PPP Loans - Now a Surprise Tax Liability?
Venture Dairy Cooperative, along with other Wisconsin state business associations, are asking the legislature to quickly clarify the law to avoid the burden of nearly half a billion dollars of unplanned tax liability on Wisconsin farms and small businesses.
One of the most effective provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act was the Paycheck Protection Program (PPP). This program included a promise to business owners that if they used the PPP loans for appropriate payroll and non-payroll expenses, the loans would be forgiven and not recognized as taxable income. The intent of Congress is clear, and PPP dollars were meant to be tax-free.
However, there is now a disagreement between the elected officials who wrote the law and unelected agency employees who enforce it. Nearly a year later, the Wisconsin Department of Revenue changed course by issuing a guidance document stating the forgivable PPP loans are now taxable to help fund state government expenditures. This is especially egregious considering our state is estimated to have a significant general fund surplus for 2020-21 There is simply no need to force a surprise tax liability on farms and other small businesses merely because you think you can.
Below is a copy of the letter sent to the Wisconsin Legislature that will provide additional details and background on this issue.
You can help by reaching out to your state elected officials and encouraging them to take action to clarify this law to help protect you from this unplanned tax liability.
You can find your elected representatives here: