Julia Wanzco (Snowe) 202-224-1304
Dan Virkstis (Baucus) 202-224-4515
Snowe, Baucus Introduce Bill to Expand NOL Carrybacks
WASHINGTON D.C. – To help ease the burden of the economic downturn on American entrepreneurs, U.S. Senator Olympia J. Snowe (R-Maine), a senior member of the Senate Finance Committee and Committee Chair Max Baucus (D-Mont.) today introduced the Net Operating Loss (NOL) Carryback Act, legislation to allow formerly profitable businesses to carryback losses incurred in 2008 and 2009 for five years.
“As American employers continue to struggle to stay afloat in the worst economic crisis since World War II, Congress must fully utilize the tax code to provide timely and targeted relief for American entrepreneurs,” Senator Snowe said. “While the recently enacted economic stimulus bill included a modest NOL carryback provision to assist smaller firms, this legislation will help any company that has losses from 2008 or 2009 carry back those losses to offset taxes paid in the previous five years when they were profitable. This will go a long way in helping to keep more workers on payroll and stabilize overall operations.”
“The bottom line here is that this measure will help generate immediate cash for businesses and prevent further job loss, which is critical for our economic security. This bill offers tax relief that gives owners and entrepreneurs better means to make payroll and invest in new equipment, put people back to work, and create new jobs when they can,” Baucus said. “I was proud to include this provision in the economic recovery bill, and today we take the second step in making great strides in support of millions of working families and American businesses.”
Current tax law allows “net operating loss carrybacks” to help companies recoup their losses by off setting taxable income from previous tax years. Recognizing the adverse impact of the ailing economy on entrepreneurs, Senator Baucus and Senator Snowe fought to establish a five year carryback for NOLs in 2008 and 2009 to further help increase access to capital for financially distressed firms. Current tax law permits companies to carryback losses two years. Although the Senate-passed stimulus bill allowed carrybacks for any d business, the provision was trimmed- down in the House-Senate Conference negotiations and capped for businesses with gross receipts of $15 million and under. The NOL Carryback Act would expand current law to include small, medium and large firms. In addition, the Snowe-Baucus initiative would block companies that receive cash from the Trouble Asset Relief Program (TARP) from utilizing the tax incentive.
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