Wisconsin businesses concerned about possible PPP tax
HAYWARD, WI – Wisconsin business owners fear a hefty tax bill is coming their way.
Mike Covelli is the Managing Director of the Northern Lakes Co-operative in Hayward, Wisconsin.
“The co-op is a group of six different retail businesses in Hayward, an organization of around $ 15 million,” Covelli said.
Like many other businesses during the pandemic, Covelli had to use federal P3 loans to help the co-op stay afloat. He received approximately $ 400,000.
“Extremely helpful. We needed it because COVID had just started to unleash its terror. The business was down,” Covelli said.
Covelli and other business owners felt that PPP loans would not be taxed.
“This whole revelation is a shock to us,” Covelli said.
The shock came last month, when the Wisconsin Department of Revenue announced it wanted to tax P3 loans companies had received.
“It surprises thousands of Wisconsin businesses,” said Chris Ruckdaschel, president of the Hayward Chamber of Commerce.
Ruckdaschel said this sudden news did not allow business owners to make an informed decision on whether to take PPP money.
“Part of the problem here is that PPP has been presented to businesses as tax-free money and a help to them during these tough times. Business decisions have been made with that in mind,” Ruckdaschel said.
In total, if the P3 money is taxed, the Wisconsin DOR will raise $ 430 million from Wisconsin businesses. Covelli has said he will owe $ 30,000. This will affect its operations.
“Definitely cut back a few hours, and then probably have to go to our line of credit at the bank,” Covelli said.
Ruckdaschel said he hopes lawmakers will give it some thought.
“We just hope the logical heads prevail and hope they say wait a minute, the whole CARES law in the first place is meant to help businesses,” Ruckdaschel said.
Tuesday evening, the State Assembly voted not to tax PPPs.
It’s now in the Wisconsin Senate and potentially the Governor.