An Act To Eliminate the Restriction on Net Operating Loss Carry-forwards
Maine Legislature, Session 125, LD 0140
Committee Amendment CA_A_H255 (House)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT "A " to H.P. 123, L.D. 140, Bill, "An Act To 
Eliminate the Restriction on Net Operating Loss Carry-forwards" 
Amend the bill by adding after section 1 the following: 
'Sec. 2. 36 MRSA §5122, sub-§2, ~H, as amended by PL 2009, c. 213, Pt. ZZZ, 
§2, is further amended to read: 
H. For each taxable year subsequent to the year of the loss, an amount equal to the 
absolute value of the net operating loss arising from tax years beginning on or after 
January 1, 1989, but before January 1, 1993, for which federal adjusted gross income 
was increased in accordance with subsection 1, paragraph H, and the absolute value 
of the amount of any net operating loss arising from tax years beginning on or after 
January 1, 2002, for which federal adjusted gross income was increased in 
accordance with subsection 1, paragraph H and that pursuant to the Code, Section 
was carried back for federal income tax purposes, less the absolute value of loss 
used in the taxable year of loss to offset any addition modification required by 
subsection 1, but only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is within the allowable federal period for carry-over; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; and 
(4) 
The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 2010 or 2011. The amount not deducted as the result of the 
restriction with respect to tax years beginning in 2009, or 2010 or 2011 may be 
deducted in any tax year beginning after December 31, 20-1+ 2010, but only to the 
extent that the requirements of subparagraphs (1) and (3) are met and the taxable 
year is within the allowable federal period for carry-over plus the number of 
years that the net operating loss carry-over adjustment was not deducted as a 
result of the restriction with respect to tax years beginning in 2009, or 2010 er 
20-1+' , 
COMMITTEE AMENDMENT 
~ .,. 
COMMITTEE AMENDMENT" n" to H.P. 123, L.D. 140 
Sec. 3. 36 MRSA §5122, sub-§2, ~P, as amended by PL 2009, c. 213, Pt. ZZZ, 
§3, is further amended to read: 
P. An amount equal to the absolute value of any net operating loss arising in a tax 
year beginning or ending in 2001 for which federal adjusted gross income was 
increased in accordance with subsection 1, paragraph M and that, pursuant to Section 
of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-
147, was carried back more than 2 years to the taxable year for federal income tax 
purposes, but only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is either within 2 years prior to the year in which the loss 
arose or within the allowable federal period for carry-over of net operating losses; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; and 
(4) The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 2010 or 2011. The amount not deducted as the result of the 
restriction with respect to tax years beginning in 2009, or 2010 or 2011 may be 
deducted in any tax year beginning after December 31, ~ 
2010, but only to the 
extent that the requirements of subparagraphs (1) and (3) are met and the taxable 
year is within the allowable federal period for carry-over plus the number of 
years that the net operating loss carry-over adjustment was not deducted as a 
result of the restriction with respect to tax years beginning in 2009, or 2010 Of 
~. 
, 
Sec. 4. 36 MRS A §5122, sub-§2, ~, as amended by PL 2009, c. 213, Pt. ZZZ, 
§4, is further amended to read: 
V. The taxpayer's pro rata share of an amount that was previously added back to 
federal taxable income pursuant to section 5200-A, subsection 1, paragraph H by an S 
corporation of which the taxpayer is a shareholder and by which, absent the S 
corporation election, the corporation could have reduced its federal taxable income 
for the taxable year pursuant to section 5200-A, subsection 2, paragraph H, except 
that the modification under this paragraph may not be claimed for any tax year 
beginning in 2009, or 2010 or 2011. The amount not deducted as the result of the 
restriction with respect to tax years beginning in 2009, or 2010 or 2011 may be 
deducted in any tax year beginning after December 31, 2Q.U 2010, but only to the 
extent that the requirements of section 5200-A, subsection 2, paragraph H, 
subparagraphs (1) and (3) are met and the taxable year is within the allowable federal 
period for carry-over plus the number of years that the net operating loss carry-over 
adjustment was not deducted as a result of the restriction with respect to tax years 
beginning in 2009, or 2010 or 2011 ; 
Sec. 5. 36 MRS A §5122, sub-§2, ~CC, as corrected by RR 2009, c. 1, §26, is 
amended to read: 
cc. An amount equal to the value of any prior year addition modification under 
subsection 1, paragraph DD, but only to the extent that: 
COMMITTEE AMENDMENT 
.,. 
~< 
l3 
COMMITTEE AMENDMENT·A "to H.P. 123, L.D. 140 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is within the allowable federal period for carry-over plus the 
number of years that the net operating loss carry-over adjustment was not 
deducted as a result of the restriction with respect to tax years beginning in 2009, 
or20100r2011; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; and 
(4) 
The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 2010 or 2011; 
Sec. 6. 36 MRS A §S200-A, sub-§l, IJV, as amended by PL 2009, c. 652, Pt. A; 
§54, is further amended to read: 
v. For any taxable year beginning in 2009, or 2010 or 2011, an amount equal to the 
absolute value of any net operating loss carry-forward claimed for purposes of the 
federal income tax; and 
Sec. 7. 36 MRS A §S200-A, sub-§2, ~H, as amended by PL 2009, c. 2l3, Pt. 
