, ,

WBA Compliance: New WI Tax and COVID Liability Law Summary

The 2021 Wisconsin legislative session is off to a busy, and productive start. Two key pieces of legislation were recently enacted into law, which are discussed in this article. Both pieces of legislation were supported by WBA throughout the process that led to enactment. Each provides meaningful benefits to banks and their customers.  

This article is focused on law that has been passed. At the time of this article’s publication, the legislature is still in session. WBA and its government relations team remain hard at work. Bills that are later signed into law will be discussed in future publications.  
Tax Conformity and PPP Deductibility 

On February 18, 2021, Governor Evers signed Assembly Bill 2 into law as 2021 Wisconsin Act 1 (Act 1). Act 1 contains various provisions which conform state tax law to recent federal changes. It includes a section which permits deductibility of business expenses paid for with Paycheck Protection Program (PPP) loan proceeds at the state level, just as they are at the federal level. Without this change, Wisconsin businesses which received PPP loans would have faced over $400 million in unexpected tax implications over the next three years. 

To look at it more specifically, Wisconsin Statute section 71.05 provides for income tax computation for state and local revenues. Pursuant to Act 1, a provision has been added to that section which exempts from taxation certain allowances from the federal coronavirus relief fund, including grants to small businesses. Thus, Act 1 federalizes Wisconsin tax law with respect to treatment of certain economic support programs funded through the federal Coronavirus Aid, Relief, and Economic Security Act, including loans under the PPP, and deduction of expenses paid with funds from such loans. These provisions take effect for taxable years beginning after December 31, 2018. 

COVID Premises Liability Protection 

On February 25, 2021, Governor Evers signed Special Session Senate Bill 1 into law as 2021 Wisconsin Act 4 (Act 4). Act 4 provides immunity for entities from civil liability for a COVID-19-related injury or death, except in the case of reckless or wanton conduct or intentional misconduct. The immunity is retroactive to claims accruing on or after March 1, 2020, but does not apply to an action filed before its enactment.

Act 4 applies to “entities” which broadly includes partnerships, corporations, associations, governmental units, Tribal governments, schools, nonprofit organizations, and any employer covered by state unemployment insurance laws. The law also provides immunity beyond the employer-employee relationship and would apply, for example, to a business’ customers, a school’s students, or a nursing home facility’s patients. 

Thus, the civil liability protection created under Act 4 allows entities, including financial institutions, to continue operation or begin opening their doors with immunity from claims of liability for acts or omissions resulting in exposure to COVID-19. This is a significant piece of legislation as Wisconsin’s financial institutions continue to be on the economic frontlines of the crisis and have been since its inception. 

More specifically, Wis. Stat. section 895.476 provides that beginning March 1, 2020, an entity is immune from civil liability for the death of or injury to any individual or damages caused by an act or omission resulting in or relating to exposure, directly or indirectly, to the novel coronavirus identified as SARS−CoV−2 or COVID−19 in the course of or through the performance or provision of the entity’s functions or services. 

Immunity under Act 4 is in addition to, not in lieu of, other immunity granted by law, and nothing in the above section limits immunity granted under any other provision of law, such as workman’s compensation laws, which, for example, generally provides an exclusive remedy for sick or injured workers. Also, as noted above, this immunity does not apply if the act or omission involves reckless or wanton conduct or intentional misconduct. Thus, financial institutions should continue to take steps to mitigate the risk of exposure to COVID-19. Financial institutions are reminded to remain mindful of state and local mandates, guidance, and recommended procedures. For example, considering the standards issued by the Centers for Disease Control and Prevention, the Occupational Safety and Health Administration, Wisconsin Department of Health Services, and local government issuances such as county orders. Banks should also consider consulting with its legal counsel for a fuller, more specific analysis of how it can obtain protections under Act 4. 

WBA will continue to monitor existing bills and update the membership on any significant changes. If you have any additional questions on any of the above laws, do not hesitate to contact us at wbalegal@wisbank.com

Additional Resources 
2021 Wisconsin Act 1 

2021 Wisconsin Act 4 

WBA’s reopening resource center 

CDC Guidance for Businesses and Employers 

OSHA Guidance on preparing workplaces for COVID-19 

OSHA Updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the workplace 

DHS Guidance for Employers 

By, Alex Paniagua