Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Net Operating Loss Extension topic
No spam. Unsubscribe anytime.
Proposal to extend net‑operating‑loss carryforwards to 20 years draws debate on long‑term revenue effects
Summary
Representative David Ray presented House Bill 1538 to extend net operating loss (NOL) carryforward periods from 10 to 20 years; committee discussed competitiveness benefits, comparisons with other states and the fiscal timing of costs but did not vote.
Representative David Ray (District 69) presented House Bill 1538 to extend Arkansas' net operating loss (NOL) carryforward period from 10 years to 20 years. Ray said longer NOL carryforwards smooth firms' taxable income over time and are particularly important for startups and industries with cyclical profits.
Ray noted that many states either conform to federal NOL rules or allow 20‑year carryforwards; he said Arkansas is among a small number of states with the shorter 10‑year limit. Supporters argued a longer carryforward would increase neutrality in the tax code, promote risk‑taking and encourage startups to locate or expand in Arkansas.
Department of Finance and Administration analyst Paul Gehring told the committee DFA's fiscal analysis is static and that the projected revenue impact in the DFA estimate would begin in fiscal year 2037 under current scoring conventions; he said the agency did not produce a dynamic score estimating potential economic growth tied to the policy.
Committee members debated whether to advance the bill now despite long‑horizon fiscal effects. Several members supported the policy but cautioned the committee about releasing bills with future fiscal impacts without consistent rules; Representative Ray withdrew his motion so the bill will remain pending while members consider timing and additional analysis.
Ending: The committee heard extensive discussion, acknowledged support for extending NOL carryforwards, and deferred a final decision pending further study and possible inclusion in a broader tax package.
