The Wisconsin Tax Appeals Commission recently clarified the applicability of the state’s property tax exemption for machinery, tools, and patterns (“MTP”) under Wis. Stat. § 70.111(27), which took effect in 2018. At issue in this appeal was which of a taxpayer’s property items were eligible for the exemption, which applies to all MTP unless the property is “used in manufacturing.”

The taxpayer—a cheese producer—claimed the MTP exemption for various items of property that were not exclusively used in manufacturing. The Department argued that all property owned by a manufacturer or located at a manufacturing site was “used in manufacturing” and ineligible for the MTP exemption. The Commission rejected Department’s interpretation of the MTP exemption as too narrow. Conversely, the taxpayer argued that only property exclusively used in manufacturing is ineligible for MTP exemption, which the Commission rejected as too broad.

The Commission held that property was not eligible for the MTP exemption if it had any use in the cheese manufacturing process, even if the manufacturing use was non-exclusive, indirect, or occasional. Therefore, the parties had to reexamine the taxpayer’s property to determine which property was not used at all in the cheese manufacturing process.


Masters Gallery Foods Inc. v. Wis. Dept. Rev., Wisconsin Tax Appeals Commission Docket No. 19-M-067 (Sept. 8, 2020)