Minnesota, Wisconsin Try to Reboot Income Tax Reciprocity
ST. PAUL (AP) - State tax officials in Minnesota and Wisconsin say they're working to reinstate a system that allowed 80,000 people who work across their shared border to file one state income tax return.
Under the reciprocity system that began in 1968, Wisconsin made payments to Minnesota to make up for what border-crossing Wisconsin residents would have given to Minnesota in taxes. More people live in Wisconsin and work in Minnesota than vice versa.
The system was stopped in 2009 by former Minnesota Gov. Tim Pawlenty because the state was losing money.
A bill introduced in the Minnesota House would lift a sticking point between the two states that remains after a series of reconciliation attempts. It essentially drops a claim that $5 million more should go to Minnesota to cover a difference in tax breaks.