A flatbed tow truck loading a car at dusk, How to Start a Towing Business in Wisconsin

How to Start a Towing Business in Wisconsin

Last verified: November 10, 2026

A towing business in Wisconsin is regulated from three directions at once: the state entity and tax filings every business makes, a short list of state statutes written specifically about towing, and the ordinances of the city or county that sends you calls. This guide takes them in the order you will meet them, and it says plainly where we could not confirm a requirement. If you are weighing towing against hauling freight, the trucking company guide covers for-hire freight authority, which is a different set of filings.

What You Need Before You Begin

Gather these before you file anything:

  • A business structure: sole proprietorship, LLC, or corporation (Step 1).
  • A business name that meets Wisconsin naming rules if you form an entity.
  • A registered agent with a physical Wisconsin street address and an email address, for an LLC or corporation.
  • An EIN from the IRS if you form an entity or hire employees.
  • A truck and a place to keep it. If you will store vehicles, you also need a lot, and your city or county decides what that lot needs.
  • Insurance quotes from agents who write towing or garage coverage, along with a list of the municipalities you want calls from.

Step 1: Choose Your Business Structure

The structure decides which state filings you make. A tow operator is regularly in custody of someone else's vehicle, so liability is the main question, and a separate entity is the usual answer. Whether it fits you depends on your insurance and your finances, so ask an attorney or CPA before you decide.

Sole Proprietorship

You file nothing with the Wisconsin Department of Financial Institutions (DFI) to operate under your own name. The Wisconsin Small Business Development Center notes that Wisconsin Statutes do not require registration for a sole proprietorship (Wisconsin SBDC business FAQ, snapshot of July 13, 2026). You are personally liable for the business's debts and claims.

Limited Liability Company (LLC)

File Articles of Organization (Form 502) with DFI. The filing fee is $130 online (the DFI fee table lists $170 on paper). Domestic LLCs file an annual report for $25 online or $40 on paper. The fee amounts come from the DFI fee table (DFI fees, snapshot of October 19, 2026) and Wis. Stat. 183.0122(2)(a).

Corporation

Articles of Incorporation (Form 2) cost $100 under Wis. Stat. 180.0122(1m)(a), and the corporation's annual report is $25 online or $40 on paper. A corporation can elect S-corporation tax treatment, but it brings more recordkeeping, and that is a question for your CPA.

Step 2: Register Your Business Name

An LLC name must include "limited liability company," "limited company," "LLC," or "LC" (Wis. Stat. 183.0112(1)). Search the DFI business entity search first. DFI says no name is available until a filing is accepted, and a name someone has reserved can count against you.

To hold a name while you prepare paperwork, DFI's name reservation (Form 1) costs $15 for an LLC or corporation and lasts 120 days (DFI Form 1).

A sole proprietor trading as "Joe's Towing" is not required to register that name. DFI offers an optional Tradename registration for $15 that lasts 10 years (DFI trademark fees). A tow operator's name appears on signs, invoices, and the police notices described in Step 7, so decide on the name you will use everywhere before you buy lettering for the truck.

Step 3: File Your Formation Documents

Wisconsin entity filings go to DFI, not a Secretary of State. File the LLC Articles through DFI's online filing portal. Include your registered agent and the agent's email address. If you need an answer faster, DFI's optional expedited service adds $100 and is acted on by close of business the next business day. Statute 183.0210(3) gives DFI five business days to return a document or notify you that it was refused, so that is a refusal deadline, not a promised approval time.

You can file yourself or hire a formation service. Our Wisconsin LLC services comparison sets the two side by side.

Step 4: Name a Registered Agent

Every Wisconsin LLC and corporation keeps a registered agent and registered office in the state. The agent is either a Wisconsin-resident individual or an entity whose business office is the registered office, and the office must be an actual street address, not a P.O. box, mailbox service, or answering service (Wis. Stat. 183.0115, Form 502 instructions). A garage or office where someone is present during business hours can work for a tow operator, and a lot with no staff cannot. A change of registered agent costs $10 online or $25 on paper.

