What does Milwaukee's new sales tax apply to? What's exempt?

 

MILWAUKEE (CBS 58) -- Now that Milwaukee adopted a new sales tax, you might be wondering what it will apply to.

After the Milwaukee Common Council passed a 2% sales tax increase, it will apply to some services and items that are currently taxed under the state's existing 5% sales tax.

The increase will add 2 cents on every dollar spent starting Jan. 1, 2024.

For now, the sales tax in the city will remain at 5.5%. That includes the statewide sales tax of 5% and Milwaukee County's current .5% sales tax. When the new city sales tax goes into effect it will go up to 7.5%.

There's also a series of items that are exempted from Wisconsin's sales tax.

In the Historic Third Ward, Milwaukee residents had a range of emotions about the new tax.

"It's only 2%, but it adds up, honestly, it does," said Azmi Aladdin, owner of Aladdin Taste of the East at Milwaukee Public Market.

"I think it's ridiculous, we're already paying too much with inflation," said Mike Klug, a construction worker in Milwaukee.

Others who weighed in say while it's unfortunate they'll be taxed at a higher rate for certain services and goods, they understood what's at stake without an increase. Milwaukee officials warned their looming fiscal crisis would mean drastic cuts to core services like police and fire departments without additional revenues.

"Nobody really loves taxes, right? But I think Mayor Johnson and leadership were in a tough position because you are looking at critical services being cut, which I don't think is good for Milwaukee," said Saj Thachenkary, a resident of Milwaukee.

Having the ability to raise the city's sales tax was made possible through a deal top Republicans, Gov. Tony Evers and Milwaukee leaders made in part of a larger package to boost funding to local governments.

"This was probably one of the toughest decisions any of the Common Council members are ever going to make, but we have no choice, the city has been starved for so long," said Ronald San Felippo, chair of business improvement in the Third Ward.