Minnesota-Wisconsin tax reciprocity talks may resume

Tax reciprocity with Wisconsin, which has been eliminated to help with Minnesota’s budget deficit, may be back in play.

The longstanding policy had allowed residents of the two states who live or work in the other state to file only one state tax return. But Wisconsin has been pokey in repaying Minnesota’s share of the take — which results from far more Wisconsites working in Minnesota than vice versa — and that hurt Minnesota’s bottom line.

Now, Sen. Kathy Saltzman, DFL-Woodbury, reports new interest in resuming discussions.

“Last Friday, I was contacted by the Wisconsin Senate Majority Leader’s office and asked to convey to our administration that the Wisconsin Legislature would be willing to call itself into an ‘extraordinary session’ for the purpose of passing legislation specific to restoring reciprocity,” Saltzman said in a statement.

She asked Minnesota Revenue Commissioner Ward Einess to speak with Wisconsin officials, and now both sides seem interested in “jump-starting negotiations,” she said.

Einess, though, wants to wait until early December, after the next state budget forecast.

Reports Saltzman:

If a new agreement is not reached, 13,000 Minnesota residents who work in Wisconsin will need to file a separate Wisconsin income tax return for income earned after Jan. 1, 2010. In addition, about 8,000 of these filers will experience an average additional tax payment of $300 to Wisconsin, according to Minnesota’s Department of Revenue. About 33,500 Wisconsin residents are expected to be affected by the change.

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