Wisconsin small businesses hit with unexpected tax bills

When the federal government offered payroll protection loans to millions of businesses, it did so to try to help the companies that received the money stay afloat amid the pandemic and its economic fallout. It is credited with keeping thousands of businesses from closing their doors, at least for now. But there is trouble lurking for businesses that accepted the forgivable loans in Wisconsin. Although the loans are tax-free at the federal level, that is not the case in Wisconsin. In fact, nearly 90,000 small businesses in the state that took out PPP loans will face hundreds of millions of dollars in state tax liability. Wisconsin businesses that took the loans will face $457 million in state tax obligations through 2024. Half of those bills will come due this spring, as those businesses continue to face the challenges of the pandemic. The state’s bars, restaurants and other small businesses are continuing to struggle. That struggle will become harder when they get their tax bills. Increasing their tax liability now could force those struggling businesses to close. Wisconsin state lawmakers should get to work and fix this now, before those big bills come due. Otherwise forcing them to pay taxes on what was not designed to be taxable income will mean more job losses, and more business closures, the very thing the PPP program was designed to prevent in the first place.