Earlier this year, Minnesota Governor Tim Pawlenty decided to end a 40-year tax reciprocity agreement with the State of Wisconsin.

Officials say the long time deal had allowed people who live in one state and work in another, to file one return, paying taxes in their state of residence. Without the agreement, affected workers will double their tax paperwork.

Residents who live in one state and work another may soon find themselves shelling out cash to Uncle Sam.

"I think it's really unfair, it costs extra money," said Cheryl Schultz, a Duluth resident who works in Superior.

Officials say Pawlenty opted to end to the agreement in an effort to keep Minnesota's budget in check.

Affected residents say the issue is a double-edged sword.

"I don't think any American is happy to pay more in tax...but if it helps the deficit for the state I live in--I guess that'd be okay," said Johnny Ringold, a Minnesota resident who work across the border.

Officials say they're working on resolving the issue on both sides of the border.

"We have continued to meet and talk with the Wisconsin legislature," said Sen. Yvonne Prettner Solon, DFL--Duluth.

Officials say legislative leaders in the Badger State are willing to call a special session in an effort to restore the agreement.

"Reciprocity has been extraordinarily successful for thousands of Minnesota and Wisconsin residents," said Sen Bob Jauch, D--Poplar.

If a new agreement is not reached, officials say about 8,000 Minnesotans will experience an average additional tax payment of $300 to the Badger state.

Experts say about 35,000 Wisconsin residents will be affected if a new agreement is not reached.