Fifth Third Equipment Finance Company v. Director, Division of Taxation

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NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
________________________________________
FIFTH THIRD EQUIPMENT FINANCE : TAX COURT OF NEW JERSEY
COMPANY, : DOCKET NO. 013380-2018
:
Plaintiff, :
:
v. :
:
DIRECTOR, DIVISION OF TAXATION, :
:
Defendant. :
_______________________________________ :
Decided: February 23, 2021
Kenneth R. Levine argued the cause for plaintiff
(Reed Smith, LLP, attorneys, Kyle O. Sollie, attorney of record and on the
brief; Matthew L. Setzer, on the brief).
Michael J. Duffy for defendant
(Gurbir S. Grewal, Attorney General of New Jersey, attorney).
SUNDAR, P.J.T.C.
This opinion decides the parties’ respective summary judgment motions as to whether
defendant (Taxation) properly granted only a portion of plaintiff’s refund claim of Corporation
Business Tax (CBT) for tax years 2010-2012. Most of the refund claim was based on plaintiff’s
methodology of carrying forward net operating losses (NOL) from tax years 1999-2002 pursuant
to N.J.S.A. 54:10A-4(k)(6)(E) (hereinafter Subparagraph E). This statute disallowed a deduction
of NOL carryovers for tax years 2002-2005 (100% for 2002 and 2003, 50% for 2004 and 2005),
but also extended the normal seven-year period of the carryover losses for a period commensurate
with the suspension period(s) “if and only to the extent” the NOL carryover deduction was
disallowed under Subparagraph E.
Taxation’s auditor denied plaintiff’s NOL carryover-based refund claim in its entirety
based on the regulation, N.J.A.C. 18:7-5.17(c). However, Taxation’s Conference and Appeals
Approved for Publication
In the New Jersey
Tax Court Reports

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branch (CAB) followed a different methodology: one that was elucidated in a 2015 bench opinion
of the Tax Court in an unrelated litigation that involved the interpretation of Subparagraph E.1
Due to this change in position, CAB granted a portion of plaintiff’s refund claim relating to the
NOL carryover issue.
Plaintiff contends that (1) the plain language of Subparagraph E supports its methodology
wherein the entire amount of an NOL carryover was disallowed or suspended for the four years
2002-2005, regardless of whether plaintiff had income in those years, and the normal seven-year
carryover period was also extended for that same period; (2) Taxation’s regulation is invalid in
that it improperly limits the extension of only those NOL carryovers which would have expired in
any one of the four suspension years; and (3) Taxation’s decision to follow the bench opinion on
the interpretation and methodology of Subparagraph E as opposed to its regulations is invalid rule-
making under the Administrative Procedures Act.
Taxation argues that per the bench opinion, the extension period is never four years, and
that the statute conditioned the extension to only those NOL carryovers which could have been
used (deducted from income) during the suspension periods. Thus, if the NOL carryover could
not have been used due to insufficiency of income, Subparagraph E would not apply. It contends
that its decision to follow the bench opinion, while a change of its position, does not require formal
rule adoption. It also notes that since it did not apply its regulation, the court should not rule on
its validity as doing so would be an advisory opinion.
A secondary issue is whether plaintiff can claim a refund for the available tax credits under
the Alternative Minimum Assessment (AMA) statute, which it could have used to offset its self-
reported CBT for tax year 2010. Taxation contends the refund claim was not raised timely.
1 That case was Amtopp Corp. v. Dir., Div. of Taxation, Docket No. 012139-2012 (Feb. 11, 2015).

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For the reasons stated below, the court finds that (a) in light of the entire NOL carryover
scheme set forth in N.J.S.A. 54:10A-4(k)(6), Taxation is correct that Subparagraph E does not
allow for an extension if in a suspension period there was no income to absorb an NOL carryover;
(b) Taxation is correct that consideration must be given to the first-in-line, first-in-time sequence
of using an NOL carryover specified in N.J.S.A. 54:10A-4(k)(6)(B) for purposes of applying
Subparagraph E; (c) plaintiff is incorrect that the extension period for NOL carryovers is four years
for each NOL carryover that could have been used to offset income in the suspension year(s); (d)
the court agrees, in part, with plaintiff’s proffered computation of the NOL carryovers and
extension periods under Taxation’s construction of Subparagraph E except for extending the 1999
NOL carryover into tax year 2010 to offset $70,501,320 of income in that year; (e) N.J.A.C. 18:7-
5.17(c) is invalid; (f) Taxation properly denied plaintiff’s refund claim attributable to the AMA
tax credits. Each party’s summary judgment motion is therefore granted in part and denied in part.
LAW ON NOL CARRYOVERS
An NOL carryover is the NOL which is generated or incurred in one tax year, and which
is allowed to be carried forward to successive future tax years, so that it can be used to absorb or
offset the entire net income (ENI) earned in those successive years. N.J.S.A. 54:10A-4(k)(6)(A)
(“there shall be allowed as a deduction for the privilege period the [NOL] carryover to that
period”). For tax years ending before June 2009, the carryover period is seven years “following
the period of loss.” N.J.S.A. 54:10A-4(k)(6)(B). There can be no carryover in the NOL’s eighth
year. N.J.A.C. 18:7-5.13(a).
The methodology for using the NOL carryover amounts as a deduction from the ENI over
the seven-year period is set forth in N.J.S.A. 54:10A-4(k)(6)(B). The “entire amount” of the NOL
must be carried forward “to the earliest” tax year “to which” it can be carried. Ibid. Any loss that	---

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is not absorbed ENI in that “earliest” tax year, gets further carried forward to “each” of the other
remaining tax years. Ibid. The applicable regulation provides as follows:
The [NOL] carryover is carried to each of the succeeding taxable
years and is reduced in each such succeeding year by the amount of
entire net income before [NOL] deduction and before exclusions,
and is further reduced to zero seven years following the year of the
loss taking into account the normal or extended due date for filing
the return for the seventh year succeeding the year of the loss. The
[NOL] carryover may not be carried back to any year preceding the
year of the loss. For this purpose, taxable year shall mean the
accounting period covered by the taxpayer’s return. In no event may
a [NOL] carryover be used for a net operating loss deduction on the
eighth return succeeding the loss year.
[N.J.A.C. 18:7-5.13(a).]
Note that under the above scheme of NOL carryovers, a successive tax year’s NOL
carryover must wait in line for the prior year’s NOL carryover to be exhausted before it can be
used to offset income. Thus, for example, if there was insufficient income to absorb the earliest
tax year’s NOL carryover (first-in-time first-in-line NOL carryover) for the seven years of its life,
then the successive tax year’s NOL carryover (next-in-time next-in-line NOL carryover) cannot
be used during that period, but is carried over to its last year of life, i.e., its seventh year. If there
is no income in that seventh year or insufficient income to absorb it, then that next-in-line NOL
carryover is deemed unused and expires. This chain reaction happens to each successive tax year’s
NOL vis-à-vis the preceding tax year’s NOL carryover. See N.J.A.C. 18:7-5.13, Example 2
(showing the “application of the [NOL] deductions in the proper sequence”).
Subparagraph E
In 2002, as part of a revenue raising measure, the Legislature enacted Subparagraph E and
disallowed a deduction for NOL carryovers in tax years 2002 and 2003. See L. 2002, c. 40 (the	---

