If what's going on at Building Materials Holding Corp. (BMHC) is any indication, LBM dealers stand to collect hundreds of millions of dollars worth of tax refunds this year thanks to a recent act of Congress.
The potential windfall comes via a change in the tax code that lets companies apply current losses against profits from as far back as five years ago. The old limit was two years.
For companies that reaped big profits in the middle of the housing boom last decade, that change could be huge. BMHC estimated in a recent Chapter 11 filing that it could reap at least $50 million as a result of the change, and it had sought to conclude two sales by Dec. 31, 2009, that could get it another $23 million in tax refunds. Boise, Idaho-based BMHC had been seeking permission to sell its C Construction unit and wind down its SelectBuild Illinois operation.