Food purchases in Wisconsin are subject to state and local sales taxes, with rates varying based on the type of food or beverage purchased. However, Wisconsin provides exemptions for certain food items and regulations regarding prepared foods. This article will provide a comprehensive overview of Wisconsin’s food tax laws, including a food tax calculator to estimate your tax burden.
We’ll explore common exemptions, regulations around prepared foods and tips for maximizing savings. Read on for everything you need to know about Wisconsin food taxes in 2024.
Wisconsin Food Tax Calculator
Use the calculator below to estimate your food tax burden in Wisconsin. Simply enter your location and the cost of your food purchase. The Wisconsin food tax calculator will apply the correct state and local tax rates based on whether your food item is classified as a basic grocery or prepared food.
Wisconsin Food Tax Calculator
Wisconsin Food Tax Calculator
Tax: $0.00
As you can see, sales tax on your food purchase can vary significantly depending on your location in Wisconsin. Next, we’ll look at exemptions that can reduce your tax burden.
What is the Sales Tax Rate on Food in Wisconsin?
Wisconsin has a statewide sales tax rate of 5%. On top of this, local municipalities can add up to an additional 0.5% in local sales taxes. Combined, this puts Wisconsin’s maximum possible sales tax rate at 5.5%. However, not all food purchases are taxed at this full rate.
Wisconsin applies two different tax rates to food, depending on the type of item purchased:
- Basic grocery food and food ingredients: These items are taxed at a reduced rate of 0% to 1%, depending on the local sales tax in your municipality. This includes most unprepared food meant for home consumption.
- Prepared foods and beverages: These items are taxed at the full state and local rates, usually between 5% and 5.5%. This includes restaurant meals, takeout, and prepared deli foods.
See the next sections for details on which food items qualify for the reduced versus full tax rates in Wisconsin.
What Foods are Tax Exempt in Wisconsin?
Wisconsin provides full sales tax exemptions on the following basic grocery food items:
- Most unprepared food and food ingredients: This includes breads, fruits, vegetables, meats, fish, poultry, dairy products, bottled water, soft drinks, candy, dietary supplements, and more. Basically, anything you’d buy at a grocery store to prepare meals at home.
- Baby food: This includes formula, juice, and jarred foods.
The key is that the exempted food must be unprepared. As soon as any processing or preparation takes place before you purchase the item, it typically loses its tax exemption. Let’s look at some examples:
| Exempt Foods (0% Tax) | Taxable Prepared Foods (5-5.5% Tax) |
|---|---|
| – Whole raw chickens | – Rotisserie chickens |
| – Cartons of eggs | – Deviled eggs |
| – Blocks of cheese | – Sliced cheese trays |
| – heads of lettuce | – premade salads |
| – flour and baking ingredients | – baked breads, muffins |
As you can see, even simple actions like slicing, cooking, or mixing ingredients can make your purchase taxable.
There are a few additional exemptions, including:
- Most non-alcoholic beverages, besides bottled water, remain exempt from sales tax. This includes soda, juice, sports drinks, etc.
- Herbal supplements and vitamins are exempt.
- Gift baskets containing primarily exempt food items are not taxed. However, gift baskets with prepared foods are taxable.
The key is to check if the food is in its basic unprepared form when purchasing to maximize your exemptions. Next, we’ll look at the regulations around prepared foods.
Regulations on Prepared Foods in Wisconsin
Prepared foods in Wisconsin are subject to the full state and local sales tax rates. But what exactly counts as a prepared food? Here are the main regulations:
Two Heated Ingredients Test
Foods that contain two or more heated ingredients are considered “prepared” and taxed at the higher rate. This includes pizza, soups, sandwiches, and mixed dishes with more than two cooked ingredients.
So a roasted chicken sandwich would be taxable, since it contains both cooked chicken and toasted bread. But a cold cuts sandwich would not, since the ingredients are unheated.
Sold Heated
Any food product that is sold heated or cooked is considered prepared and taxed at the full rate. This includes hot foods from a restaurant or deli counter.
