Capitol Week-in-Review – June 22, 2017

A Call to Action for WIB Members

The legislature’s budget-writing committee is finishing up their work on the state’s next two-year budget and all reports indicate that repeal of the personal property tax is “on the table” for possible inclusion as part of the budget.

With that in mind, we are asking members to contact Governor Walker and state legislators to let them now that it’s time to get rid of this unfair tax on small, independent businesses.

Click here to send a message to Governor Walker.  Legislators can be reached via the Legislative Hotline (toll-free)  at 1-800-362-9472. If you do not know who represents you in the Wisconsin State Legislature, click here.

Thank you in advance for your assistance.

New Hope for a Minnesota-Wisconsin Tax Reciprocity Agreement

For decades, Minnesota and Wisconsin had an income tax reciprocity agreement. Residents who lived in one state and worked in the other only had to file an income tax return in their state of residence, rather than in both states.

Minnesota ended the tax reciprocity agreement with Wisconsin in 2009. At that time, Minnesota wanted accelerated payments from Wisconsin to improve Minnesota’s cash flow and an updated benchmark study of the amount of taxes border-crossers owed to the two states. To address these issues, Wisconsin offered to:

  • Provide payments to Minnesota that would rise from the $58 million that was paid for tax year 2009 to $87 million for tax year 2015 and more in future years;
  • Make payments to Minnesota on a quarterly basis; and
  • Base future payments on a benchmark study completed in 2013.

Minnesota rejected that offer and requested an additional provision whereby the State of Wisconsin would make an additional payment of up to $6 million to Minnesota to cover the cost of a tax increase imposed by the State of Minnesota on its own residents who work in Wisconsin when the prior reciprocity agreement ended. Wisconsin rejected this new provision.

It now appears that the State of Minnesota is softening its negotiating position. Minnesota Governor Mark Dayton recently signed into law a provision authorizing a new income tax reciprocity agreement between Minnesota and Wisconsin. The income tax reciprocity provision calls for a dual track approach.

In tax year 2017 and beyond Minnesota residents working in Wisconsin will be eligible for an income tax reciprocity tax credit. For tax year 2018, the Commissioner of the Minnesota Department of Revenue is directed to work with the Secretary of the Wisconsin Department of Revenue to enter into a new income tax reciprocity agreement.

We hope these negotiations will lead to a new, long-term Minnesota-Wisconsin tax reciprocity agreement.

Wisconsin Supreme Court Justice Announces Retirement

Last Thursday, Wisconsin Supreme Court Justice Michael Gableman indicated that he will not seek re-election to the Wisconsin Supreme Court.  This unexpected announcement caught even the most astute political observers by surprise. Traditionally, Supreme Court Justices serve for more than one term.

Justice Gableman was elected to a ten-year term on the state’s highest court in 2008. Next spring, Wisconsin voters will choose his replacement.