AB 2408 Summary

• Disallows net operating loss carrybacks for individual and corporate taxpayers for taxable years beginning on or after January 1, 2013.

• Maintains existing carryover provisions allowing losses to be carried forward to subsequent years, with carryover periods ranging from 5 to 20 taxable years depending on the loss year.

• Exempts "qualified taxpayers" including new businesses, eligible small businesses (less than $1,000,000 in gross receipts), and biopharmaceutical/biotechnology companies from the carryback prohibition.

• Suspends net operating loss deductions entirely for taxable years 2008-2011, with extended carryover periods of 1-4 additional years to compensate for the suspension period.

• Requires a two-thirds vote in each legislative house for passage as a tax levy under California Constitution Article XIII A, and takes effect immediately upon enactment.