Stafsholt Income Tax Reciprocity Bill Signed Into Law

Madison, WI – Senator Rob Stafsholt (R – New Richmond) released the following statement after his Wisconsin and Minnesota Income Tax Reciprocity bill, authored along with Representative Shannon Zimmerman (R – River Falls), which would begin the process of reestablishing income tax reciprocity between the two states, was signed into law by Governor Tony Evers.

“This is great news for everyone in our region that lives in Wisconsin, but who commute to their jobs in Minnesota. Since 2009, we have not had income tax reciprocity between Wisconsin and Minnesota. I hear about this issue from people in my district all the time, and I’m proud to lead this effort in the Senate and work to get this done for our area,” said Senator Stafsholt.

The bill requires the Wisconsin Department of Revenue (DOR) to conduct a study with Minnesota on the effects of reinstating an income tax reciprocity agreement between Wisconsin and Minnesota. The methodology of the study must use benchmark figures regarding the proportion of border-crossers and income taxes foregone, with adjustments to reflect total income tax collections in each state and population trends in border counties. Following the results of the study, the Secretary of DOR can use that data to negotiate an income tax reciprocity agreement between the two states.

The agreement would allow taxpayers who live in one state and work in the other to file tax returns in their home state only, rather than in both states as they do now.

“This is an issue my constituents know all too well. Filing income taxes for two states is costly, complicated, and takes up too much time. However, now that this bill has been signed into law, we are closer to getting this done for the residents of Western Wisconsin.”

Senator Stafsholt finished by saying, “I have had good discussions with the Department of Revenue Secretary Peter Barca about this problem, and we are excited about working together across the aisle, as well as potentially across state lines with our good neighbors to our west, to hopefully see an agreement reestablished that works for both states.”