CENTRAL WISCONSIN (WOAW) -- Businesses who received Paycheck Protection Program (PPP) loans will have to pay Wisconsin state taxes on them.
The federal government is allowing businesses to make deductions on those loans, but the Wisconsin Department of Revenue website says:
"A taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses listed in section 1106(b) of the CARES Act may not deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year."
The Portage County Business Council said the cost of the tax is something businesses owners will have to weigh against the benefit of the PPP loan.
"It does depend on the organization, where they are," said Portage County Business Council Executive Director Todd Kuckkahn. "I think, again, the federal government and the state government are trying to do their best to support the business community, but people have to make sure that they look at all the strings attached to those forgivable loans."
Michael Zamzow, a co-owner of Bull Falls Brewery in Wausau, said the first round of PPP loans helped the company rehire workers that were laid off at the beginning of the pandemic.
Even though the loan is helpful, he said it could be even more impactful if the funds weren't taxed.
"I mean if they're helping us out, I don't know why they would want to be taxing us at the same time, because it seems to be counter to what they're trying to accomplish and that's helping American companies," Zamzow said.
Ultimately, Zamzow said, the the tax won't deter him from applying for a second round of PPP loans.
"It wouldn't change my thoughts because net is net, there would be some value in it."
But he still hopes something changes before Tax Day.