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Wisconsin pays its bill, so tax reciprocity may return

With Wisconsin’s payment of $60 million in overdue taxes to the state of Minnesota, efforts can begin to rebuild a new tax reciprocity agreement between the two states, Wisconsin Gov. Scott Walker said today.

An old reciprocity agreement was ended in 2009 by then-Minnesota Gov. Tim Pawlenty, because Wisconsin hadn’t kept up on its payments to Minnesota. Wisconsin always owed Minnesota money under the deal, because it collected more state tax from Wisconsin residents working in Minnesota than the other way around. Under the reciprocity deal, those residents living and working in different states were required to file just one state tax return that covered both states.

The two states will now work on a new reciprocity deal, Walker said today.

“We want to make life easier for taxpayers and pay our bills,” Walker said. “With this payment we can continue talking with our Minnesota neighbors about restoring our reciprocity agreement. Renewing a reciprocity agreement will ease tax-filing for over 55,000 Wisconsinites and 20,000 Minnesotans.”

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