UPDATE: Cos. Keep Up Lobbying Push On Tax Refunds For Losses

U.S. companies are reviving a campaign to get refunds for taxes paid as many as five years ago, as losses mount.

Chief executives from Borders Group Inc. (BGP), International Paper Co. (IP), Office Depot Inc. (ODP), Talbots Inc. (TLB) and 75 other large and medium-sized companies asked lawmakers Wednesday to pass legislation allowing those refunds as soon as possible.

At issue is a proposal to allow companies to use 2008 and 2009 net operating losses (NOLs) to get refunds for taxes paid as far back as 2003. Current law allows only a two-year carryback of those losses.

"The NOL provision is the strongest tool you can provide to help companies in a broad cross-section of industries weather the current economic conditions," the CEOs wrote to lawmakers.

"It will allow businesses to meet payroll, retain their work force, help avoid additional layoffs and stabilize the business environment," they wrote.

The five-year loss carryback relief already passed the House and Senate this year as part of economic stimulus legislation. But in last-minute conference negotiations, lawmakers pared back the loss treatment so that it only benefits firms with less than $15 million in annual gross receipts.

In order for the tax loss provision to advance, it will now likely have to be added to broader legislation, and it remains unclear where congressional backers of the provision will try to insert it.

Both Democratic and Republican senators - including Sens. Debbie Stabenow, D-Mich., and Olympia Snowe, R-Maine., have said they want the loss carryback measure included in the next bill that comes through the Senate Finance Committee, a panel with jurisdiction over tax, pension and health matters.

With many U.S. companies facing steep losses in 2008 and 2009 after years of profitability, the tax measure would benefit a wide swath of industries. It has been particularly highly sought by retailers, manufacturers, home builders and casino operators.

"These companies are desperate not to have to lay off more workers. We're doing meetings at Treasury and on the Hill to try to focus attention on this," said Monica M. McGuire, who chairs a lobbying coalition run out of the National Association of Manufacturers on the loss-carryback issue.

- By Martin Vaughan, Dow Jones Newswires; 202-862-9244; martin.vaughan@dowjones