Partial Loss Refundability: How Are Corporate Tax Losses Used?*

Michael Cooper and Matthew Knittel

National Tax Journal, 2006, vol. 59, issue 3, 651-63

Abstract: Using tax return data for1993–2003, we measure how US corporations use tax losses over time. For firms included in our dataset, we find that: (1) approximately 50–60 percent of tax losses are used over a ten–year window as a carryback refund or loss carryforward deduction; (2) approximately 10–20 percent remain to be used; and (3) approximately 25–30 percent are never used. Moreover, many tax losses are used only after a substantial delay. Hence, we find that certain firms and industries incur a significant penalty from the partial loss refund regime due to the erosion in the real value of their tax loss.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:59:y:2006:i:3:p:651-63

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