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NAM commends passage of expanded NOL tax relief.
November 10, 2009 -
According to Monica McGuire, senior policy director, taxation at NAM, by allowing companies to carry back current losses to offset taxes paid in profitable years, expanded net operating loss relief provision will provide cash for hard hit manufacturers to finance ongoing operations and retain jobs. Bill will enable manufacturers to carry back losses in 2008 or 2009 for period of 5 years instead of current 2 year carry back, which does not provide enough relief during prolonged economic downturn.
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NAM Commends Congressional Passage of Expanded Net Operating Loss Tax Relief National Association Of Manufacturers (NAM) Provision Will Help Struggling Manufacturers Save Jobs
WASHINGTON, D.C., Nov. 5, 2009 -- Monica McGuire, senior policy director, taxation at the National Association of Manufacturers (NAM), issued the following statement today following Senate and House approval of expanded net operating loss (NOL) relief, commonly referred to as the Unemployment Insurance (UI) bill. By allowing companies to "carry back" current losses to offset taxes paid in profitable years, the NOL provision will provide cash for hard hit manufacturers to finance ongoing operations and retain jobs.
The House's action today clears the way for the President to sign into law tax relief that will provide needed cash for struggling manufacturers to meet payroll, retain jobs and, in many cases, stay in business. Manufacturing has suffered greatly from this deep economic downturn, losing 2.1 million jobs, and manufacturers of all sizes are now falling into a position where their losses exceed income.
This provision will allow manufacturers to "carry back" losses in 2008 or 2009 for a period of five years. The current two-year carry back, which means that companies only can use losses to offset taxes paid in the previous two years, does not provide enough relief during the prolonged economic downturn. This provision is urgently needed- more than 20 percent of small and medium-sized NAM members reported NOLs in 2008, and we expect that number to double for 2009. Once enacted, this relief will give manufacturers the ability to transform a future tax benefit into cash today and stem the flow of mounting job losses. The NOL relief included in the February 2009 stimulus was limited and excluded many manufacturers and struggling companies in other industries. This broader relief will help many more companies get through these hard times.
The NAM commends Rep. Richard Neal (D-MA), Rep. Pat Tiberi (R-OH), Senate Finance Committee Chair Max Baucus (D-MT) and Sen. Olympia Snowe (R-ME) for their leadership on the NOL issue.
The National Association of Manufacturers is the nation's largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 11 additional offices across the country. Visit the NAM's web site at www.nam.org for more information about manufacturing and the economy.
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