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Lawmakers to Propose Dropping Personal Property Tax on Businesses
Republican lawmakers plan to soon introduce a bill that would gradually repeal all personal property taxes on businesses and eliminate some state payments to municipalities.
State Rep. Bob Kulp (R-Stratford), a co-author of the bill, said the measure would eliminate a class of taxes that has overburdened large and small businesses and would make Wisconsin more competitive with neighboring states.
"It's overdue because it makes us less competitive than other states," he said. "We're the only Upper Midwest state with it still in effect."
Illinois and Iowa exempt tangible personal property from tax rolls and Minnesota taxes much less personal property than Wisconsin. Items such as office furniture, some manufacturing equipment, machinery and tools are considered personal property.
Personal property taxes make up close to 3% of the overall tax base statewide. But that figure varies by municipality. In Green Bay, personal property accounted for about 5% of the total property tax base in 2013, or $6.6 million. In Milwaukee, those figures were about 3.5%, or $26.3 million.
Kulp said the hit municipalities would take would be spread out over a few years. All personal property placed in service by businesses on or after Jan. 1, 2016, would be exempt from the tax. The tax would be eliminated completely by January 2020.
Supporters and opponents of the change agree the personal property tax code is difficult to comply with and takes a lot of time to enforce.
"The personal property portion of our operation is a fairly big chunk of time," said Milwaukee Assessor Steve Miner. "In a lot of ways, it's a lot of work for little value."
Kulp and Craig said they are open to finding a way to make municipalities financially whole as the cuts take place, such as allocating some funds cut from another part of the state budget.
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