Minnesota: Don’t Forget, Wisconsin, You Owe Us $59 Million

Wednesday, January 19, 2011 at 11:01 PM by

Just when most Wisconsinites were getting over our disdain for Minnesota for the sin of dressing Brett Favre in a purple uniform, the new Minnesota Governor added fuel to the fire by reminding Wisconsin that we owe Minnesota a $58.7 million payment as part of the termination of the income tax reciprocity agreement between the two states. Governor Dayton has cause to complain, but that doesn’t make paying the money any easier.

In the fall of 2009 – just as Favre was taking to the field in the Metrodome – Minnesota Governor Tim Pawlenty unilaterally cancelled the income tax reciprocity agreement that had been in place with Wisconsin since 1967. This agreement allowed taxpayers who lived in one state and worked in another to file a return only in the state where they live. At the end of each year, Wisconsin sent money to Minnesota because more people live in Wisconsin and work in Minnesota than live in Minnesota and work in Wisconsin.

The problem with this agreement, from Minnesota’s perspective, was that Wisconsin took about 17 months to pay Minnesota the money owed – even though Wisconsin paid interest on the amount owed. The loss of the reciprocity agreement means that some taxpayers will have to file two returns, although the amount they owe will be the same. An article in the Journal Sentinel by Patrick Marley summed up the situation at the time the agreement was revoked.

Now the Minnesota Governor has written a letter to Governor Walker pointing out that Wisconsin did not make our scheduled $58.7 million payment to Minnesota, due on December 1st. According to the letter, Wisconsin’s Secretary of Revenue Rick Chandler has informed Minnesota’s Revenue Commissioner that the payment will be put off until next fiscal year. Wisconsin accrues $4,584 of interest for every day this payment is late.

There’s no word from Secretary Chandler on the reason for the late payment, although he’s quoted by Patrick Marley in an article in the Milwaukee Journal Sentinel as saying, “Our basic goal here is to get back to the agreement where we have a reciprocity agreement and taxpayers only have to file one return.”
It’s probably just coincidence that this kerfuffle comes at a time when the Favre-less Packers are headed to the NFC championship game and the Vikings are dwelling in the cellar of the NFC North. Probably.

Tamarine Cornelius

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