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Business Tax Reform Act or “BTRA”). At the same time, it allowed an extension of the normal
carryover period. Subparagraph E (effective July 2, 2002) read:
Notwithstanding the provisions of this paragraph (6) of subsection
(k) of [N.J.S.A. 54:10A-4] . . . to the contrary, for privilege periods
beginning during calendar year 2002 and calendar year 2003, no
deduction for any net operating loss carryover shall be allowed. If
and only to the extent that any net operating loss carryover deduction
is disallowed by reason of this subparagraph (E), the date on which
the amount of the disallowed net operating loss carryover deduction
would otherwise expire shall be extended by two years.
[N.J.S.A. 54:10A-4(k)(6)(E).]
See also Assembly Budget Comm. Statement to A. 2501 7 (June 27, 2002) (BTRA “suspends the
application of net operating loss (NOL) deductions for tax years 2002 and 2003. The usual seven
year carryforward . . . is extended for two years”).
Taxation adopted a regulation, “Suspension of net operating loss carryover,” which read:
Except as provided below, for privilege periods beginning during
calendar year 2002 and calendar year 2003, no deduction for any net
operating loss shall be allowed. If and only to the extent that any
net operating loss carryover deduction is disallowed by reason of
this subsection, the date on which the amount of the disallowed net
operating loss carryover deduction would otherwise expire shall be
extended by two years . . . .
[N.J.A.C. 18:7-5.17.]2
When proposing the regulation, Taxation stated that Subparagraph E provided for a two-
year “suspension of” NOL carryovers. Thus, “[i]f” a NOL carryover “would otherwise expire
during the suspension period, a taxpayer may obtain relief in the extended year of expiration based
2 There were no subsections to the regulation. Therefore the “[e]xcept as provided below”
introduction is unclear. The last sentence in N.J.A.C. 18:7-8.17 stated: “This section shall not
restrict the surrender or acquisition of [CBT] benefit certificates pursuant to N.J.S.A. 34:1B-7.42a
and shall not restrict the application of [CBT] certificates pursuant to N.J.S.A. 54:10A:4-2.” Four
examples followed the regulation. Example 4 related to the last sentence of the regulation. It is
possible that the last sentence and its example were the prefaced “[e]xcept as provided below.”

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upon the tax significance of the NOL’s lost in 2002 and 2003.” See 35 N.J.R. 1573(a) (Apr. 7,
2003) (emphasis added).
In 2004, the Legislature again amended Subparagraph E by limiting the NOL carryover
deduction to 50% of the income for tax years 2004 and 2005 and amended the language as to the
extension period. See L. 2004, c. 47 (effective June 29, 2004). Subparagraph E now read as
follows: (amendments underscored)
Notwithstanding the provisions of this paragraph (6) of subsection
(k) of this section to the contrary, for privilege periods beginning
during calendar year 2002 and calendar year 2003, no deduction for
any net operating loss carryover shall be allowed, and for privilege
periods beginning during calendar year 2004 and calendar year
2005, there shall be allowed as a deduction for the privilege period
so much of the net operating loss carryover as reduces entire net
income otherwise calculated by 50%. If and only to the extent that
any net operating loss carryover deduction is disallowed by reason
of this subparagraph (E), the date on which the amount of the
disallowed net operating loss carryover deduction would otherwise
expire shall be extended by a period equal to the period for which
application of the net operating loss was disallowed by this
subparagraph.
The legislative history to this amendment states:
Assembly Bill No. 3110 limits the application of net operating loss
(NOL) deductions under the corporation business tax (CBT) for
privilege periods beginning in calendar years 2004 and 2005 to so
much of the NOLs as reduce the entire net income subject to tax to
50% of what it would otherwise be.
“Net operating loss” is a tax accounting concept; if a taxpayer has
more business expense than business income in a tax year, the
taxpayer has a [NOL] for that year. The [NOL] can be deducted in
later years from taxable income to reduce tax liability. The [BTRA]
. . . provided for a suspension of the application of [NOLs] for
privilege periods beginning in calendar years 2002 and 2003; under
current law, corporation business tax payers are allowed to begin to
apply NOLs against income for privilege periods beginning in
calendar year 2004.
The Governor’s Proposed Budget for State Fiscal Year 2004-2005
assumed that the total suspension of NOL application would be
extended for privilege periods beginning in calendar years 2004 and

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2005. This bill, however, allows the use of available NOLs for 2004
and 2005 for reducing taxable income by up to 50 percent, returning
NOLs to full deductibility for privilege periods beginning in
calendar year 2006.
The bill extends the usual seven year carryforward (14 years for
certain high-technology corporations) extended for the period of
suspension . . .
[Assembly Budget Comm. Statement to A. 3110 (June 22, 2004).]
The allowance of “deductions at” 50% was estimated to “maintain about $140 million of
CBT revenue in FY 2005.” Ibid.
In 2007, Taxation amended N.J.A.C. 18:7-5.17. New subsection (b) provided:
For privilege periods beginning during calendar year 2004 and
calendar year 2005, there shall be allowed as a deduction for the
privilege period so much of the [NOL] carryover as reduces entire
net income otherwise calculated by 50 percent. If and only to the
extent that any [NOL] carryover deduction is disallowed by reason
of this section, the date on which the amount of the disallowed
[NOL] carryover deduction would otherwise expire shall be
extended by a period equal to the period for which application of the
[NOL] was disallowed by this section.
[N.J.A.C. 18:7-5.17(b).]
New subsection (c) stated:
Any net operating [loss] deduction that was disallowed by the
prohibition, and would have expired in return periods beginning in
2002 and 2003 is extended for two years. Any net operating loss
deduction that was disallowed by the prohibition, and would have
expired in return periods beginning in 2004 and 2005, is extended
for one return period for each return period that it was disallowed.
[N.J.A.C. 18:7-5.17(c).]
Taxation noted that the 2004 amendment resulted in the NOL carryover for tax years 2004
and 2005 as “limited to 50 percent of the loss otherwise available.” 39 N.J.R. 844(a) (Mar. 19,
2007). It repeated that the “date on which the amount of the disallowed [NOL] carryover deduction
would otherwise expire is extended by a period equal to the period for which application of the

