N.J. Admin. Code § 18:7-3.27

Current through Register Vol. 56, No. 17, September 3, 2024

Section 18:7-3.27 - Tax rate for privilege periods ending on and after July 31, 2019

(a) In computing the tax liability owed pursuant to N.J.S.A. 54:10A-5 for privilege periods ending on and after July 31, 2019 (beginning on and after August 1, 2018, if a full tax year), the tax rate shall be applied against the taxable net income as defined at N.J.S.A. 54:10A-4(w), in addition to the non-operational income specifically assigned to New Jersey, and 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.

(b) A New Jersey S corporation that did not elect to be included as a member of a combined group will compute its tax liability based on a tax rate applied to its taxable net income as defined at N.J.S.A. 54:10A-4(w).

(c) A taxpayer that is a real estate investment trust shall compute its tax liability at a rate applied to four percent of the taxpayer's taxable net income as defined at N.J.S.A. 54:10A-4(w), in addition to the non-operational income specifically assigned to New Jersey.

(d) A taxpayer that is an investment company shall compute its tax liability at a rate applied to 40 percent of the taxpayer's taxable net income as defined at N.J.S.A. 54:10A-4(w), in addition to the non-operational income specifically assigned to New Jersey.

(e) No alternative minimum assessment is owed for privilege periods ending on and after July 31, 2019 (beginning on and after August 1, 2018, if a full tax year).

(f) Minimum tax is owed at the applicable minimum tax rates. See N.J.S.A. 54:10A-5.e.

(g) For privilege periods ending on and after July 31, 2019, but ending before July 31, 2020, all members of a combined group filing either a mandatory or elective New Jersey combined return shall calculate the tax based on the rates imposed pursuant to N.J.S.A. 54:10A-5.c(1) on an entity-by-entity basis and any New Jersey S corporation electing to be included as a member of the combined group shall be taxed at the same rate as the other members of the combined group. For privilege periods ending on and after July 31, 2020, the combined group as a taxpayer (at the group level) filing either a mandatory or elective return shall calculate the tax based on the rates imposed pursuant to N.J.S.A. 54:10A-5.c(1).

(h) The statutory minimum tax of each taxable member of a combined group filing either a mandatory or elective New Jersey combined return shall be $ 2,000 for the group privilege period. For privilege periods ending on and after July 31, 2019, if the total tax on income of the combined group exceeds the aggregate value of the statutory minimum tax of the taxable members, only the surtax (if any) and the tax on income will be owed by the combined group.

N.J. Admin. Code § 18:7-3.27

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

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