MADISON, Wis. (AP) — Wisconsin’s state tax burden increased slightly last year for the first time in a decade due largely to a pandemic-related economic surge, according to a report released Wednesday.
The nonpartisan Wisconsin Policy Forum’s study found total state and local taxes in Wisconsin grew to $34 billion last year, up 7.1% from 2020. Overall, combined state and local taxes rose to 10.5% of income in Wisconsin last year, up from 10.3% in 2020. The 2021 burden was still the fourth-lowest in Wisconsin Policy Forum records dating back to 1990.
Revenue from the state individual income tax rose 6.2% to $9.3 billion in 2021. Revenue from the state sales tax jumped 9.2% to $6.4 billion, the largest year-over-year increase since 1983. Corporate franchise and income tax revenue grew almost 60% to $2.6 billion, the biggest jump since 1961, according to Wisconsin Policy Forum archive data.
The report attributed the increase not to higher taxes but to a surge of pandemic-related economic activity, including the influx of federal stimulus dollars. The report also noted the growth is linked to collecting state and local taxes on online and out-of-state retailers.
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