Wisconsin Business Taxes at a Glance
Wisconsin's tax system has some features that set it apart. Manufacturers and farmers can claim a credit that greatly reduces tax on their production income. Pass-through businesses could elect to pay tax at the entity level earlier than in most states. And Wisconsin eliminated its personal property tax on business equipment beginning in 2024. BOMCAS helps Wisconsin individuals and businesses take advantage of these rules and file correctly.
Individual Income Tax
Under Wisconsin's graduated rates, residents are taxed on worldwide income and nonresidents on what they earn from Wisconsin sources. Wisconsin starts from federal adjusted gross income with its own modifications, and it does not adopt every federal change automatically. Wisconsin excludes Social Security benefits and offers a deduction for a portion of long-term capital gains.
Wisconsin has reciprocal agreements with Illinois, Indiana, Kentucky, and Michigan for wages. Minnesota and Wisconsin no longer have reciprocity, so cross-border workers file nonresident returns. We prepare Wisconsin returns and handle part-year and nonresident filings.
The Manufacturing and Agriculture Credit
Wisconsin's manufacturing and agriculture credit applies to income from qualified production activities on property located in Wisconsin, for both manufacturing and agriculture. For many manufacturers and farms, the credit greatly reduces Wisconsin income tax on that income. It is available to corporations and passes through to owners of partnerships and S corporations.
Claiming the credit requires separating qualified production income from other income and using property factors based on Wisconsin property. We calculate the credit, document the qualifying activities, and include it on corporate, entity, and individual returns.
Entity-Level Tax for Pass-Throughs
Wisconsin was one of the first states to let partnerships and S corporations elect to pay tax at the entity level. Owners then exclude the income from their own Wisconsin returns. Whether it helps depends on the owners, their residency, and the federal deduction. We evaluate the election each year and handle the filings.
Corporate Franchise and Income Tax
Corporations doing business in Wisconsin pay corporate franchise tax on apportioned income. Wisconsin uses combined reporting for unitary groups. Corporations with Wisconsin income but no business presence may owe income tax instead. We prepare corporate returns and track Wisconsin adjustments.
Personal Property Tax Eliminated
Starting with the 2024 property tax year, Wisconsin exempted business personal property, such as furniture, equipment, and machinery, from property tax. Most businesses no longer file personal property tax returns with their municipality. Real property remains taxable. We maintain fixed asset records for federal depreciation and update the accounting for businesses that previously paid this tax.
Sales and Use Tax
Wisconsin's sales tax combines a state rate with a county tax in most counties. Milwaukee County and the City of Milwaukee have additional sales taxes, which apply to sales delivered there. Wisconsin also has local taxes on lodging, food and beverages, and rental cars in some areas.
Manufacturing machinery and equipment, farm equipment, and many agricultural inputs are exempt with proper documentation. We register businesses, track rates by location, review exemption documents, and file returns.
Agriculture and Dairy
Wisconsin is known for dairy and has a large agricultural economy. Farm clients need:
- Livestock and feed inventory records
- Federal farm reporting, including income averaging and program payments
- Equipment depreciation schedules
- Records for the manufacturing and agriculture credit and sales tax exemptions
Lottery Credit and Homestead Credit
Wisconsin homeowners can receive a lottery and gaming credit on the property tax bill for their primary residence, which must be claimed for the home where they live. Lower-income renters and homeowners may also qualify for the homestead credit, claimed on a separate schedule. New homeowners should check that the lottery credit appears on their bill.
Remote Sellers and Marketplaces
Out-of-state sellers that reach Wisconsin's economic nexus threshold must register and collect sales tax, including county tax where it applies. Marketplace facilitators collect for their third-party sellers. We help online sellers decide when to register and set up filing.
Payroll and Reciprocity States
Wisconsin employers withhold state income tax and report unemployment insurance to the Department of Workforce Development. Employees from reciprocal states file exemption forms with their employer. Our payroll work includes the state filings and a reconciliation to the books each quarter.
Paper, Machinery, Cheese, and Tourism
- Manufacturing: the production credit, inventory, and unitary filing
- Dairy and agriculture: the credit, inventory, and farm reporting
- Paper and forest products: fixed assets and manufacturing exemptions
- Health care and insurance: multistate payroll and apportionment
- Tourism in the Northwoods and Door County: lodging taxes and seasonal staffing
Arriving in or Leaving Wisconsin
People moving between Wisconsin and other states file part-year returns in the year of the move. Retirees moving south should document their change of residence. We help clients organize records and file correctly.
Bookkeeping for Wisconsin Businesses
Wisconsin bookkeeping should separate qualified production income for the credit, track sales by county and city for local taxes, and keep exemption documentation. We build these breakdowns into the chart of accounts and check them at each month-end close.
Contact BOMCAS About Wisconsin
Manufacturers claiming the manufacturing and agriculture credit, dairy farms, and pass-throughs weighing the entity-level tax can contact BOMCAS for a remote review. We plan to add Wisconsin city pages, each with its own services, under this section. Return to the BOMCAS home page or see our United States services. This overview is general information; your own filings depend on your facts.
Talk to BOMCAS About Your Wisconsin Taxes
Have a question about your Wisconsin filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.