N.J. Admin. Code § 18:7-1.25

Current through Register Vol. 56, No. 21, November 4, 2024

Section 18:7-1.25 - Nexus and combined groups

(a) For purposes of the Corporation Business Tax Act, the combined group and the members of the combined group are both taxpayers pursuant to N.J.S.A. 54:10A-4(h) and the combined group is taxed as one taxpayer. A member of a combined group may have nexus with New Jersey by deriving New Jersey receipts from the unitary business (whether such receipts are the member's own receipts or are receipts derived from intercompany transactions with other members of the combined group, regardless of whether the receipts are eliminated). A member may have nexus consistent with other factors giving rise to nexus with New Jersey pursuant to N.J.A.C. 18:7-1.6 through 1.14. A member may also have nexus independent of a combined group. Such member will be a taxable member of the combined group.

(b) Pursuant to N.J.S.A. 54:10A-4(h) and (z), a combined group is a taxpayer for purposes of the Corporation Business Tax Act, and taxed as one taxpayer on the taxable income from the unitary business activities of the combined group.

1. A combined group shall be treated, for privilege periods ending on and after July 31, 2020, as one taxpayer for purposes of paragraph (1) of subsection (c) of section 5 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-5) and section 1 at P.L. 2018, c. 48 (N.J.S.A. 54:10A-5.41) for the income derived from the unitary business; provided, however, with regard to the surtax imposed pursuant to section 1 at P.L. 2018, c. 48 (N.J.S.A. 54:10A-5.41) and for that purpose only, the portion of income that is attributable to a member that is a public utility exempt from the surtax shall not be included when computing the surtax due by the combined group.

(c) For more information on combined groups and combined reporting, see N.J.A.C. 18:7-21.

N.J. Admin. Code § 18:7-1.25

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