By BRYNA GODAR
MADISON, Wis. (AP) — More than 30 trade associations and businesses are banding together to end Wisconsin’s personal property tax.
Many states have long chipped away at a tax on personal property such as furniture, equipment and machinery. In Wisconsin, that process of exempting property from the tax has left a piecemeal structure in place that businesses say is unfair and disproportionately affects small businesses.
“There’s no rhyme or reason to what is exempted and what’s not,” said Michelle Kussow from the Wisconsin Grocers Association, which is a member of the new Coalition to Repeal Wisconsin’s Personal Property Tax. The coalition includes 31 major business interests in the state like AT&T, American Family Insurance, Wisconsin Manufacturers and Commerce, and the Wisconsin Restaurant Association.
While many legislators agree the tax should go, there is disagreement about how to fill the hole it would leave for local governments.
Personal property taxes make up less than 3 percent of total taxes, which came to about $253 million last year, according to a Department of Revenue fiscal estimate. Shifting that to property owners would increase the average property tax bill by about $80, the estimate found.
Sen. Duey Stroebel, a Saukville Republican who authored the bill to make that shift, said the tax is antiquated, inequitable and unfair. He said he thinks it would make sense to start phasing out the tax in the next budget.
But Democratic lawmakers, including Senate Minority Leader Jennifer Shilling, oppose shifting that burden onto homeowners.
“There’s fairly wide agreement that it maybe has outlived its usefulness,” said Todd Berry, president of the Wisconsin Taxpayers Alliance. “The hiccup, if you will, is that if you get rid of it, then local governments have to find a way to generate that money.”
In the past, Berry said, the state has covered the lost funds for municipal governments when they exempt personal property taxes. But with the state’s on-and-off budget problems, he said, there’s always something lawmakers would rather spend the money on.
Tom Evenson, a spokesman for Gov. Scott Walker, said in an email that the governor is committed to ensuring property taxes are lower in 2018 than they are today. He said any specifics would be presented in Walker’s budget next year.
Kit Beyer, a spokeswoman for Assembly Speaker Robin Vos, said in an email that the Republican lawmaker has been a supporter of repealing the personal property tax in the past. She said he feels it’s important to examine all the tax policies moving forward to determine what reforms are most beneficial to help grow the economy.
The Coalition to Repeal Wisconsin’s Personal Property Tax hopes to find a solution and repeal the tax entirely. Kussow said they don’t have a solution for where the funding should come from but think it’s the right time to push for changes as the Legislature looks to make business-friendly changes.