Among the laws recently signed by Governor Ned Lamont is one which will give the state a 30 year period for net operating loss carryforward.
Although many states follow the federal provisions on the matter which allow for an unlimited number of years, Maine is the only state in New England that follows the federal provision. Nearby states including New Jersey, Pennsylvania, New York and Massachusetts all have 20 year provisions, while Rhode Island only allows five years. Vermont and New Hampshire both set 10 year periods.
As reported by Bloomberg Tax, Â the move seems aimed at attracting biotechnology firms, particularly from Massachusetts which is a major hub for biosciences, pharmaceuticals, and other forms of medical research and development.
Long carryforward windows are attractive to companies that enter cycles of booms and busts by more closely taxing their average profitability than that of a given year. While other states offer even longer periods to work with, Connecticut’s location between a number of high-tech hubs while fostering growth in New Haven and Stamford could lure some businesses from across neighboring borders.
