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Wisconsin Business Personal Property Tax: A Guide

Posted by Eleshia Matheny on Jan 30, 2020 5:48:50 PM

Wisconsin Business Personal Property Tax: A Guide

Compared to other states, Wisconsin consistently ranks on the high end when it comes to property tax. Why are Wisconsin property taxes so high? Because the state law has tax restrictions that make it difficult to collect funding for public services from any other source. Only the state can levy an income tax, and sales tax is reserved for the state, counties, and a few select municipalities that qualify as “premier resort areas.” (The Badger State also receives less federal aid than other states.) As a result, local governments rely on property tax to provide a significant portion (42%) of their revenue.

Both real and personal property are taxable in Wisconsin; in this article, we’ll focus primarily on Wisconsin business personal property tax and what your business needs to know if it operates there.

Key Dates For Wisconsin Business Personal Property Tax

Key Dates

Explanation

1/1 Assessment date

 

3/1 Return deadline

Tax return due date. File to local assessors unless you are a qualified manufacturer, in which case you file to the state. (See more below)

March–April notices are mailed

 

Late May–mid-June Open Book session

The completed assessment roll is open for examination

1/31 Personal property taxes due in full*; real property taxes due in full, or first installment due

Pay to local treasurer

7/31 Second half of real property tax due

Pay to county


*Although the state provides this standard payment schedule, local governments may enforce their own schedules.

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Wisconsin Personal Property Tax Highlights

In Wisconsin, “personal property” refers to “all goods, wares, merchandise, chattels and effects of any nature or description having any marketable value and not included in real property.” Intangible assets, such as bank accounts, are exempt from property tax. And over the years, Wisconsin has repealed personal property tax as it relates to certain specific categories of items, such as:

  • Computers, software, and electronic peripheral equipment (see the computer exemption guidelines)
  • Manufacturing equipment either owned or leased and used exclusively and directly (95% or greater) in the manufacturing production process
  • Motor vehicles and aircraft
  • Property used for abatement of air and water pollution
  • Livestock, inventories and merchant’s stocks

Wisconsin business personal property returns are filed annually using the Statement of Personal Property.

Manufacturing Personal Property

Manufacturing companies follow a unique set of rules with regard to business personal property in Wisconsin. To qualify as a manufacturing company, you must first request and receive this designation from the Wisconsin Department of Revenue’s (DOR) Manufacturing & Utility Bureau.

Machinery and equipment used exclusively and directly in the manufacturing process is exempt from property tax. However, a number of manufacturing assets are taxable, including:

  • Shipping and receiving equipment
  • Raw material or finished product storage racking, tanks and silos
  • Forklifts used in shipping and receiving, or in a warehouse
  • Equipment used to clean and maintain machines and buildings
  • Equipment used in research and development
  • Multi-function device (MFD) copiers, single-function copiers, telephone systems and equipment
  • Furniture, fixtures and office equipment
  • All other property not listed on other schedules, for example pallets, signs, kegs, rail cars, trays, returnable containers, and creative works of art
  • Safety equipment
  • Leasehold improvements
  • Boilers

Manufacturing companies report their assets annually using the Manufacturing Personal Property Assessment Form (M-P Form), which is submitted to the Wisconsin Department of Revenue (DOR). To challenge your assessment, submit a written appeal request to the Wisconsin Board of Review.

Assessed Value vs. Equalized Value

In an effort to ensure property taxes are administered fairly and uniformly, Wisconsin uses what is known as an “equalized value” as part of its assessment process. (Tweet this!) It is assumed that property values change yearly, and that local assessors are unable to review and revalue all assessments every year. So in years without a revaluation, the assessed value is not likely to truly reflect the property’s market value.

To address these inaccuracies, the state uses a two-tiered process to determine asset value:

  1. Local assessors assign a value to your business personal property. Since each municipality cannot be assessed at exact market value each year, the law allows them to be within 10% of market value. Local assessments help maintain equity among individual taxpayers within a municipality.
  2. Next, because the percentage is likely to vary amongst different taxing districts, the DOR converts the assessed values by taxing district to uniform values, or equalized values. Equalized value represents market price, and helps maintain equity among municipalities and counties.

Appealing Your Assessment

To file an appeal, you must give notice of your intent to appeal (either written or oral, though written is preferred) to the Board of Review clerk at least 48 hours before a scheduled meeting. The Board of Review is responsible for evaluating the evidence with regard to the fairness and accuracy of your property tax assessment.

All municipalities also hold what’s called an “Open Book” session before Board of Review sessions take place. It is an informal appeal process that gives you the opportunity to discuss your valuation with the assessor, who may make changes during this time as necessary. Once the Open Book period ends, formal appeals must be made to the Board of Review.

Reduce The Time You Spend On Property Tax Compliance

Property tax compliance takes time, especially if your business operates in multiple states. You can reduce the time your team spends on compliance activities with CrowdReason tax document automation software. After switching to our software, some clients have been able to meet compliance requirements with 70% fewer staff members, redirecting their team’s efforts to more strategic—and more valuable—tax activities instead.

If you’d like to see how our tax document automation software can help your team generate higher-quality work product, schedule a demo with us today.

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Topics: Business personal property tax