Bill Ends Business Tax Break for Quitters
Bipartisan bill ends tax write-off on moving expenses for companies leaving the state.
Businesses that move out of Wisconsin would no longer be able to deduct relocation expenses from their state taxes under a proposal at the Capitol.
The bipartisan bill is looking to eliminate what sponsors are calling a “loophole” in the current state tax code.
“Wisconsin is a business-friendly state, but we also need to fair,” said Sen. Dan Feyen, R-Fond du Lac, one of the bill’s sponsors. “Wisconsin taxpayers shouldn’t be subsidizing the costs of a company that is moving jobs and other economic activity outside of our state.”
Gov. Tony Evers included a similar plan in his budget proposal. The governor’s office estimated it would save the state about $500,000, Feyen said.
However, during testimony before lawmakers earlier this month, a representative from the state Department of Revenue said it is difficult to determine the exact gain for the state. They said the bill would result in “a small increase in revenue, most likely less than $1 million.”
Moving expenses currently eligible for deduction include storage rentals, moving company expenses, and expenses paid to sell property in the state.
Businesses that move within the state would not be affected.
Rep. Adam Neylon, R-Pewaukee, called the proposal a “common sense measure.”
“If a company wants to move out of state, we’re not going to tell them no, but we’re not going to give them special tax benefits to do so,” Neylon said.
Stephanie Bloomingdale, president of the Wisconsin AFL-CIO, told lawmakers earlier this month the current practice “really stings” for workers.
“Think about a worker who is being laid off from their job, being eliminated, and then to have salt put in the wound that they have to subsidize this company in terms of tax breaks,” she said.
No organizations have registered their opposition.
The bill was unanimously approved Wednesday by an Assembly committee. It will now move to the full Assembly. It has yet to be voted on in a Senate committee.
Listen to the WPR report here.
Proposal Would Eliminate Tax Break For Businesses That Leave Wisconsin was originally published by Wisconsin Public Radio.