Wisconsin taxes corporations at a flat 7.9%, among the higher rates in the Midwest, and individuals at 3.5% to 7.65%. It offsets the high corporate rate with one of the country's most generous incentives for manufacturers: the manufacturing and agriculture credit, which largely eliminates state income tax on manufacturing income. The 5% sales tax is low, and business equipment is no longer taxed.
This guide covers Wisconsin's business taxes for 2026, with worked examples and comparisons with its neighbors.
Wisconsin business taxes at a glance
A Wisconsin C corporation pays 7.9% on profit, plus an economic development surcharge if its gross receipts are $4 million or more. Pass-through owners pay graduated personal rates that reach 5.3% above about $52,000 and 7.65% above about $333,000. Manufacturers and farmers can claim a credit that largely offsets tax on qualifying income. Customers pay 5% state sales tax, plus 0.5% county tax in most counties and more in Milwaukee. Personal property tax on business equipment was repealed in 2024. LLCs pay $130 to form and $25 a year.
Corporate income tax
| Item | 2026 |
|---|---|
| Corporate franchise or income tax rate | 7.9% |
| Economic development surcharge | About 3% of gross tax liability for receipts of $4M or more, capped at $9.8 million |
- Apportionment: Single sales factor.
- Combined reporting: Required for unitary groups.
- Manufacturing and agriculture credit: Credit equal to 7.5% of qualified production income, effectively eliminating tax on that income.
- Other credits: Research credit, jobs credits through WEDC and business development credits.
- Returns: Form 4 or 6 is due on the 15th day of the fourth month after year-end.
Personal income tax and pass-through owners
| Taxable income (single, 2026, approx.) | Rate |
|---|---|
| $0 to $15,110 | 3.5% |
| $15,110 to $51,950 | 4.4% |
| $51,950 to $332,720 | 5.3% |
| Over $332,720 | 7.65% |
- LLC owners, partners and sole proprietors pay these rates on profit.
- S corporation shareholders pay on their share.
- PTE election: Entity-level tax at 7.9%, deductible federally.
- Manufacturing credit: Available to pass-through owners, but capped for manufacturing income above $300,000 since 2023.
Sales and use tax
| Component | Rate |
|---|---|
| State sales tax | 5% |
| County tax (most counties) | 0.5% |
| Milwaukee County and city (since 2024) | 0.9% county + 2% city |
| Average combined rate | About 5.72% |
- Groceries are exempt.
- Manufacturing machinery is exempt.
- Services: Some services, including repairs, landscaping and admissions, are taxable.
- Remote sellers with more than $100,000 of Wisconsin sales must collect.
Payroll and property taxes
- Unemployment insurance: Employers pay on the first $14,000 of each employee's wages.
- Property tax: Real property is taxed at moderate to high rates. Personal property tax on business equipment and furniture was eliminated from 2024, with the state reimbursing local governments.
Forming a business in Wisconsin: fees and ongoing costs
| Item | LLC | Corporation |
|---|---|---|
| Formation filing fee | $130 online | $100 minimum |
| Annual report | $25 | $25 to $40 |
| Registered agent | Required | Required |
Worked example: $500,000 of profit
| Step | Amount |
|---|---|
| Taxable income | $500,000 |
| Wisconsin corporate tax at 7.9% | $39,500 |
| Federal tax at 21% on $460,500 | $96,705 |
| Total income tax | $136,205 (27.2%) |
A manufacturer could eliminate most of the Wisconsin tax with the manufacturing credit. For a single LLC owner with $150,000 of Wisconsin taxable income, state tax is about $7,346. At $75,000 it is about $3,371.
How Wisconsin compares with its neighbors
Wisconsin's corporate rate is below Minnesota's and Illinois', but above Iowa's and Michigan's. Its personal rates are lower than Minnesota's but higher than Iowa's, Illinois' and Michigan's for most business owners. The manufacturing credit makes Wisconsin very competitive for manufacturers.