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[NOL] was disallowed by this provision of law.” Ibid. While “[p]roposed new subsection (b)
reflects the suspension provided” under the 2004 amendment Subparagraph E, “proposed new
subsection (c) provides guidance on the application of suspension periods referred to in subsections
(a) and (b).” Ibid. It “declined to delete the phrase ‘and would have expired’ in the two places
that it appeared in N.J.A.C. 18:7-5.17(c),” or alternatively “hold a hearing if [Taxation] did not
agree to change the language in question based upon the comment submitted or was unsure what
language to adopt.” See 39 N.J.R. 3780(b) (Sept. 4, 2007).
FACTS AND PROCEDURAL HISTORY
Plaintiff is an Ohio corporation in the business of equipment leasing on a nation-wide basis.
Tax years 1995-2002 were Loss Periods with losses totaling $2,755,471,168. Tax years 2003-
2012 were Profit Periods with income totaling $1,865,421,798.
When plaintiff filed its CBT returns for tax years 2010-2012, it did not claim a deduction
for the NOL carryovers from tax years 1999-2001 due to its alleged reliance on the regulations.
Subsequently, it recomputed its NOL carryovers, and on September 1, 2015 filed refund claims
for 2010-2012 tax years and used the NOLs in 1999, 2000, and 2001 to reduce the ENI for tax
years 2010-2012 to zero. The refund claims totaled $1,298,868, which was the CBT paid for each
tax year 2010-2012 ($581,563 + $495,810 + $221,595), plus interest.
Taxation denied the refund claims as the NOL “carryover deductions as currently applied,
with no amounts available to deduct on the 2010, 2011, or 2012 returns, are in accordance with
New Jersey statutes and regulations.” In a separate Notice of Assessment Related to Final Audit
Determination for tax years 2010 and 2011, Taxation found that there was “no NOL available to
use,” and “[o]nly NOL’s that were disallowed by the prohibition and would have expired are
extended.” As part of the audit adjustment, the auditor allowed plaintiff a credit for the AMA tax

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against the CBT liabilities of $1,288 and $2,188 for each tax year 2010 and 2011, although plaintiff
had $109,444 in carried forward AMA credits.
Plaintiff protested the refund denial and audit determination to CAB. It argued that the
NOL carryover period should be extended by four years per Subparagraph E, thus, its 1999-2001
NOLs should be allowed as a deduction in tax years 2010-2012. Plaintiff also sought a refund of
$109,444 (plus interest), the available AMA tax credits, which it claimed should have been used
to reduce its self-reported CBT for tax year 2010.
The CAB agreed that plaintiff was entitled to a partial refund of $82,723 based on the NOL
carryover issue. In its conference report, the CAB in rejecting plaintiff’s settlement offer, stated:
In the court case AmTopp v. Director, Division of Taxation 012139-
2012, the court extended NOL from 1997 an additional two periods
and applied NOL amounts to 2006. The court expired the remaining
amounts from 1997. The court did the same thing with the amounts
from 1998 applying the NOL amounts to 2007 with an extension of
only two years. The AmTopp decision indicates that NOL amounts
can only be extended two periods, not four periods like [plaintiff] is
requesting.
The CAB also rejected plaintiff’s request to offset its 2010 self-reported CBT by $109,444
of the carried forward AMA tax credits because (i) it never requested this refund in its initial refund
request; and (2) such credits cannot be used to create refunds.3
Taxation’s final determination agreed with the AMA issue, and as to the NOL issue stated:
Due to the suspension years the NOL from 1998 is extended an
additional two periods. This causes a portion of the NOL from 1999
to expire so the amount that could have been used extends an
additional year. This happens again to the NOL from 2000, 2001
and 2002. The amount from 2002 that is extended an additional year
is $40,890,930 and is applied to the first year in question 2010. This
results in a refund being issued in the amount of $82,723. These
adjustments are in accordance with N.J.S.A. 54:10A-4(k)(6)(E) that
3 The charts of the NOL carryover methodology in plaintiff’s refund claim, in the auditor’s
decision, and the CAB’s conference report are reproduced at the end of this opinion.

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extend portions of NOLs as a result of NOL suspension periods,
privilege periods beginning during calendar year 2002 through
2005.
. . .
The refund is being adjusted to reflect the NOL extension due to the
suspension years, however, the extension of four periods is denied.
ANALYSIS
(A) APPROPRIATENESS OF SUMMARY JUDGMENT
Summary judgment will be granted “if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact challenged and that the moving party is entitled to a judgment
or order as a matter of law.” R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,
523 (1995). The only issue here is the disagreement on Subparagraph E’s interpretation which
does not involve materially disputed facts. Therefore, summary judgment is appropriate.
(B) INTERPRETATION OF SUBPARAGRAPH E
In interpreting any statute, the court must first examine its plain language to effectuate the
legislative intent. Cowley v. Virtua Health System, 242 N.J. 1, 15 (2020) (citation and internal
quotation marks omitted). The court’s “review is not limited to the words in a challenged
provision.” State v. Twiggs, 233 N.J. 513, 532 (2018). It can “also draw inferences based on the
statute’s overall structure and composition” and can review “the entire legislative scheme of which
[the statute] is a part.” Ibid. (citations and internal quotations marks omitted). The court should
ensure that its interpretation of a statute should not “render[] any part of the statute superfluous.”
Id. at 532-33 (citation omitted). Statutory “words and phrases” should not be considered “in
isolation but rather in their proper context and in relationship to other parts of [the] statute, so that
meaning can be given to the whole of [the] enactment.” Id. at 533 (citation omitted).

