Wisconsin is not a tax-free state. If you live, shop, or own property there, you’ll pay a progressive state income tax ranging from 3.50% to 7.65%, a 5% state sales tax, property taxes that average around 1.25% of a home’s market value, and excise taxes on fuel, alcohol, and tobacco. What Wisconsin does skip are a few taxes that other states impose: there’s no estate tax, no inheritance tax, and Social Security benefits are fully exempt from state income tax.
What Wisconsin Does Tax
Income
Wisconsin’s individual income tax uses four brackets. For the 2025 tax year (the return you file in 2026), a single filer pays:
- 3.50% on the first $14,680 of taxable income
- 4.40% on income from $14,680 to $50,480
- 5.30% on income from $50,480 to $323,290
- 7.65% on income above $323,290
Married couples filing jointly get wider brackets. The 3.50% rate applies to the first $19,580, and the top 7.65% rate kicks in above $431,060.1Wisconsin Department of Revenue. Tax Rates These thresholds adjust slightly each year for inflation.
Most pensions and annuities are taxable to the same extent they’re taxable on your federal return. A narrow exception covers people who were members of certain Wisconsin state and Milwaukee retirement systems, or the federal Civil Service Retirement System, as of December 31, 1963.2Wisconsin Department of Revenue. Wisconsin Tax Information for Retirees
Sales
Wisconsin charges a 5% state sales tax on most retail goods and certain services. On top of that, 70 of the state’s 72 counties have adopted an optional 0.5% county sales tax, so the combined rate in most places is 5.5%.1Wisconsin Department of Revenue. Tax Rates A handful of tourist communities add a premier resort area tax of 0.5%, and Wisconsin Dells and the Village of Lake Delton charge 1.25%, which pushes the combined rate in the Dells to 6.75%.3Wisconsin Department of Revenue. Premier Resort Area Tax – Q&A for Municipalities and Counties
Groceries bought for home consumption are exempt, though prepared foods, candy, and soft drinks are taxable. Prescription drugs, prosthetic devices, mobility-enhancing equipment, and durable medical equipment used in a person’s home are also exempt.4Wisconsin State Legislature. Tax 11.45 – Pharmacies and Drug Stores Online or out-of-state purchases where no sales tax was collected trigger a use tax at the same combined rate; most large online retailers now collect it automatically.
Property
Property taxes in Wisconsin run on the higher side nationally, averaging around 1.25% of market value. Local assessors value your property as of January 1 each year, and the bill combines levies from your municipality, county, school district, and technical college district.5Wisconsin State Legislature. Wisconsin Code Chapter 70 – General Property Taxes Schools usually take the largest slice. Each jurisdiction sets its own mill rate, so two homes with identical values in different towns can face noticeably different bills. Payment comes in two installments: the first due January 31 to your municipality, the second due July 31 to the county treasurer.
Fuel, Alcohol, and Tobacco
Wisconsin layers excise taxes onto specific goods. These are collected from producers and distributors, then baked into retail prices.6Wisconsin Department of Revenue. Wisconsin’s General Fund Excise Taxes Gasoline carries a tax of 30.9 cents per gallon, with revenue going to the state transportation fund.7Wisconsin Department of Revenue. Motor Vehicle Fuel Tax Liquor is taxed at 85.86 cents per liter plus a small administrative fee. Wine runs 6.605 cents per liter at 14% alcohol or below, and 11.89 cents per liter between 14% and 21%.8Wisconsin Department of Revenue. Intoxicating Liquor, Cider, and Wine Tax Cigarettes and other tobacco products carry significant per-unit taxes under Chapter 139 of the Wisconsin Statutes.
What Wisconsin Does Not Tax
Several categories of income and wealth are off the table in Wisconsin:
- Social Security benefits are fully exempt from state income tax.
- Railroad retirement benefits are fully exempt.
- Military retirement pay from the Defense Finance and Accounting Services is fully exempt, along with retirement pay tied to Coast Guard, NOAA corps, and Public Health Service commissioned corps service.2Wisconsin Department of Revenue. Wisconsin Tax Information for Retirees
- There is no estate tax for anyone dying after December 31, 2007.
- There is no inheritance tax; it was repealed effective January 1, 1992.9Wisconsin Department of Revenue. Estates, Trusts, and Fiduciaries
Passing assets to heirs does not trigger a state-level death tax in Wisconsin, regardless of the estate’s size.
How Wisconsin Compares to No-Income-Tax States
Nine states currently impose no broad-based personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Washington taxes capital gains above a certain threshold for high earners, and New Hampshire taxes interest and dividend income but not wages. Wisconsin’s top rate of 7.65% puts it on the higher end among states that do tax income.
That comparison only goes so far. States without an income tax generally make up the revenue through higher sales taxes, property taxes, or fees. Wisconsin’s 5% sales tax is moderate by national standards, and the absence of estate and inheritance taxes is a real advantage for families thinking about wealth transfers. The Social Security exemption matters for retirees weighing where to settle. Whether Wisconsin feels expensive depends on which of these taxes hits your situation hardest.
Credits That Reduce What You Owe
A few Wisconsin credits are worth checking each year, because people who qualify often don’t claim them.
Homestead Credit
The homestead credit targets lower-income homeowners and renters. For the 2025 tax year, household income must be below $24,680 to qualify, and the maximum credit is $1,168.10Wisconsin Department of Revenue. Homestead Credit The amount is based on property taxes or rent paid relative to income, and it’s refundable, so you can receive it even if you owe no income tax.
Earned Income Tax Credit
Wisconsin’s EITC piggybacks on the federal credit for families with children. The state credit equals 4% of your federal amount with one qualifying child, 11% with two children, and 34% with three or more.11Wisconsin Department of Workforce Development. Other Tax Credits Single filers without children do not qualify for the Wisconsin version.
Lottery and Gaming Credit
Homeowners who use their property as a primary residence can claim the Lottery and Gaming Credit, which appears directly on the property tax bill as a reduction. The amount changes each year based on lottery and gaming revenue, and you can apply through the Department of Revenue’s online portal or by paper form.