Minnesota News

Wisconsin and Minnesota fail to reach tax reciprocity deal

LA CRESCENT, Minn. -- - The deal is off.

Monday was the deadline for Minnesota and Wisconsin to reach an agreement for tax reciprocity between the two states for tax year 2013.

That deadline has come and gone.

It's just a 10-minute drive from Mary Burrow's home in La Crosse to her job at Mayo Clinic Health System in La Crescent. But that cross-border commute means she will once again have to file her income tax returns in both states.

"Oh, not again," said Burrow.

That's because Wisconsin and Minnesota failed to reach an agreement on tax reciprocity – again -- which would have allowed her to file just one return in her home state.

She said she's had enough.

"I'm going to have to start going to a tax preparer and pay for both states. So yeah, it's a hassle. It'd be nice if I didn't have to do that," said Burrow.


She's in good company. Nearly 60,000 Wisconsin residents work in Minnesota and more than 22,000 Minnesota residents work in the Badger state.

Here's the problem. As part of a new deal, Minnesota wanted Wisconsin to pay an extra $10-15 million to compensate Minnesota for tax revenue they'd be losing.

The Wisconsin Department of Revenue said no way.

"We just think that Minnesota is being unreasonable in asking for us to pay them an amount that would reverse a tax increase that they imposed on their own residents when they ended reciprocity in 2009," said Wisconsin Department of Revenue Secretary Rick Chandler.

Minnesota has tax reciprocity agreements with Michigan and North Dakota, but do not require a similar reimbursement from them.

Minnesota Department of Revenue Commissioner Myron Frans said that's for a reason.

"There is no reimbursement in Minnesota for these other states because there are so few people involved and the tax rates are almost the same. In Wisconsin, the tax rates for most middle income workers is higher than in Minnesota," said Frans.

But if you ask Burrow, she just wishes the two states would work together.

"Do it. Do it. Please do it by next year if you're not doing it this year," said Burrow.

Representatives from both states said that's exactly what they're trying to do. The new goal is to have a deal in place for tax year 2014.

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