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Plaintiff argues that the term “allowed” and “disallowed” are terms of art in taxing statutes
(resorting to the interpretation under the federal Internal Revenue Code). The term “allowed” per
plaintiff, is used in N.J.S.A. 54:10A-4(k)(6)(A), which grants a deduction for NOL carryover
without any qualification, condition or limitation, which means that the deduction is granted even
in tax years when there is no income to absorb the NOL carryover. Therefore, Subparagraph E’s
disallowance is what is allowed under N.J.S.A. 54:10A-4(k)(6)(A), which is the entire NOL
carryover amount, regardless of whether there was any income or loss during the suspension
period, and therefore, any NOL carried over to 2002-2005 (the suspension years) gets an extension
of its carryover life. Taxation’s “income-testing” pre-qualification for deeming whether an NOL
carryover is “allowed” plaintiff argues, is improper. In addition, plaintiff contends, the Legislature
took four years away from the normal seven-year NOL carryover period, therefore, it simply gave
back that four-year period, which means that the extension period is also four years.
Taxation contends that the limiting phrase “[i]f and only to the extent” in Subparagraph E,
militates against the broad construction plaintiff seeks. What is disallowed in Subparagraph E, per
Taxation, is only that amount which could have otherwise been used to offset income (i.e., used
but for Subparagraph E), which then presupposes existence of income. If there was no income to
absorb an NOL carryover, then that carried over NOL cannot benefit additional carryover period/s
by virtue of Subparagraph E. In addition, Taxation argues, as ruled in the 2015 bench opinion of
the Tax Court, there can never be a four-year extension period.
(1) Disallowed NOL Carryover under Subparagraph E
It is undisputed that Subparagraph E was enacted, and amended, for raising revenue. It is
equally clear that the Legislature returned to taxpayers, the benefits lost during the suspension
period (2002-2005), by extending the carryover period. No less clear is the Legislature’s intent to

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limit the benefit because it explicitly stated in Subparagraph E as follows: “If and only to the extent
that any [NOL] carryover deduction is disallowed by reason of this subparagraph (E), the date on
which the amount of the disallowed [NOL] carryover deduction would otherwise expire shall be
extended” by a commensurate period.
The court finds that the language in Subparagraph E requires an examination of the entire
scheme of the NOL carryover deduction in determining how much of an NOL carryover can be
used in the extension period. Even without Subparagraph E, the court is unpersuaded by plaintiff’s
argument that since N.J.S.A. 54:10A-4(k)(6)(A) grants an unconditional deduction for an NOL
carryover, the entire amount is deemed “allowed” and when suspended is deemed “disallowed.”
This is because N.J.S.A. 54:10A-4(k)(6)(B) conditions the deductibility on (a) availability of
income to absorb an NOL carryover; and (b) availability of the seven-year period. And when there
is no income to absorb an NOL carryover, such amount is only carried over to the next tax year.
It is not “disallowed” in the year there is no income.
In addition, the grant of a deduction for an NOL carryover under N.J.S.A. 54:10A-
4(k)(6)(A) is not unconditional since it incorporates by reference the income restriction under
N.J.S.A. 54:10A-4(k)(6)(B): Subparagraph A states “there shall be allowed as a deduction for the
privilege period the net operating loss carryover to that period,” while the term “net operating loss
carryover” is defined in Subparagraph B and limits its deductibility to the extent of income.4
4 N.J.S.A. 54:10A-4(k)(6)(B) provides as follows:
“Net operating loss carryover. A net operating loss for any privilege period ending
after June 30, 1984 shall be a net operating loss carryover to each of the seven
privilege periods following the period of the loss and a net operating loss for any
privilege period ending after June 30, 2009 shall be a net operating loss carryover
to each of the twenty privilege periods following the period of the loss. The entire
amount of the net operating loss for any privilege period (the “loss period”) shall
be carried to the earliest of the privilege periods to which the loss may be carried.
The portion of the loss which shall be carried to each of the other privilege periods

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However, if there was income which could have been reduced by an NOL carryover, and
Subparagraph E prevented this ability for the specific tax years, then that NOL carryover is
effectively disallowed. Therefore, the court agrees with Taxation that when in 2002, a year of
suspension, plaintiff had no income, regardless of Subparagraph E, no NOL carryover amount
could have been used. This is not a “disallowance” for purposes of Subparagraph E so that the
NOL carried over to 2002 gets an extension period. Rather, it is carried over to the next tax year.
If in 2003 there was income, then, that NOL carried over will benefit from an extension. However,
as here for plaintiff’s 1995 NOL carryover: it expires at the end of the 2002 tax year and there was
no income to absorb it; therefore, it is not extended into 2003.
This construction finds support in the language of the limiting portion of Subparagraph E:
“If and only to the extent that any [NOL] carryover deduction is disallowed by reason of this
subparagraph (E), the date on which the amount of the disallowed net operating loss carryover
deduction would otherwise expire shall be extended . . . .” (emphasis added). The underscored
phrases when read together with the term “deduction,” implicates N.J.S.A. 54:10A-4(k)(6)(B),
which defines an NOL carryover and which dictates how, and how much of an NOL can offset
income. Thus, Subparagraph E has a “built in” income testing restriction by referencing “net
operating loss carryover” which is defined in N.J.S.A. 54:10A-4(k)(6)(B) and which is limited to
the extent of income.
The legislative history also aids in this regard. The Legislature stated that Subparagraph E
suspended “application of [NOL] . . . deductions.” See also Assembly Budget Comm. Statement
shall be the excess, if any, of the amount of the loss over the sum of the entire net
income, computed without the exclusions permitted in paragraphs (4) and (5) of
this subsection or the net operating loss deduction provided by subparagraph (A) of
this paragraph, for each of the prior privilege periods to which the loss may be
carried.” (emphasis added).

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to A. 2501 (emphasis added). The Legislature also noted that a NOL which is generated or
incurred in a particular tax year “can be deducted in later years from taxable income to reduce tax
liability,” that the enactment of Subparagraph E “provided for a suspension of the application of”
the NOL carryovers in 2002, while the 2004 amendment was to “allow[] the use of available NOLs
for 2004 and 2005 for reducing taxable income.” Assembly Budget Comm. Statement to A. 3110
(emphasis added). The word “application” means how an NOL carryover is used, i.e., deducted.
This again implicates N.J.S.A. 54:10A-4(k)(6)(B). Cf. also N.J.A.C. 18:7-5.13(a) (“In no event
may a [NOL] carryover be used for a net operating loss deduction on the eighth return succeeding
the loss year”) (emphasis added).
The court also notes that Taxation’s position when promulgating N.J.A.C. 18:7-5.17 in
2003 (renumbered as N.J.A.C. 18:7-5.17(a) in 2007), and N.J.A.C. 18:7-5.17(b) in 2007 was that
only such amount of NOL carryovers which could have absorbed income during the suspension
periods gets the benefit of the extension period. See 35 N.J.R. 1573(a) (“a taxpayer may obtain
relief in the extended year of expiration based upon the tax significance of the NOL’s lost in 2002
and 2003”); 39 N.J.R. 3780(b) (an NOL is “disallowed if its force and validity are denied and its
effect as a tax attribute is nullified in the suspension year. This occurs only if the attribute could
have been used or applied against income during that suspension period” which promotes “the
legislative goals of the [CBT] statute of meeting the State’s revenue needs and at the same time
enabling those taxpayers that would have lost NOLs . . . that they could have used to have possible
use of those NOLs preserved”). This reasoning/construction is within the fair contemplation of
Subparagraph E.
Since raising revenue was reason for the enactment and amendment of Subparagraph E,
the court finds that the Legislature presupposed the existence of income in 2002-2005, and that

