Committee Considers Net Operating Loss Carry Over Change
A key legislative committee heard testimony March 24 on a bill that will help Connecticut corporate better compete against companies in other states.
Net operating loss carryforwards permit a business suffering a loss in a certain year to deduct those losses on future tax filings.
The ability to deduct operating losses is useful for emerging businesses and companies with long product development cycles.
Of the states with a corporate tax, Connecticut’s net operating loss carryforward policy is among the least competitive in the nation.
Most states allow companies to offset losses by up to 80% of tax liability for up to 20 years.
Connecticut allows annual offsets of only 50%, with only Pennsylvania’s 40% being less competitive.
While the allowed deduction percentage sets Connecticut apart from other states in terms of competitiveness, CBIA believes the committee’s extension of the carryforward period is the best course of action as it minimizes the short-term revenue impact to the state.
HB 6922 provide corporate businesses with a little relief and will encourage greater private sector investment and growth in Connecticut.
CBIA’ Eric Gjede, Connecticut Bioscience Growth Council executive director Paul Pescatello, Greater New Haven Chamber of Commerce president and CEO Garrett Sheehan, and United Rentals director of government affairs Ed Noonan all testified in support of the bill.
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