Zayo Group Holdings Inc.’s “taxable” spinoff may not be so taxable after all, and the transaction may leave it with much lower taxes for the foreseeable future.

The Boulder, Colo.-based communications infrastructure multinational announced Nov. 7 that it is splitting into two companies with different business segments, and that gains from the transaction will be taxable to Zayo.

But only the company’s shareholders will face a tax on that gain, as Zayo has enough net operating losses from prior years—$1.9 billion, per its most recent annual financial filing—to effectively make the transaction tax-free to...