SB 374 — Relating to: Wisconsin and Minnesota income tax reciprocity. (FE)

- 2024 LEGISLATURE LRBa0408/1LRB-2878/1 KP:skw&cjsKP:wlj SENATE AMENDMENTBILL 1,374 TOAugust SENATE9, BILL2023 374- JanuaryIntroduced 24,by 2024Senators -TAFSHOLT, OfferedALLWEG , BRADLEY and QUINN , cosponsored by SenatTAFSHOLT.Representatives Z IMMERMAN , P ETRYK, GREEN , M AGNAFICI, OC ONNOR and W ITTKE.

AtReferred theto locationsCommittee indicated,on amendUniversities theand billRevenue. as follows:

1.A N A CT to amend 71.10 (7) (a) and 71.10 (7) (c);

Pageand 3,to linecreate 8:71.10 (7) (d) of the statutes;

afterrelating thatto: line insert:

“bm.Wisconsin and Minnesota income tax reciprocity.

TheAnalysis governorby issuesthe aLegislative writtenReference noticeBureau ofThis approvalbill ofrequires the agreementDepartment noof laterRevenue, thanin 90conjunction dayswith afterthe beingMinnesota presentedDepartment withof Revenue, to conduct a study on the agreementeffects underof subd.instituting income tax reciprocity between Wisconsin and Minnesota.

1m.”.The study must determine the number of residents of each state who earn income in the other state, the total amount of income earned in each state by such taxpayers, and the amount of tax revenue that would be forgone by each state if reciprocity were instituted.

Under reciprocity, taxpayers must pay taxes only in their state of residence on income earned in the other state.

The study is to be based on income tax data for taxable years 2020 and 2021 and any other information each DOR determines is necessary to complete the study.

The results of the study must be submitted to the legislature and governor of each state no later than December 31, 2024.

The bill also requires that any income tax reciprocity agreement between Wisconsin and Minnesota applies to wages, salaries, tips, and commissions received by persons who reside in this state or Minnesota for at least 183 days during their taxable years and return to their state of residence at least once per month;

does not have an expiration or termination date;

and is approved by both the governor and the Joint Committee on Finance.

Under the bill, Wisconsin may not make a payment to Minnesota for any prior taxable years before the reciprocity agreement takes effect, and a reciprocity agreement may not be revised unless approved by JCF.

- 2024 Legislature - 2 - LRB-2878/1 KP:wlj SENATE BILL 374 For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SECTION 1.

71.10 (7) (a) of the statutes is amended to read:

71.10 (7) (a) For purposes of income tax reciprocity reached with the state of Minnesota under s.

71.05 (2), whenever the income taxes on residents of one state which would have been paid to the 2nd state without reciprocity exceed the income taxes on residents of the 2nd state which would have been paid to the first state without reciprocity, the state with the net revenue loss shall receive from the other state the amount of the loss.

Interest shall be payable on all delinquent balances relating to taxable years beginning after the first December 31, 1977 after the date identified in the notice under 2023 Wisconsin Act ....

(this act), section 4 (2).

The secretary of revenue may enter into agreements with the state of Minnesota specifying the reciprocity payment due date, conditions constituting delinquency, interest rates and the method of computing interest due on any delinquent amounts.

SECTION 2.

71.10 (7) (c) of the statutes is amended to read:

71.10(7) (c) For taxable years beginning after the first December 31, 2000 after the date identified in the notice under 2023 Wisconsin Act ....

(this act), section 4 (2), this state shall pay Minnesota interest on any reciprocity payment that is due under this subsection.

Interest shall be calculated according to the Laws of Minnesota 2002 Chapter 377, or at another rate and under another method of calculation that is agreed to by Minnesota and Wisconsin.

SECTION 3.

71.10 (7) (d) of the statutes is created to read:

LRB-2878/1 - 2024 Legislature - 3 - KP:wlj SECTION 3 SENATE BILL 374 71.10 (7) (d) 1.

No agreement that is entered into under this subsection on or after the effective date of this subdivision ....

[LRB inserts date], may take effect unless all of the following apply:

a.

The agreement applies to wages, salaries, tips, and commissions received as an employee by persons who reside in this state or Minnesota for at least 183 days during their taxable years and who return to their state of residence at least once per month.

b.

The agreement contains no expiration or termination date.

c.

The agreement is approved by the governor and by the joint committee on finance under s.