ST. PAUL, MN (WTAQ) – There are signs that Wisconsin residents who work in Minnesota could soon go back to filing just one state income tax return instead of two.
The Minnesota House Tax Committee chairman, Republican Greg Davids, has proposed a compromise bill.
It would re-write the formula for determining tax reciprocity, and would essentially drop the Gopher State’s demand for an additional $5 million a year from Wisconsin to make up for Minnesota’s loss of tax revenues under the arrangement.
Minnesota Revenue Commissioner Cynthia Bauerly tells the St. Paul Pioneer Press she wants to work with Davids on the bill.
Wisconsin Revenue Secretary Rick Chandler, who has balked at the extra payments, said the new discussions have “the makings of a deal.”
Wisconsin Senate Republican Sheila Harsdorf of River Falls says Davids’ bill “opens the door to reinstating the reciprocity agreement.”
Wisconsin and Minnesota had income tax reciprocity for over 40 years until former Gopher State Governor Tim Pawlenty cut it off in 2009. That was after Wisconsin got behind on the payments it made to balance out the revenues both states receive without the reciprocity.
Wisconsin was the paying party because more of its residents work in Minnesota than vice versa.
Former Wisconsin Governor Jim Doyle held back payments due to budget pressures. Current Governor Scott Walker paid Minnesota back in 2011.
(Story courtesy of Wheeler News Service)
