MILWAUKEE – A reminder to residents in both the City of Milwaukee and Milwaukee County: starting on Monday, new sales taxes take effect on goods and services.
The taxes were part of a larger effort by both the Milwaukee Common Council and Milwaukee County Board this summer to avoid looming fiscal challenges. In July, a historic 2% city sales tax was approved 12-3 by the Common Council and approved by Mayor Cavalier Johnson, while a separate 0.4% tax was given the 15-3 green light by the County Board.
Mayor Johnson acknowledged after the passage that despite being a hotly contested matter, the tax was necessary to avoid much larger cuts across the board to city services. “No elected official wants to institute a tax” Johnson said. “But we have to deal with political reality.”
That reality will manifest in the form of a now 7.9% tax in the city, and a 5.9% tax throughout the rest of the county (factoring in the existing 5% state sales tax already in place).
While those making small purchases won’t notice much of a change, larger ticket items like cars and appliances couldsee hundreds or even thousands of dollars more added to the price tag. A 20,000 dollar car, for example, would now cost 21,580 dollars before separate fees. Additionally, it won’t be possible to avoid paying the higher tax by buying a car at a dealership in, say, Waukesha County, since Wisconsin taxes car purchases based on the address associated with the buyer.
When it comes to how Milwaukee’s new tax racks up against its Midwestern peers, 7.9% falls in roughly the middle of major cities. Compared with the 20 cities meeting that definition in the region, the 7.9% is the seventh-highest, ahead of St. Paul, Minnesota’s 7.875% and behind Cleveland, Ohio’s 8% rate.
For a complete and comprehensive look at who and what the new sales taxes impact, the Wisconsin Department of Revenue has put out a detailed document which you can view here.
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