A new report from the Wisconsin Policy Forum showed that the state’s sales tax revenues saw one of their largest year-to-year drops since 2016, according to the Wisconsin State Journal. The report suggests the negative impact of greater economic trends on a major revenue source for local governments.
Key sectors of the economy that comprise the majority of Wisconsin’s sales tax base — including retail, food service, wholesale trade, and manufacturing — recorded slowing sales tax growth and, in almost half of all cases, reported declines. The retail sector, accounting for almost half of Wisconsin’s total sales taxes, saw an increase of only 0.6% — mostly driven by online businesses like Amazon. Food service saw a 0.2% decline compared to last year. Conversely, transportation and warehousing reported an almost 23% jump in the first half of 2024.
March’s sales tax revenue this year was down 2.3% from March 2023. Excluding historic drops during the COVID-19 pandemic, the March drop was the biggest since 2016.
Businesses reported $2.73 billion in sales tax in the first half of this year — nearly unchanged from early 2023’s $2.72 billion. That is the smallest year-to-year growth since 2016, not including pandemic figures.
Dane County recorded a nearly 3% drop in sales tax revenues so far in 2024. Sales tax collections were expected to make up 12% of revenues this year and were projected to total roughly $90 million. Adjusted for inflation and accounting for declines, however, the county’s sales tax revenue is still well above 2016 levels.