15
such income would be taxed since it would not be absorbed by an NOL carryover. This means
that the Legislature intended to disallow only such amount of an NOL carryover that would
otherwise have been allowed to offset the existing ENI in 2002-2005. This construction gives
effect to the overall language and intent of the NOL carryover statute and will avoid rendering the
limiting phrase in Subsection E superfluous. Additionally, all entities which had income in any
tax year 2002-2005, which income would have been reduced/absorbed by NOL carryover amounts
but for Subparagraph E, benefit by getting an extension of the NOL’s carryover period, whereas
entities which did not have any ENI are also treated equally in that none benefit by getting
additional carryover period(s). Thus, the court is unpersuaded by plaintiff’s contention that the
limiting phrase in Subparagraph E applies only to a specific disallowance of an NOL carryover,
here, N.J.S.A. 54:10A-4(k)(6)(D) (which bars deduction of a predecessor’s NOL carryover, or
where the acquisition of an entity is for the “primary purpose” of using its NOL carryover).
(2) Extension Period
When enacted, Subparagraph E specified the extension period as two years. This is
because the suspension period was for 2002 and 2003. See Assembly Budget Comm. Statement
to A. 2501 (the BTRA “suspends the application of . . . (NOL) deductions for tax years 2002 and
2003. The usual seven year carryforward . . . is extended for two years”). This extension, taking
into consideration that preceding analysis of the amount of the disallowed NOL carryover, means
that if an entity has ENI in 2002, that NOL carryover which would have offset that income has
another year of life. If the entity still exists and had income in 2003, and this same NOL carryover
could not be used to offset the 2003 income, it gets one more year of life.
However, and since the Legislature continued the disallowance (partially) for 2004 and
2005, it amended the extension period to provide that “the date on which the amount of the

16
disallowed [NOL] carryover deduction would otherwise expire” is extended by “a period equal to
the period for which application of the [NOL] was disallowed by” Subparagraph E. See also
Assembly Budget Comm. Statement to A. 3110 (“the usual seven year carryforward” is extended
“for the period of suspension”).
Plaintiff is correct that the extension period is tied to the suspension period. However, its
further reciprocal argument that the Legislature took away four years of an NOL carryover’s life
during 2002-2005, therefore, it gave (or must have given) back those four years via an extension
period is unpersuasive. Rather, the extension period(s) commensurate with the year the NOL
carryover could have been used to offset income in the suspension year, but Subparagraph E
prevented its use. This means that an NOL carryover gets an additional year for each suspended
tax year in which it could not be used to offset income. This is so whether the suspension year
was 2002 or 2004. However, if the entity had income to absorb a particular NOL carryover (or
more than one NOL carryover) in 2002 and 2003, it stands to reason that the extension period
would have to be two years because the Legislature barred use of any amount of NOL carryover
as a deduction for each of those two tax years (unlike for tax years 2004 and 2005).
In this connection, the CAB’s computation of the disallowed NOL carryover (based on the
bench opinion) indicates that if a first-in-time, first-in-line NOL carryover was extended into a tax
year because of Subparagraph E, and as a result, absorbs the ENI for that year, then the next-in-
line NOL carryover is also deemed as a disallowed deduction. In other words, but for
Subparagraph E, the first-in-time, first-in-line NOL carryover would not have been “pushed down”
into an extension year, and therefore would not have usurped the next-in-line NOL carryover.
Therefore, the next-in-line NOL carryover is deemed to be equally disallowed due to Subparagraph
E, meriting it an extension. This logic comports with the conclusion that Subparagraph E should

17
not be interpreted in a vacuum, thus, should also consider its impact on the first-in-time, first-in-
line sequence of use in N.J.S.A. 54:10A-4(k)(6)(B).
(3) Computation of Plaintiff’s Disallowed NOL Carryover and Extension Periods
As explained earlier, a disallowed NOL carryover deduction is one that could have offset
the reported ENI for a suspension year. While the Legislature effectively taxed 100% of an entity’s
ENI in 2002 and 2003 by disallowing use of any amount of NOL carryover, it taxed 50% of ENI
in 2004 and 2005 by limiting the amount of usable NOL carryover. In either scenario, an NOL
carryover that could have offset income in a suspension year gets an extension. Thus, for tax years
2002 and 2003, any NOL carryover which could have offset the suspension year(s) ENI, is pushed
down to an extension year after its seventh year of life. Similarly, any NOL carryover that could
have offset the balance 50% income in 2004 and 2005, merits an extension to its normal seven-
year carry over life. The balance 50% of income was taxed only because it was not allowed to be
used up by an NOL carryover by Subparagraph E, thereby raising revenue for the State. Thus, if
any NOL carryover in excess of 0% of ENI is usable in an extension period(s), then any NOL
carryover in excess of 50% of ENI is also usable in an extension period(s). Regardless of the zero
deduction in 2002 and 2003, or partial deduction in 2004 and 2005, all four years were suspension
periods and the Legislature extended the normal NOL carryover period(s) commensurate with the
suspension periods. Therefore, the court rejects a position that only so much of the balance of an
NOL carryover that was available but could not be used against the taxed 50% income (either
because the NOL carryover amount was greater than the 50% taxed income, or the 50% taxed
income was absorbed by a first-in-line, first-in-time NOL carryover), merits an extension.
Plaintiff points out, that if the court accepts Taxation’s “change in policy” position (the
“push down” of the first-in-time, first-in-line NOL carryover into an extension period due to

18
Subparagraph E), then the correct amounts would be by comparing how the carryover would be
computed without Subparagrah E and how it would be under the new methodology. It provided
the court two charts in this regard (also reproduced at the end of this opinion). Per these charts,
plaintiff argues, its total used and expired NOLs would be the same: $1,510,152,532. Whereas,
the CAB’s calculation of this amount is inexplicably much higher ($1,860,992,054).
Plaintiff’s logic of comparing what NOL carryovers would have been used without and
with Subparagraph E is persuasive. The court cannot understand Taxation’s logic of the 2007 ENI
being absorbed by the 1999 NOL carryover of up to $121,563,438 and $39,544,180 by the 2000
NOL carryover, when all of the 2007 ENI could be absorbed by the 1999 NOL carryover.
The court therefore accepts plaintiff’s computation of the NOL carryover/use with
Subparagraph E under Taxation’s policy change which this court has ruled above is a reasonable
construction of that statute. The only disagreement the court has with plaintiff’s computation
under the new methodology is of the extension period for the 1999 NOL carryover. It should be
three years, not four because the 1999 NOL carryover could not be used in 2004, 2005 and 2006.
Tax year 2002, a suspension year, did not impact the 1999 NOL carryover even without
Subparagraph E since it was a non-income year.5 While 2003, another suspension year, did have
income, the 1999 NOL carryover could not have been used to offset any portion of the income
because it was next in line to both the 1996 and 1997 NOL carryovers even without Subparagraph
E, or even under Subparagraph E’s “pushed down” effect. However, it could have been used in
2004 and 2005, and also in 2006 (where, due to the impact of Subparagraph E, the first-in-time,
5 As 2002, a year of suspension, was a loss year, the 1995 NOL carryover could not be used
regardless of Subparagraph E. And since 2002 was its seventh year, it expires. This lack of income
in 2002 is also why the subsequent tax year/s NOL carryovers do not merit an additional extension
period to their normal seven-years.

