Gov. Scott Walker expanded an election year $137 million tax cut Tuesday, using his partial veto powers to lengthen a sales tax holiday from two to five days in August and ensure that a $100 per-child rebate will go to any family with dependent children.
The bill Walker signed into law puts the tax rebate and sales tax holiday in place this year only.
"This rebate and sales tax holiday will help Wisconsin families with the costs of raising children," Walker said in a statement after signing the bill in the children's clothing department at Blain's Farm and Fleet in Waukesha. "A couple hundred dollars more in the family budget could really make a difference, particularly when getting ready for the next school year."
Families who apply for the $100 per-child rebate will receive the payment by Sept. 1, timing Democrats have assailed as amounting to an election bribe. The primary is Aug. 14 and the general election, where Walker is seeking a third term, is Nov. 6.
"Instead of one-time campaign gimmicks and massive tax giveaways to the wealthy, we should be investing in long-term child care relief, expanding access to affordable health care and supporting strong community schools," said Democratic Senate Minority Leader Jennifer Shilling.
Families must apply online for the child tax rebate starting on May 15. Walker said more details about how to apply through the Department of Revenue website will be announced later. The deadline for applying will be July 2 and payments will be made either through direct deposit or a mailed check.
To qualify, a child must have been under age 18 for all of 2017, be a resident of Wisconsin as of Dec. 31 and be a U.S. citizen.
Walker used his veto to ensure the tax rebate would be available to any family that claims a child under age 18 as a dependent, not just parents of the children. The veto will not increase the $122 million cost of the rebate because it sticks with the original intent of the Legislature, Walker said.
The bill as passed originally also included just a two-day sales tax holiday over the first weekend in August. But Walker said that wasn't long enough to give "hardworking taxpayers" the chance to take advantage. So he used his veto to extend the holiday by three more days, from Wednesday Aug. 1 through Sunday Aug. 5.
That will increase the cost of the sales tax holiday -- measured in lost sales tax revenue to the state -- from $11.8 million to $14.8 million, Walker said.
The sales tax will be waived on pieces of clothing costing less than $75, a computer costing less than $750, computer supplies costing less than $250 and school supplies costing no more than $75 per item.
Critics of sales tax holidays, particularly retailers, argue they are costly and difficult to administer.
Sixteen states had some type of sales tax holiday in 2017, according to the Federation of Tax Administrators.
