NOL

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In General Motors Corporation v. Commonwealth, the Pennsylvania Supreme Court held that the state’s prior flat $2 million cap on a corporate taxpayer’s net operating loss (NOL) deduction violated the state constitution’s Uniformity Clause and, therefore, the state’s NOL deduction statute must be stricken in its entirety.1 Nevertheless, the Court determined that the…

On May 27, the New Jersey Tax Court held that the New Jersey Division of Taxation could not eliminate a taxpayer’s net operating losses generated during years beyond the statute of limitations. The division’s proposed reduction was based on a transfer pricing adjustment between related entities for years never audited by the division and otherwise…

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…

The South Carolina Administrative Law Court found that the taxpayer bank could not deduct net operating loss (NOL) carryforwards when computing its bank tax liability. The taxpayer argued that banks should be allowed to deduct NOLs regardless of whether it is paying under the income or the franchise tax, because of the state’s conformity with…