Auto tax reductions likely to be triggered by online collections

It’s not a certainty yet, but a report from a state office in Madison this week appears to be pointing toward an automatic income tax break in Wisconsin.

It comes on the heels of the recent U.S. Supreme Court ruling saying states could broaden collections of sales taxes from online retailers.

It’s something likely to trip a provision in state law that offsets increased sales tax collections with other tax cuts.

“Instead of that money being new money to the state, we would send it back to the taxpayers, figuring it shouldn’t be a tax increase, it should just be leveling the playing field for retailers and other operations in the state,” Wisconsin Gov. Scott Walker said a few days ago.

The new report from the Legislative Fiscal Bureau this week says Wisconsin could collect an additional $120 million per year in sales taxes from online retailers who lack a physical presence in the state.

And though it is not a federal law change, exactly, Walker said it could still trigger the auto tax break.

“How we do that, I think will be part of a larger discussion we’ll have later this summer going into the fall,” Walker said.