United States

Montana: Bill Revising NOL Provisions Pending Enactment

May 01, 2017
From KPMG TaxWatch

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Montana House Bill 550, which is pending enactment, makes certain changes to Montana’s NOL regime. Under current law, Montana allows taxpayers to carry NOLs back three years and forward seven years. House Bill 550 would increase the NOL carryover period from seven years to ten years for NOLs generated in a tax period beginning after December 31, 2017. The three-year NOL carryback period would remain unchanged, however for NOLs generated after December 31, 2017, an NOL carryback could not exceed $500,000 per tax period. Under the version of House Bill 550 originally sent to Governor Bullock for signature, a taxpayer with a federal NOL carryback or carryover would be considered to have elected the same treatment for Montana purposes. However, the taxpayer could have made an election on its return to forego the automatic election and carry the NOL forward or back differently for Montana purposes than for federal. Noting that Montana law does not require NOLs be treated the same as they are for federal, Governor Bullock suggested that this change would “add a new complication” for taxpayers and that the current system be retained. This system simply requires that the taxpayer check a box on the return indicating how it wishes to treat NOLs for Montana purposes. The House and Senate both voted to accept the Governor’s proposed change. Please contact Rob Passmore at 503-820-6844 with questions on House Bill 550.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.