hb 1268

CHAPTER 211

HB 1268-FN - FINAL VERSION

AN ACT relative to the net operating loss deduction under the business profits tax.

SPONSORS: Rep. Sapareto, Rock 13; Rep. Mercer, Hills 27; Rep. J. Bradley, Carr 8; Rep. Norelli, Rock 31; Rep. Lasky, Hills 33; Sen. Boyce, Dist 4; Sen. Cohen, Dist 24

This bill increases, over a 4-year period, the amount of net operating loss generated in a business profits tax year that may be carried forward for 10 years following the loss year.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to the net operating loss deduction under the business profits tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

211:1 Business Profits Tax; Net Operating Loss Deduction. RSA 77-A:4, XIII is repealed and reenacted to read as follows:

XIII. A deduction for the amount of the net operating loss carryover determined under section 172 of the United States Internal Revenue Code in effect on December 31, 1996 provided, however, that in calculating such net operating loss carryover, the election permitted under section 172(b)(3) of the United States Internal Revenue Code in effect on December 31, 1996, shall not be allowed. A net operating loss shall be apportioned in the year incurred according to RSA 77-A:3. Net operating losses may only be carried forward for the 10 years following the loss year. For taxable periods ending:

(a) On or before June 30, 2003, the amount of net operating loss generated in a tax year that may be carried forward may not exceed $250,000.

(b) On or after July 1, 2003 and on or before June 30, 2004, the amount of net operating loss generated in a tax year that may be carried forward may not exceed $500,000.

(c) On or after July 1, 2004 and on or before June 30, 2005, the amount of net operating loss generated in a tax year that may be carried forward may not exceed $750,000.

(d) On or after July 1, 2005, the amount of net operating loss generated in a tax year that may be carried forward may not exceed $1,000,000.

In the case of a business organization not qualifying for treatment as a subchapter C corporation under the United States Internal Revenue Code, such deduction shall be the amount that would be determined under section 172 of the United States Internal Revenue Code in effect on December 31, 1996 if the business organization were a subchapter C corporation and as limited by this section. A deduction for the amount of the net operating loss carryover shall be limited to losses incurred on or after July 1, 1997.