Arizona Senate Passes $203M NOL Carryback Bill

The Arizona Senate passed a bill that would conform state tax law to net operating loss provisions in the federal coronavirus relief act passed last year for individual tax filers, a measure that could cost the state $203.5 million.

The Senate on Wednesday approved S.B. 1392, sponsored by Sen. Vince Leach, R-SaddleBrooke, by a vote of 16-14. It now heads to the House for consideration.

The bill would remove an 80% limit on net operating loss deductions in tax years 2018 through 2020 and allow a five-year carryback on net operating losses stemming from the same years, according to a bill analysis. The measure would conform sections of state tax law with relief provisions in the 2020 Coronavirus Aid, Relief and Economic Security Act .

A legislative analysis estimated the measure would cost the state $134.7 million in the 2022 fiscal year, but the note also says the state Department of Revenue has estimated it would cost the state $203.5 million in the same year.

The measure would be retroactively effective after Jan. 1, 2018.

--Editing by Neil Cohen.

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