Standard & Poor’s last week said a Wisconsin Supreme Court decision that adversely affects the state won’t have an immediate impact on its rating.
Wisconsin finance officials said last week they would spend the next several months assessing the full impact of the court’s decision overturning the sales tax on customized computer software.
The court found that Wisconsin had improperly levied a 5% sales tax on customized computer software purchased by Menasha Corp., which then modified the software. The packaging company had argued that modified software should not be subject to the sales tax. The state had argued that the software was pre-written and should be subject to the tax as tangible property.
The high court’s decision eliminates a revenue stream that had generated about $28 million annually of the roughly $4 billion generated by the 5% sales tax. It also could result in refunds owed to other companies totaling about $265 million.
Wisconsin’s current general obligation ratings are AA-minus by Standard & Poor’s and Fitch Ratings and Aa3 by Moody’s Investors Service with a negative outlook
