Vukmir Calls for Special Session to Repeal Combined Reporting

MacIver News Service – [Madison, Wisc…] State Representative Leah Vukmir is hoping the Legislature can come back to work in Madison to repeal the combined reporting tax which was instituted in 2009.

“We must act now and we must be bold,” said Vukmir (R-Wauwatosa) “Of all the issues the legislature should be addressing in a special session this is the most important and one that will have an immediate impact on protecting  jobs.”

Under the combined reporting law, each member of an affiliated or “combined” group of corporations engaged in a unitary business reports on a combined report the unitary business income allocatable to the state Wisconsin. Each member of this combined group of corporations is treated as doing business in Wisconsin as long as any member of the combined group is doing business in the state.

Yesterday, motorcycle manufacturer Harley Davidson announced it was informing its employees of the need to cut the cost of manufacturing in Wisconsin by more than $50 million a year or it would have to consider moving operations to a different state.

The 2009 tax law change to combined reporting increased corporate taxes in Wisconsin by an estimated $1.2 billion and reportedly increased Harley Davidson’s Wisconsin tax burden by $22.5 million.

The bill which imposed Combined Reporting passed both houses of the Legislature and was signed into law by Governor Doyle four days after was first made public in mid-February 2009.

Republicans have bemoaned the tax since it was imposed and many have vowed to repeal it should they gain control of the Wisconsin Legislature next session.

Vukmir said Harley’s plight added urgency to the effort.

“We cannot afford to lose another company that made Milwaukee famous,” she said.

Opponents of the change warned an imposition of new taxes could have a profoundly negative impact on Wisconsin’s economy and employment situation.

In a February 2009 letter to Wisconsin Legislators, a coalition of Wisconsin employers wrote, “As you consider the revenue side of the equation, we encourage you to avoid adopting measures, such as combined reporting, that will harm investment and job growth
opportunities, the two critical pathways that will ultimately help Wisconsin move beyond its challenging fiscal situation. Combined
reporting is not the solution to improve Wisconsin’s overall business climate.”

Members of that coalition that formed in opposition to Combined Reporting included: Wisconsin Manufacturers and Commerce,   Metropolitan Milwaukee Association of Commerce, the Community Bankers of Wisconsin, Midwest Food Processors Association, Wisconsin Bankers Association, Wisconsin Economic Development Association, Wisconsin Engine Manufacturers and Distributors Alliance, Wisconsin Innkeepers Association, Wisconsin Insurance Alliance, Wisconsin Manufacturers & Commerce, Wisconsin Mortgage Bankers Association, Wisconsin Motor Carriers Association, Wisconsin Paper Council, Wisconsin Petroleum Council, Wisconsin Restaurant Association, Wisconsin Retail Council, and Wisconsin Utility Investors, Inc.

Under the organizing resolution for the current session, the legislature could reconvene next week for a limited floor session to possibly deal with some state contracts and technical corrections to previously passed legislation. In order for the legislature to consider repealing Combined Reporting, the governor would have to call them back for a Special Session.