Senator Jeremy Miller (R-Winona) introduced Senate File 2798; bipartisan legislation to address the issue of income tax reciprocity between Minnesota and Wisconsin. Senate File 2798 will require the Commissioner of the Minnesota Department of Revenue to initiate negotiations for a reciprocity agreement, wherein Minnesota and Wisconsin will assume equal shares of the $6 million discrepancy resulting from a recent dataset study.
“Tax reciprocity continues to be a significant issue in southeastern Minnesota and other border communities where thousands of residents live in Minnesota and commute to Wisconsin for work,” said Senator Miller. “Since the results of the dataset study have been released, we have not seen much movement from either Minnesota or Wisconsin towards a new agreement. We have gone too long without one and my hope is this legislation will help restart this conversation.”
An estimated 80,000 Minnesotans and Wisconsinites live in one state and work in the other and nearly 24,000 of those are Minnesotans. Based on data information that was collected between Wisconsin and Minnesota, it was determined there is a $6 million difference in what is gained and lost for each state under a new reciprocity agreement. Negotiations began in March of 2013 and were deadlocked by the end of the year.
“Many of the 24,000 Minnesotans affected by the lack of a reciprocity agreement reside in the district I represent. I continue to hear from my constituents that are forced to file and pay taxes in two states. This is an unnecessary burden and a new agreement is long overdue. It is time to restore reciprocity,” added Miller.
Senate File 2798 was introduced in the Senate on Wednesday, March 19, 2014 and was referred to the Committee on Taxes. The House companion to this legislation, House File 3096, was introduced on March 17, 2014 and is chief authored by Representative Greg Davids (R-Preston).