State NOL Services
We help our clients in this complex corner of the State Income / Franchise tax world by performing State NOL reviews. Our team of experienced professionals can help you by determining opportunities and risk related to your current NOL position. We then file for refunds, schedule the expiration of the state NOLs for planning and reporting, and provide guidance as it relates to increasing or decreasing the tax value of the NOL for financial reporting.
These projects are sometimes done, and can be efficiently completed, in conjunction with a State RAR Filing Project.
During our reviews, we use our internally developed NOL Web App to accumulate client data and to perform calculations and evaluate results. At the end of our review, clients may wish to continue to use the software for ongoing compliance and accounting. In that case, we can make the Web App available to them as a stand-alone software service.
State NOL Web App
The Web App assists clients in tracking State NOLs on a jurisdiction basis for:
- State Compliance and Planning
- FIN 48
- ASC 740 / Financial Statements
Items We’ve Considered in Development of the Web App
Each state has their own unique rules related to net operating losses which have been evaluated and incorporated into the Web App. Differences include:
- Carryback and carryforward periods
- Suspension of NOL usage for a period of years
- Limitations on carryback and carryforward
- Tracking NOLs on post-apportioned vs. pre-apportioned bases
- Tracking “Quasi-NOL” assets and liabilities (or the net) that are proportionately included in the tax base when a portion of the NOL is utilized (e.g., Maryland’s Net Addition Modification)
- AMT NOL tracking
Even states that follow federal IRC Sec. 172 may have different deduction and carryforward amounts resulting from the state’s unique limitations or combination rules.
The Web App assists clients in tracking State NOLs in accordance with all of these rules.
Characteristics and Features of the Web App
The Web App:
Includes NOL rules for all states from 1986 forward
Tracks NOLs on a pre or post-apportionment basis
Tracks NOLs on a combined or separate entity basis
Computes and tracks individual states limitation and suspensions
Provides standard reports which are delivered to the user in Excel such as:
- Separate Company Reports – summarized by year or detailed by event,
- Multi-Entity/Multistate Reports – which can be used as support for the tax footnote and provide a schedule of state NOL expirations,
- Matrix Report – This report shows Losses across the top axis, income on the right hand axis with utilization and expiration amounts shown in the center section.
- If filing on a separate basis, this report will be for the separate company,
- If a combined return where losses are generated and used by the combined group (similar to Federal), then on a combined group basis, and
- If the combined return limits usage to each individual entity in the group, it will be a separate entity report
Comparison Report – A report that compares one scenario against another with differences and tax effected differences provided.
Allows you to calculate NOL valuations on an interim basis
Allows you to establish events unique to your group and account for:
- Audit Changes
- RAR Changes
- Legislative Changes
- Transactional Changes
Provides functionality to give users the ability to keep data in the database without valuing it for ASC 740 purposes (for disposed entities). This enables you keep data on hand in order to file RAR and prior year amended returns for the disposed entities,
Portions of the database can be used so that only manual processing takes place thereby allowing for corrections of errors have occurred in the original returns, and
Accommodates a corporation’s prior year history of short-period years.
We regularly provide demonstrations of the Web App and are ready to discuss how a State NOL review might benefit your company.