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Manufacturing and the Wisconsin Personal Property Tax Repeal

Manufacturing and the Wisconsin Personal Property Tax Repeal

On June 30, 2023, Governor Tony Evers signed Assembly Bill 245, Wisconsin Act 12 that repealed the business personal property tax. The repeal takes effect January 1, 2024 and aims to eliminate the costly process for business owners to ensure compliance with personal property tax laws and alleviates the tax burden on businesses.

As a result, no personal property tax returns will need to be filed in 2024 for both manufacturers and non-manufacturers. Businesses will still be liable for personal property taxes related to their January 1, 2023 filings.

While the personal property tax filing requirements are eliminated, Wisconsin manufacturing real estate tax returns will still need to be filed if required. Such returns will be affected due to changes in the classification of leasehold improvements as a result of the repeal.

Previously, such improvements could be assessed as real or personal property. A new section of the legislation clarifies that improvements and buildings on leased property must be assessed as real property. The new section also allows separate tax parcels to be established for buildings and improvements that are owned by someone other than the landowner, allowing those properties to be assessed to the respective owners.

The legislation also changes the rules on several manufacturing classifications and assessments, updates the definition of manufacturing property, and defines what it means to be engaged in manufacturing. It also states that entities that were classified as manufacturing before January 1, 2024 do not need to reapply for classification.

Real property of manufacturing businesses will continue to be assessed by the Wisconsin Department of Revenue (WDOR), and the WDOR will continue to review new requests for manufacturing classification of real property.

Contact SVA for help understanding what these tax changes mean for you.

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Biz Tip Topic Expert: Todd Clemens, CPA, CFE, CGMA

Todd Clemens, CPA, CFE, CGMA

Todd is a Principal at SVA Certified Public Accountants and works with closely-held businesses in the manufacturing, distribution, and construction industries. His specialties include offering assurance services (audits, reviews, compilations, forecasts, and projections), mergers and acquisition services, fraud and litigation support services, and outsourced CFO services.

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