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Committee Hears Bill to Allow Indefinite NOL Carryforwards; DRA Says 2023 Use Offset $88.5M
Summary
HB 15‑99 would let businesses carry net operating losses forward without a 10‑year limit; sponsors argued conformity simplifies returns while DRA said $1.2 billion of NOLs were used in 2023, reducing revenue by about $88.5 million after tax computation and warned of uncertainty and timing effects.
Representative John Genigian presented HB 15‑99, which would conform New Hampshire’s treatment of net operating losses (NOLs) to the current federal rule by eliminating the state’s 10‑year carryforward limit and instead allowing carryforward until used.
Committee members questioned the permanence of revenue loss and whether indefinite carryforwards would erode long‑term BPT revenue that funds the general fund and Education Trust Fund. Representative Genigian said increasing the carryforward period could reduce revenue, but the magnitude and timing are uncertain and deserve further study.
Jennifer Ramsey of the Department of Revenue Administration provided context and numbers from the department’s analysis. Ramsey said net operating losses actually used in tax year 2023 totaled $1.2 billion in offsetting revenue or profits, which resulted in about an $88.5 million reduction in state revenue once the tax rate was applied. She explained that the $88.5 million figure reflects the revenue reduction after computation of tax, and that assumptions about future taxpayer behavior, business survival and timing mean the long‑term effect is hard to predict. Ramsey noted a larger illustrative figure — $4.2 billion in NOLs that expired in 2022 — which at the 7.5% tax rate would offset up to $316 million in BPT revenue if those losses had been preserved and later used.
Members and witnesses discussed tradeoffs: proponents framed the change as simplification and business friendly, while others warned of scale and timing risks to state revenue. Several members asked DRA for follow‑up work to estimate dynamic revenue impacts and to clarify timing assumptions. The committee closed the public hearing without immediate action and requested additional information from DRA and stakeholders.
