Skip to main content

Minnesota offers deal to restore tax reciprocity with Wisconsin


The tax situation can get complicated for the approximate 56,000 Wisconsonites who commute to work in Minnesota, and for the smaller number of Minnesotans – about 24,000 of them – who cross the river/border to draw a paycheck in Wisconsin.

The Star Tribune reports that the adjacent states are negotiating a deal to simplify income taxes for workers who live in one state and work in the other.

The two states had an income tax reciprocity agreement from 1968 to 2009 when then-Gov. Tim Pawlenty scrapped it because Wisconsin was late making payments, and the two states were using outdated figures on the number of workers covered by the 40-year-old agreement. Ending the pact meant the 80,000 border-crossing workers have had to file two state tax returns.

The Pioneer Press reports that Minnesota officials are initiating talks with their Wisconsin counterparts to restore tax reciprocity. The newspaper said Revenue Commissioner Myron Frans is dangling a $1 million carrot to get the effort on track. In a letter to Wisconsin's revenue secretary, he proposed that the states resume reciprocity in 2015 and offered to reduce Wisconsin's payment by $1 million per year. To get the reduction, Wisconsin would have to take the deal by Sept. 30. Except for the $1 million reduction, the proposal is similar to offers from 2012 and 2013.

Minnesota says Wisconsin owes the state about $92 million a year, because more Wisconsinites work in Minnesota than the other way around. That's $4 million to $6 million more than Wisconsin officials think the state should pay, so Wisconsin revenue officials have declined the offer.

"Unfortunately, Minnesota is insisting on millions more that no other states with agreements require, including Minnesota in its other agreements," said Jennifer Western, assistant deputy secretary of Wisconsin's revenue department. “We are glad Minnesota’s ransom has come down $1 million from its original $6 million, but it’s not right for Wisconsin to pay to undo a tax increase Minnesota imposed on its citizens when it ended reciprocity.”

Minnesota has tax reciprocity agreements in place with Michigan and North Dakota.

Next Up

Chris Finch

Hawks bury Timberwolves in 3-point barrage

Without D'Angelo Russell, the Wolves couldn't keep up with the Hawks.

P.J. Fleck, Gophers football

Kirk Ciarocca returning to Gophers as offensive coordinator

The architect of the 2019 offense will look to revive the Gophers.

Klobuchar - MTP - NBC screengrab

Klobuchar says Congress should pass law to protect abortion rights

Her comments came as the Supreme Court appears poised to weaken — or gut — Roe v. Wade

MPD missing Heard - crop 1_

Police ask for public's help finding Mpls. woman missing a week

The 36-year-old hasn't been seen or heard from recently.

unsplash cold winter breath dark

Hello, winter: List of the coldest wind chills in MN Monday morning

The state went from a relatively mild start of the season, to downright frigid wind chills.


1 CWD-positive deer in Brainerd Lakes area, so surveillance will continue

The CWD monitoring measures were supposed to end after this year.

unsplash - visitor patient doctor hospital emergency - crop

MN program will train, hire 1,000 nursing assistants for long-term care

The facilities are facing a severe staffing shortage.

Minnesota State Fair - main gate day 2021

Minnesota State Fair reestablishes a police department

The fair had been contracting with the Ramsey County Sheriff's Office.

teacher, covid, masks, school

Minnetonka to consider removing middle school mask requirement

The school board has been impressed by vaccination rates among middle school students.

snow, plow

Friday winter storm could hit Twin Cities, southern Minnesota

Meteorologist Sven Sundgaard is already monitoring the forecast.

Sauk Rapids Middle School street view, Minnesota - November 2018_

Teen student arrested for threats toward MN middle school

The Sauk Rapids middle school and high school were closed Monday.


Rally for trans child outed during Hastings school board race draws big crowd

Hastings has been in the spotlight since the child's family was featured in a CNN story.