There was a major legislative victory today for counties as the Wisconsin State Assembly unanimously passed 2007 Senate Bill 122 (SB 122), authored by Senator Dave Hansen. The Wisconsin Counties Association (WCA) strongly supports SB 122 and has been working expeditiously and aggressively to get it enacted.
SB 122 relates to property tax exemptions and, in particular, attempts to address the huge loophole created by the Newark Decision. SB 122, if signed into law, will fix a loophole in the property tax exemption for waste treatment facilities by specifically defining waste treatment facilities as used "exclusively and directly" for removing, storing or causing change in industrial waste or air contaminants.
In 2004, a Tax Appeals Commission (TAC) ruling exempted $11 million worth of value of the Newark Group's property. Newark claimed that by using recycled paper in their paperboard division they were abating pollution and should be exempt under state statute 70.11 (21)(a). The circuit court later reaffirmed the TAC ruling. As a result of the ruling, other manufacturers have filed waivers from the property tax under this exemption.
In 2005, two other manufacturers requested a property tax exemption worth $12.2 million. Approximately $150 million of taxable property could have been removed from the property tax rolls in 2006. Estimates for future exemption requests add up to over $2 billion worth of value being exempt from the property tax. For over fifty years it has been understood the exemption for waste treatment facilities was meant for waste treatment facilities, not manufacturers. It has only been the last couple of years in which the interpretation of the law has been expanded.
While the manufacturers are claiming and receiving these exemptions, they continue to benefit from local government services. The exemptions come at the expense of retail and residential property taxpayers. The remaining property taxpayers will be forced to pay an increased percentage of the property tax if SB 122 is not enacted.
The State Senate unanimously passed SB 122 on July 17, 2007. It will now go to Governor Doyle's desk to await his signature.
For more information regarding SB 122, click here.
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