MADISON (AP) – Wisconsin’s latest income tax reciprocity offer to Minnesota does not include an additional payment of up to $6 million a year that its neighbor wanted, a demand that the head of Wisconsin’s Revenue Department derided Thursday as “unprecedented.”
Still, Revenue Secretary Rick Chandler and Wisconsin lawmakers who live on the border with Minnesota said they hoped the two states could reach agreement for the 2015 tax year before a Sept. 30 deadline.
An agreement would simplify income taxes for the roughly 80,000 who live in one state and work in the other. Currently, those people have to file tax returns in both states. A deal would allow them to file just one, but the two states have been unable to reach an agreement since Minnesota canceled a 40-year agreement in 2009 because it was losing money.
Minnesota made an offer to Wisconsin in June that would require Wisconsin to pay up to $6 million more a year to make up the difference. But Chandler, in a statement announcing Wisconsin’s latest offer, said Minnesota’s demand for $6 million more was unreasonable.
“We hope Minnesota will put taxpayers first and not block a new agreement with an unprecedented new condition,” Chandler said. “We’re close to a new agreement, so let’s come together.”
Minnesota Department of Revenue Commissioner Myron Frans said the state’s latest offer to Wisconsin, made in June, trimmed $1 million from its prior request. Minnesota lawmakers authorized the cut last session in an attempt to reinstate reciprocity.
“We’ve seen no effort by Wisconsin to deal with the revenue lost by Minnesota,” Frans said.
Chandler said Wisconsin’s latest offer means payments from Wisconsin to Minnesota would increase from the $58 million paid for tax year 2009 to $87 million for tax year 2015. Future payments would be made based on a study both states completed in 2013.
Both Republican and Democratic lawmakers in Wisconsin urged Minnesota to accept the offer.
“Taxpayers lose precious time and money each year because we have not reached an agreement to restore reciprocity,” state Rep. Dean Knudson, R-Hudson, said.
An estimated 56,000 Wisconsin residents work in Minnesota. About 24,000 Minnesotans commute to jobs in Wisconsin.