Consider contacting your local legislators regarding a potential proposal to impose a state tax on Forgiveable PPP Loans. Feel free to use and adopt our memo below.
To: Wisconsin Legislature
From: Evansville Area Chamber of Commerce & Tourism, Inc.
Date: February 4, 2021
Re: Protect Small Businesses from Surprise Tax Liability
During the opening weeks of the COVID-19 pandemic, state governments across the nation took drastic measures, shutting down whole economic sectors in a bid to slow the spread of the virus. These shutdowns helped push Wisconsin, and the nation, into its worst economic crisis since the Great Depression.
Congress reacted to these twin public health and economic crises by passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which allowed some of these businesses to make it through the worst of the crisis. One of the most effective portions of the CARES Act was the Paycheck Protection Program (PPP), which helped employers keep people employed in the early months of the pandemic. This program included a promise to small business owners that if they used the loans for appropriate payroll and non-payroll expenses, the loans would be forgiven and that the aid was tax-free.
Now small businesses may be saddled with almost half a billion dollars of surprise tax liability.
The businesses who used these loans likely saved the state money on government programs and helped stimulate the economy by keeping Wisconsinites employed. Businesses have kept Wisconsinites employed in an incredibly challenging economic environment. And to now be taxed on this money, could prove incredibly detrimental to the businesses and whole communities, as many businesses are still trying to hold on in the midst of continued economic challenges.
We are urging lawmakers to follow the federal government example and the intention of the CARES act of these forgivable PPP loans to be tax free aid to businesses.
Respectfully,
Board of Directors
Evansville Area Chamber of Commerce & Tourism, Inc.
