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Bill

LC 1041

Revise income tax laws for net operating loss carryovers

2025 Regular Session

Montana bill revises net operating loss carryover rules to affect how businesses apply prior-year losses against future income tax liability.

(LC) Draft Delivered to Requester
#revenue #state #taxation(generally) #taxation--individualincome
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Bill Summary · LC 1041

Legislative bill overview

Bill LC 1041 would modify Montana's income tax provisions governing net operating loss (NOL) carryovers—the ability of businesses to apply losses from one tax year to offset income in future years. The bill is currently in draft form and has not yet been formally introduced, meaning specific policy changes remain under development.

Why is this important

NOL carryover rules directly affect business tax liability and cash flow, particularly for startups, seasonal businesses, and companies experiencing temporary losses. Changes to these rules can influence business competitiveness, state tax revenue, and economic development incentives in Montana.

Potential points of contention

  • Revenue impact: Expanding NOL carryovers reduces state tax revenue by allowing businesses to defer or eliminate tax obligations; restricting them increases revenue but may harm struggling businesses
  • Fairness across business types: Different industries benefit differently from NOL rules (e.g., agriculture vs. manufacturing), raising questions about equitable treatment
  • Federal-state coordination: Montana's rules must align with federal tax law changes, and divergence could create compliance complexity and disputes

Compiled from official sources — confirm details with the bill’s official record.

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