Personal property tax for businesses has been abolished in all states surrounding the state of Wisconsin. In Wisconsin, there are many industries that are exempt from paying personal property taxes. Two notable industries that have exemptions are manufacturing and agriculture. This tax is extremely unfair to small businesses like manufactured home dealers and community owners. For example, dealers pay this tax on their tools; however, the same tool in a manufacturing facility would be exempt from the tax. Wisconsin Housing Alliance was an active participant in getting some additional exemptions to this tax and we expect full repeal during the next budget cycle.
The repeal includes exempting all property previously included under Schedule C of the Statement of Personal Property and includes machinery, patterns and tools. Specifically, “machinery” is defined as a structure or assemblage of parts that transmits forces, motion or energy from one part to another in a predetermined way by electrical, mechanical or chemical means, but “machinery” does not include a building. Generally, this means that if it plugs in, if it is fueled or if it contains a mechanism that makes it run, it will now be exempt.
Businesses may have previously reported machinery under another schedule, such as schedule D: Furniture & Fixtures. However, with the new exemption, it is recommended that retailers and business owners look at every piece of personal property and determine if it could be exempt because it falls under the definition of “machinery.”
The Wisconsin Department of Revenue will be revising the Statement of Personal Property, which is due March 2018 to reflect the recent exemptions. In addition, DOR will be putting together guidelines for assessors and property owners that will contain many items, including machinery and computers and specify whether they will be exempt or taxable. It is anticipated that these guidelines will be complete by the end of the year.
The Alliance will update the members with new guidance as it comes out from the WI Dept. of Revenue, but expect to see a savings on your next personal property tax bill.
The Board of Directors and the members of WI Housing Alliance did a great job at answering the call to action when asked to contact their legislators regarding this issue. This is greatly appreciated because it certainly makes a big difference.
In addition, a bill (AB515) has been introduced, which will make it very clear that the homeowner is responsible for any building code violations in a manufactured home community. Municipalities will not be able to fine community owners for the homeowner’s disregard for violation notices or for building decks, steps, etc. without getting a building permit. Other legislative items include a comprehensive landlord/tenant bill that would help deal with fake service animals, raise the credit check fee and other items that would be better for community owners.
On the regulatory side, WHA has been working with the Department of Transportation since March to make it easier to deal with abandoned vehicles in a manufactured home community. The new form for getting title to an abandoned vehicle should be coming out soon.