Governor Walker and Republican Leaders:
IT’S TIME TO REPEAL WISCONSIN’S PERSONAL PROPERTY TAX
The personal property tax (PPT) is a tax imposed on “tangible” personal property, such as equipment and furniture, owned by a business. Over the years, the State Legislature has whittled away at the PPT, arbitrarily picking winners and losers by exempting specific equipment.
The remaining items still subject to the tax after more than 50 exemptions are specific to retail small businesses, for example: coolers, safes, sound and intercom equipment, surveillance equipment, signs, restaurant & bar equipment, soda machines, store fixtures, time clocks and security systems. These businesses left footing the PPT bill are in every main street in every district of the state—propane dealers, chiropractors, dentists, grocers, convenience stores, restaurants, car dealerships and the list goes on.
On behalf of these businesses, we ask that you repeal this inequitable and financially detrimental tax.
Additional Information on Personal Property Tax
Wisconsin Small Businesses United supports changes to tax policy that provide a sustainable, predictable and competitively neutral revenue system that encourages economic growth, entrepreneurship, and prosperity. Eliminating the personal property tax will help ensure small businesses stay competitive and encourages job creation and retention in Wisconsin.
The personal property tax is a tax imposed on ‘tangible’ personal property, consisting of that which can be touched and moved, such as equipment and furniture. Personal property taxes are assessed and collected by the State of Wisconsin and local governments including cities, villages and towns. Originally introduced in 1848, the personal property tax was levied upon citizens during a time when the state had neither income nor sales tax. Today, the personal property tax is unbalanced and relies disproportionately on small business revenues.
Over the past century, Wisconsin’s tax structure has changed and developed, and during that time personal property exemptions grew to include household goods, computers, and businesses in the agricultural and manufacturing sectors. With these exemptions in place, it is now up to a small percentage of business owners to shoulder the personal property tax burden.
Like all business expenses, personal property tax must be offset by revenues; potentially manifesting in the form of higher product and service prices. Unfortunately, contrary to the cost of retail sales tax -- which can be displayed on a receipt -- the personal property tax is unseen by consumers and an issue that is often overlooked.
Wisconsin’s personal property tax restricts growth by discouraging expansion as business owners must pay additional personal property taxes on any new or upgraded equipment; funds that could otherwise be used to hire new employees or reduce existing debt. The benefits for small business owners who invest in upgrading or expanding their establishments are lower than their Iowa and Illinois counterparts.
The personal property tax is an inefficient means of taxation, as it makes up less than 1% of the state tax revenue, yet presents an overwhelming challenge to administer and remit for both business and local government . Eliminating this tax may present revenue challenges for local governments, creating the need for financial tools that will allow municipalities to recover losses. In order to help Wisconsin better compete with neighboring states in attracting and retaining small business development, WSBU supports efforts to gradually repeal all personal property taxes on businesses.