UPDATE: Cos. Keep Up Lobbying Push On Tax Refunds For Losses
April 01 2009 - 7:13PM
Dow Jones News
U.S. companies are reviving a campaign to get refunds for taxes
paid as many as five years ago, as losses mount.
Chief executives from Borders Group Inc. (BGP), International
Paper Co. (IP), Office Depot Inc. (ODP), Talbots Inc. (TLB) and 75
other large and medium-sized companies asked lawmakers Wednesday to
pass legislation allowing those refunds as soon as possible.
At issue is a proposal to allow companies to use 2008 and 2009
net operating losses (NOLs) to get refunds for taxes paid as far
back as 2003. Current law allows only a two-year carryback of those
losses.
"The NOL provision is the strongest tool you can provide to help
companies in a broad cross-section of industries weather the
current economic conditions," the CEOs wrote to lawmakers.
"It will allow businesses to meet payroll, retain their work
force, help avoid additional layoffs and stabilize the business
environment," they wrote.
The five-year loss carryback relief already passed the House and
Senate this year as part of economic stimulus legislation. But in
last-minute conference negotiations, lawmakers pared back the loss
treatment so that it only benefits firms with less than $15 million
in annual gross receipts.
In order for the tax loss provision to advance, it will now
likely have to be added to broader legislation, and it remains
unclear where congressional backers of the provision will try to
insert it.
Both Democratic and Republican senators - including Sens. Debbie
Stabenow, D-Mich., and Olympia Snowe, R-Maine., have said they want
the loss carryback measure included in the next bill that comes
through the Senate Finance Committee, a panel with jurisdiction
over tax, pension and health matters.
With many U.S. companies facing steep losses in 2008 and 2009
after years of profitability, the tax measure would benefit a wide
swath of industries. It has been particularly highly sought by
retailers, manufacturers, home builders and casino operators.
"These companies are desperate not to have to lay off more
workers. We're doing meetings at Treasury and on the Hill to try to
focus attention on this," said Monica M. McGuire, who chairs a
lobbying coalition run out of the National Association of
Manufacturers on the loss-carryback issue.
- By Martin Vaughan, Dow Jones Newswires; 202-862-9244;
martin.vaughan@dowjones