What is the Personal Property Tax?
Wisconsin’s Personal Property Tax (PPT) is a tax imposed on a businesses’ “tangible” personal property, consisting of that which can be touched and moved, i.e. equipment and furniture. Personal property taxes are assessed and collected by local governments including cities, villages and towns.
What was the most recent exemption in the 2017-2019 State Budget?
Effective January 1, 2018, machinery will be exempt from the personal property tax. “Machinery” is defined as a structure or assemblage of parts that transmits forces, motion or energy from one part to another in a predetermined way by electrical, mechanical or chemical means, but "machinery" does not include a building. Meaning that if it plugs in, if it is fueled or if it contains a mechanism that makes it run, it will now be exempt! In addition, a requirement that businesses provide assessed values for exempt computers and related equipment was removed by the Legislature.
How much would it cost to repeal the tax?
The personal property tax is assessed on businesses by municipalities as part of their overall property tax base. The Coalition supports having the state reimburse municipalities for lost revenue. While the total cost of full repeal will not be known until early 2019, it is estimated at $195 million to fully repeal the tax.
What is exempt from the personal property tax?
Over the years, the State Legislature has whittled away at the PPT, arbitrarily picking winners and losers by exempting specific equipment. In the 1970’s, manufacturing equipment was exempted, in the 1980’s it was agricultural equipment, and in the 1990’s, computers were exempted. In many cases, municipalities are reimbursed by the State for exempted equipment, such as computers and related items. Most recently, the Legislature exempted machinery, tools and patterns from the personal property tax.
What happens if businesses don’t pay the personal property tax?
Businesses in Wisconsin pay corporate taxes, income taxes, labor and employment taxes, and real estate property taxes, in addition to the PPT, which places Wisconsin on the top of many lists ranking state tax obligations. Eliminating the personal property tax creates an equitable tax code - treating everyone equally under the property tax law.
Do other states have a personal property tax?
From an economic development perspective, repeal of the personal property tax will incite businesses to reinvest in their employees and communities, and will help attract businesses to Wisconsin. Seven states have no personal or tangible property tax, including our closest neighbors: Minnesota, Iowa, Illinois, North Dakota and South Dakota, with Michigan most recently phasing out the personal property tax in 2014.