The Wisconsin Institute for Law & Liberty (WILL) has filed suit against Brown County, Wisconsin in Brown County Circuit Court, alleging that the county’s proposed Sales and Use Tax which took effect January 1st violates state law. WILL filed the suit Tuesday afternoon on behalf of the Brown County Taxpayers Association and a resident of Brown County, and also names the Secretary of the Wisconsin Department of Revenue as a Defendant.
County supervisors voted in May to create a 0.5 percent sales and use tax, which took effect Monday. The tax will fund $147 million in spending on various county infrastructure and construction projects, including a new expo center. The tax is to end after six years. Based on the county’s 2018 budget, the tax will raise over $22 million and spend close to $18 million in 2018 alone.
According to WILL, although Wisconsin law permits counties to impose a “sales and use tax” of 0.5 percent, such a tax may only be imposed to reduce the existing property tax levy imposed by the county. WILL argues that Brown County’s sales tax is not being used to reduce its property tax levy but is instead being used to evade Brown County’s tax levy limit and is therefore void and unenforceable.
WILL argues in the suit that Wisconsin law imposes tax levy limits on political subdivisions, including counties. These limits prohibit counties from increasing their tax levy in any year by a percentage that exceeds their “valuation factor” based on growth. Effectively, a county’s levy is fixed at its current level and can only be raised if the county experiences a net positive growth in property values due to new construction.
Brown County’s 2017 levy was $86,661,972.00 and its 2018 levy limit is $91,115,007. Brown County could only raise its levy $4,453,035 to pay for new spending in 2018. Since Brown County cannot raise its tax levy limit to pay for the new projects (totaling almost $18 million in 2018), it cannot enact a separate tax to do so either.
“Brown County has enacted an illegal tax in violation of state law in order to fund projects that they could not otherwise fund,” said WILL’s President and General Counsel Rick Esenberg. “By doing so they will raise the price for all taxed products and services in Brown County, increase the cost of living, and place an additional burden on vendors and consumers. We have laws for a reason, and the reason for Wisconsin’s tax levy limits is to ensure political subdivisions like Brown County do not have unbounded authority to tax their residents.”
This article appears courtesy of Media Trackers.
