Madison, Wisconsin tax rates break down into a 5.5% combined sales tax, state income tax ranging from 3.50% to 7.65%, and property tax set each year through a combined mill rate collected by the City of Madison. There is no city income tax. Vehicle owners pay a local wheel tax at registration, and short-term lodging carries a 10% room tax.
Sales and Use Tax
Taxable purchases in Madison carry a combined 5.5% sales tax: 5% to the state under Wisconsin Statutes Chapter 77, plus 0.5% to Dane County.1Wisconsin State Legislature. Wisconsin Statutes Chapter 77 – Taxation of Forest Croplands; Real Estate Transfer Fees; Sales and Use Taxes It applies to most tangible goods and certain digital products.
Several everyday categories are exempt. Unprepared groceries (meat, produce, dairy, bakery items) are not taxed, but prepared foods, candy, and soft drinks are. Prescription drugs dispensed by a pharmacist are also exempt.2Wisconsin State Legislature. Wisconsin Administrative Code Tax 11.09 Most services are not taxable, though landscaping and certain digital services are.
If you buy from an out-of-state retailer that doesn’t charge Wisconsin sales tax, you owe the same 5.5% as use tax on anything stored, used, or consumed in the state. The Wisconsin Department of Revenue administers both, and unpaid use tax can produce penalties and interest in an audit.
Wisconsin Income Tax Brackets
Madison imposes no local income tax, so the state’s four progressive brackets are your only income tax obligation. For taxable years beginning after December 31, 2024, single filers and heads of household pay:3Wisconsin State Legislature. Wisconsin Statutes 71.06 – Rates of Taxation
- 3.50% on taxable income from $0 to $14,680
- 4.40% on income over $14,680 up to $50,480
- 5.30% on income over $50,480 up to $323,290
- 7.65% on income over $323,290
Married couples filing jointly use wider brackets:3Wisconsin State Legislature. Wisconsin Statutes 71.06 – Rates of Taxation
- 3.50% on taxable income from $0 to $19,580
- 4.40% on income over $19,580 up to $67,300
- 5.30% on income over $67,300 up to $431,060
- 7.65% on income over $431,060
Married filing separately uses narrower bands: 3.50% up to $9,790, then 4.40% up to $33,650, 5.30% up to $215,530, and 7.65% above that.4Wisconsin Department of Revenue. DOR Tax Rates Only the income within each band is taxed at that band’s rate.
Who Has to File
Filing thresholds for 2025 depend on status and age. A single filer under 65 must file at $14,260 or more in gross income. Married couples filing jointly where both are under 65 must file at $26,510 or more. Heads of household file at $18,220 or more.5Wisconsin Department of Revenue. Individual Income Tax – Filing Requirements Thresholds rise slightly if you or your spouse are 65 or older. The deadline is April 15, and Madison employers withhold state tax through the year.
Property Tax
Property tax in Madison runs on a mill rate: the tax per $1,000 of assessed value. The rate is a combination of levies from the City of Madison, Dane County, the Madison Metropolitan School District, Madison Area Technical College, and a few smaller districts. The City acts as the collection agent and distributes revenue to each.6City of Madison. Property Taxes
The combined mill rate changes each year with the budgets of those jurisdictions and the total assessed value in the area. Assessments are governed by Wisconsin Statutes Chapter 70, which requires the City Assessor’s Office to value properties on current market data.7Wisconsin State Legislature. Wisconsin Statutes Chapter 70 – General Property Taxes If you think your assessment is wrong, you can challenge it through the Board of Review.
Payment Deadlines and Late Charges
You can pay the full bill by January 31 or split it into four installments due January 31, March 31, May 31, and July 31.6City of Madison. Property Taxes Miss even one installment and the entire remaining balance becomes due immediately. Late amounts carry 1% interest plus a 0.5% penalty for each month or partial month starting February 1.8City of Madison. Four Installment Payment Method – Property Taxes On a large balance, that adds up fast.
Credits That Reduce Your Property Bill
The lottery and gaming credit applies automatically if a Madison property is your primary residence. For tax year 2025 it ran from $188 to $287 per property depending on the school district, and the amount shifts each year with state lottery and gaming revenue.9Dane County Treasurer Office. Lottery Credit
The Wisconsin Homestead Credit is a state-funded refund for lower-income homeowners and renters. For 2025, household income must be below $24,680, and you must be a Wisconsin resident for the full year and at least 18. You also need to meet one of these: you or your spouse had earned income during the year, you or your spouse are 62 or older, or you or your spouse have a disability.10Wisconsin Department of Revenue. Claiming Homestead Credit The maximum credit is $1,168.11Wisconsin Department of Revenue. Homestead Credit Tax Year 2025 You claim it on your state income tax return, and it can’t be combined with the veterans property tax credit or the farmland preservation credit.
Veterans with a 100% service-connected VA disability rating, or a rating based on individual unemployability, can receive a full refund of property tax paid on their primary residence and up to one acre. Unremarried surviving spouses of qualifying veterans also qualify. You must be a Wisconsin resident and must have entered active duty as a Wisconsin resident or lived in the state at least five consecutive years after service.12Wisconsin Department of Veterans Affairs. Veterans and Surviving Spouses Property Tax Credit It does not cover vacation homes, second properties, or portions used for farming or business.
Business Taxes
C corporations pay Wisconsin’s corporate income and franchise tax at a flat 7.9%.13Wisconsin State Legislature. Income and Franchise Taxes – Legislative Fiscal Bureau S corporations and partnerships can elect entity-level tax at the same 7.9% rate instead of passing income through to owners’ individual returns. Because 7.9% sits just above the top individual rate of 7.65%, it’s worth running the numbers both ways before choosing.
Wisconsin repealed its personal property tax effective January 1, 2024. Madison businesses no longer file personal property returns or pay tax on equipment, furniture, and other business personal property.
Vehicle Wheel Tax
Registering a vehicle in Madison means paying a local wheel tax on top of the state registration fee. The City of Madison charges $40 per vehicle, and Dane County adds its own fee.14Wisconsin Department of Transportation. Municipal or County Vehicle Registration Fee (Wheel Tax) The Dane County portion is currently $28 and rises to $40 for registrations beginning on or after May 1, 2026, bringing the combined local charge to $80 for most Madison vehicle owners.
The Wisconsin Department of Transportation collects the fee during registration, and the revenue must be spent on transportation. Some plate types are exempt, including antique, collector (but not collector special), ex-prisoner of war, historic military, hobbyist, and Medal of Honor plates, along with farm trucks, dual-purpose farm trucks, and motor homes with special plates.14Wisconsin Department of Transportation. Municipal or County Vehicle Registration Fee (Wheel Tax) There are no income-based exemptions or reduced rates.
Room Tax on Short-Term Lodging
Hotels, motels, bed-and-breakfasts, and short-term rental platforms like Airbnb and Vrbo collect Madison’s 10% room tax from the guest and remit it to the city. The elevated rate is allowed because Madison carries long-term debt for convention center construction.15City of Madison. Room Tax Overview Returns are due quarterly on January 31, April 30, July 31, and October 31.16City of Madison. Transient Room Tax Operators who fail to collect and remit face audits and administrative penalties from the city.