In response to the announcement yesterday that the state is expected to have an additional $600 million in income tax receipts through the end of the next biennium in 2013, State Senator Sheila Harsdorf (R €“ River Falls) called on the Governor to use a portion of that new revenue to pay the approximately $60 million that Wisconsin owes Minnesota from the expired income tax reciprocity agreement. Former Governor Doyle allowed the long-standing income tax reciprocity agreement to expire and made matters worse by failing to make the December 2010 payment to Minnesota.
“The fiscally responsible thing to do with these new revenues is to pay down our debts. While Governor Doyle failed to meet our state’s obligations to Minnesota, our new governor is committed to paying Wisconsin’s bills,” says Harsdorf.
Paying the $60 million to Minnesota will clear the way for the two states to open negotiations for a new income tax reciprocity agreement. The 41-year-old agreement came to an end when Governor Doyle failed to negotiate an extension of the agreement. Tens of thousands of residents of western Wisconsin that work in Minnesota now have to file taxes in both states instead of only filing in their home state.
“The loss of income tax reciprocity has meant increased costs to residents living in one state and working in another when filing their tax returns,” says Harsdorf. “I was disappointed that Governor Doyle failed to work with Minnesota to ensure that the agreement would continue, but, I am encouraged by Governor Walker’s commitment to paying our overdue bill and working to restore this agreement for the benefit of the tens of thousands of affected residents.”