The New Jersey Tax Court held that a parent corporation was not required to add back to its corporation business tax base any amount of royalty payments it made to a subsidiary. The parent company and subsidiary company each filed a New Jersey CBT return. The parent deducted the royalty payment, and the subsidiary included
New Jersey
New Jersey Tax Court Rules Not Taxes Must be Added-Back as Taxes for CBT
By Alla Raykin & Todd Betor on
Posted in Income
On January 31, 2019, the New Jersey Tax Court issued its ruling on whether a taxpayer must add-back intercompany payments to its parent, estimated payments based on tax sharing agreements, as tax payments made to other states. The payments were to reimburse the parent corporation for taxes it paid on behalf of the combined group…
Unboxing the New Jersey Tax Court’s Decision in IP Holding Company Nexus Case
By Justin Brown & Open Weaver Banks on
Posted in Income
The New Jersey Tax Court denied a holding company’s motion for partial summary judgment seeking a determination that the taxpayer lacked nexus with New Jersey and would not be required to file corporation business tax returns. The taxpayer’s only connection to the state of New Jersey was the receipt of royalties from an affiliate doing…
Podcast: Requirements for delivery of tax assessment
In this podcast, our state tax team discusses a matter where New Jersey upheld an assessment addressed to the wrong taxpayer and routed to the wrong location.
New Jersey Tax Court Rejects Division’s Interpretation of Regulation Regarding “Regular Place of Business” and Permits Apportionment
By Suzanne Palms & Jeffrey Friedman on
Posted in In the News
The New Jersey Tax Court ruled that a corporation was entitled to apportion its corporate income based on a “regular place of business” outside of New Jersey. This now-repealed apportionment requirement was the source of several New Jersey Tax Court cases. For tax years beginning before July 1, 2010, N.J. Rev. Stat. § 54:10A-6 provided…
New Jersey Upholds Assessment Addressed to Wrong Taxpayer and Routed to Wrong Location
By Michele Borens & Chris Lee on
Posted in Financial Services, Income
The New Jersey Tax Court rejected a taxpayer’s due process claim finding that the Division of Taxation properly issued the notice of assessment. The taxpayer made three arguments: (1) that the Division issued the assessment in the name of the predecessor corporation instead of the successor corporation, (2) that the assessment was addressed to the…
Podcast: New Jersey apportionment of GILTI
By Eversheds Sutherland SALT on
Posted in Podcast, Tax Reform
In this podcast, our state tax team discusses New Jersey guidance regarding the apportionment treatment of GILTI income.
New Jersey Tax Court Rejects Alternative Apportionment Formula
By Jessica Eisenmenger & Maria Todorova on
Posted in In the News, Tax Reform
The New Jersey Tax Court rejected the Division of Taxation’s application of a five-factor alternative apportionment formula as invalid rulemaking under New Jersey’s Administrative Procedures Act (APA). The Tax Court previously determined that an application of the statutory apportionment formula in effect prior to 2011 for companies without a “regular place of business” outside New…
It’s Not the Eggnog – New Jersey Proposes to Specially Allocate GILTI Based on GDP
By Eversheds Sutherland SALT on
Posted in Tax Reform
On December 21, the New Jersey Division of Taxation released Technical Bulletin TB-85, which addresses how the Division will expect taxpayers to calculate the amount of so-called global intangible low-taxed income (GILTI) and foreign derived intangible income (FDII) that are taxable for New Jersey corporation business tax (CBT) purposes.
Background: GILTI and FDII under Federal …
New Jersey Partnership Filing Fee Is Not an Unconstitutional Flat Tax
By Chelsea Marmor & Open Weaver Banks on
Posted in In the News, Noteworthy Cases
The New Jersey Tax Court rejected the taxpayer’s argument that the partnership filing fee, which requires a partnership with New Jersey source income to pay a per-partner fee of $150 (capped at $250,000), violated the Commerce Clause. The Tax Court held that the filing fee is not facially discriminatory because all partnerships must pay the…