On Thursday, February 18, Gov. Evers signed into law the first act of the 2021 legislative session, a bill making various changes to the laws administered by the Department of Revenue. Among other mostly routine changes, the law conforms Wisconsin tax law with the federal code as of December 31, 2020, for the purposes of state income and franchise taxes.
Most notably, the law federalizes Wisconsin’s treatment of loans made under the federal Paycheck Protection Program (PPP), exempting those loans from the definition of taxable income and allowing purchases made with those loans to be deducted. Similarly, the law adopted tax exemptions and expense deductions for income received from other economic support programs funded by federal COVID relief legislation.
The bill ultimately garnered widespread support in the Legislature, passing the Assembly 87-3 and the Senate 27-5. The Legislative Fiscal Bureau estimated that the law will reduce state general fund tax revenues by $563 million from now through the end of the 2022-23 fiscal year.