19
first-in-line NOL carryover of 1998 was pushed down into 2006, which then absorbed a portion
of the 2006 ENI, whereas without Subparagraph E, all of the 2006 income could have been
absorbed by a portion of the 1999 NOL carryover amount). Therefore, the 1999 NOL carryover
is extended to 2009. This means, plaintiff cannot use $70,501,320, a portion of the 2010 income
to be offset by the 1999 NOL carryover.
The 2000 NOL carryover would normally expire in 2007 when there was income of only
$161,107,618. Thus, even without Subparagraph E, this is what could be used in 2007. However,
due to the first-in-time, first-in-line sequence, the 1999 NOL carryover bars use until tax year
2010. The similar logic applies to the 2001 and 2002 NOL carryover.
The court requires the parties to compute the ensuing refund claim pursuant to plaintiff’s
computation of NOL carryovers under the new methodology but without extension of the 1999
NOL carryover into tax year 2010 in the amount of $70,501,320.
(4) Taxation’s Regulations
The plain language of the regulations, N.J.A.C. 18:7-5.17 (re-numbered as N.J.A.C. 18:7-
5.17(a) in 2007), and N.J.A.C. 18:7-5.17(b) reiterate Subparagraph E’s language. Additionally,
when these regulations were promulgated/amended, Taxation made it clear that existence of
income was a necessary criterion because an NOL carryover has tax significance (or is a tax
attribute) only when it can offset income, thus, this significance is lost when it is not allowed to be
used to deduct income. See 35 N.J.R. 1573(a); 39 N.J.R. 3780(b) (an NOL carryover “is
disallowed if its force and validity are denied and its effect as a tax attribute is nullified in the
suspension year”). To this extent, and as explained earlier, the court agrees with Taxation’s
interpretation of Subparagraph E: when there was income in a suspension year, but an NOL
carryover could not be used to offset the same because of Subparagraph E, the NOL carryover’s

20
tax attribute or significance is then lost, which renders that NOL carryover as disallowed by, and
for purposes of, Subparagraph E. However, as explained below, it appears that Taxation’s
application of these two regulatory subsections superimposes a second condition explicated in
N.J.A.C. 18:7-5.17(c), which second condition the court finds suspect.
N.J.A.C. 18:7-5.17(c), reproduced above, specifies the suspension years and the extension
years, but includes as a condition for extension that the NOL carryover “would have expired” in
the suspension years 2002-2005. This regulatory subsection was promulgated to “provide[]
guidance on the application of suspension periods” enunciated in Subparagraph E. See 39 N.J.R.
844(a). However, the court finds that such condition is unwarranted.
Subparagraph E extends “the date on which the amount of the disallowed [NOL] carryover
deduction would otherwise expire.” (emphasis added). Although the time when an NOL carryover
would normally expire is after its seventh year, above-quoted statutory language simply means
that the normal seven-year carryover period is extended by additional period/s. See also Assembly
Budget Comm. Statement to A. 2501 (the BTRA “suspends the application of net operating loss
(NOL) deductions for tax years 2002 and 2003. The usual seven year carryforward . . . is extended
for two years”); Assembly Budget Comm. Statement to A. 3110 (the 2004 proposed amendment
extends the usual seven year carryforward . . . for the period of suspension”). Therefore,
Taxation’s requirement that a disallowed NOL carryover merits an extension only if it its seventh
year of life falls in a suspension year is wrong. As plaintiff correctly points out, the second
sentence in Subparagraph E which addresses the extension period, allows an extension to any NOL
carryover which could not be used to offset income in 2002, 2003, 2004, or 2005.
It appears that Taxation considered this second requirement as being a natural consequence
of what constitutes a disallowed NOL carryover deduction for purposes of Subparagraph E. See

21
35 N.J.R. 1573(a) (“[i]f” a NOL carryover “would otherwise expire during the suspension period,
a taxpayer may obtain relief in the extended year of expiration based upon the tax significance of
the NOL’s lost in 2002 and 2003”) (emphasis added); 39 N.J.R. 3780(b) (an NOL carryover’s
significance as a “tax attribute is nullified in the suspension year” which “occurs only if the
attribute could have been used or applied against income during that suspension period and would
otherwise have been lost” and this interpretation “enable[es] those taxpayers that would have lost
NOLs through expiration that they could have used to have possible use of those NOLs preserved”)
(emphasis added).
However, this reasoning defeats the language and intent of Subparagraph E which is that
if an NOL carryover was available for use to offset income in a suspension year, and was not
permitted to be so used, its carryover period is extended. It does not have to be in its seventh year
of life when it is disallowed. Taxation’s justification for the second condition, a necessary
consequence of what is a disallowed NOL carryover deduction, is suspect. Plaintiff therefore
properly contends that the additional requirement in N.J.A.C. 18:7-5.17(c) is contrary to the
language and intent of Subparagraph E, and the court finds such requirement to be invalid.
Problematic is also Taxation’s extension of its “necessary consequence” premise of
N.J.A.C. 18:7-5.17(c), into the interpretation of the other two subsection, N.J.A.C. 18:7-5.17(a)
and 18:7-5.17(b). Taxation stated, “it must be noted that the words that begin N.J.A.C. 18:7-
5.17(a) (‘Except as provided below’) incorporate by reference the meaning of N.J.A.C. 18:7-
5.17(c) into that section.” See 39 N.J.R. 3780(b). Similarly, it noted that when N.J.A.C. 18:7-
5.17(b) provides that “[i]f and only to the extent that any [NOL] carryover deduction is disallowed
by reason of this section,” those underscored words mean that this regulation “incorporates by
reference the meaning of disallowance set forth later in N.J.A.C. 18:7-5.17, namely in N.J.A.C.

