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Wisconsin Manufacturers and Commerce Inc. v. Village of Pewaukee

Unlawful Taxation

On behalf of WMC, the WMC Litigation Center filed this lawsuit in April 2022 to challenge the Village of Pewaukee’s so-called “transportation utility fee” or TUF, which Pewaukee imposed on all property owners to pay for road repair throughout the village. The Waukesha County Circuit Court upheld the TUF, but the Wisconsin Court of Appeals unanimously reversed the circuit court in March 2024. The court of appeals ruled that the TUF is an “impermissible tax.” Pewaukee subsequently filed a petition for review, but the Wisconsin Supreme Court declined to hear the case.

In November 2024, the Litigation Center filed a motion asking the circuit court to hold Pewaukee in contempt for continuing to impose the TUF for several months after the court of appeals struck the TUF down. The contempt motion asks the circuit court to order Pewaukee to reimburse all its taxpayers for the TUF money that they paid to the village since the court of appeals’ decision in March 2024. This contempt motion is in briefing, with a hearing scheduled for February 14, 2025.

Why This Case is Important

This lawsuit is significant because more than 15 municipalities around Wisconsin have either adopted a similar tax or proposed doing so. These transportation taxes can be very costly, exceeding ordinary property taxes for some businesses. By mislabeling these taxes as “fees,” municipalities have been using these taxes to exceed their statutory levy limits, impose taxes on tax-exempt property, and circumvent the Wisconsin Constitution’s uniformity requirement for property taxation. Because these transportation taxes have no legal basis, they also have no legal limit – a municipal government could charge homeowners and businesses as much money in “transportation utility fees” as the local elected officials want. The Litigation Center’s victory in this case sends a clear message to local governments throughout the state: “transportation utility fees” are unlawful taxes.

Court:

Waukesha County Circuit Court; Wisconsin Court of Appeals (District 2)

Case No.:

Waukesha County Case No. 2022CV515. Appeal No. 2023AP690.

Stage:

Contempt proceedings against Pewaukee in the circuit court

Our Involvement:

The WMC Litigation Center filed and litigated this lawsuit on WMC’s behalf
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