ZZZ, §9, is further amended to read: 
H. For each taxable year subsequent to the year of the loss, an amount equal to the 
absolute value of the net operating loss arising from tax years beginning on or after 
January 1, 1989 but before January 1, 1993 and the absolute value of the amount of 
any net operating loss arising from tax years beginning on or after January 1, 2002, 
for which federal adjusted gross income was increased under subsection 1, paragraph 
H and that, pursuant to the Code, Section 172, was carried back for federal income 
tax purposes, less the absolute value of loss used in the taxable year of loss to offset 
any addition modification required by subsection 1, but only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is within the allowable federal period for carry-over; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; 
(4) For taxable years beginning in 2008, the amount does not exceed $100,000. 
In the case of an affiliated group of corporations engaged in a unitary business, 
the $100,000 threshold applies with respect to the entire affiliated group of 
corporations; and 
(5) The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 2010 or 2011. The amount not deducted as the result of the 
restriction with respect to tax years beginning in 2009, or 2010 or 2011 may be 
deducted in any tax year beginning after December 31, 2.(}.1..l. 2010, but only to the 
extent that the requirements of subparagraphs (1) and (3) are met and the taxable 
year is within the allowable federal period for carry-over plus the number of 
years that the net operating loss carry-over adjustment was not deducted as a 
COMMITTEE AMENDMENT 
~ .,. 
COMMITTEE AMENDMENT "A "to H.P. 123, L.D. 140 
result of the restriction with respect to tax years beginning in 2009, or 2010 eF 
~; 
Sec. 8. 36 MRSA §S200-A, sub-§2, ~L, as amended by PL 2009, c. 213, Pt. 
ZZZ, § 10, is further amended to read: 
L. An amount equal to the absolute value of any net operating loss arising from a tax 
year beginning or ending in 2001 for which federal taxable income was increased 
under subsection 1, paragraph M and that, pursuant to Section 102 of the federal Job 
Creation and Worker Assistance Act of 2002, Public Law 107-147, was carried back 
more than 2 years to the taxable year for federal income tax purposes, but only to the 
extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is either within 2 years prior to the year in which the loss 
arose or within the allowable federal period for carry-over of net operating losses; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; 
(4) For taxable years beginning in 2008, the amount does not exceed $100,000. 
In the case of an affiliated group of corporations engaged in a unitary business, 
the $100,000 threshold applies with respect to the entire affiliated group of 
corporations; and 
(5) The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 20 I 0 or 2011. The amount not deducted as the result of the 
restriction with respect to tax years beginning in 2009, or 2010 or 2011 may be 
deducted in any tax year beginning after December 3 1, ~ 
2010, but only to the 
extent that the requirements of subparagraphs (1) and (3) are met and the taxable 
year is within the allowable federal period for carry-over plus the number of 
years that the net operating loss carry-over adjustment was not deducted as a 
result of the restriction with respect to tax years beginning in 2009, or 2010 eF 
~. 
, 
Sec. 9. 36 MRS A §S200-A, sub-§2, ~T, as repealed and replaced by PL 2009, c. 
652, Pt. A, §56, is amended to read: 
T. 
An amount equal to the value of any prior year addition modification under 
subsection 1, paragraph V, but only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is within the allowable federal period for carry-over plus the 
number of years that the net operating loss carry-over adjustment was not 
deducted as a result of the restriction with respect to tax years beginning in 2009, 
or 2010 and 2011; 
(3) The amount has not been previously used as a modification pursuant to this 
subsection; and 
COMMITTEE AMENDMENT 
~ .,. 
COMMITTEE AMENDMENT "A "to H.P. 123, L.D. 140 
(4) 
The modification under this paragraph is not claimed for any tax year 
beginning in 2009, or 2010 or 2011; and 
Sec. 10. Application. This Act applies to tax years beginning on or after January 
1,2011.' 
SUMMARY 
This amendment adds provisions to ensure that corporations as well as individuals are 
eligible to claim net operating losses as income tax deductions for tax years beginning in 
2011 and makes technical corrections related to net operating loss recapture provisions. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05112111 Mac.. 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
LD 140 
LR 695(02) 
An Act To Eliminate the Restriction on Net Operating Loss Carry-forwards 
Fiscal Note for Bill as Amended by Committee Amendment 'A" 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2011-12 
FY 2012-13 
$7,467,000 
$1,140,000 
Projections 
FY 2013-14 
($1,083,000) 
Other Special Revenue Funds 
($7,467,000) 
($393,000) 
($1,140,000) 
($60,000) 
$1,083,000 
$57,000 
Fiscal Detail and Notes 
Projections 
FY 2014-15 
($1,710,000) 
$1,710,000 
$90,000 
Eliminating the restriction on net operating loss carry-forwards (NOLs) for both individual taxpayers and corporations 
allows individuals to deduct NOLs for the purposes of computing Maine income tax. This bill reduces General Fund 
revenue and reduces revenue sharing in the present biennium in both fiscal years 20 11-12 and 2012-13, but increases 
General Fund revenue and revenue sharing in the following biennium. 
LR0695(02) - Fiscal Note - Page 1 of 1