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Increased sales tax would be unavoidable for Milwaukee residents on the market for new car

People who live in Milwaukee wouldn't be able to avoid the bigger sales tax by buying a car in a neighboring suburb or in Waukesha County which has the lowest sales tax in the state.
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Posted at 4:02 PM, Jul 10, 2023
and last updated 2023-07-10 19:22:45-04

MILWAUKEE — The Milwaukee Common Council will vote Tuesday on whether to raise the city's sales tax by 2 percent.

An extra two cents on each dollar spent may not be felt as much on small purchases, but it could make a substantial difference on big-ticket items.

Let’s go in-depth on how much more it would cost you for arguably the biggest item that’s subject to this tax — and why those who live in Milwaukee wouldn’t be able to shop elsewhere to avoid it.

Replacing a bad car battery is Gebrel Miller’s first priority, but the next is finding something new.

"I'm actually in the process of buying two trucks,” he said.

Miller says the trucks are a necessity to run his business. He’s thankful he’s ready to buy them soon as the city is set to vote on a substantial sales tax increase.

“It's extra money, a percentage that doesn't come back to me,” he said.

"If you're in the market now, I mean, right at this moment, buy a car now,” said Jim Tolkan.

Tolkan is the president of the Auto Dealers Association of Metro Milwaukee, which represents more than a hundred car dealerships in the area.

“What do you think this means for people who are on the market for a new car if this does pass?” TMJ4 reporter Ben Jordan asked.

"The bottom line is it's going to increase the overall cost of the vehicle,” Tolkan replied.

If Milwaukee city leaders approve the 2 percent sales tax and the county follows with a .4 percent increase, a $17,000 car would come with an extra $404 in sales taxes. A $43,000 car would cost $1,041 more for Milwaukee residents.

"I'm 100 percent sure there will be some people surprised,” Tolkan said.

Tolkan says the most important thing to remember is you pay sales tax on a new or used car based on where you live or where your vehicle is garaged.

That means people who live in Milwaukee can’t avoid the bigger tax by buying a car in a neighboring suburb or in Waukesha County which has the lowest sales tax in the state.

"That end county and the city's within that county, they have some responsibility for maintenance of the roads and you're going to drive your car probably more often in the immediate area that you live so they should get the extra tax money,” he said.

Tolkan says this would have the biggest impact on low-income residents who have less to spend on a vehicle.

"Maybe they're going out to buy a car out of necessity and they only have we'll say $5,000 to spend and that includes license, tax and title,” he said. “Well now, at $5,000 they may be $250 over budget because of the additional sales tax."

It’s a decision that could mean your money doesn’t go as far, especially if you’re looking for a new or used car.

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