Challenge to Brown Co. sales tax goes to state Supreme Court

MADISON (WLUK) -- A challenge to how Brown County is spending a half-percent sales tax is headed to the Wisconsin Supreme Court.

The sales tax, implemented in 2018, funded the new Resch Expo center, road and infrastructure improvements, the county jail, museum, libraries and parks.

The Brown County Taxpayers Association challenged the tax, arguing that the sales tax is illegal because state law only allows counties to impose sales taxes to reduce property taxes -- not fund new spending.

A circuit court ruled in Brown County’s favor. The BCTA appealed. On Wednesday, instead of ruling on the case, a state appeals court sent the case directly to the state Supreme Court.

That said, the appeals court leaned towards Brown County’s arguments, which rely on an Attorney General’s opinion in 1998, which concluded that although a county could achieve the goal of a direct property tax reduction by a dollar-for-dollar offset of sales and use tax proceeds against the property tax levy, that goal could also be achieved by offsetting the cost of individual items in the county budget.

“We tend to agree with the attorney general’s well-reasoned opinion, which is of significant persuasive value. By its plain language, WIS. STAT. 77.70 speaks of a legislative purpose to achieve a direct reduction in the property tax levy in counties that choose to enact a sales and use tax. The statute does not specifically endorse a “dollar-for-dollar” methodology in budgeting for achieving this purpose, nor does the statute explicitly prohibit counties from using sales and use tax revenue to fund new projects. The attorney general’s conclusion that 77.70 restricts the expenditure of sales and use tax revenue to items that may otherwise be funded by property taxes is sensible,” the court wrote.

“The primary issue presented in this case is triply novel: whether the attorney general was correct in 1998, what weight should be given to his interpretation, and also whether the tax levy limit subsequently established in WIS. STAT. 66.0602(2) should affect that interpretation. Given the profound importance of the issues raised in this appeal, the longstanding interpretation of WIS. STAT. 77.70 (on which many counties have relied), the potential budgetary consequences for Wisconsin’s counties, the need for clarity regarding the interaction of 77.70 and 66.0602, and issues regarding a potential remedy, we believe this is a case in which it would be appropriate for the supreme court, rather than the court of appeals, to render a decision,” the court ruled.

Brown County issued this statement: "We fully expected this case to wind up before the Wisconsin Supreme Court, and we remain confident that the Wisconsin Supreme Court will come to the same conclusion the Circuit Court reached and will rule in Brown County’s favor."

The Brown County Taxpayers Association did not reply to FOX 11's request for comment.

Of Wisconsin’s 72 counties, only four do not have a county sales tax: Manitowoc, Racine, Waukesha, and Winnebago.