WASHINGTON — Congress sent a bill to President Obama’s desk on Thursday that would provide millions of dollars in tax refunds to retailers and manufacturers, as well as additional aid to millions of unemployed workers.
The House passed the bill 403 to 12 after the Senate passed the measure on a vote of 98 to 0 Wednesday night. Obama is expected to quickly sign the legislation.
Retail trade associations pressed for an expansion of the so-called net operating loss carryback, which allows large companies to carry their losses back two years and apply for refunds on taxable profits. The new bill will now allow businesses that had operating losses in 2008 or 2009 to seek refunds for taxes paid on profits over the past five years.
Under the economic stimulus bill enacted earlier this year, the net operating loss carryback was extended from two to five years for small businesses with gross receipts of $15 million or less, from 2008. Under the new bill, small businesses that already elected to carry back in 2008 can also elect to carry back losses from 2009.
The bill also extends jobless benefits that were set to expire at the end of the year by 14 weeks in all states and gives workers an additional six weeks of benefits in states with an unemployment rate of 8.5 percent or higher.
Homeowners will also benefit from the legislation. It extends a first-time homeowner tax credit of $8,000, set to expire at the end of the year, for six months and provides a tax credit of up to $6,500 for buyers who have owned their current homes for at least five years.
The National Retail Federation led the lobbying effort on tax breaks for retailers struggling with thin inventories, profit margins and a string of unprofitable years.
“This legislation will provide retailers with an important source of capital to finance their operations and keep employees on the payroll,” said Rachelle Bernstein, vice president and tax counsel for the NRF. “Because retail sales have fallen so dramatically over the past year and access to capital has been so limited, retailers are experiencing severe challenges in finding the cash they need to operate their businesses as the economy moves toward recovery.”
Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, said the new carryback provision will also “create new capital for apparel and footwear companies that have withstood substantial losses during the recession.”