Out-of-state purchases still contribute to Wisconsin sales tax benefits

GREEN BAY, Wis. (WBAY) - Many of us have spent the past few weeks, or even months, shopping for Christmas gifts. In fact, when people in our area buy from out-of-state retailers, Wisconsin still gets the benefits of state sales tax.

Thanks to a question posed by one of our viewers, Action 2 News investigated for you where that money goes and why shopping locally can help communities throughout the state.

Wisconsin sales tax is 5% on purchases of tangible items which include things like clothes or furniture. Prior to Wisconsin Act 10, also called the “marketplace bill,” only about 1% of the public actually filed sales tax and purchases they made out of state.

“In the case of Brown County then we would transmit that 0.5% [county sales tax] to Brown County so that they could use it to pay for various services like roads and education and things that they provide there,” Wisconsin Department of Revenue (DOR) secretary, Peter Barca, explained.

After being signed by Governor Tony Evers in July 2019, Wisconsin had expanded authority to require out-of-state retailers and marketplace providers to collect taxes on purchases made by people living in Wisconsin.

Now, the DOR estimates there is about a 95% compliance of reporting and collecting sales tax. Barca said it helps level the playing field for local business owners.

“I have an expression, watch the pennies and the dollars will take care of themselves,” Green Bay business owner of iDeal Furniture, Tom Brzoski, shared. “You really have to watch every penny with a small business. Particularly now with COVID, prices are rising. We get price increases from our suppliers almost on a daily basis. “

With Act 10 in place for over two years now, out-of-state stores continue to contribute to community funding like local businesses.

“It provides equity so that stores that have brick and mortar who are oftentimes the ones who make contributions to the Girl Scouts, to the Little Leagues, and are very involved in their communities,” Barca highlighted. “It provides equity for them. We think it’s very important. We’re so glad that’s in place.”

“It is a trickle down effect,” Brzoski emphasized. “When people spend locally whether it’s here or other local shops it does trickle down. As our business grows we employ more people or we buy locally. Our mattresses are made here in Wisconsin and we try to buy as much local product [as we can].”

Overall, Act 10 provided a sales tax change that filtered more money back into communities. A shared financial goal with family-business owner Brzoski at iDeal Furniture in Green Bay who works alongside his daughter, Kayla. The local store who found a silver lining in the pandemic with more people staying home.

“Really a lot of people were at home,” Brzoski said. “They were spending their money redoing their houses, buying new furniture, all those kind of things. We’ve seen a very steady increase.”

A steady increase like the DOR has tracked with sales tax across the state this year.

To learn more about the Wisconsin DOR’s marketplace policies, CLICK HERE.

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