When buying a used car in Wisconsin, don’t get caught off guard by the state’s vehicle sales tax. Wisconsin charges a 5% statewide tax on car purchases.
Wisconsin’s 5% is charged on your vehicle's purchase price. On top of that, you may owe local taxes as well. And then there are the fees.
Keep reading to get the scoop on Wisconsin's vehicle sales taxes and fees.
Do you Pay Taxes When you Purchase a Car From a Private Party in Wisconsin?
When making a car purchase in Wisconsin, you’ll pay 5% of the vehicle’s purchase price, whether you buy from a private seller or a car dealer. Wisconsin tax law does not discriminate between the two. Unless you qualify for a tax exemption (discussed below), you have to pay tax on your vehicle purchase.
In addition to the 5% Wisconsin state sales tax on car purchases, some Wisconsin counties charge local vehicle sales taxes.
Local Sales Tax
68 out of 72 Wisconsin counties have an additional 0.5% car sales tax rate. That means that if you live in one of those 68 counties, you will pay a 5.5% tax rate.
See a complete list of all Wisconsin county tax rates on this official resource.
Wisconsin Local Sales Tax Example
You're in Green Lake County, and you find a stunning Nissan GT-R for $60,000.
Green Lake County’s sales tax is 0.5%. This means you'll owe $300 in county tax ($60,000 multiplied by .005). Add the local tax to the state sales tax due of $3000 ($60,000 multiplied by .05) and you owe a total tax bill of $3,300 on that GT-R.
What If I Paid Sales Tax In Another State Already?
When purchasing vehicles out-of-state you will have to pay a 5% use tax. Depending on where in Wisconsin the car is registered, you may have to pay local use tax as well. The use tax ensures that vehicles purchased within the state and cars brought into the state are taxed identically.
Use tax is based on the fair market value (FMV) of the vehicle rather than the purchase price. In most cases, the FMV and purchase price should be close—unless you get a screaming deal.
If you paid sales tax on the purchase of a vehicle in another state, Wisconsin deducts that tax so that you are not taxed twice. There are four potential scenarios (leaving out local taxes for the sake of simplicity).
- You paid exactly 5% sales tax in North Dakota (the only other state with the same tax rate as Wisconsin), in which case Wisconsin will give you a pass.
- You paid no sales tax in another state, in which case you owe the full 5% Wisconsin sales tax. Let's say you bought a used car in Montana and didn’t pay sales tax, given Montana’s 0% tax rate. You’ll pay Wisconsin’s full 5% sales tax.
- You paid less than 5% sales tax in another state, in which case Wisconsin charges you the difference.
- You paid more than 5% in the other state (for example, Minnesota levies a 6.85% tax on every used vehicle purchase). We wish we could tell you Wisconsin will give you a refund, but no. At least they won’t charge you any more tax.
Wisconsin Registration, Title and License Plate Fees
In addition to the state sales tax, you may owe other fees when buying a car and registering it in Wisconsin, such as a car title fee and registration fee.
To register your vehicle at the Wisconsin Division of Motor Vehicles (DMV) branch office, you must show proof of used car insurance. The first time you register a passenger car, you will need to transfer ownership, which will cost you $164.50 (or $157 for a low speed vehicle).
According to the Wisconsin DMV, registration fees are the following:
The Wisconsin standard license plate fee is included in the registration fee. A personalized plate costs an additional $15.
How is Used Car Sales Tax Calculated in Wisconsin?
Wisconsin vehicle tax is calculated as a percentage of the vehicle's purchase price. Some people think they can outsmart the state by negotiating a low "official" purchase price and paying the rest in a side transaction. But the Wisconsin Department of Revenue (DOR) can't be fooled so easily.
If the Department of Revenue suspects that the purchase price of the vehicle was artificially decreased, they will calculate sales tax based on the car's fair market value or book value.
The DOR establishes what the car is worth on the open market by referring to Kelley Blue Book, NADA value, or other reliable sources on used car prices. If they conclude that the car's fair market value is greater than its purchase price, they can opt to base sales tax on the fair market value.
