Stafsholt Income Tax Reciprocity Bill Clears Vote In Senate And Assembly

Madison, WI – Senator Rob Stafsholt (R – New Richmond) released the following statement after his legislation, authored along with Representative Shannon Zimmerman (R – River Falls), which would begin the process of reestablishing income tax reciprocity between Wisconsin and Minnesota, recently passed in both the Senate and the Assembly.

“This has been an issue that many constituents of my Senate district know very well. If you live in Wisconsin, but work in Minnesota, you have to file income taxes twice for both states. This can get expensive, burdensome, and is time consuming. This bill would get the ball rolling on bringing back reciprocity for those that cross the border every day to get to work,” said Senator Stafsholt.

The bill requires the 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.

Senator Stafsholt added, “I met and had good discussions with the Wisconsin Department of Revenue Secretary Peter Barca recently, and I am hopeful we can work together to get a new agreement in place.”

“This is just the first step on getting this back on the books. We used to have a reciprocity agreement with Minnesota until 2009, when the previous agreement fell through. I’ve had many constituents reach out to me expressing their frustration with this, and I’m glad we’re making progress on this.”

He ended with saying, “The bill has had a lot of support in both house of the State Legislature. I’m hopeful Governor Evers signs this and we can get this done for the residents of Western and Northwestern Wisconsin.”