Owners of small businesses in Wisconsin would no longer pay property taxes on machinery, tools and patterns not used for manufacturing under a tax package approved Wednesday by the Legislature’s budget-writing committee.
Lawmakers on the Republican-led Joint Finance Committee voted on party lines to eliminate a portion of the personal property tax, which applies, in general, to furniture, equipment, machinery and watercraft owned by businesses. The state would make payments to local taxing jurisdictions to replace the revenue lost from the tax — an estimated $74.4 million per year.
The co-chairs of the Legislature’s Joint Finance Committee said the partial repeal of the tax took precedence over two proposals included in Gov. Scott Walker’s budget: a $203 million income tax cut and a $17 million back-to-school sales tax holiday.
Co-chair Sen. Alberta Darling, R-River Hills, told reporters the proposed income tax cut “wasn’t significant enough.”
“While we want to continue cutting taxes, especially for the middle class, at this point we felt that a lot of middle class people are small business people,” Darling said. “By reducing that personal property tax, we’re really helping small business as well as middle class families.”
The Republican-led committee voted last month to approve the governor’s proposal to eliminate the state’s portion of the property tax. Ending the forestry mill tax will amount to a reduction of about $180 million over the two-year budget period.
Despite its delayed passage, both Darling and Nygren praised the 2017-19 spending plan, 40 percent of which Darling said is directed toward property tax relief.