HP0123
LD 140		 First Regular Session - 125th Maine Legislature
C "A", Filing Number H-255, Sponsored by
LR 695
Item 2
Bill Tracking, Additional Documents Chamber Status

Amend the bill by adding after section 1 the following:

‘Sec. 2. 36 MRSA §5122, sub-§2, ¶H,  as amended by PL 2009, c. 213, Pt. ZZZ, §2, is further amended to read:

H. For each taxable year subsequent to the year of the loss, an amount equal to the absolute value of the net operating loss arising from tax years beginning on or after January 1, 1989, but before January 1, 1993, for which federal adjusted gross income was increased in accordance with subsection 1, paragraph H, and the absolute value of the amount of any net operating loss arising from tax years beginning on or after January 1, 2002, for which federal adjusted gross income was increased in accordance with subsection 1, paragraph H and that pursuant to the Code, Section 172 was carried back for federal income tax purposes, less the absolute value of loss used in the taxable year of loss to offset any addition modification required by subsection 1, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is within the allowable federal period for carry-over;

(3) The amount has not been previously used as a modification pursuant to this subsection; and

(4) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011. The amount not deducted as the result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011 may be deducted in any tax year beginning after December 31, 2011 2010, but only to the extent that the requirements of subparagraphs (1) and (3) are met and the taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

Sec. 3. 36 MRSA §5122, sub-§2, ¶P,  as amended by PL 2009, c. 213, Pt. ZZZ, §3, is further amended to read:

P. An amount equal to the absolute value of any net operating loss arising in a tax year beginning or ending in 2001 for which federal adjusted gross income was increased in accordance with subsection 1, paragraph M and that, pursuant to Section 102 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147, was carried back more than 2 years to the taxable year for federal income tax purposes, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is either within 2 years prior to the year in which the loss arose or within the allowable federal period for carry-over of net operating losses;

(3) The amount has not been previously used as a modification pursuant to this subsection; and

(4) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011. The amount not deducted as the result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011 may be deducted in any tax year beginning after December 31, 2011 2010, but only to the extent that the requirements of subparagraphs (1) and (3) are met and the taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

Sec. 4. 36 MRSA §5122, sub-§2, ¶V,  as amended by PL 2009, c. 213, Pt. ZZZ, §4, is further amended to read:

V. The taxpayer's pro rata share of an amount that was previously added back to federal taxable income pursuant to section 5200-A, subsection 1, paragraph H by an S corporation of which the taxpayer is a shareholder and by which, absent the S corporation election, the corporation could have reduced its federal taxable income for the taxable year pursuant to section 5200-A, subsection 2, paragraph H, except that the modification under this paragraph may not be claimed for any tax year beginning in 2009 , or 2010 or 2011. The amount not deducted as the result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011 may be deducted in any tax year beginning after December 31, 2011 2010, but only to the extent that the requirements of section 5200-A, subsection 2, paragraph H, subparagraphs (1) and (3) are met and the taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

Sec. 5. 36 MRSA §5122, sub-§2, ¶CC,  as corrected by RR 2009, c. 1, §26, is amended to read:

CC. An amount equal to the value of any prior year addition modification under subsection 1, paragraph DD, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

(3) The amount has not been previously used as a modification pursuant to this subsection; and

(4) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011;

Sec. 6. 36 MRSA §5200-A, sub-§1, ¶V,  as amended by PL 2009, c. 652, Pt. A, §54, is further amended to read:

V. For any taxable year beginning in 2009 , or 2010 or 2011, an amount equal to the absolute value of any net operating loss carry-forward claimed for purposes of the federal income tax; and

Sec. 7. 36 MRSA §5200-A, sub-§2, ¶H,  as amended by PL 2009, c. 213, Pt. ZZZ, §9, is further amended to read:

H. For each taxable year subsequent to the year of the loss, an amount equal to the absolute value of the net operating loss arising from tax years beginning on or after January 1, 1989 but before January 1, 1993 and the absolute value of the amount of any net operating loss arising from tax years beginning on or after January 1, 2002, for which federal adjusted gross income was increased under subsection 1, paragraph H and that, pursuant to the Code, Section 172, was carried back for federal income tax purposes, less the absolute value of loss used in the taxable year of loss to offset any addition modification required by subsection 1, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is within the allowable federal period for carry-over;

(3) The amount has not been previously used as a modification pursuant to this subsection;

(4) For taxable years beginning in 2008, the amount does not exceed $100,000. In the case of an affiliated group of corporations engaged in a unitary business, the $100,000 threshold applies with respect to the entire affiliated group of corporations; and

(5) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011. The amount not deducted as the result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011 may be deducted in any tax year beginning after December 31, 2011 2010, but only to the extent that the requirements of subparagraphs (1) and (3) are met and the taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

Sec. 8. 36 MRSA §5200-A, sub-§2, ¶L,  as amended by PL 2009, c. 213, Pt. ZZZ, §10, is further amended to read:

L. An amount equal to the absolute value of any net operating loss arising from a tax year beginning or ending in 2001 for which federal taxable income was increased under subsection 1, paragraph M and that, pursuant to Section 102 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147, was carried back more than 2 years to the taxable year for federal income tax purposes, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is either within 2 years prior to the year in which the loss arose or within the allowable federal period for carry-over of net operating losses;

(3) The amount has not been previously used as a modification pursuant to this subsection;

(4) For taxable years beginning in 2008, the amount does not exceed $100,000. In the case of an affiliated group of corporations engaged in a unitary business, the $100,000 threshold applies with respect to the entire affiliated group of corporations; and

(5) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011. The amount not deducted as the result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011 may be deducted in any tax year beginning after December 31, 2011 2010, but only to the extent that the requirements of subparagraphs (1) and (3) are met and the taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 or 2011;

Sec. 9. 36 MRSA §5200-A, sub-§2, ¶T,  as repealed and replaced by PL 2009, c. 652, Pt. A, §56, is amended to read:

T. An amount equal to the value of any prior year addition modification under subsection 1, paragraph V, but only to the extent that:

(1) Maine taxable income is not reduced below zero;

(2) The taxable year is within the allowable federal period for carry-over plus the number of years that the net operating loss carry-over adjustment was not deducted as a result of the restriction with respect to tax years beginning in 2009 , or 2010 and 2011;

(3) The amount has not been previously used as a modification pursuant to this subsection; and

(4) The modification under this paragraph is not claimed for any tax year beginning in 2009 , or 2010 or 2011; and

Sec. 10. Application. This Act applies to tax years beginning on or after January 1, 2011.’

summary

This amendment adds provisions to ensure that corporations as well as individuals are eligible to claim net operating losses as income tax deductions for tax years beginning in 2011 and makes technical corrections related to net operating loss recapture provisions.

FISCAL NOTE REQUIRED
(See attached)

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