Nonprofit, nonpartisan journalism. Supported by readers.

Donate
Topics

A familiar problem: $58 million payment from Wisconsin overdue

A payment of $58 million due to the state of Minnesota from Wisconsin for tax reciprocity hasn’t been paid, state officials say.
This is supposed to be the final payment under the old rules, where Minnesotans and Wisconsinites who work in the other

A payment of $58 million due to the state of Minnesota from Wisconsin for tax reciprocity hasn’t been paid, state officials say.

This is supposed to be the final payment under the old rules, where Minnesotans and Wisconsinites who work in the other state only had to file one state income tax return. The two states would then settle up their accounts, and Minnesota was always due lots of money because more Wisconsinites work in Minnesota than vice versa.

But Minnesota ended the deal last year, because … Wisconsin took too long to pay.

A report from the Minnesota Management and Budget department noted:

Article continues after advertisement

“Income tax reciprocity receipts were $58 million less than projected as Minnesota has yet to receive the final settle-up payment from the state of Wisconsin following the termination of the agreement that simplified filing for taxpayers who live in one state and work in another.”

MPR’s Tom Scheck checked with Wisconsin, which also has a new governor, to see what’s up. The state’s Revenue Secretary replied:

“Minnesota unilaterally ended the tax reciprocity agreement with Wisconsin 15 months ago, which appears to have led to a communications breakdown between past administrations. Our new administration, under Governor Walker’s leadership, is dedicated to working in good faith with our Minnesota partners, and that includes reviewing how to best meet previous payment agreements. We look forward to working with Minnesota to fix the broken agreement so taxpayers from both states can more easily file future tax returns.”

So the new Wisconsin administration seems interested in resuming recipricity, but I’m betting the new Minnesota Legislature will want them to pay up first. The big problem: A major cash flow problem is projected for Wisconsin this month. So maybe the check isn’t in the mail.