NRF urges Senate to approve 'carry back' extension

WASHINGTON The National Retail Federation asked the Senate to approve an amendment that would allow businesses to lengthen the period during which they can “carry back” current losses to claim a tax refund from previous years when they made a profit.

“For retailers struggling in the current recession, NOL carryback provides an important source of capital to finance ongoing operations and retain employees,” NRF SVP government relations Steve Pfister 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.”

Pfister’s comments came in a letter to leadership and members of the Senate, which is expected to consider legislation extending unemployment insurance benefits this week.

Majority Leader Harry Reid, D-Nev., and Finance Committee Chairman Max Baucus, D-Mont., plan to offer an amendment to the unemployment bill that would give both large and small businesses the ability to “carry back” net operating losses suffered during the current recession in order to claim a refund from taxes paid in previous years when they made a profit.

Carryback is normally limited to two years, but economic stimulus legislation signed into law in February expanded the period to five years for companies with up to $15 billion in annual gross receipts. Larger businesses are still restricted to two years.