Tax Hot Topics
In Hologic, Inc. v. Commissioner, N.H. Department of Revenue Administration (PDF - 0.46KB), 2026 N.H. 32 (Aug. 26, 2026), the New Hampshire Supreme Court held that a capital loss carryback is determined on a member-by-member basis and may be used only against the prior capital gains of the same taxpayer that incurred the loss.
In its ruling the court determined that under New Hampshire’s Business Profits Tax “water’s-edge combined reporting” regime, the carryback cannot count against gains recognized by another member of the combined group.
This decision reversed a previous superior court ruling and concluded that New Hampshire law requires each group member first to compute its own federal-style net income, including capital gains, losses and carrybacks, before those separately determined amounts are combined into the group’s taxable income and apportioned based on the group’s activity in the state.
As a result, Hologic’s parent-company capital loss from the sale of a subsidiary could not be carried back to offset a capital gain realized in an earlier year by a different affiliate. The court also upheld the Department of Revenue Administration’s interpretation of the statute and rejected the taxpayer’s constitutional and regulatory challenges, thereby confirming that New Hampshire combined reporting does not permit the cross-member sharing of capital loss carrybacks.
Grant Thornton insight:
The result in Hologic is very different from the standard federal income tax result for a consolidated group, where capital losses of one member can generally be used to offset the capital gains of another.
The decision highlights the fact that state combined reporting regimes, which in many cases are mandatory if certain ownership and unitary business conditions are met, may not always be consistent with federal consolidated group rules that allow capital losses and gains from different component members to be netted.
Contacts:
Content disclaimer
This content provides information and comments on current issues and developments from Grant Thornton Advisors LLC and Grant Thornton LLP. It is not a comprehensive analysis of the subject matter covered. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC and Grant Thornton LLP. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this content.
For additional information on topics covered in this content, contact a Grant Thornton professional.
Grant Thornton LLP and Grant Thornton Advisors LLC (and their respective subsidiary entities) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. Grant Thornton LLP is a licensed independent CPA firm that provides attest services to its clients, and Grant Thornton Advisors LLC and its subsidiary entities provide tax and business consulting services to their clients. Grant Thornton Advisors LLC and its subsidiary entities are not licensed CPA firms.
Tax professional standards statement
This content supports Grant Thornton Advisors LLC’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. If you are interested in the topics presented herein, we encourage you to contact a Grant Thornton Advisors LLC tax professional. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact a Grant Thornton Advisors LLC tax professional prior to taking any action based upon this information.
Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton Advisors LLC assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
Grant Thornton Advisors LLC and its subsidiary entities are not licensed CPA firms.
Trending topics
Share with your network
Share