During the debate on whether or not NJ should allow companies to carry Net Operating Losses (NOL) forward for twenty years versus the current standard of seven, critics have argued that the state does not know what the cost of a change would be. It is something that was brought up during our appearance on New Jersey Now last week.
Just to clarify, there is now an official estimate from the Office of Legislative Services (OLS). OLS serves as the non-partisan research and legal arm of the legislature. Their findings remind us that the bill will result in $0 of lost tax collections for the state through 2018. After that, the decreased revenue is indeterminate, but rarely are fiscal estimates offered 10 years out.
From the OLS Fiscal Note,
The Office of Legislative Services (OLS) concurs with the Executive that the bill could not affect State finances until fiscal year 2018, when it could begin to generate an annual revenue loss to the State General Fund. The OLS notes further that the bill could also yield a moderate revenue loss to county and local governments through special dedications applying to corporation business tax (CBT) payments by banks, financial institutions, and electric, natural gas, and telecommunications utilities. (emphasis ours)
So if a bill "costs" the state nothing for 10 years, and can help improve our worst-in-the-nation business tax climate, is there a compelling reason not to pass it quickly? Fortunately, the Senate appears poised to vote on the measure on Thursday, and it deserves to be passed with an overwhelming majority.
