MADISON – On Wednesday, the Second District Court of Appeals ruled that taxpayers must go to the Wisconsin Tax Appeals Commission before taxpayers can bring a challenge before a state court alleging the Department of Revenue has issued an unpromulgated rule.
The underlying issues in the lawsuit – Wisconsin Property Tax Consultants & WMC v. Department of Revenue – are whether the Department of Revenue’s interpretation of the personal property tax exemption on machinery, tools, and patterns, conflicts with state law, and whether the Department has implemented this interpretation without going through the rulemaking process.
“The court’s decision will force taxpayers to incur additional costs and time when seeking to challenge unlawful actions by the Department of Revenue” said Cory Fish, WMC’s General Counsel and Director of Tax. “The overly burdensome nature of the personal property tax – exemplified by the Department’s actions that led to this case – is yet another reason the tax should be repealed in its entirety.”
The personal property tax is one of Wisconsin’s oldest taxes pre-dating statehood. Over the last 170 years, the legislature has created a myriad of exemptions to the tax resulting in uneven enforcement, frequent audits and litigation. For many small businesses, complying with the recordkeeping costs associated with the tax can be more expensive than the tax itself. All of Wisconsin’s neighbors – Minnesota, Iowa, Illinois and Michigan – have repealed their personal property taxes.
WMC calls on the legislature and Gov. Tony Evers to work together in a bipartisan manner to repeal this outdated and overly burdensome tax on Main Street businesses. WMC plans to appeal the court’s decision.