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While online sales tax revenues did contribute to the surplus, the main drivers were federal pandemic relief aid, lower state spending and consumer price increases, according to a 2022 Wisconsin Policy Forum report.

“The growth in tax collections is due to factors that include federal pandemic relief, previously low interest rates, and the rise in consumer prices, which boosts sales tax revenues in particular,” the group found.

It attributed lower state spending to the federal government paying a larger share of Medicaid costs and lawmakers’ choice to limit the amount of one-time federal COVID-19 aid it sent to schools and local governments.

Online sales did contribute some to the state’s current surplus, however. The share of the sales tax made up from nonstore retailers — primarily online sales — increased from 3.6% before the pandemic to 7.5% in 2022, according to the Department of Revenue. 

This Fact Brief is responsive to conversations such as this one.


Wisconsin Department of Administration: November 2022 budget report

Wisconsin Policy Forum: The astounding state surplus

Google Drive: Nonstore (online) retailers

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Jacob Alabab-Moser / Wisconsin WatchFact Checker

Jacob Alabab-Moser joined as Wisconsin Watch’s fact checker in September 2022, as part of the effort by The Gigafact Project in partnership with different state-level news outlets to combat misinformation in the 2022 midterm elections. Jacob has several years of experience as a fact checker and research assistant at a variety of organizations, including at The Gigafact Project. He holds a BA from Brown University and is pursuing a MSc from the London School of Economics and Political Science.