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Last Updated: 3/27/2012

Net Operating Losses and the Corporation Franchise Tax

A net operating loss (NOL) occurs when a taxpayer has allowable deductions that exceed taxable income for a given tax year. This negative taxable income may be applied, or carried over, to reduce tax liability in other years.
Under Minnesota law, NOLs may only be carried forward to subsequent years for purposes of the state Corporation Franchise Tax. Carrybacks – applying NOLs to previous years to claim a refund – are not allowed. The only exception is for NOLs incurred during tax years before 1987.
For more information, view the statute (M.S. 290.095).