22
18:7-5.17(c), and thus incorporates into N.J.A.C. 18:7-5.17(b) the need for expiration as a
precondition for time shifting the NOL.” 39 N.J.R. 3780(b). None of these interpretations are
found in the plain language of either N.J.A.C. 18:7-5.17(a) or 18:7-5.17(b). Application of these
regulations as further support of the second condition in N.J.A.C. 18:7-5.17(c) will also be invalid,
including the phrase “[e]xcept as provided below” in N.J.A.C. 18:7-5.17(a).6
In sum, N.J.A.C. 18:7-5.17(a) and 18:7-5.17(b) validly interpret Subparagraph E in
connection with the determination of what constitutes as disallowed amount of an NOL carryover
deduction. The phrase “and would have expired” in N.J.A.C. 18:7-5.17(c) is invalid. Any implied
incorporation of this requirement in N.J.A.C. 18:7-5.17(a) and 18:7-5.17(b) is also invalid.
Taxation contends that this court cannot decide the validity of its regulations because
“[r]ather than follow N.J.A.C. 18:7-5.17(c), [it] . . . properly followed the Tax Court’s decision in
Amtopp,” and therefore, “plaintiff’s attack of that regulation’s validity is moot.” Taxation
contends that for the court to nonetheless address plaintiff’s arguments in this connection is to
render an impermissible advisory opinion.
The court disagrees. By choosing not to address plaintiff’s arguments in this regard,
Taxation has waived any objection to the same, which equates to conceding that plaintiff’s position
is correct. More importantly, an agency “ordinarily must enforce and adhere to, and may not
disregard, the regulations it has promulgated.” County of Hudson v. Dep’t of Corr., 152 N.J. 60,
70 (1997) (citation omitted). While an agency “may change its regulations, so long as they are in
force the agency is bound by them.” Ibid. (citations omitted). Similarly, “an agency generally
6 But see supra n.2. If the “[e]xcept as provided below” phrase in N.J.A.C. 18:7-5.17(a) was
meant to address the third sentence in N.J.A.C. 18:7-5.17(a) as to inapplicability of Subparagraph
E to CBT benefit certificates, it can survive.

23
should not waive its own duly-enacted regulations by disregarding them,” unless there is specific
statutory or regulatory authority to do so. Id. at 71 (citations omitted).
Here, Taxation did not, delete or amend N.J.A.C. 18:7-5.17(c) to reflect the 2015
unpublished opinion. Therefore, it cannot “waive” or disregard this regulation unless it has
formally acted. Thus, its decision to follow the 2015 unpublished opinion, but only at the CAB
level,7 does not prevent this court from deciding plaintiff’s arguments that the additional
requirement of “and would have expired” is invalid.
It is troubling to this court that Taxation’s decision to disregard portions of its regulations
is without any public announcement or formal amendment. That such a decision was only because
Taxation felt compelled to follow an unpublished court opinion does not mitigate the unjust lack
of notice to taxpayers and entities subject to the CBT, that Taxation has informally waived
application of N.J.A.C. 18:7-5.17(c). Nor is it an excuse that plaintiff’s attorney was aware of the
bench opinion due to an unrelated litigation involving the same issue. The attorney’s knowledge
of the unpublished opinion and Taxation’s policy change is not a notice to the public. Like
plaintiff, perhaps there are taxpayers which did not use an NOL carryover into an extended tax
year because they relied on N.J.A.C. 18:7-5.17(c).8
If the public is beholden to the application of a regulation due to its presumptive
correctness, Taxation is also beholden to notify the public that the regulation will no longer be
applied. A government needs to turn square corners “particularly” in tax matters since taxpayers
7 Taxation’s auditor had no knowledge of this “change in position” when in 2016 and 2017, she
(1) denied plaintiff’s refund claims because there were no NOL carryovers to offset the 2010,
2011, or 2012 income “in accordance with New Jersey statutes and regulations;” and (2) asserted
that “[o]nly NOL’s that were disallowed by the prohibition and would have expired are extended.”
8 Plaintiff became aware that its refund claim would be guided by the Tax Court’s bench opinion
and not the regulations, only after it commenced the instant litigation, and then only during
discovery when it obtained the conference report which referenced that opinion.

24
“and others must be able to reliably engage in tax planning and, to do so, they must know what the
rules are.” Residuary Trust v. Dir., Div. of Taxation, 28 N.J. Tax 541, 545, 548 (App. Div. 2015)
(citations omitted). Thus, it is “fundamentally unfair” when Taxation publishes certain guidance,
“and then retroactively apply a different standard years later.” Ibid.
Normally, the lack of notice would suffice for this court to reverse Taxation’s final
determination especially when it is to the detriment of the taxpayer. However, the court will not
void Taxation’s final determination here because it has found that (1) interpretation of the limiting
sentence in Subparagraph E must account for the methodology of using NOL carryovers set forth
in N.J.S.A. 54:10A-4(k)(6)(B), including the first-in-time, first-in-line sequence; (2) Taxation’s
regulations, specifically N.J.A.C. 18:7-5.17(a) and 18:7-5.17(b), without the implicit incorporation
of N.J.A.C. 18:7-5.17(c), properly interpret Subparagraph E’s limitation,9 and (3) only the phrase
“and would have expired” in N.J.A.C. 18:7-5.17(c) is invalid.10
(D) AMA TAX CREDITS
The court rejects plaintiff’s claim for refund of the AMA tax credits. It was never raised
in the refund claim but only during protest. Further, as Taxation pointed out, one of the tax years
was also time barred in this regard (for refund claims). Plaintiff is not harmed since those credits
are available for offset of future CBT liabilities.
9 Plaintiff agrees that Taxation’s regulations “looked to whether the taxpayer had income in the
suspension period” but attacks this as an invalid pre-qualification for purposes of Subparagraph E.
10 The court rejects Taxation’s argument that since plaintiff’s case is one of a partial refund denial,
as opposed to one imposing an assessment, this court has no authority to grant any additional
refund. A final determination denying a refund claim is no different than a final determination
which affirms an audited assessment. When that determination is reversed, the consequences are
the same: cancellation of an audited assessment or cancellation of the refund denial. This means
no additional tax can be imposed, or the refund as claimed should be paid.

