This bill amends the law regarding the net operating loss (NOL) income tax deduction in Arkansas, primarily by increasing the carry-forward period for NOL deductions from ten years to twenty years. The legislative findings emphasize the need to modernize and simplify the tax code to enhance competitiveness, promote job creation, and ensure fairness for all taxpayers. The bill also notes that many states offer longer carry-forward periods, which can support businesses facing economic fluctuations and encourage growth in startups and existing operations.

Specific amendments include changes to various sections of the Arkansas Code, which extend the carry-forward period for NOL deductions applicable to different types of taxpayers, including steel manufacturers and qualified medical companies. The bill establishes that for net operating losses occurring in tax years beginning on or after January 1, 2025, the carry-forward period will be twenty years. Additionally, the bill specifies that these changes will take effect for tax years starting on or after January 1, 2025.

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