| Legislation Bill will help save retail jobs, NRF | | November 06, 2009 (USA) |  |
 The National Retail Federation welcomed passage of legislation that will bring recession-plagued retailers and other businesses more than $10 billion in badly needed cash by lengthening the period during which they can “carry back” current losses to claim a tax refund from previous years when they made a profit.
“This legislation will provide retailers with an important source of capital to finance their operations and keep employees on the payroll,” NRF Vice President and Tax Counsel Rachelle Bernstein said. “Because retail sales have fallen so dramatically over the past year and access to capital has been so limited, retailers are experiencing severe challenges in finding the cash they need to operate their businesses as the economy moves toward recovery.”
“Today’s vote comes at a crucial time because most retailers see between a quarter and half of their annual sales during the final quarter of the year as consumers buy gifts for the holidays,” Bernstein said. “If retailers can’t find a way finance inventories for the 2009 holiday season, many could be forced to close stores, lay off workers or even go out of business. This will help keep that from happening.”
The House voted 403-12 today to approve Senate amendments to H.R. 3548, the Unemployment Compensation Extension Act of 2009, and sent the measure to President Obama for his signature. The bill extends unemployment insurance benefits but also includes a provision added in the Senate that will expand businesses’ ability to “carry back” net operating losses suffered during the current recession in order to claim a refund from taxes paid in previous years.
Existing law allows companies to carry back a loss for up to two years. Economic stimulus legislation enacted in February expanded the period to five years for companies with up to $15 million in annual gross receipts, but larger businesses were still restricted to two years. The provision included in the unemployment bill will expand the five-year period to include all businesses that suffer a loss regardless of size, and will give companies the choice of using the carryback for losses from either 2008 or 2009 rather than just 2008 as provided in the stimulus bill. In the fifth year, the carryback will be limited to 50 percent of a company’s taxable income for that year, but any loss not utilized can be “carried forward.” Small companies that took a five-year carryback under the stimulus bill will be able to carry back 2009 losses as well. The proposal is estimated to provide $10.4 billion in tax relief over 10 years.
The provision was added to the bill by Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., but was based on legislation sponsored in the Senate by Baucus and fellow Finance Committee member Senator Olympia Snowe, R-Maine, and in the House by Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass., and Ranking Member Patrick Tiberi, R-Ohio.
| | |
|
|
|