Regulatory Update

• By: MEUW Administrator
• On: 09/04/2025 17:11:37
• In: Regulatory

A new law signed in July makes residential electricity and natural gas usage exempt from the state sales tax year-round. Previously, energy usage was tax exempt only during the months of November through April, when home heating is considered an essential service. The sales tax exemption takes effect Oct. 1.

The Wisconsin Department of Revenue (DOR) has provided guidance to implement the new exemption. DOR said the exemption is based on the bill date, not the usage or meter reading date. Electricity or natural gas is considered "sold" at the time of billing.

This means:

• Bills issued before Oct. 1, 2025: Tax applies, even if some or all of the usage occurred in October.
• Bills issued on or after Oct. 1, 2025: Tax exemption applies, even if some of the usage occurred in September.
• Mid-month billing cycles (e.g., Sept. 15 – Oct. 15): If  the bill is dated prior to Oct. 1, sales tax must still be charged on the entire billing period.

The interpretation is outlined in Wis. Stat. § 77.54(30)(b) and Wis. Adm. Code Tax 11.57(2)(n).
These rules also apply to any county's 0.5% sales tax.