It is important to note that underreporting the purchase price of a motor vehicle in order to avoid paying sales tax is illegal.
How to Pay Vehicle Sales Tax
After buying a car from a private seller, you will pay the sales tax. Here is how to do it:
- To transfer the title, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Wisconsin bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
- The original car title.
- Proof of valid vehicle insurance.
- Valid driver’s licenses or IDs
- Calculate the sales tax due. Multiply the vehicle's purchase price by 5%.
- Submit payment for all taxes and fees.
- Get payment proof from the Wisconsin DOR.
- Get your registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary documentation, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will get your new license plates by mail.
How to Avoid Paying Sales Tax on Cars in Wisconsin ?
Taxes are something you just can't avoid—they are a part of our lives. You are required by law to pay tax on private used vehicle purchases in Wisconsin or any other state that charges sales tax—unless you meet an exemption in Wisconsin.
Wisconsin Car Sales Tax Exemptions
Here are some sales tax exemptions for used car purchases in Wisconsin:
- Personal property traded for a car with no money exchanged.
- Members of one of the federally recognized Native American tribes and live within reservation boundaries (to qualify for the exemption, the vehicle must be delivered to the reservation).
- Transactions made within a family.
- Vehicles purchased by a registered non-profit.
- Vehicles purchased by certain governmental entities.
To see more on vehicle sales tax exemptions, see Wisconsin’s “Sales and Use Tax” PDF.
Is Purchasing a Car from a Dealer Better?
A lot of people mistakenly believe that buying a car from a Wisconsin dealer saves money. The opposite is true.
- Dealerships charge documentation fees above and beyond all the other taxes and fees you have to pay (the other taxes and fees are exactly the same whether you buy from a dealer or a private seller, by the way). An average documentation fee in Wisconsin is $299.
- Used car dealerships typically charge higher prices. Their business model is based on buying low and selling high to generate the spread that keeps them in business. To get the best deals, skip the middleman andWhich state has the cheapest car tax?
- The states with the cheapest car tax are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has no taxes on private-party car sales, though it does have them for dealership purchases.
- If you really want to avoid car sales tax, you might consider moving to one of these states.
- With the exception of the above states, all US states charge sales tax on private-party vehicle purchases. There are some states, such as Oklahoma, North Carolina, Colorado, and Alabama, that charge 4.5% or less.
- go directly to private sellers.
We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. In fact, that’s why we exist. PrivateAuto gives you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself.
By shopping for a used car on PrivateAuto, you avoid the doc fee and get lower prices by purchasing directly from private-party sellers.
Wisconsin Sales Tax Calculator
If you're in the market for a used vehicle, you'll want to calculate the applicable sales tax. With PrivateAuto's used car sales tax calculator, calculating sales tax has never been easier. This free online car sales tax calculator calculates the amount of tax you must pay on a used car purchase based on your sales tax rate (5%) and the vehicle's price.
Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments via our banking gateway, PrivateAuto Pay. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.
Here are the steps to selling your car in Wisconsin.
- Gather the required paperwork for selling a vehicle in Wisconsin
- Register on PrivateAuto and get verified
- List your car
- Set your terms
- Vet incoming offers
- Choose a buyer
- Schedule a meeting
- E-sign documents
- Get paid, instantly
- Transfer title
WI Sales Tax Frequently Asked Questions
How much sales tax should I expect to pay if I live in Green Bay?
If you live in Green Bay, you will have to pay a total of 5.5% sales tax. If your vehicle purchase was $20,000, the total amount you will have to pay is $1,100.
Why is the title transfer fee in Wisconsin so expensive?
There are a few reasons why title fees are so expensive.
- To help offset the DMV's operating costs.
- To generate revenue for the state.
- To discourage people from buying and selling vehicles frequently.
What is the dealer plate use tax rate in Wisconsin?
In Wisconsin, the dealer plate use tax is $191 per plate per month. This tax is levied on motor vehicles assigned to specific dealer employees who are subject to federal income tax withholding on wages or certain dealership owners. The tax is calculated by multiplying $191 by the applicable use tax rate (5% or 5.5%).