The Problem:  Each December homeowners in Wisconsin receive a property tax bill levying property taxes on the value of their home and land. Many business owners receive two property tax bills – one for their land and buildings and another for the business’s “personal property” like furniture and tools. This second property tax bill for businesses originally covered a wide array of business property but over time the legislature exempted many items including manufacturing equipment, inventory, livestock, farming equipment, computers, fax machines and cash registers. Today about 80% of the business property that was once taxed has been exempted and an only odd hodge-podge of items remain.  While homeowners no longer pay property taxes on their furniture, businesses still do.

Last year, Wisconsin businesses paid more than $200 million in property taxes on “personal property”.  In contrast, Illinois, Iowa and Minnesota don’t have a personal property tax for businesses. In the most recent state budget, the Joint Finance Committee vote 14-0 to eliminate the personal property tax for most businesses and to reimburse local governments $200 million for lost revenues. Governor Evers vetoed the provision and maintained this irritating and obsolete tax.

“The personal property tax has evolved into a grab bag of exemptions and definitions that violates the basic principles of tax fairness, simple cost-effective administration, and low enforcement costs,” said Bill G. Smith, NFIB State Director in Wisconsin.

The Solution:  In the next state budget, Wisconsin should eliminate the personal property tax for businesses (other than utilities and railroads). The state should reimburse local governments for their lost revenues so that they can maintain local services.

 

Resources:

  1. https://wispolicyforum.org/research/the-property-tax-no-one-knows-the-personal-property-tax-fair-unfair-or-just-outdated/
  2. https://www.crowdreason.com/blog/property-tax-comparison-by-state

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