Wisconsin Basic Business Taxes 2010
Wisconsin's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include basic business taxes, research and development tax credits, and sales and use taxes.
All businesses with income derived from Wisconsin sources are subject to either the 7.9 percent corporate income tax or the 7.9 percent franchise tax. Both taxes are based on net income and have the same rate structure. The only difference is that interest from federal obligations is subject to the franchise tax but not income tax.
The tax is determined by calculating income from all sources, subtracting the exclusions and deductions, allocating and apportioning the net income of the multistate corporations, applying the flat tax rate and allowing for any credits. Federal income taxes paid are not deductible.
The tax on job creation has been eliminated by the single-factor sales tax on corporate sales.
Research and development:
Qualified research or experimentation expenditures not chargeable to capital accounts are deductible from the corporate income tax or the franchise tax. Such expenses that are chargeable to capital accounts may be treated as deferred expenses deductible over a period of not less than 60 months.
Sales and use taxes:
A five percent state sales tax is levied on retailers for selling, renting, or leasing certain tangible personal property and for selling or furnishing certain services. In addition, 58 counties have a 0.5 percent county sales tax. A use tax at the same rates is imposed on the use, consumption, or storage of tangible personal property or taxable services on which a Wisconsin sales or use tax has not previously been paid. There is a retailers' discount of 0.5 percent of state, county, and stadium tax payable on retail sales with a minimum discount of $10 or the amount of tax payable.
Goods in transit:
Sales to a contract or common carrier, if the seller ships the property via the carrier to a point outside the state under a bill of lading, are exempt from sales taxation. Property sold out of state is also exempt from sales tax.
Both real and tangible personal property, with specific exceptions, are subject to property taxation at the local level. Property is assessed at the local level by local assessors, except for the property of manufacturers, which is assessed by the Wisconsin Department of Revenue. Real property is assessed in the taxing district where it is located. Personal property is assessed either where it is intended to be kept or located, or where the owner or person in possession resides.
Intangible personal property and certain motor vehicles, trucks, trailers and aircraft are exempt from the general property tax because they are subject to special taxes. Other special taxation items are public utilities, iron ore concentrates, vessels employed in interstate commerce, coal docks, grain elevators, scrap steel docks and forest croplands. Property taxes are administered by local taxing officials.
Business inventories are exempt from property taxation.
Cost of all waste treatment or pollution-abatement plants and equipment purchased may be depreciated or amortized over five years. Approved facilities for the treatment of industrial wastes and air pollution are exempt from property taxation. Tangible personal property that becomes part of a qualifying waste treatment facility is exempt from sales and use taxation. The exemption extends to chemicals and supplies and replacement parts for the facility.
Industrial machinery and equipment:
Sales and use taxation does not apply to manufacturers' machinery and equipment used exclusively and directly in manufacturing; motor vehicles and truck bodies sold to nonresidents for use outside Wisconsin; equipment used to produce maple syrup; railroad rolling stock, accessories and parts and fuel; trucks and trailers purchased by common or contract carriers for exclusive use in common or contract carriage; aircraft and accessories sold to nonresidents for use outside the state; and certain barges and vessels.
No property tax is imposed on manufacturing machinery and equipment, mechanics' tools, and farm machinery and tools stocked by retailers. And no property tax is imposed on computers used in business.
Industrial fuels and raw materials:
An exemption from sales and use taxation is allowed for property that becomes a component part in the manufacture of tangible personal property for sale, excluding fuel or electricity; fuel used by utilities to produce gas, steam or electric energy; water delivered through the mains; motor or aviation fuels subject to the Wisconsin excise tax; and containers and packaging materials for merchandise sold or meat.
A sales tax exemption for energy used in the manufacturing process helps manufacturers to reduce production costs and remain competitive.
No property taxes are imposed on stored, unmanufactured tobacco and natural cheese aging in storage.
Energy and fuel conservation measures:
Solar and wind energy systems are exempt from property taxation.
Wisconsin State Contact:
Wisconsin Department of Commerce
201 W. Washington Avenue
P. O. Box 7970
Madison, WI 53707
Fax request hotline: (608) 264-6154
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.