Step 5: Register for Taxes and Employer Accounts

Seller's Permit

The Department of Revenue charges $20 for a seller's permit covering two years and $10 to renew (DOR Business Tax Registration FAQ, snapshot of October 9, 2026). Register through the Business Tax Registration portal. We did not find an official statement on whether towing, recovery, and storage charges are taxable sales, so confirm that classification with DOR before you set your invoice format. The state rate is 5%, and most counties add 0.5% (the Wisconsin Statutes, ch. 77, and DOR new business page).

EIN

The IRS issues an EIN free (IRS: Get an EIN). Apply only on irs.gov, because look-alike sites charge for the same form.

Employer Accounts

Workers' compensation coverage is required once you have three employees, or one employee paid $500 or more in a calendar quarter for Wisconsin work (DWD workers' compensation for employers). A tow operator who hires drivers will usually pass that line quickly. Unemployment insurance coverage starts at $1,500 in wages in a quarter or employment in 20 or more weeks (DWD unemployment insurance employer handbook, snapshot of July 6, 2026). The Wisconsin One Stop Business Portal handles DFI, DOR, and DWD registrations in one application, but only for new LLCs and corporations (snapshot of October 11, 2026).

Step 6: Plan Your Insurance

We could not find a statewide minimum insurance amount for towing in the sources we read, so the figure that binds you is whatever your customers and licensing municipalities require. Before you quote a price to anyone, ask each city or county you want calls from what coverage it requires in writing, and ask an insurer who writes towing policies to price it. Three coverages are worth asking about by name:

  • Auto liability on the tow truck itself.
  • Garage keepers or on-hook coverage for customer vehicles while they are in your care or on your lot.
  • General liability for your premises, and workers' compensation once you reach the Step 5 threshold.

The reason to ask before you buy is that a policy sized for one contract may be too small for the next.

Step 7: Does Wisconsin Require a State Towing License?

We found none. In Wis. Stat. ch. 349 (the Wisconsin Statutes chapter 349 PDF, Wayback snapshot of October 9, 2026) the only provisions that mention a towing service are rules about how it must act, not a license to hold one. We also found no towing license on the WisDOT operating authority page (WisDOT motor carrier operating authority, snapshot of October 14, 2026). We have not read every chapter of the statutes or code, so this is a finding about what we read, not a statement that no license exists. Confirm it with WisDOT Motor Carrier Services at 608-266-9900 before you buy a truck.

Do You Need WisDOT Operating Authority?

WisDOT defines operating authority as permission to carry property for someone else for compensation, or to carry passengers for compensation. Property carriers within Wisconsin apply on Form MV2843 and receive an "LC" number. We could not find a statement on whether hauling a customer's disabled vehicle counts as carrying property for hire, so ask WisDOT Motor Carrier Services ([email protected]) in writing and keep the reply. Do not rely on a tow company's or a forum's answer for this.

What State Law Does Say About Towing

Section 349.13 of the Wisconsin Statutes sets rules you will work under every week:

  • Police-directed removals: a traffic officer may have an illegally parked or freeway-obstructing vehicle moved, and local authorities may contract for the removal. Charges are regulated by local ordinance, so your rates for that work come from the municipality (349.13(3)).
  • Private-property tows: a vehicle can be removed from private property only by a towing service at the request of the property owner or agent, a traffic officer, or a parking enforcer, and only if the property is properly posted or a citation has been issued (349.13(3m)(b) to (d)).
  • Tell the police first: before removing a vehicle from private property, the towing service must give a local law enforcement agency the make, model, VIN, plate number, and destination. A service that has not made a good faith effort to do so may not collect its charges, and in a first-class city it may not collect at all without compliance (349.13(3m)(d)2. and (dr)).
  • Stolen vehicles: a towing service may not remove a vehicle reported stolen (349.13(3m)(dr)1.).
  • Municipal service fee: if the municipality asks, you collect a service fee of up to $35 from the owner and remit it (349.13(3m)(dm)).
  • Unpaid charges: a vehicle left unpaid 30 days after removal, with no written installment agreement, is deemed abandoned (349.13(3m)(d)3.).
  • Personal property: you must release personal property in the vehicle to the owner during regular office hours on proof of identity, and you may not charge for it (349.13(5)(b)).

