Tax boosts to garner $685 million in state revenues through mid-2009
By Greg Bump
WisPolitics staff
Wisconsin residents may want to get to the DMV to update their car registration or drivers license before the end of the year. Smokers, too, may want to stock up.
On Jan. 1, fees and taxes will jump for motor vehicle registration and other car and truck-related services, and a $1 per pack increase on cigarettes will go into effect. The measures passed as part of the biennial budget back in October, mean $685 million in additional state revenues through June 30, 2009, legislative budget analysts say.
The registration fee for automobiles will go from $55 to $75 annually. For light trucks up to 4,500 pounds, the fee will increase from $48.50 to $75. Owners of tucks between 4,500 pounds and 6,000 pounds will see their registration fees jump from $61.50 to $84. And for trucks up to 8,000 pounds, the fees go from $77.50 to $106.
The increases will bring in $143.9 million in new revenue over the biennium, according to the Legislative Fiscal Bureau.
Also, registration fees for heavy trucks of over 8,000 pounds, for which there are 16 different classifications, are going up 30 percent. According to the LFB, that increase will mean an extra $56.9 million to state coffers over the biennium.
Registration fees aren’t the only higher costs drivers will see at the DMV. Title fees will rise from $28.50 to $53 in the New Year, a change that will result in an additional $52.6 million to state coffers over the biennium. Plus, license renewals will cost an extra $10 to offset costs to implement the federal Real ID Act specifications for driver’s licenses. The $10 increase will generate $20.7 million over the biennium to implement Real ID.
Smokers, too, will experience a jump in the taxes they pay, as the cig tax goes from 77 cents per pack to $1.77 per pack, which will grab an additional $378.5 million for the state over the biennium.
In addition, the tax on “tobacco products” other than cigarettes increases from the current 25 percent of the manufacturers’ list price to 50 percent. (There is a cap, however, that holds the tax on cigars to a maximum of 50 cents per cigar.) “Moist snuff” tobacco users will see their product’s tax go from a price-based tax to a weight-based tax of $1.31 per ounce. The changes to tobacco products are expected to mean an extra $32.4 million in revenue on top of the cig tax, according to the LFB.
Also effective at the end of the year is the elimination of the Revisor of Statutes bureau, which will be folded into the Legislative Reference Bureau. The move, written into Gov. Jim Doyle’s original budget, passed the Joint Finance Committee in June on a 14-2 vote.
The move saves the state $550,000 in 2008-09 and removes 10 positions from the state payroll while creating two positions in the LRB. In addition, one position is deleted in the Legislative Council, and one position is deleted in the Senate.
The end of 2007 will also see at least a temporary reprieve from the estate tax, though some dollars will continue to be collected as estates of individuals who died before Jan. 1 are settled.
The Legislative Fiscal Bureau said an average annualized figure for state collection of the estate tax is about $100 million. For the 2006-07 fiscal year, Wisconsin collected $121.1 million in estate taxes and expects to collect $95 million in the 2007-08 fiscal year. In 2008-09, as estates from individuals who died in 2007 or earlier are settled, $25 million is expected to flow into the state.
Due to a complicated mix of state and federal laws, those who die between Jan. 1, 2008, and Dec. 31, 2010, will not have to pay an estate tax to Wisconsin. In 2010, the federal estate tax is also eliminated.
But the tax may come back on Jan. 1, 2011, unless federal law is changed, and the state will collect some estate tax revenue based on what happens at the federal level.
See a list of laws taking effect on Jan. 1 compiled by the Legislative Reference Bureau:
http://www.wispolitics.com/1006/071219Jan1laws.pdf
