The 2017 Wisconsin Tax Act 59 gave all Wisconsin commercial businesses some property tax relief.
There’s been some questions around the changes so let’s dive right in.
The exemptions in this bill are effective with the property tax assessments as of January 1, 2018. All commercial and manufacturing taxpayers with property in the state must self-report taxable personal property with the assessor by March 1, 2018. Based on this self-reporting, the 2018 personal property tax bills will arrive in your mailbox sometime in December 2018.
For commercial personal property, Form PA-003 Statement of Personal Property is filed with the local assessor where the property is located regardless of whether a city, town or village. The manufacturing personal property is filed on the Form M-P Manufacturing Personal Property Return with the state assessor through the Wisconsin Department of Revenue (“WDOR”). Beginning with 2018, the historical computer and software exemption continues but now has no requirement to be reported on Form PA-003, Schedule D-1 or Form M-P, Schedules C & LC.
Machinery, tools and patterns
One of the biggest changes for 2018 is for commercial property filers. The new legislation exempts machinery, tools and patterns. There is now no requirement to report machinery, tools and patterns on Form PA-003, Schedule C. Specifically, the exemption does not apply to manufacturing. There are no changes to report machinery, tools and patterns on Form M-P, Schedule M. Previously exempt machinery continues to be exempt and taxable machinery continues to be taxable (for manufacturers).
For commercial property filers, “machinery” means a structure or assemblage of parts that transmits force, motion, or energy from one part to another in a predetermined way by electrical, mechanical, or chemical means. “Machinery” does not include a building.
There has been some confusion as to whether machinery, tools and patterns historically reported on schedules other than Schedule C are exempt. The new law provides machinery, tools and patterns are exempt; not that the “form” designed by the WDOR is exempt. Accordingly, if you reclassify these newly exempted items on your 2018 property tax listing differently from the previous year, the assessors will compare and may question inconsistencies.