Is Wisconsin a high-tax state? Not really, at least not anymore. State and local taxes now total about 9.6 percent of personal income, roughly a point below the national average, and Wisconsin ranks around 35th among the states. The catch is that the average hides real variation: property taxes are genuinely high, income taxes sit in the upper-middle range, and the sales tax runs below average. Whether Wisconsin feels expensive depends on which taxes hit your situation hardest.
Where Wisconsin Ranks Overall
The standard way to compare state tax climates is total state and local taxes as a share of personal income. By that measure, Wisconsin has been steadily dropping. In fiscal year 2022, the figure was 9.9 percent, a record low at the time, placing Wisconsin 35th nationally and 1.2 percentage points below the 11.1 percent national average.1Wisconsin Policy Forum. State Tax Ranking Hits All-Time Low More recent data suggest the burden has kept sliding to around 9.6 percent, helped by rising personal incomes and state-imposed limits on local property tax growth.
This is a real shift. In the 1990s, Wisconsin routinely ranked in the top ten for tax burden. Three decades of income tax rate cuts, property tax levy limits, and school funding changes have moved it into the middle of the pack. The “high tax” reputation lags the numbers.
Income Tax
Wisconsin taxes individual income at four graduated rates from 3.50 percent to 7.65 percent.2Wisconsin Department of Revenue. Tax Rates For single filers in the 2025 tax year:
- 3.50% on taxable income up to $14,680
- 4.40% from $14,680 to $50,480
- 5.30% from $50,480 to $323,290
- 7.65% above $323,290
Married couples filing jointly get wider brackets, roughly double in most tiers. The top rate of 7.65 percent is above average nationally, but it only hits taxable income over $323,290 for single filers. Most middle-income earners land in the 4.40 or 5.30 percent brackets, comparable to Midwestern neighbors.
One quiet advantage: no city or county in Wisconsin imposes a local income tax. That’s meaningful compared to states like Ohio or Maryland, where local income taxes can add one to three percentage points on top of the state rate.
Property Tax
Property tax is where Wisconsin genuinely earns the high-tax label. The effective property tax rate runs around 1.25 percent of a home’s market value, compared to a national average near 0.89 percent. That ranks Wisconsin roughly 11th highest, with a median annual bill near $3,680. Homeowners in high-spending districts pay considerably more.
The bill is a stack of levies from overlapping jurisdictions: the county, the municipality, the school district, and the local technical college district. School districts typically account for the largest share, often more than 40 percent. Each jurisdiction sets its levy based on its budget, and the total is expressed as a mill rate applied to assessed value. One mill equals one dollar per $1,000 of assessed value, so a home assessed at $250,000 in a district with a combined mill rate of 20 owes $5,000 before credits.
Two automatic credits appear directly on the December tax bill and require no separate application. The School Levy Tax Credit offsets a portion of the school district levy. The Lottery and Gaming Credit uses state lottery proceeds to reduce the bill for qualifying homeowners.3Wisconsin Department of Revenue. Wisconsin Lottery and Gaming Credit Program
Lower-income homeowners and renters can also claim the Homestead Credit on their state income tax return. For the 2025 tax year, the maximum is $1,168, and household income must be below $24,680.4Wisconsin Department of Revenue. Homestead Credit Tax Year 2025 Renters qualify because a percentage of rent is treated as property taxes paid, a detail many renters miss.
Sales and Excise Taxes
The statewide sales tax is 5 percent on most tangible goods and taxable services.5Wisconsin State Legislature. Wisconsin Code 77.52 – Imposition of Retail Sales Tax Seventy of the 72 counties add a 0.5 percent county sales tax, bringing the combined rate to 5.5 percent across most of the state. Milwaukee County’s rate rose to 0.9 percent in January 2024, making the combined rate there 5.9 percent.6Wisconsin Department of Revenue. County and City Sales and Use Taxes A few counties, including Waukesha and Winnebago, impose no county sales tax, staying at a flat 5 percent.
Even at 5.9 percent in Milwaukee, Wisconsin’s sales tax comes in below combined rates in many other states, where state-plus-local totals routinely top 8 or 9 percent. Groceries and prescription drugs are exempt, which lowers the real burden on household essentials. Prepared foods, soft drinks, and candy remain taxable.
Excise taxes are mixed. Motor vehicle fuel is taxed at 30.9 cents per gallon, a rate frozen since 2006, putting Wisconsin in the middle nationally.7Wisconsin Department of Revenue. Motor Vehicle Fuel Tax Cigarettes carry a $2.52-per-pack state excise tax.8Wisconsin Department of Revenue. Cigarette Tax Alcohol excise taxes are notably low: beer is taxed at $2.00 per 31-gallon barrel (about 6.5 cents per gallon), and distilled liquor at $3.25 per gallon.9Wisconsin Department of Revenue. Wisconsin’s General Fund Excise Taxes
Retirement Income
Wisconsin is genuinely friendly to retirees. Social Security benefits are completely exempt from state income tax.10Wisconsin Department of Revenue. Individual Income Tax – Retired Persons That’s a real advantage over the dozen or so states that tax Social Security to some degree.
Pension income, 401(k) distributions, and IRA withdrawals are generally taxed as ordinary income. But two subtractions can shrink the bill substantially:
- At age 65 or older, you can subtract up to $5,000 in qualifying retirement income, provided your federal adjusted gross income is below $15,000 ($30,000 if married filing jointly).
- At age 67 or older, you can subtract up to $24,000 ($48,000 on a joint return where both spouses qualify). This larger subtraction first became available for the 2025 tax year, and claiming it means you cannot claim any tax credits on that return.
The $24,000 subtraction is a substantial recent change. A married couple both over 67 could shield up to $48,000 in pension or retirement account income from state tax. Combined with the Social Security exemption, many Wisconsin retirees end up paying little or no state income tax.
Estate and Inheritance Taxes
Wisconsin imposes no estate tax and no inheritance tax. The inheritance tax was eliminated for deaths on or after January 1, 1992, and the estate tax for deaths after December 31, 2007.11Wisconsin Department of Revenue. Estates, Trusts, and Fiduciaries Assets passed to heirs face no state-level death tax regardless of the estate’s size. Only the federal estate tax applies, and its exemption sits well above $13 million per individual.
Who Actually Pays More, and Who Pays Less
The averages describe a state, not a household. A retiree collecting Social Security and modest pension or 401(k) withdrawals will find Wisconsin quite affordable, especially at age 67 or older. Middle-income wage earners without property see a moderate income tax, no local income tax, and a below-average sales tax. High earners above $323,290 in taxable income run into the 7.65 percent top rate. And homeowners in high-mill-rate school districts pay property taxes that rank among the country’s highest, regardless of what the state’s overall average looks like.
So the honest answer is that Wisconsin is no longer a high-tax state on the whole, but it remains a high property tax state. If most of your tax bill comes from what you own rather than what you earn or spend, the old reputation still fits. If it doesn’t, the numbers have moved.