Minnesota is not giving up on reviving income tax reciprocity with Wisconsin.

So on Thursday, state Revenue Commissioner Myron Frans tried to get the effort back on track, this time with $1 million carrot.

In a letter to Wisconsin’s revenue secretary proposing that the states resume reciprocity in 2015, Frans included a new twist on a previous proposal: Wisconsin’s payment for Minnesota’s net revenue loss would be reduced by $1 million per year.

The offer was made possible by a change in Minnesota law, but Frans said the clock is running.

For the reduction to apply, Wisconsin has to agree to the deal by Sept. 30.

“I have heard from many taxpayers that live on one side of the border but work in the other about the importance of this issue, and how we could make their taxes simpler by restoring reciprocity,” Frans wrote to Wisconsin Revenue Secretary Richard Chandler.

The trouble is, Wisconsin was not exactly thrilled by the offer.

“Wisconsin has met all the terms to restore the agreement which Minnesota cited when they ended income tax reciprocity in 2009, including accelerated payments and completing a benchmark study,” Jennifer Western, the state’s assistant deputy revenue secretary, said in an email to the Pioneer Press.

“Unfortunately, Minnesota is insisting on millions more that no other states with agreements require, including Minnesota in its other agreements,” said Jennifer Western, assistant deputy secretary of Wisconsin’s revenue department.

“We are glad Minnesota’s ransom has come down $1 million dollars from its original $6 million dollars, but it’s not right for Wisconsin to pay to undo a tax increase Minnesota imposed on its citizens when it ended reciprocity,” Western continued.

“If they eliminate that particular payment, we can get reciprocity back ASAP.”

The proposed agreement would allow 56,000 Wisconsin residents and 24,000 Minnesotans to file income tax returns only in their state of residence.

Except for the $1 million reduction, the proposal is similar to offers made in 2012 and 2013.

Minnesota and Wisconsin had a reciprocity agreement from 1968 to 2009. But then-Gov. Tim Pawlenty scrapped it because Wisconsin was late in making payments to Minnesota, and the two states were using outdated figures on the number of taxpayers migrating between the states.

Under the agreement, Wisconsin compensated Minnesota for revenue it would have raised by taxing Badger State residents who cross the border to work.

Ending the pact meant the 80,000 Minnesotans and Wisconsinites who live in one state and work in the other must file two state income tax returns instead of one.

Minnesota’s net revenue loss for 2015 is estimated at $92.5 million, meaning if Wisconsin were to accept the deal, it would pay $91.5 million over four quarterly installments. Interest would be charged on late payments.

Doug Belden can be reached at 651-228-5136. Follow him at twitter.com/dbeldenpipress.com.