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Legislators: Gov. Dayton should accept new tax reciprocity offer

Wisconsin lawmakers representing western Wisconsin are calling on Minnesota Gov. Mark Dayton to accept a new offer by the Wisconsin Department of Revenue to restore income tax reciprocity.

“Today’s (July 24) offer by Wisconsin to reinstate the income tax reciprocity agreement goes beyond meeting all the demands made by Minnesota when they ended the agreement in 2009,” according to a statement by state Sen. Sheila Harsdorf (R-River Falls).

“Taxpayers lose precious time and money each year because we have not reached an agreement to restore reciprocity,” said Rep. Dean Knudson (R-Hudson), also in a statement. “We must come together to fix this problem.

“Work to restore the agreement progressed quickly at first,” said Knudson, “but stopped abruptly three years ago when Minnesota demanded an extra payment -- one that no state has ever been asked to pay in a reciprocity agreement.”

He continued, “To agree to this unprecedented demand would put at risk Wisconsin's reciprocity agreements with four other states. In an effort to break this intolerable impasse, today we offer further concessions on all other terms related to reciprocity. Minnesota should accept our proposal for the benefit of taxpayers on both sides of the border.”

Harsdorf added, “This proposal gives Minnesota all that they asked for and more with an annual payment of $87 million, accelerated payments and higher interest rates.”

She asked Dayton and his administration to sign the agreement and “restore the cooperative, neighborly approach our two states enjoyed for decades.”

“Now is the time to support our taxpayers and businesses on both sides of the river to reduce the burdensome requirements and higher costs imposed by the lack of reciprocity,” Harsdorf.

Rep. Warren Petryk (R-Eleva), who represents Pierce County in the Assembly, said Wisconsin has recognized Minnesota’s previous concerns.

“I am hopeful that (Minnesota) will accept this reasonable offer so that taxpayers are no longer burdened by this red tape, inconvenience and unnecessary hassle caused by delaying this agreement.”

Minnesota abruptly canceled the 41-year-old tax reciprocity deal with Wisconsin in 2009. It affects some 80,000 residents who live in one state and commute across the border to work in the other.