PEWAUKEE – On November 12, the WMC Litigation Center filed a motion for sanctions against the Village of Pewaukee for contempt of court, citing the Village’s continued imposition of its transportation tax even after the Wisconsin Court of Appeals struck the tax down.
The WMC Litigation Center filed suit against the Village of Pewaukee in April 2022, arguing the Village’s transportation utility fee (TUF) is an illegal tax. While this case was on appeal, the Wisconsin Supreme Court in another case struck down the Town of Buchanan’s TUF as an unlawful property tax.
TUFs have been adopted in several Wisconsin municipalities to generate revenue to fund local road improvements while avoiding the legal restrictions on property taxes. TUFs have allowed these municipalities, including the Village of Pewaukee, to effectively impose taxes on tax-exempt property and exceed municipal property-tax levy limits.
But in March 2024, the Wisconsin Court of Appeals issued a decision in Wisconsin Manufacturers and Commerce, Inc. v. Village of Pewaukee, concluding that the Village of Pewaukee’s TUF is an “impermissible tax.” Yet the Village continued to impose the tax for several months even after the appeals court struck it down.
“The Pewaukee village government’s actions are egregious twice over,” said WMC Litigation Center Executive Director Scott Rosenow, who filed this lawsuit against the Village of Pewaukee and the contempt motion. “The Village of Pewaukee continued imposing its so-called transportation utility fee after the Wisconsin Supreme Court unanimously ruled in the Town of Buchanan case that such charges are actually unlawful taxes. Worse yet, Pewaukee directly defied the Wisconsin Court of Appeals by imposing these taxes even after that court ruled they are impermissible. Pewaukee’s defiance of the court of appeals is contempt of court.”
The contempt motion requests the circuit court schedule a hearing, find that the Village of Pewaukee committed contempt of the court of appeals, and order the Village to reimburse all utility customers for their TUF payments dating back to March 13, 2024, when the court of appeals’ decision was issued.
“Taxpayers are owed their money back,” said WMC Litigation Center Deputy Director Nathan Kane. “Everyone in our state must obey the rule of law—and that includes municipalities. The government is not above the law.”
The WMC Litigation Center filed this contempt motion on behalf of Wisconsin Manufacturers & Commerce (the combined state chamber of commerce and manufacturers’ association) and Hawthorne Place LLC (the owner of the Hawthorne Place apartments in the Village of Pewaukee).
Click here to read the Motion for Sanctions for Contempt of Court.
