As tax season gets underway, Wisconsin taxpayers may be wondering how much the state collects and where their tax dollars go. According to the Wisconsin Department of Revenue, General Purpose Revenue (GPR) tax collections for the first half of Fiscal Year (FY) 2025—covering July through December 2024—totaled $9.7 billion, a 5.2% increase from the same period in FY 2024. While these revenues fund key state programs, the state’s record surplus has fueled debate over whether taxpayers should see relief or if the funds should remain in government reserves.

Breaking Down Wisconsin’s Tax Collections

The state’s primary tax sources fund critical programs, from education to infrastructure to public safety. The latest collection data from the Department of Revenue shows:

• Individual Income Tax: The largest contributor to state revenues, this tax brought in $4.7 billion, an 8.4% increase over the prior year. These funds primarily support K-12 education, the University of Wisconsin system, healthcare, corrections and shared revenue to local governments.
• General Sales & Use Tax: Generating $3.3 billion, up 2.7%, these taxes help fund similar programs as the individual income tax. 
• Corporate Income Tax: Collected from businesses, corporate tax revenue increased 3.8% to $1.2 billion. 
• Excise Taxes: These taxes—levied on specific goods like alcohol, tobacco, and gasoline—declined 5.6% to $246 million, primarily funding highway maintenance. 
• Other Revenue: Including taxes on real estate transactions and various fees, these collections totaled $267 million, slightly below last year’s figures.

The Budget Battle Over Wisconsin’s Surplus

Thanks to strong tax collections, Wisconsin has accumulated a record budget $4.6 billion surplus, leading to competing proposals over how to use the funds.

Republican lawmakers have repeatedly pushed for broad tax relief, arguing that the state is over-collecting from taxpayers and should return more money to families and businesses. In their most recent budget, Republicans passed a $3 billion tax cut, which included reducing income tax rates across brackets, eliminating retiree taxes, and tax cuts for married households. 

However, Governor Tony Evers vetoed these tax cuts last session, blocking Republicans’ plan and arguing that the state must prioritize funding for schools, local governments, and childcare. Instead. 

What’s Next for Wisconsin Taxpayers?

With the second half of FY 2025 now underway, the debate over the state’s tax collections and surplus is far from over. Republican legislators are expected to renew their push for returning more of the surplus to taxpayers, while Governor Evers and Democratic lawmakers will likely argue for maintaining the state’s financial cushion to fund public services and welfare expansion.

As the budget fight unfolds, Wisconsin taxpayers will be watching closely to see if they receive any relief—or if the state’s growing surplus remains in government hands.