Minnesota-Wisconsin income tax reciprocity to expire

by Greta Kaul

            Minnesota lawmakers rejected a Wisconsin tax reciprocity plan for 2010 Wednesday, according to the Star Tribune.

            Formerly, 80,000 commuting Wisconsin residents been able to file one tax return form for both states, the Winona Daily News said.  The states reimbursed one another afterward.

            Wisconsin offered to pay Minnesota $90 million, but Minnesota rejected the offer, calculating a $131 million boost in revenue by directly taxing Wisconsin residents who work in Minnesota, the Star Tribune said.

            Minnesota is currently in the midst of a $1.2 billion deficit.

            The current reciprocity arrangement will expire on Dec. 31.  Lawmakers are unlikely to agree upon a new plan by the time the old one expires, the Winona Daily News said.

            Interstate commuters are likely to pay income taxes in both states in 2010, according to the Winona Daily News.