Wisconsin has a reputation for being a high-tax state. Gov. Scott Walker and Republicans in the state Legislation have recently pushed through legislation to provide tax relief for businesses.
But the state already ranks low for sales tax.
According to a new report by the Washington, D.C.-based Tax Foundation, Wisconsin’s sales tax ranks 40th of the 50 states. Wisconsin has a 5.0 percent sales tax and an average local sales tax rate of 0.42 percent, for an average total of 5.42 percent, according to the foundation.
The five states with the highest combined state-local sales tax rates are: Tennessee (9.44 percent), California (9.08 percent), Arizona (9.01 percent), Louisiana (8.69 percent) and Washington (8.64 percent), according to the foundation.
The five states with the lowest combined state-local sales tax rates are: Hawaii (4.35 percent), Maine (5.0 percent), Virginia (5.0 percent), South Dakota (5.22 percent) and Wyoming (5.3 percent), according to the foundation.
Illinois has a state sales tax of 6.25 percent and an average local sales tax of 1.97 percent, for an average state-local sales tax rate of 8.22 percent.
Retailers in Kenosha County, which has a 5.5 percent sales tax, attract a significant amount of shoppers from Lake County, Ill., where the sales tax ranges from 6.25 to 9.5 percent, according to Lou Molitor, executive director of the Kenosha Area Chamber of Commerce.
“(Illinois residents shopping in Kenosha County) happens all the time,” Molitor said.
Some Milwaukee area officials have advocated for a Milwaukee County sales tax increase to provide a dedicated funding source for the bus system and parks, and reduce the property tax burden for county residents. However, Walker and the Republican-controlled Legislature are showing no signs of supporting an increase to any taxes. The Legislature recently approved a bill requiring a two-thirds vote for any tax increase.
“This legislation sends a signal to employees that we will tackle our state budget challenges without raising taxes,” said Walker. “It also sets a precedent for the future that difficult decisions must be made so that Wisconsin’s economy can grow.”
In addition, Walker said his proposed biennial budget will not include any proposed tax increases.
“After years of tax increases, Wisconsin residents, families and job creators need a reprieve,” he said. “Keeping money in the hands of people, who will make wise spending decisions and reinvest in the private sector, will ultimately lead to economic growth and job creation.”
