Contact: Erika Martinez
(505)986-4819
Erika.Martinez@nmlegis.gov
FOR IMMEDIATE RELEASE
March 11, 2014
Bill Signed Into Law, Making NM More Attractive to Businesses
Extends Net Operating Loss Carry Forward to 20 years
Santa Fe, NM – This week, Governor Susana Martinez signed a Corporation and Transportation Committee Substitute that combines two Senate Bills (SB106 & 156) to allow sole-proprietors, partnerships, and sub-chapter “S” and “C” corporations to take advantage of the Net Operating Loss (NOL) carry forward for 20 years against future profits, mirroring federal policy. Current law only allows a NOL carry forward for five years.
SB 106 applied the NOL carry forward to corporations, while SB 156 extends the carryover period to the personal income tax.
“This change to the law will make our state more competitive with surrounding states to attract businesses to make large capital investments and be able to recover those investments in future years after the company has been established,” said Senator Clemente Sanchez (D-30- Cibola, Socorro, McKinley & Valencia), sponsor of Senate Bill 156. “What is even more important is that this new law applies to small businesses that have losses in early years and will now be able to use those losses in future years when they become established and profitable.”
According to the bill’s Fiscal Impact Report, because it does not create any significant fiscal impacts, it should not be considered a tax expenditure, but is a measure to conform the state’s corporate and personal income taxes to national and regional norms.
“This will encourage businesses to take more risk to start up in New Mexico and to employ more people,” added Sen. Sanchez.
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