Choosing an entity in Wisconsin
- LLC: $130 to form and $25 a year; owners pay up to 7.65%.
- S corporation: Same personal rates, federal payroll tax savings and the PTE election.
- C corporation: 7.9% plus 21% federally.
For manufacturers with large incomes, a C corporation can be attractive because the corporate manufacturing credit isn't capped the way the individual credit is.
Wisconsin taxes by business type
Manufacturers. Wisconsin has one of the largest manufacturing shares of employment in the country. The manufacturing credit, sales tax exemption for machinery and repeal of personal property tax all reduce costs significantly.
Dairy and agriculture. Farmers can claim the agriculture portion of the credit, and farm machinery and inputs are exempt from sales tax.
Retailers in Milwaukee. Since 2024, Milwaukee's combined sales tax is 7.9%, well above the rest of the state.
Professional services. Consultants and professionals pay up to 5.3% on most income, and 7.65% at high incomes, without access to the manufacturing credit.
Doing business across Wisconsin
Milwaukee is Wisconsin's largest city and manufacturing center, with companies in machinery, electrical equipment and food. Madison, the capital, has state government, the University of Wisconsin and a strong technology and health sector, including Epic Systems in nearby Verona. Green Bay, the Fox Valley and other cities have paper, food and manufacturing industries. Wisconsin has income tax reciprocity with Illinois, Indiana, Kentucky and Michigan, so residents of those states working in Wisconsin generally pay income tax only to their home state on wages.
Tax planning tips for Wisconsin businesses
Claim the manufacturing and agriculture credit. Make sure your qualified production income and property factors are calculated correctly, since the credit can eliminate most Wisconsin tax.
Elect the PTE tax. For profitable pass-through owners, the election makes Wisconsin tax deductible federally.
Watch the economic development surcharge. Once gross receipts reach $4 million, the surcharge applies, even if net income is small.
Who pays the most in Wisconsin
C corporations outside manufacturing and agriculture pay the full 7.9% rate plus the economic development surcharge if they're large, which makes Wisconsin relatively expensive for service and retail corporations. High-income professionals pay the 7.65% top rate. Property owners pay high real estate taxes, particularly in Milwaukee and Madison. Consumers in Milwaukee pay the highest sales tax in the state. Manufacturers and farmers, by contrast, often pay little or no state income tax thanks to the credit.
How the manufacturing credit works
The manufacturing and agriculture credit equals 7.5% of qualified production income, which is income from manufacturing or agricultural property located in Wisconsin. Because the corporate rate is 7.9%, a corporation that earns all its income from Wisconsin manufacturing pays an effective rate of only 0.4%. Income from manufacturing outside Wisconsin doesn't qualify, and the credit is limited by the share of the business's property and payroll in the state. For individuals and pass-through owners, the credit is capped once manufacturing income exceeds $300,000.
Recent changes for 2025 and 2026
- Personal property tax on business equipment eliminated from 2024.
- Milwaukee sales tax increased in 2024.
- Manufacturing credit capped for high-income individuals since 2023.
- Income tax cuts to middle brackets debated in recent budgets.
Is Wisconsin a good state for business?
Advantages
- Manufacturing and agriculture credit nearly eliminates tax for producers
- No personal property tax on business equipment
- Low 5% state sales tax
- Strong manufacturing workforce
Drawbacks
- 7.9% corporate rate and economic development surcharge
- High top personal rate
- High property taxes on real estate
- Higher sales tax in Milwaukee
Compliance checklist
- File Articles of Organization or Incorporation with the Department of Financial Institutions.
- Register with the Department of Revenue for sales tax, withholding and income tax.
- Register with the Department of Workforce Development if you hire.
- File the annual report each year.
- File Form 4, 5S or 3 each year.
Compare Wisconsin with its neighbors below or estimate your taxes in the United States calculator. See LLC taxes for more.