It’s a sad day when we read about a business closing its doors. And it seems to happen all too frequently.
Some of these are small businesses, others large. But what they all have in common is they have a brick and mortar storefront and hardworking employees who lose their jobs.
Traditional retailers are losing ground when competing with e-commerce because they have a storefront. Location used to be critical to a retailer’s success, but today having a physical location can be a liability, stifling their ability to compete.
Wisconsin lawmakers can help level the playing field between Wisconsin businesses and online retailers (many of whom are out of state) by removing regulatory impediments and lowering their costs. A business with a physical location in Wisconsin is subject to many fees and taxes that online retailers are not: sales taxes, real estate property taxes, license and registration fees, corporate income tax and other state-specific fees.
But in Wisconsin, traditional retailers also are subject to the personal property tax — a “main street” — tax that further differentiates them from other exempt Wisconsin businesses, e-commerce retailers and similar businesses in other states.
Lawmakers can remove the shackles and help Wisconsin businesses compete by repealing the personal property tax.
Personal property tax is paid on businesses’ tangible property, items that have already been taxed at purchase but Wisconsin continues to tax them annually. Over the years, the Legislature has granted nearly 60 exemptions, leaving main street and small businesses to pay the tax.
At this point in the budget process, full repeal of the personal property tax seems to be a tall order. But the Legislature can take a step in the right direction by repealing the tax on new equipment. Doing so has a minimal price tag, but maximum results will be seen in new equipment purchases and related economic development.
Compared to other tax relief on the table, such as income and property tax relief, the repeal of the personal property tax could mean tangible, significant savings to small businesses at a time when they need it most. Those small businesses then can turn around and spend that savings on their businesses, employees and communities.
We believe, now more than ever, businesses need help to compete. We hope the Legislature recognizes this and addresses repeal of the personal property tax in the 2017-2019 state budget.