MADISON — A Senate committee last week voted (3-2) on an amendment to Senate Bill 2 that stops the Department of Revenue from taxing forgivable Paycheck Protection Program (PPP) loans, a key part of last year’s bipartisan federal CARES Act.
The Financial Institutions and Revenue Committee’s three Republicans voted for the measure, while the two Democrats voted against.
As Empower Wisconsin first reported, the Evers administration quietly moved to tax the loans, a move that runs counter to the intent of the federal legislation. The Senate amendment aligns Wisconsin tax code with the federal government’s so that state tax collectors aren’t able to collect an estimated $480 million on the loans to businesses.
Critics of the move, including some conservatives, say a many large, profitable businesses have benefitted from the PPP loans. They’ve shown a profit, unlike other businesses and individuals that, under state law, are forced to pay taxes on forgivable loans.
But many small and large businesses have been hit hard by lost sales from the pandemic and the disastrous government lockdowns and restrictions implemented by the same governor who wants to tax them again.
“Wisconsin businesses were told they could receive forgivable and tax-free PPP loans to help them survive COVID-19 and subsequent government shutdowns. While these funds were critical to so many employers and their employees, businesses could now face a hefty and surprising tax bill,” said Wisconsin Manufacturers & Commerce General Counsel and Director of Tax, Transportation and Legal Affairs Cory Fish.
“WMC and our members applaud the efforts of Sens. Stafsholt, Roth, Kooyenga and Marklein for moving forward legislation that will protect thousands of small businesses from these unexpected taxes,” Fish added