The statute directs the Department of Transportation to set reasonable removal and storage charges for private-property tows where no citation was issued, and it cross-references chapter Trans 319 of the Wisconsin Administrative Code for that. We did not read Trans 319 itself, so read it before you set storage rates.

City and County Rules

Because charges and contracts for police-directed tows are set locally, your city or county is where licensing, rotation lists, and rate schedules come from, and they differ place to place. We looked at the Madison clerk's licenses and permits page on November 10, 2026: it lists categories such as auto salvage dealer, taxicab, and motor bus but no towing license. The Milwaukee and other city sites were not readable from our systems, so we cannot tell you what they require. Call the clerk or licensing office of every municipality you want to serve and ask whether it licenses tow operators, how it chooses companies for rotation calls, and what it requires for an impound lot. Zoning for the lot is a separate question for the planning department.

Commercial Driver License

The weight lines come from federal rules. A straight truck with a gross vehicle weight rating of 26,001 pounds or more is Group B, and a combination with a gross combination weight rating of 26,001 pounds or more is Group A when the towed unit's rating exceeds 10,000 pounds (49 CFR 383.91, via Cornell LII). Most light and medium wreckers stay below those lines, and a heavy wrecker or a rotator does not. Check the rating plate on any truck before you buy, and confirm the Wisconsin requirements with the WisDOT motor carrier credentials page.

Step 8: Set Up Your Operations

Lot and Facility

If you will hold vehicles, ask the city or county first whether your site is zoned for it and what it requires for fencing, lighting, and records. Private-property tows send vehicles to you with a 30-day clock on unpaid charges, so know where you stand with the local rules before the first one arrives.

Bank Account

Open an account in the entity's exact legal name, using your EIN and filed formation documents. Keep customer money separate from your own, because a liability shield only helps a business that is run as a separate one.

Step 9: File Your Annual Report

An LLC or corporation files its first annual report in the year after the calendar year of formation, in the calendar quarter of the anniversary of its registration. The fee is $25 online or $40 on paper. Due dates fall on March 31, June 30, September 30, or December 31, depending on your quarter. DFI says delinquent status is cured by filing the current report and paying back fees, and an LLC can be administratively dissolved if fees stay unpaid for a year after they were due (Wis. Stat. 183.0708(1); DFI business entity FAQ, snapshot of October 17, 2026).

Common Mistakes to Avoid

  • Towing without telling the police. The notice in 349.13(3m)(d)2. is the step that decides whether you can collect your charges on a private-property tow.
  • Removing a vehicle from unposted property. Without proper posting or a citation, the statute does not authorize the removal.
  • Assuming rates are yours to set. For police-directed tows the municipality regulates the charges.
  • Assuming a CDL is unnecessary. Check the weight rating of the truck and the load it will pull.
  • Skipping the written answer from WisDOT on whether you need operating authority.
  • Mixing personal and business money. It weakens the protection you formed the entity to get.

Cost Summary

ItemCostSource
LLC Articles of Organization (Form 502)$130 online, $170 paperDFI fee table; Wis. Stat. 183.0122
Corporation Articles of Incorporation (Form 2)$100Wis. Stat. 180.0122
Name reservation, 120 days$15DFI Form 1
Optional Tradename for a sole proprietor, 10 years$15DFI trademark fees
Optional expedited DFI service$100 added to the filing feeDFI FAQ
Annual report, from the year after formation$25 online, $40 paperDFI fee table
Registered agent change$10 online, $25 paperDFI fee table
Seller's permit, two years$20 (renewal $10)DOR Business Tax Registration FAQ
Municipal service fee on police-directed removalsUp to $35, collected for the municipalityWis. Stat. 349.13(3m)(dm)
Local towing or impound licenseSet by each city or county: confirmYour clerk's office
WisDOT intrastate operating authority (MV2843)Confirm with WisDOT whether it applies and the feeWisDOT Motor Carrier Services
Insurance premiumVaries by carrier and riskInsurer quotes

Disclaimer

This article is informational only and is not legal, tax, or insurance advice. Towing rules in Wisconsin come from state statutes and from local ordinances that differ by municipality, and they change. Confirm every requirement with the agency named, and talk to an attorney about liability and contracts. This guide was reviewed on November 10, 2026.

Sources

Keep exploring: related Wisconsin guides