MILWAUKEE — The new year starts with new taxes in Milwaukee. The city’s new 2% sales tax goes into effect and the county sales tax will increase from .5% to .9%.
The state of Wisconsin imposes a 5% sales tax, so buying something in the city will now come with a combined 7.9% tax. That’s up from the previously combined 5.5%.
Milwaukee leaders said they needed theses taxes to keep essential services funded and avoid bankruptcy.
If someone buys an automobile, however, the tax rules are different.
When buying a car, buyers pay the sales taxes where they live, not where they buy, according to state law.
“Specifically, to automobile purchases, the tax will be solely determined by where you live, so if you live in Waukesha County or Racine, for example, you won’t pay that tax,” said Andy Schlesinger, president of Andrew Automotive Group.
Schlesinger owns Andrew Toyota and Andrew Chevrolet, located in Milwaukee County and the City of Glendale.
Schlesinger said if you bring a car that you purchased from him — or any other dealership — to his service department, it’s a different story.
“An important clarification point is regardless of where you live — for example, if you come to our dealership in Glendale in Milwaukee County, you will only pay the .4% county tax, because that is the tax increase outside the City of Milwaukee,” Schlesinger said.
David Gleason is a City of Milwaukee resident. He said he chose to buy a car before Jan. 1 to avoid the new city sales tax.
“Lucus inspired me, my salesperson, to make the purchase because of the sales tax before it went up, you know. Save some money-put it somewhere else,” said Gleason.
Gleason said he saved about $500 by purchasing his vehicle before Jan. 1 and will use that money for home improvements.
Gleason said he can still live with the new sales taxes by sticking to a budget.
“I’m learning to spend wisely, just adapt to the situation,” said Gleason.
Schlesinger said even if you have to pay the combined 7.9% city, county and state taxes next year, the extra cost can be spread out by financing a multi-year loan.
He also said car buyers can look forward to anticipated lower gas prices and an improvement in supply chain challenges.
“There is definite improvement in the supply chain certainly dealer inventories are much better than they were, parts are still a bit of an issue, but they are improving, and I suspect it’s going to continue to improve as we go forward into 2024,” said Schlesinger.
Schlesinger said he has high hopes for the new year both in his industry and for the economy.