More than 170 years of paying personal-property taxes has lulled Wisconsin’s construction industry into a state of lethargy.
That is discouragingly uncharacteristic for an industry that rarely bows out of a fight.
When the Occupational Safety and Health Administration proposes new regulations, such as the recent changes to silica rules, the industry shakes its fists, arguing the added bureaucracy will increase the cost of doing business. State lawmakers who adjusted contributions to the unemployment insurance fund had to duck under the swings from industry representatives because the changes added considerably to contractors’ cost of doing business.
But now, while state officials invite people to make a case against Wisconsin’s personal-property tax, industry leaders, at least publicly, sit on their hands. Not one construction representative has testified during the first two hearings of the Legislative Council Steering Committee for Personal Property Tax even though the state’s abolishing the tax would save the industry millions.
Personal property is anything that can be removed from real estate without affecting its value, and Wisconsin started taxing those items before statehood. But in the past century-plus, exemptions to the tax have chewed away at its consistency, leaving a threadbare remnant of what once was a tightly woven law.
What remains is often as absurd as it is unfair. The property of nonprofit youth hockey and baseball associations, for example, is exempt. But nonprofit youth soccer associations are not so lucky.
Neither is the construction industry.
The state has not broken down personal-property tax payments by industry, but contractors certainly are big contributors to the nearly $290 million Wisconsin rakes in annually. At the start of every year, construction companies, among others, must report the value of all equipment and tools in the state.
Assuming contractors do not spend their New Year’s Eves spiriting their backhoes and bulldozers across state lines, those companies are kicking in money that others, such as manufacturers, do not have to spend.
But state officials are willing to find fixes to the inequality, though a solution will not come easily. Abolishing the personal-property tax almost certainly means the money has to come from somewhere else because officials from local governments, which collect the tax, will not willingly sacrifice any revenue stream.
There still is time to join the discussion, but, so far, the construction industry has slept through the alarm.
Maybe it’s the snooze-inducing name of the legislative committee. Perhaps tax debates and summer afternoons do not mix. Or maybe contractors have paid the tax for so long that it’s a bad habit as difficult to shake as a cigarette after dinner.
Whatever the reason for their inaction, construction leaders need to wake from their reverie and realize their go-to argument, “this increases the cost of doing business,” is exactly what state lawmakers need to hear. There will be a fight, but it’s one the industry can, and should, win.