ST. PAUL, MN – On Monday, March 4, Department of Revenue Commissioner Myron Frans prepared a new agreement that could potentially restore income tax reciprocity between Minnesota and Wisconsin starting Tax Year 2014. Restoring income tax reciprocity would allow nearly 80,000 taxpayers in the neighboring states the convenience of filing income tax forms only in their state of residence.
“This is an issue I have worked on for years and it is important we recognize how important reciprocity is, and how this agreement would directly impact our border communities. Thousands of Duluthians work in Superior, and even more Wisconsinites work in Duluth,” said Senator Roger Reinert (DFL-Duluth).
The Minnesota Income Tax Reciprocity Benchmark Study released March 1 determined that seventy percent of taxpayers live in Wisconsin and work in Minnesota. That seventy percent of taxpayers would only file income taxes in Wisconsin under the new agreement. The same would be true for Minnesotans who work in Wisconsin. To make up for this lost revenue under reciprocity, the agreement also includes measures compensating Minnesota.
In 2011, Sen. Reinert authored the legislation requiring the new benchmark study. Prior to this study, reciprocity was based on data from the 1990s.
“I believe Minnesota has now made its best offer to Wisconsin, and I hope our neighbor will accept it,” continued Sen. Reinert.”It’s in the best interest of both states, and the Twin Ports, for income tax reciprocity to be restored.”