Waste Treatment Exemption

Facilities used for the treatment of industrial wastes or air contaminants may qualify for an exemption from property taxes under the provisions of s. 70.11(21) of the Wisconsin Statutes. Below are responses to the most frequently asked questions regarding this exemption.

  1. How is "waste treatment facility" defined?
  2. What does "used exclusively"mean?
  3. What is "industrial waste"?
  4. What are "air contaminants"?
  5. What property qualifies for this exemption ?
  6. Is bio-gas equipment eligible for a waste treatment exemption? ?
  7. If I sell the crop grown on my agricultural land where a food processor or manufacturer spreads wastewater, does the land qualify for the waste treatment exemption?
  8. How do I claim and maintain this exemption and what type of records do I need to keep?
  9. What if DOR determines that property recorded on my M-Form does not qualify for exemption? Can I appeal the decision?
  10. 10. Where can I find more information on this exemption?

  1. 1. How is "waste treatment facility" defined?

    All property purchased or constructed to be used exclusively and directly to remove, store or cause a physical or chemical change in industrial waste or air contaminants for the purpose of reducing or eliminating pollution of surface waters, air or waters of the state. (sec. 70.11(21)(am), Wis. Stats.)

  2. What does "used exclusively" mean?

    "Used exclusively" means the property's sole purpose is to control or eliminate pollution. The property may have other uses if they do not exceed 5% of the total use.

  3. What is "industrial waste"?
    • Any gas, liquid or solid matter resulting from a process of industry, manufacture, trade, business or the development of any natural resource
    • Industrial waste has no monetary value and would otherwise be considered superfluous or discarded material
    • Industrial waste can be used to produce heat or steam for a manufacturing process if the fuel consists of one of the following:
      • 95 percent or more industrial waste that would otherwise be superfluous or discarded material
      • 50 percent or more of wood chips, sawdust, or other wood residue from the paper and wood products manufacturing process, if the wood chips, sawdust, or other wood residue would otherwise be superfluous or discarded
  4. What are "air contaminants"?
    • Air contaminants include: dust, fumes, mist, liquid, smoke, other particulate matter, vapor, gas, odorous substances or a combination of the above
    • Air contaminants do not include: uncombined water vapor
      (sec. 285.01(1), Wis. Stats.)
  5. What property qualifies for this exemption?

    All land, land improvements, buildings and machinery purchased or constructed as a waste treatment facility used exclusively to remove, store or cause a physical or chemical change in industrial waste or air contaminants to control or eliminate pollution of surface waters, air or waters of Wisconsin.

    Property typically included in this exemption (exempt):

    • Dust collection systems
    • Air cleaners
    • Electrostatic precipitators
    • Equipment used to remove smoke or fumes from welders
    • Scrubbers used to remove air pollutants
    • Wastewater pretreatment systems
    • Waste holding tanks
    • Wood waste burning process boilers
    • Aerators
    • Ridge and furrow systems and industrial wastewater holding ponds
    • Thermal incinerators
    • Gas vapor recovery equipment at gas stations
    • Paint booths

    Property typically excluded from this exemption (taxable):

    • Equipment used to compact or bale waste to reduce volume
    • Storage tanks used outside of production process
    • Equipment used for sewage treatment or garbage handling
    • Conversion of a furnace from one type of fuel to another type of fuel
    • Equipment treating uncombined water vapor (ex: steam)
    • Unnecessary siltation resulting from operations, including: washing of vegetables or raw food products, gravel washing, stripping of lands for development of subdivisions, highways, quarries and gravel pits, mine drainage, cleaning of vehicles or barges, or gross neglect of land erosion
    • Smokestacks with increased height to diffuse emissions over a wider area
    • Monitoring equipment that is not a component or integral part of a waste treatment facility
    • Equipment used to remove trimmings or scraps from the production process when those items have monetary value
    • Land used to dispose industrial waste and also used to grow agricultural products that are sold
  6. Is bio-gas equipment eligible for a waste treatment exemption?

    No. As of January 1, 2014, bio-gas energy systems are exempt under state law (sec. 70.111(18), Wis. Stats.).

  7. If I sell the crop grown on my agricultural land where a food processor or manufacturer spreads wastewater, does the land qualify for the waste treatment exemption?

    No. Whenever a crop is sold, the land no longer qualifies for the exemption. Below are examples of what qualifies and what is taxable.

    When land exemptions typically apply:
    Landowner:

    • Cuts the cover crop and lets it lie in the field
    • Leases property to a farmer; the farmer plants, harvests and feeds the crop to his own cattle
    • Grows the crop and allows an area farmer to harvest and feed the crop to the farmer's cattle
    • Allows an area farmer, at no charge, to grow, harvest and feed the crop to the farmer's cattle

    When land exemptions typically do not apply and land is taxable:
    Landowner:

    • Leases property to a farmer; the farmer plants, harvests and sells the cover crop
    • Grows, harvests and uses the crop in his/her own manufacturing process (ex. canning company)

    Farmer:

    • Harvests the crop and sells it
    • Sells the crop instead of feeding it to his cattle
  8. How do I claim and maintain this exemption and what type of records do I need to keep?

    Each year, manufacturers must report waste treatment property on the manufacturing self-reporting forms due annually on March 1. Owners must retain a list of assets classified as exempt waste treatment at their place of business. The Department of Revenue (DOR) will inspect this asset list.

    Personal Property: Waste treatment personal property costs must be reported on the M-P Wisconsin Manufacturing Personal Property Return, Schedule Y-P, Part 1, line 11.

    Real Estate: The costs of land, land improvements, buildings and building components related to waste treatment must be reported on the M-R Wisconsin Manufacturing Real Estate Return, Schedule Y-R, Part 1, line 6 and on Schedule R-6.

  9. What if DOR determines that property recorded on my M-Form does not qualify for exemption? Can I appeal the decision?

    Yes, if DOR determines your property is taxable, you may appeal. If you are a manufacturer, the value of the property denied for the waste treatment exemption is added to your manufacturing real estate or personal property assessment. You may appeal your full value manufacturing assessment to the Board of Assessors.

  10. Where can I find more information on this exemption?

    Manufacturers - contact the Manufacturing & Utility district officewhere your property is located.

    Non-Manufacturers - contact the local assessor responsible for assessments in the municipality where your property is located.

    For additional information, view the following documents:
    Wisconsin Statutes

    Wisconsin Property Assessment Manual

For more information contact the DOR Manufacturing & Utility District Office in your area.

July 10, 2014