2015-2016 Tax Policy Toolkit
Download these one-pager fact sheets for more information on each of these issues:
Repeal the Doyle Personal Income Tax Hike
Wisconsin’s top personal income tax bracket, currently 7.65%, is the tenth highest such rate in the nation and is a significant contributing factor to keeping Wisconsin on the list of the Top Ten Highest Taxed States. This higher bracket was signed into law by Governor Doyle in 2009. Repealing this bracket would have a significant pro-growth effect on small and medium-sized businesses as they seek to expand investment and employment. Most businesses are organized as pass-through entities that pay personal income tax rather than corporate income tax. If repealed, the income of these taxpayers would be subject to the next lowest bracket of 6.27%.
FACT SHEET: Repeal the Doyle Personal Income Tax Hike
Phase Out the Personal Property Tax
Eliminate the difficult-to-comply-with Statement of Personal Property that every business must file with local governments. Instead, phase that aid out over a four-year period. Taxes on personal property have already been eliminated for households and other states in the region are moving to eliminate this tax as well.
FACT SHEET: Elimination of Personal Property Tax and Statement of Personal Property (PPT)
Retain the Manufacturing & Agriculture Credit
First phasing in during 2013, the Manufacturing & Agriculture Credit (MAC), also called the Manufacturers Tax Credit, continues implementing in 2015 before finally providing a maximum 7.5% credit against state income tax liability for manufacturers in 2016 and beyond. Some critics have called for rolling the credit back even as it is luring manufacturing jobs and investment into Wisconsin before becoming fully implemented. Allow the credit to work and, combined with other pro-business reforms, bring prosperity to even more Wisconsinites.
FACT SHEET: Retain the Manufacturing & Agriculture Credit (MAC)
Corporate Income Tax Relief
By taking no action, Wisconsin will decline from the 17th highest corporate income tax rate in 2014 to the 15th in 2015 (and may rise further if other states cut the corporate income tax rate). Wisconsin should reduce this rate to allow C corporations to remain competitive with other states’ tax rates.
FACT SHEET: Corporate Income Tax Relief
Repeal the State Alternative Minimum Tax (AMT)
Wisconsin is among the last six states in the nation to assess an alternative minimum tax on personal income. This additional tax, which is not indexed for inflation, should be repealed before it applies to many more taxpayers.
FACT SHEET: Repeal State Alternative Minimum Tax (AMT)
Repeal the Economic Development Surcharge
The 2013-15 state budget repealed the economic development surcharge on pass-through entities and farms. C corporations and limited liability corporations taxed as C corporations continue to be subject to the surcharge. It should be repealed.
FACT SHEET: Repeal the Economic Development Surcharge
Modernize the M&E Sales Tax Exemption
Wisconsin has provided a manufacturing machinery & equipment (M&E) sales tax exemption for personal property since the early 1970s. But this exemption has not been updated to keep pace with modern equipment. Allow the exemption to apply to the storage of raw materials and work in progress and also change the definition of qualifying equipment from “exclusively” (used 95% of the time in manufacturing) to “primarily” (50% or more).
FACT SHEET: Modernize the M&E Sales Tax Exemption
Repeal the Throwback Rule
Wisconsin is among 25 states that penalize businesses for selling goods in another state that does not tax income. These sales are “thrown back” to Wisconsin to be taxed, adding to the tax liability of Wisconsin-based firms. The rule should be repealed to help improve the competitiveness of Wisconsin companies.
FACT SHEET: Repeal the Throwback Rule
Federal Excise Tax on Heavy Trucks and Trailers
Wisconsin began assessing sales tax on the amount of federal excise tax paid when purchasing heavy trucks and truck trailers. Legislation has been introduced to exempt the federal excise tax from sales tax, retroactive to September 1, 2014, when the sales tax was first applied.
FACT SHEET: Federal Excise Tax on Heavy Trucks and Trailers
Tax on Sales by Non-Profit Organizations
While non-profit organizations – generally 501(c) organizations – and governmental agencies may purchase goods and services without paying sales tax, many observers are surprised that (with a few exceptions) non-profits must collect sales tax on items they sell and remit the tax to the state. As a result, many churches, local chambers of commerce, Little League organizations, local governments, and other non-profit and charitable organizations are required to collect and remit sales tax on goods they sell and services they provide.
FACT SHEET: Tax on Sales by Non-Profit Organizations
Tourism Entity Clarification
The state budget adopted in summer 2015 negatively impacts chambers of commerce which provide tourism promotion services for their communities. Legislation has been introduced to favorably resolve those issues and allow chambers to continue providing these services.
FACT SHEET: Tourism Entity Clarification
Tax Administrative Reforms
To make Wisconsin tax law easier to comply with and ensure fairness for taxpayers, WMC has put forth the following package of reforms for consideration in the 2015-17 state budget.