Definition
NOL is an abbreviation with two distinct legal meanings depending on context:
1. Nolle Prosequi (Criminal/Civil Procedure). Shorthand for nolle prosequi, the formal declaration by a prosecutor or plaintiff that they will not further prosecute a charge or claim. A prosecutor who enters a NOL is effectively abandoning the case — at least for the present. In criminal practice, a NOL entered before jeopardy attaches generally does not bar re-prosecution on the same charge.
2. Net Operating Loss (Tax Law). In federal and state tax practice, NOL refers to a net operating loss — the amount by which a taxpayer's allowable deductions exceed gross income in a given tax year. Because businesses and individuals cannot pay negative taxes in the year the loss occurs, tax law allows the NOL to be carried to other tax years to offset taxable income, reducing tax liability in those years. The rules governing carryback and carryforward periods, and limits on the amount of income that can be offset, have changed repeatedly under federal statute and vary significantly by state.
Common Confusion
The same abbreviation serves two entirely unrelated legal concepts. A researcher encountering "NOL" in case law, court dockets, or procedural records is almost certainly reading nolle prosequi. A researcher encountering "NOL" in tax filings, corporate records, transactional documents, or tax litigation is reading net operating loss. Context resolves the ambiguity in almost every case, but cross-domain confusion is a real trap — a tax attorney's memo referencing the "use of NOLs" and a criminal court docket entry noting a "NOL entered" mean entirely different things.
Why It Matters in Research
For researchers working in criminal procedure or civil litigation records, NOL as shorthand for nolle prosequi appears frequently in docket entries, minute books, and court indexes — often without expansion. Historical court records may spell out nolle prosequi, abbreviate it as nol. pros., or simply enter NOL. Understanding that these are equivalent forms prevents miscounting dispositions or misreading case outcomes. The entry in Rapalje & Lawrence points to a Massachusetts case defining the term in context (12 Allen 218), which is a useful anchor for 19th-century procedural usage in that jurisdiction.
For tax researchers, NOL as net operating loss is a heavily statutory concept with a complicated legislative history. The carryback and carryforward rules have been amended multiple times — most significantly by the Tax Reform Act of 1986, the Tax Cuts and Jobs Act of 2017 (which eliminated carrybacks for most taxpayers and capped carryforwards at 80% of taxable income), and the CARES Act of 2020 (which temporarily restored five-year carrybacks for losses arising in 2018–2020). Any research into corporate tax planning, bankruptcy valuations, or merger and acquisition due diligence that touches NOLs must account for which statutory regime was in effect for the tax years at issue. State conformity to federal NOL rules is inconsistent — some states follow federal changes automatically, others have decoupled entirely.
The two meanings of NOL rarely appear together in the same body of law, but any general legal research database search on the abbreviation alone will return results from both domains. Search strategy should include domain-specific terms alongside the abbreviation.
Historical Dictionary Support
The historical dictionaries do not address NOL as an independent entry. Rapalje & Lawrence and Bouvier both treat nol. pros. as an abbreviation directing the reader to nolle prosequi, and both include the Latin phrase nolens volens (whether willing or unwilling) as a nearby entry — a proximity that reflects alphabetical arrangement rather than conceptual connection. Burrill's entry for this alphabetical range appears to be a page reference only, offering no substantive definition. None of the historical sources address NOL in the tax sense, which is unsurprising: the net operating loss concept in modern form is a creature of 20th-century federal income tax legislation and would have had no place in 19th-century legal dictionaries.
The absence of a standalone NOL entry in any of the historical dictionaries confirms that researchers working with pre-20th-century sources should look under nolle prosequi for procedural usage, and should not expect to find tax-law usage in any historical dictionary source.
Jurisdictional Note
NOL as nolle prosequi carries procedural consequences that vary by jurisdiction — particularly regarding double jeopardy, re-prosecution rights, and whether court approval is required. NOL as net operating loss is a federal tax concept, but state tax conformity differs substantially; some states impose their own carryforward limits, disallow carrybacks entirely, or have not adopted federal amendments.
Encyclopedia Cross-Reference
See Law Mind Encyclopedia: Nolle Prosequi; Net Operating Loss.