Net operating loss (NOL) is a loss taken in a period where a company’s allowable tax deductions are greater than its taxable income, resulting in a negative taxable income. This generally occures when a company inccurs more expenses than revenues during that period. If a company has a net operating loss, it can apply this tax relief in two ways: it can apply the net operating loss to its past tax payments and receive a tax credit; or it could apply the net operating loss to future income tax payments, reducing the need to make payments in future periods.