The bill aims to amend the law regarding the net operating loss (NOL) income tax deduction in Arkansas by increasing the carry-forward period for these deductions. The General Assembly recognizes the need to modernize and simplify the tax code to enhance competitiveness, create jobs, and ensure fairness for all taxpayers. The proposed changes include extending the carry-forward period from the current ten years to twenty years for net operating losses, which is in line with practices in many other states and federal law. This extension is expected to benefit businesses, particularly those with cyclical income streams or those facing economic downturns, by reducing their tax burdens and promoting growth.

Specific amendments include changes to various sections of the Arkansas Code, such as increasing the carry-forward period for net operating losses from ten to twenty years for certain taxpayers, including steel manufacturers and qualified medical companies. The bill also establishes that these changes will take effect for tax years beginning on or after January 1, 2025. Overall, the bill seeks to provide a more favorable tax environment for businesses in Arkansas, encouraging investment and expansion.

Statutes affected:
HB 1538: 15-4-2404(a), 26-51-427(1), 26-51-1203(a), 26-51-1213(a)