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Navigating the complexities of state net operating losses
Your state NOLs are an asset. Are you using them effectively?
At both the federal and state levels, NOLs can often be used to reduce taxable income in future (or sometimes past) years. However, the way states provide for NOLs is continuously changing. Let’s take a closer look at the recent trends in state NOL tax provisions—and the value in managing state NOLs effectively.
Companies generally do not like to report an operating loss to shareholders. But investors and executives also recognize that the ability to use Net Operating Losses (NOLs) to offset future taxable income can be an asset. At both the federal and state levels, NOLs can often be used to reduce taxable income in future (or sometimes past) years. And that is good news for companies that have recently incurred or acquired operating losses.
The way different states provide for NOLs is continuously changing though, which may create new risks and complexities for companies operating across multiple states. Using those NOLs effectively is not always straightforward.
In this article, we explore some of the recent trends in state NOL tax provisions, highlighting important areas of focus for corporate tax leaders. We explore how these changes might influence key business decisions, financial statements, and forecasting. And we offer some considerations and insights to help corporate tax leaders address the complexity and manage the value of their NOLs.
Download the article to learn more.
Discover Deloitte’s State NOL Insight tax tool: Tax technology for tracking and evaluating state tax NOLs for tax planning, compliance, and provision purposes.
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Jamisen Hamilton
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