Wisconsin legislation to exclude certain healthcare benefits from Wisconsin taxable income.

October 5, 2011

On October 5, 2011, Tax Executives Institute submitted the following comments to key leaders of the Wisconsin legislature, endorsing legislation to conform Wisconsin's tax law to federal provisions relating to the income tax exclusion for employer-provided health care insurance, which were changed by the 2010 health care reform law. The comments, which took the form of a letter from TEI President David M. Penney, were prepared under the aegis of TEI's State and Local Tax Committee, whose chair is Linda H. Dickens of Texas Instruments Incorporated. Contributing substantially were two members of the Wisconsin Chapter--Victor Ledesma of Kimberly-Clark Corporation and Carita R. Twinem of Spectrum Brands, Inc. Daniel B. De Jong, TEI Tax Counsel, serves as legal staff liaison to the State and Local Tax Committee and coordinated the preparation of the comments.

As president of Tax Executives Institute, I write to express the Institutes' support for legislation to conform provisions of the Wisconsin Tax Code to recent federal legislation that excludes from an employee's taxable income employer-provided health insurance benefits for adult children under the age of 27. Significantly, Wisconsin is the only state that has not updated its laws in this manner. In addition to increasing the tax burden on Wisconsin residents, failure to enact this legislation will impose severe administrative burdens on Wisconsin employers. We urge prompt action to resolve this matter.

Tax Executives Institute was founded in 1944 to serve the professional needs of in-house tax professionals. Today, the organization has 56 chapters in the United States (including two in Wisconsin), Canada, Europe, and Asia. Our 7,000 members represent 3,000 of the largest companies in the world, many of which either are resident or do business in Wisconsin. As the preeminent association of business tax professionals worldwide, TEI has a significant interest in encouraging uniform and equitable enforcement of the tax laws and reducing the cost and burden of administration and compliance to the benefit of taxpayers and government alike. The Institute is committed to maintaining a system that works--one that builds upon the principle of voluntary compliance and is consistent with sound tax policy.

In 2010, Congress passed the Patient Protection and Affordable Care Act, Public Law 111-149, and the Health Care and Education Reconciliation Act of 2010, Public Law 111-152 (together...