WASHINGTON, D.C. – U.S. Senators Thad Cochran and Roger Wicker (R-Miss.) today cosponsored legislation to establish a tax break to help businesses on the Gulf Coast deal with losses suffered because of the ongoing oil spill.

The Mississippi Senators are backing an amendment to create a five-year net operating loss carryback period for losses related to the April 20 explosion of the Deepwater Horizon rig and subsequent oil spill.  The amendment, sponsored by Senator Bill Nelson (D-Fla.) has been offered to the Small Business Lending Fund Act (HR.5297) now being debated by the Senate.

The plan would permit Gulf Coast small businesses in the fishing and tourism industries to carry back losses for an additional three years beyond the standard two-year carryback period, allowing qualified businesses to amend tax returns from the past five years to receive a refund for past paid taxes.  This would provide these businesses with additional cash flow.  Congress created a similar five-year carryback rule following Hurricane Katrina.

“Mississippi businesses on the coast began experiencing losses well before the appearance of oil on our shores.  The immediate and long-term losses we will experience warrant consideration of tax breaks and other steps that may help businesses survive during the cleanup of this disaster,” Cochran said. “The special carryback rule provided some help following Hurricane Katrina, and it could do the same now as we combat this latest crisis.”

“The Gulf oil spill not only damages our wetlands and environment but also the livelihoods of so many Americans particularly those working in the seafood and tourism industries,” said Wicker. “This legislation will provide some of the much-needed relief for businesses impacted by this catastrophe. I am continuing to work with my colleagues on ways to support the viability of the Gulf Coast economy.”

The Nelson amendment would extend the tax benefit to qualifying Gulf of Mexico tourism-related businesses, including a hotel, lodging, recreation, entertainment or restaurant business located in any county or parish in Mississippi, Louisiana, Alabama or Florida.  Eligible losses would be those incurred after April 20, 2010 and before Oct. 1, 2011.

Both Cochran and Wicker, while supporting the carryback amendment, indicated they would like to see HR.5297 improved before pledging their full support for the overall measure.  The Magnolia State lawmakers cosponsored a similar amendment to the so-called tax extenders package that stalled in the Senate last week.

The net operating loss carryback amendment is supported by the U.S. Travel Association, American Hotel and Lodging Association, American Sportfishing Association, National Marine Manufacturing Association and other organizations.

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