Legal Question in Credit and Debt Law in Wisconsin

Although I am not aware of any prohibition on government bodies charging late fees, even if its legality were questionable, such small amounts would hardly be worth the fight unless the fees were assessed on an extremely valuable property such as a large office tower development. Essentially, what is sounds like they are doing in your case is adding the past due interest (which is what property tax late fees really are) to principal, which is a common practice, even if questionable, by creditors of all types. Interest on past due property taxes in WI is assessed at 18%, so you should definitely pay it first, then fight about it later in order to prevent the interest charges from ballooning even further.