Posted by Dan Conrad
On January 1, 2024, Wisconsin Assembly Bill (AB) 245 went into effect, exempting business personal property from taxation. This means taxpayers no longer need to file the Personal Property Return, Form M-L and Form M-P, reporting the annual statement of their business personal property to their local jurisdiction(s).
However, prior to AB 245, Wisconsin had personal property tax exemptions in place for items such as inventory, computers and manufacturing machinery. So, what type of impact does the new law really have on companies in the state?
What Business Personal Property is Exempt Under Wisconsin AB 245?
Prior to AB 245, Wisconsin taxpayers had to report and pay tax on business personal property, including:
- Boats and watercraft,
- Fixtures and equipment,
- Copiers, phone systems, etc. or
- Personal property as defined in Section 70.04, Wis. Stats.
Beginning with the 2024 tax year, these items will no longer be taxed nor will businesses need to provide an annual statement of the property. However, note that historically manufacturers were also required to provide a Manufacturing Personal Property Return along with a Manufacturing Real Estate Return on owned real estate. As of January 1, 2024, manufacturers will not need to provide the Manufacturing Personal Property Return but will still need to provide a Manufacturing Real Estate Return.
Could a Business Still Have Personal Property Tax Exposure from Prior Years?
Yes. Be mindful this repeal of personal property tax in Wisconsin begins with tax year 2024 and beyond. Taxpayers are still liable for personal property taxes on assessments for anything leading up to and through the 2023 tax year — including omitted personal property assessments and corrections of personal property errors.
What Other States Are Exempting Business Personal Property?
Currently, there are 13 states that have exempted business personal property from taxation, including Wisconsin. Others have adopted business personal property exemptions via cost or fair market value thresholds. Moreover, most states have also exempted inventory, as the trend shifts toward moving away from business personal property taxation.
Work with your tax adviser if you have questions around your business personal property tax reporting requirements.
Contact Dan Conrad at email@example.com or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.