25
CONCLUSION
As to the NOL carryover issue under Subparagraph E: the court finds that plaintiff cannot
use tax year 2002, a loss year, to obtain the benefit of extending its NOL carryovers’ seven-year
life. The extension of the carryover period is not always four years. While the court finds N.J.A.C.
18:7-5.17(c) invalid, it agrees with Taxation that the next-in-line NOL carryover should benefit
from the extension period(s) because Subparagraph E pushed down a first-in-time, first-in-line
NOL carryover into an extension period. The court accepts, in part, plaintiff’s computations under
the new methodology of its NOL carryovers extension and use, therefore, requires parties to
provide a computation of plaintiff’s refund as a result under R. 8:9-3 within 30 days of this opinion.
Plaintiff’s refund claim pertaining to the AMA tax credit was properly denied. Each party’s
summary judgment motion is therefore granted in part and denied in part.
-

26
NOL CARRYOVER METHODOLOGY CHARTS
PLAINTIFF’S METHOD USED FOR ITS REFUND CLAIM
NOL GENERATED AND USED
*1995 1996 1997 1998 1999 2000 2001 2002
**TY ENI (35,571,578) (52,347,268) (91,838,280) (251,881,194) (640,992,474) (770,274,274) (626,454,352) (286,111,748) ENI after NOL
2003 $98,610,272 $98,610,272
2004 $343,113,684 35,571,578 52,347,268 83,637,996 $171,556,842
2005 $243,126,876 8,200,284 113,363,154 $121,563,438
2006 $239,238,672 138,518,040 100,720,632 $0
2007 $161,107,618 161,107,618 $0
2008 $119,230,684 119,230,684 $0
2009 $40,890,930 40,890,930 $0
2010 $283,643,255 219,042,610 64,600,645 $0
2011 $220,978,908 220,978,908 $0
2012 $115,480,899 115,480,899 $0
USED 35,571,578 52,347,268 91,838,280 251,881,194 640,992,474 285,579,553 115,480,899 0 1,473,691,246
EXP’D 0 0 0 0 0 (484,694,721) (510,973,453) (286,111,748) (1,281,779,922)
* Loss Periods. **Profit Periods. EXP’D = Expired. Shaded areas indicate extension years.
AUDITOR’S BASIS FOR DENIAL OF NOL CARRYOVERS
NOL GENERATED AND USED
1995 1996 1997 1998 1999 2000 2001 2002
TY ENI (35,571,578) (52,347,268) (91,838,280) (251,881,194) (640,992,474) (770,274,274) (626,454,352) (286,111,748) ENI after NOL
2003 $98,610,272 $98,610,272
2004 $343,113,684 52,347,268 91,838,280 27,371,294 $171,556,842
2005 $243,126,876 121,563,438 $121,563,438
2006 $239,238,672 102,946,462 136,292,210 $0
2007 $161,107,618 161,107,618 $0
2008 $119,230,684 119,230,684 $0
2009 $40,890,930 40,890,930 $0
2010 $283,643,255 $283,643,255
2011 $220,978,908 $220,978,908
2012 $115,480,899 $115,480,899
USED 0 52,347,268 91,838,280 251,881,194 136,292,210 161,107,618 119,230,684 40,890,930 853,588,184
EXP’D (35,571,578) 0 0 0 (504,700,264) (609,166,656) (507,223,668) (245,220,818) (1,901,882,984)

27
CAB’S MODIFICATION BASED ON POLICY CHANGE
NOL GENERATED AND USED
1995 1996 1997 1998 1999 2000 2001 2002
TY ENI (35,571,578) (52,347,268) (91,838,280) (251,881,194) (640,992,474) (770,274,274) (626,454,352) (286,111,748) ENI after NOL
2003 $98,610,272 $98,610,272
2004 $343,113,684 52,347,268 91,838,280 27,371,294 $171,556,842
2005 $243,126,876 121,563,438 $121,563,438
2006 $239,238,672 102,946,462 136,292,210 $0
2007 $161,107,618 121,563,438 39,544,180 $0
2008 $119,230,684 119,230,684 $0
2009 $40,890,930 40,890,930 $0
2010 $283,643,255 40,890,930 $242,752,325
2011 $220,978,908 $220,978,908
2012 $115,480,899 $115,480,899
USED 0 52,347,268 91,838,280 251,881,194 257,855,648 158,774,864 40,890,930 40,890,930 894,479,114
EXPD (35,571,578) 0 0 0 (383,136,826) (611,499,410) (585,563,422) (245,220,818) (1,860,992,054)

28
PLAINTIFF’S NOL CARRYOVER/USE WITHOUT SUBPARAGRAPH E PROVIDED TO THE COURT
NOL GENERATED AND USED
1995 1996 1997 1998 1999 2000 2001 2002
TY ENI (35,571,578) (52,347,268) (91,838,280) (251,881,194) (640,992,474) (770,274,274) (626,454,352) (286,111,748) ENI after NOL
2003 $98,610,272 52,347,268 46,263,004 $0
2004 $343,113,684 45,575,276 251,881,194 45,657,214 $0
2005 $243,126,876 243,126,876 $0
2006 $239,238,672 239,238,672 $0
2007 $161,107,618 161,107,618 $0
2008 $119,230,684 119,230,684 $0
2009 $40,890,930 40,890,930 $0
2010 $283,643,255 $283,643,255
2011 $220,978,908 $220,978,908
2012 $115,480,899 $115,480,899
USED 0 52,347,268 91,838,280 251,881,194 528,022,762 $161,107,618 119,230,684 40,890,930 1,245,318,736
EXP’D (35,571,578) 0 0 0 (112,969,712) (609,166,656) (507,223,668) (245,220,818) (1,510,152,432)
PLAINTIFF’S NOL CARRYOVER/USE WITH SUBPARAGRAPH E UNDER POLICY CHANGE PROVIDED
TO THE COURT
NOL GENERATED AND USED
1995 1996 1997 1998 1999 2000 2001 2002
TY ENI (35,571,578) (52,347,268) (91,838,280) (251,881,194) (640,992,474) (770,274,274) (626,454,352) (286,111,748) ENI after NOL
2003 $98,610,272 $98,610,272
2004 $343,113,684 52,347,268 91,838,280 27,371,294 $171,556,842
2005 $243,126,876 121,563,438 $121,563,438
2006 $239,238,672 102,946,462 136,292,210 $0
2007 $161,107,618 161,107,618 $0
2008 $119,230,684 119,230,684 $0
2009 $40,890,930 40,890,930 $0
2010 $283,643,255 70,501,320 161,107,618 52,034,317 $0
2011 $220,978,908 67,196,367 40,890,930 $112,891,611
2012 $115,480,899 $115,480,899
USED 0 52,347,268 91,838,280 251,881,194 528,022,762 161,107,618 119,230,684 40,890,930 1,245,318,736
EXP’D (35,571,578) 0 0 0 (112,969,712) (609,166,656) (507,223,668) (245,220,818) (1,510,152,432)