Affiliated group members may share NOL carryovers on an Alabama consolidated return, subject to Alabama's SRLY limitation. SRLY applies if an NOL was incurred in a year before a member joined an "Alabama affiliated group." Because an "Alabama affiliated group" did not exist before 1999, all NOLs incurred before then were subject to the SRLY limitation. For a loss incurred in 1999 or later when the corporation that incurred the loss was a group member in the loss year, SRLY does not apply - even if the Alabama affiliated group did not file an Alabama consolidated return in the loss year.
Additionally, the federal SRLY "lonely parent exception," which would allow an NOL incurred by a common parent of a consolidated group to be shared with other members, is not applicable in Alabama. [Coca-Cola Enterprises, Inc. v. State of Alabama, Alabama Department of Revenue Administrative Law Division, Docket No. Corp. 09-641 (8/15/12)]