operation of exhibition center amenities. The District employs the following taxes to finance these amenities, with administration carried out by the Wisconsin Department of Revenue. These exposition-related taxes are levied in addition to the sales tax hike:
- 3% standard room tax
- Additional 7% room tax (exclusive to the City of Milwaukee)
- 0.5% tax on food and beverages
- 3% tax on rental cars
Sales Tax Breakdown
- City of Milwaukee:
- Sales tax: 7.9%
- County of Milwaukee (excluding the city):
- Sales tax: 5.9%
- City of Milwaukee with Exposition Taxes:
- Standard room tax 3% + 7.9% = 10.9%
- Additional room tax 7% + 7.9% = 14.9%
- Food and beverage Tax 0.5% + 7.9% = 8.4%
- Rental Cars 3% + 7.9% = 10.9%
- County of Milwaukee with Exposition Taxes (excluding the city):
- Standard room tax 3% + 5.9% = 8.9%
- Food and beverage Tax 0.5% + 5.9% = 6.4%
- Rental Cars 3% + 5.9% = 8.9%
Considerations for Consumers and Businesses
With the impending sales tax increase, many individuals and businesses may be contemplating the best course of action. While the decision ultimately rests with each consumer, it’s worth noting that the impact of the increase is relatively modest. For instance, an extra $2.40 would be added to a $100 purchase within the City of Milwaukee due to the sales tax hike. This perspective can help consumers and businesses make informed decisions about their purchasing habits and strategies.
The 2024 sales tax increase in Milwaukee County and the City of Milwaukee represents a significant change in the financial landscape. While the decision has sparked debates and discussions, its impact on most individuals and businesses may be relatively manageable. By understanding the nuances of the sales tax changes and considering their potential implications, residents and enterprises can navigate this new environment effectively.