MADISON — Starting Oct. 1, Wisconsin will no longer charge a sales tax on household energy bills.
The provision is one of several included in the bipartisan 2025-27 state budget that will take effect at the start of the month.
“Starting this week, Wisconsinites will no longer see sales and use taxes on utility bills, which means you’ll be keeping more of your hard-earned paychecks in your pockets — and that’s great news for folks, families, seniors, and so many others across our state,” Democratic Gov. Tony Evers said in a statement.
Here’s what to know.
Sales tax exemption moves from winter to year round
The state currently exempts household utility bills from sales taxes from November through April; however, the state’s 5% sales tax rate applies for the remainder of the year. When this provision takes effect, the exemption will last year-round. The exemption applies to permanent residences and not to businesses.
Estimated savings of $178M over two years
Eliminating the sales tax on electricity and natural gas bills is expected to save Wisconsin taxpayers an estimated $178 million over the biennium.
Wisconsin’s electric rates are already high
Wisconsin’s electric rates are among the highest in the Midwest, according to the consumer advocacy organization Citizens Utility Board.
The sales tax exemption is designed to provide relief especially to lower- and middle-income families, whose budgets are hit especially hard by energy taxes, advocates have said.
“Energy taxes are among the more regressive forms of taxation, taking up a significantly higher percentage of household budgets for lower and middle income families,” said state Sen. André Jacque, R-New Franken, who said in a statement the provision will provide “much-needed, broad-based relief.”
Provision a product of bipartisan work
This provision is part of the bipartisan, $111 billion state budget that Evers signed early on July 3, after a marathon legislative session sent the taxing and spending plan to the governor.
Evers included the proposal as part of the budget he introduced in February 2024. It had also been introduced as standalone legislation by Jacque, who celebrated its inclusion in the budget.
Jessie Opoien can be reached at jessie.opoien@jrn.com.
This article originally appeared on Milwaukee Journal Sentinel: Wisconsin sales tax exemption on household energy bills starts Oct. 1
