Whether you are a couple providing for a family of five, the head of a major conglomerate or an executive at a nonprofit, making ends meet is probably a part of daily conversation.
Tossing a lifeline to struggling businesses, at least, may be on the way if elected officials follow through on some legislation that currently is being floated.
President Obama's fiscal year 2010 budget calls for a broad five-year net operating loss (NOL) carryback provision for businesses of all sizes. This measure, if approved by Congress, would allow businesses of any size to carryback losses to previously profitable years, therefore, generating necessary funds. Current law generally limits the NOL carryback period to two years.
Julie Riccio, director, government affairs for Sewickley, Pennsylvania-based Printing Industries of America, said the organization supports this measure because it would be a major tool to help companies through the economic downturn. It would allow companies faced with limited access to capital the ability to transform a future tax benefit into cash today.
"A cash infusion, such as this, can help companies of all sizes meet payroll, retain jobs and in some cases, keep doors open," Riccio explained. "It really gives a chance to companies to roll back to a time when they were likely profitable."
In the spring, the American Recovery and Reinvestment Act increased the carryback period to five years, but only for businesses with average gross receipts of $15 million or less. In its current form, the legislation will allow small businesses with large losses in 2008 to benefit from these losses now instead of on future tax returns. This latest measure would apply to all businesses.
The Senate had supported a broader NOL carryback provision, such as this during economic stimulus package negotiations, but was eventually dropped over cost concerns.