N.J. Admin. Code § 18:7-3.6

Current through Register Vol. 56, No. 9, May 6, 2024

Section 18:7-3.6 - Tax rates-corporations, S corporations

(a) Tax rates for C corporations are as follows:

1. Except as may be provided in (a)3 and 4 below, for all fiscal periods beginning on or after January 1, 1980, the net income tax rate is nine percent, for a corporation that is not a New Jersey S corporation.

2. Except as may be provided in (a)3 and 4 below, for a foreign corporation acquiring a taxable status in New Jersey on or after January 1, 1980, and filing its New Jersey return Form CBT-100 on a short period basis, the tax rate is nine percent on adjusted entire net income after proper proration.

3. For privilege periods beginning on or after July 1, 1996, a taxpayer that is not a New Jersey S corporation that has entire net income of $ 100,000 or less for a 12 month privilege period, the rate for that privilege period shall be 7 1/2 percent. A corporation having an accounting period of less than 12 months may qualify for this reduced rate if its income when prorated does not exceed $ 8,333 per month.

Example: A taxpayer having a five month accounting period qualifies for the 7 1/2 percent rate if its income for the period does not exceed $ 41,666.

4. For privilege periods beginning on or after January 1, 2002, a taxpayer that is not a New Jersey S corporation that has entire net income of $ 50,000 or less for a 12-month privilege period, the rate for that privilege period shall be 6 1/2 percent. A corporation that is not a New Jersey S corporation having an accounting period less than 12 months may qualify for this reduced rate if its income when prorated does not exceed $ 4,166 per month.

5. For privilege periods ending on and after July 31, 2019, the tax rates at (a)1, 2, 3, and 4 above shall be applied to taxable net income, as defined at N.J.S.A. 54:10A-4(w), and the non-operational income that is specifically assigned to New Jersey.

(b) For privilege periods ending on or after July 1, 2007, there shall be no tax imposed on New Jersey S corporations with total entire net income that is not subject to Federal income tax.

(c) The rates for income of New Jersey S corporations that are subject to Federal tax are as follows:

1. Except as may be provided in (c)2 or 3 below, for a New Jersey S corporation the tax rate is nine percent multiplied by any of its entire net income that is subject to Federal income taxation or such portion thereof as may be allocable to this State. (See, for example, I.R.C. § 1374 or 1375.)

2. For privilege periods beginning on or after July 1, 1996, a taxpayer that is a New Jersey S Corporation that has entire net income of $ 100,000 or less for a 12-month privilege period, the tax rate is 7.5 percent multiplied by any of its entire net income that is subject to Federal income taxation or such portion thereof as may be allocable to this State. (See, for example, I.R.C. § 1374 or 1375). A corporation having an accounting period of less than 12 months may qualify for this reduced rate if its income when prorated does not exceed $ 8,333 per month.

3. For privilege periods beginning on or after January 1, 2002, a taxpayer that is a New Jersey S corporation that has entire net income of $ 50,000 or less for a 12-month privilege period, the tax rate is 6.5 percent multiplied by any of its entire net income that is subject to Federal income taxation or such portion thereof as may be allocable to this State. (See, for example, I.R.C. § 1374 or 1375.) A corporation having an accounting period of less than 12 months may qualify for this reduced rate if its income when prorated does not exceed $ 4,166 per month.

(d) For privilege periods ending on and after July 31, 2019, for the members of a combined group filing a New Jersey combined return, a tax rate shall be applied to taxable net income, as defined at N.J.S.A. 54:10A-4(w), and the nonoperational income that is specifically assigned to New Jersey. The rates shall be based on the taxable net income of the taxpayer according to the following schedule:

1. If the taxable net income is more than $ 100,000 in a 12-month period, the rate is nine percent;

2. If the taxable net income is $ 100,000 or less in a 12-month period, the rate is 7.5 percent; and

3. If the taxable net income is $ 50,000 or less in a 12-month period, the rate is 6.5 percent.

(e) See N.J.A.C. 18:7-21 for more information on combined groups and combined returns.

(f) See N.J.A.C. 18:7-3.29 for information on the surtax.

(g) For privilege periods ending on and after July 31, 2020, a combined group shall be treated as one taxpayer for the purposes at (d) above for the income derived from the unitary business pursuant to N.J.S.A. 54:10A-4(z).

N.J. Admin. Code § 18:7-3.6

Amended by 49 N.J.R. 1694(a), effective 6/19/2017

Amended by 54 N.J.R. 1819(a), effective 9/19/2022