The Maryland Tax Court reversed the Comptroller’s disallowance of NOLs and essentially struck down a regulation that limited the usage of pre-nexus NOLs. The Comptroller disallowed the taxpayer’s use of NOLs accumulates by entities with no nexus in Maryland that subsequently merged into the taxpayer. The Comptroller relied on a regulation enacted in 2007 that did not permit the use of NOLs of an acquired company that was not subject to Maryland income tax when the NOL was generated. COMAR 03.04.03.07(5). The Tax Court ruled that no statutory authority existed for this regulation, and the only permissible subtraction or addition to federal taxable income are prescribed in Maryland statutes. In this case, the Taxpayer’s NOLs were allowed for federal income tax purposes, and the Maryland Tax Court noted that no statute contemplates the modification the Comptroller made.