Sold With Utensils
Foods handed out with eating utensils like plates, napkins or cutlery are subject to sales tax. This includes takeout orders and deli sandwiches served on plates. So getting utensils to-go makes your purchase taxable.
Ready-to-Eat
Foods that are ready to eat without any further cooking or prep, like microwave meals or muffins, are considered prepared and taxed at the full rate.
Exceptions
There are some exceptions to the prepared food rules:
- Bakery items sold unheated, like breads, bagels, doughnuts, cookies and muffins, are exempt.
- Two ingredients like peanut butter and jelly between bread slices are exempt.
- Raw meat that is just combined or ground remains exempt. However, once cooked it becomes taxable.
By avoiding heated and served combinations, you can maximize your tax exemptions on basic grocery items in Wisconsin.
How to Minimize Your Wisconsin Food Taxes
Here are some tips to legally minimize sales tax on your food purchases in Wisconsin:
- Buy basic grocery ingredients: Stick to raw meats, produce, baking supplies, etc. Avoid anything pre-made or served hot.
- Avoid added ingredients: Opt for simple sandwiches and base recipes over more complex dishes. Extra ingredients often mean extra taxes.
- Skip the utensils: For takeout, opt out of cutlery and plates if possible to avoid the “served with utensils” criteria.
- Check your receipts: Make sure you aren’t being overcharged for supposedly exempt items.
- Buy from grocery stores: Purchases from restaurants and delis are more likely to be taxable prepared foods.
- Plan your shopping trips: Combine exempted grocery purchases into one trip. Separate trips may lead to more incidental prepared items.
With some careful planning, you can legally keep your Wisconsin food purchases sales-tax-free. Next, we’ll cover some frequently asked questions.
Conclusion
Calculating sales tax on food purchases in Wisconsin can be tricky thanks to exemptions, tax brackets, and regulations governing prepared foods. The basic rule of thumb is to purchase basic groceries in their unprepared form whenever possible. Avoid added ingredients, heating, and utensils to maximize exemptions. With some careful shopping and tactful receipt-checking, Wisconsin residents can minimize the taxes paid on the food they eat at home. For any tax law uncertainties, consult the Wisconsin Department of Revenue website or trusted tax professional.
FAQs
What food items are exempt from tax in Wisconsin?
Most basic unprepared food and beverage items you would purchase at a grocery store are exempt, including meats, eggs, fruits and vegetables, breads, cereal, bottled water, juice, soda, and candy. Baby food and formula are also exempt.
What food is taxable in Wisconsin?
Prepared foods that are heated, mixed, served, or ready-to-eat are taxable. This includes restaurant meals, deli items, rotisserie chicken, sandwiches, pizza, mixed salads, muffins, and other baked goods sold heated. Most foods from the prepared or deli sections of a grocery store are also taxable.
Is takeout taxed in Wisconsin?
Yes, any prepared food purchased for takeout or to-go is subject to state and local sales tax. This includes takeout meals from restaurants, heated deli items, sandwiches served on plates, etc. Since takeout involves added ingredients, heating, and utensils it is considered a prepared food.
Is fast food taxed in Wisconsin?
Yes, all purchases at fast food restaurants are subject to the full state and local prepared food tax rates in Wisconsin. This covers everything from hamburgers and fries to burritos and milkshakes. Basically anything made and served to you hot over a counter or drive-thru is considered taxable fast food.
Are rotisserie chickens taxed in Wisconsin?
Yes, rotisserie chickens sold heated at the grocery store deli counter are subject to sales tax in Wisconsin. Even though it’s from a grocery store, the heating preparation makes it a taxable prepared food item. Whole raw uncooked chickens would be exempt.
Are bakery items taxed in Wisconsin?
It depends. Baked goods like breads, bagels, and doughnuts are exempt from sales tax if sold at room temperature unheated. However, once they are sold heated or with added ingredients, they become taxable. For example, a heated blueberry muffin would be taxable but a cold one would not.
