Posted at 12:40 p.m. on Tuesday, February 16, 2021
The Brillion News
MADISON – Assembly Bill 2 (AB2) contains language that protects small businesses from millions in taxes for accepting Paycheck Protection Program (PPP) loans.
On Tuesday, February 16, AB2 got the endorsement of Wisconsin Manufacturers & Commerce (WMC), the statewide large business and manufacturers’ association.
WMC encouraged lawmakers to vote in support of AB2), which protects small businesses that received forgivable PPP loans from millions of dollars in unexpected taxes.
Congress intended for the PPP loans to be tax-free, while also allowing expenses paid for with the loans to be deductible.
Because of technical errors in drafting the federal program, the Wisconsin Department of Revenue (DOR) recently determined that any expenses funded through a PPP loan cannot be deductible – resulting in a surprise tax on small businesses of $430 million.
Lawmakers have amended AB2 to include language that ensures business expenses paid for with revenue from a PPP loan would in fact be deductible. WMC said that would fulfill the promise made by Congress.
“From the very beginning, the intent was for these loans to be tax-free,” said WMC General Counsel and Director of Tax, Transportation & Legal Affairs Cory Fish. “WMC and our members urge legislators to vote in favor on AB 2, which will protect thousands of small businesses from costly and unexpected tax bills.”
WMC expects the Assembly and Senate to vote on AB 2 on Tuesday. If passed, WMC encourages Governor Tony Evers to quickly sign it into law.