Free guide for contractors
Do contractors charge sales tax in Wisconsin?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
WI Wisconsin
Depends on the jobIt depends on the work. Wisconsin construction work carries no sales tax, but repairing many building systems and landscaping are taxed.
A Wisconsin contractor doing a real property construction activity is the consumer of its materials and is not permitted to collect sales tax from its customers. Installing a furnace in a home, for example: the contractor pays tax on the furnace, and the charge to the customer is not taxable.
Repair and maintenance of certain items, such as air conditioners, boilers, bathroom fixtures and dishwashers, is taxable, even if their original installation was a real property improvement. Repairing a furnace in a home is taxable on the entire charge, travel included.
Landscaping and lawn maintenance services are taxable. Servicing business fixtures and equipment in commercial establishments is taxable; similar work in homes may be a nontaxable realty improvement.
The state rate is 5%, plus 0.5% county tax where adopted. Since January 1, 2024, Milwaukee County's rate is 0.9% and the City of Milwaukee adds 2%.
It turns on: whether the work is a real property construction activity or a repair; what item is being repaired or serviced; whether the property is residential or commercial.
Watch out for
- On a lump-sum contract with an exempt entity, if the taxable items are less than 10% of the contract price, the contractor is deemed the consumer (WI DOR Publication 207, Part 2.D).
“A contractor who performs a real property construction activity is not permitted to collect sales tax from its customers”WI DOR Publication 207, Part 2.C