On April 3, Finance Committee member Olympia J. Snowe (R-ME) and Committee Chair Max Baucus (D-MT) introduced S. 823, the “Net Operating Loss (NOL) Carryback Act,” which would allow businesses of any size to carryback losses incurred in 2008 and 2009 for five years. 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.” Snowe was referring to the recently enacted American Recovery and Reinvestment Act of 2009 which allows qualifying small businesses (whose average annual gross receipts in a test period are $15 million or less) to choose a three- four-or five-year net operating loss (NOL) carryback period for certain losses instead of the usual two-year period.  Snowe had previously attempted to establish such a liberal five year carryback for NOLs in the Senate-passed stimulus bill but the provision was cut back in the House-Senate Conference negotiations and instead capped for businesses with gross receipts of $15 million and less.

The bill would also block companies that receive cash from the Trouble Asset Relief Program (TARP) from utilizing this tax incentive.

The 2008 Housing Act which was signed by the President on July 30, 2008, includes tax breaks for homebuyers (including a refundable credit for first-time homebuyers for home purchases after Apr. 8, 2008 and before July 9, 2009) and homeowners (including a new state and local property tax deduction for non-itemizers but only for 2008). (more…)