SAN FRANCISCO, May 14 — Uncle Sam is wearing a Santa cap this year, doling out billions in special tax rebates to select corporate citizens. Thanks to a law Congress passed this spring, Cisco is in line to get around $350 million, United Airlines $1.2 billion and CNF Inc. roughly $337 million. And those are just a few examples.
UNDER THE NEW LAW — H.R. 3090, a.k.a “the Job Creation and Worker Assistance Act of 2002” — companies that posted a net loss for fiscal year 2001, but were profitable in previous years, can dig back as far as their 1996 tax returns and apply 2001 losses against income and reduce taxes accordingly. Previously, companies could only apply losses two years back.
Individual companies’ tax records are sealed, but their published financial information shows the benefits are potentially enormous.
For example, San Jose-based Cisco posted a $874 million net loss before taxes for 2001. Under the new law, it can subtract that from its $1.46 billion net income for 1996, reducing it to $590.8 million.

New law gives firms huge tax break