Increased collections from retailers outside Wisconsin to produce $256.4 million in tax relief, Evers announces

2019 law boosts relief for low- and middle-income taxpayers

MADISON, Wis. (WKBT) — The Wisconsin Department of Revenue’s increased collections from out-of-state retailers and marketplace providers for the 12 months ending Sept. 30 will provide an estimated $256.4 million in relief for taxpayers, Gov. Tony Evers announced Tuesday.
The amount is more than three times the $77.4 million in tax relief generated last year, the governor said.
Evers signed the bipartisan legislation, 2019 Wisconsin Act 10, last year, ensuring that such relief would go to lower and middle-income Wisconsinites.
“It is important we are able to provide this much-needed tax relief for Wisconsinites, especially during these unprecedented times,” Evers said.
The additional money came from more than 9,000 remote sellers, an increase of 4,000 remote sellers previously, said Revenue Department Secretary Peter Barca.
A 2018 U.S. Supreme Court decision — South Dakota v. Wayfair — expanded the state’s authority to require out-of-state retailers and marketplace providers to collect and remit sales and use tax between Oct. 1, 2019, and Sept. 30.
The revenue estimate is based on tax amounts from out-of-state filers who registered to collect taxes after the Wayfair decision, Barca said. Additional revenue from marketplace providers is included because the marketplace provisions in the 2019 Act 10 took effect Jan. 1.
Before the act, the rate cuts related to collections from out-of-state retailers subject to the Wayfair decision were to be applied to all income tax brackets, which would have benefitted higher-income earners disproportionately, Barca said.
The 2019 Act 10 focused the rate cuts on the lower two brackets, concentrating income tax relief for lower and middle-income Wisconsin taxpayers, he said.
For example, under the marketplace legislation, average households with an income of $59,523 will enjoy a tax cut of about $137, while the across-the-board rate cut in the 2017 Wisconsin Act 368 would have given them a tax cut of only about $70.
By contrast, a household with an income of a million dollars will receive a tax cut of about $145, while the across-the-board rate cut under Act 368 would have provided them a tax cut of about $1,841, Barca said.
The marketplace legislation also defined providers and required them to collect and remit sales and use tax on taxable sales they facilitate online on behalf of third-party sellers, creating a more level playing field between brick-and-mortar stores and online retailers, Barca said.