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Wisconsin could get $90M in internet taxes by next summer

Associated Press

MADISON, Wis. (AP) — Wisconsin could rake in an additional $90 million worth of internet-sales taxes this fiscal year if lawmakers decide to start collecting them this fall, according to an analysis released Monday.

The U.S. Supreme Court last month upheld South Dakota’s plan to collect online-sales taxes, clearing the way for other states to follow suit. For some states, the ruling automatically triggers collection. Wisconsin has no statutes or administrative code that allows for collecting such taxes, however.

The Legislative Fiscal Bureau released a report on Monday finding that if Wisconsin legislators made statutory or regulatory changes in time to start collections by Oct. 1, the state would take in $90 million by the end of its 2018-19 fiscal year, which falls on July 1, 2019. The state would collect $120 million in the following year.

It’s unlikely lawmakers will make any of those changes before October; the Legislature isn’t scheduled to reconvene until January.

A state law from 2013 does require the state to adopt an equal reduction in income taxes if federal law mandates collecting online-sales taxes. It’s unclear if the Supreme Court’s decision technically amounts to a change to federal law. However, if Wisconsin adopted collections under 2017 rates taxpayers would save an average of $52, the analysis found.

The report also noted that if general-fund tax collections that exceed projections in the biennial state budget half of the additional amount must be deposited in the state’s rainy day fund. That could translate to $45 million for the fund if collections began by Oct. 1.
Gov. Scott Walker, who faces re-election in November, said last week that he would like to cut other taxes to offset online sales tax collections. He said he wants to ensure the Supreme Court ruling doesn’t result in a net tax increase.

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