Wisconsin Supreme Court Declines to Review Appellate Decision Striking Down Illegal Transportation Utility Tax

MADISON – On Friday, the Supreme Court of Wisconsin denied a petition from the Village of Pewaukee seeking review of a Court of Appeals decision that struck down its transportation utility tax. The case was filed by the WMC Litigation Center in 2022 on behalf of Wisconsin Manufacturers & Commerce (WMC) – the combined state chamber and manufacturers’ association – and the appellate court confirmed in March the charge is an illegal tax.

“This is a huge win for taxpayers across the state of Wisconsin,” said WMC President & CEO Kurt R. Bauer. “The Supreme Court’s decision confirms that local governments cannot exceed their authority to raise revenue beyond property tax limits through the creative use of so-called fees. Simply put, transportation utility fees are nothing more than unlawful taxes.”

Transportation utility fees have been adopted in many Wisconsin municipalities to generate revenue to fund local projects while avoiding the legal restrictions on property taxes. This strategy has allowed many municipalities, including the Village of Pewaukee, to impose these charges on tax-exempt property and exceed their levy limits. In its lawsuit against Pewaukee, WMC argued that transportation utility fees disproportionately impact businesses and violate the constitutional uniformity requirement.

“By denying Pewaukee’s petition, we have further confirmation from the Supreme Court that so-called transportation utility fees are unlawful taxes,” added WMC Litigation Center Executive Director Scott Rosenow, who handled this lawsuit against Pewaukee. “We’re pleased with the decision, which will help protect taxpayers from ever-increasing, limitless taxes.”

Last June, the Wisconsin Supreme Court unanimously struck down the Town of Buchanan’s transportation utility fee as an unlawful property tax. Although Pewaukee and the League of Wisconsin Municipalities argued that the Buchanan ruling was not applicable in this case, the Court of Appeals concluded otherwise in its March decision, holding that Pewaukee’s transportation utility fee is an illegal tax for the same reasons that Buchanan’s was. The Supreme Court’s denial of Pewaukee’s petition for review ensures the appellate decision will stand.

Click here to read the March Court of Appeals decision.

Click here to read the Supreme Court’s order denying Pewaukee’s petition for review.