N.J. Admin. Code § 18:7-3.29

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

Section 18:7-3.29 - Surtax imposed pursuant to N.J.S.A. 54:10A-5.41 for privilege periods beginning on or after January 1, 2018

(a) In addition to the tax paid by each taxpayer determined pursuant to section 5 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-5), each taxpayer shall pay a surtax as follows:

1. For a taxpayer, except as provided at (d) below, that has allocated taxable net income in excess of $ 1 million for the privilege periods, beginning on or after January 1, 2018, through December 31, 2023, the surtax imposed shall be 2.5 percent.

(b) For purposes of this section:

1. "Taxpayer" shall mean any business entity that is subject to tax as provided in the Corporation Business Tax Act, P.L. 1945, c. 162 (N.J.S.A. 54:10A-1 et seq.).

2. "Allocated taxable net income" shall mean allocated entire net income for privilege periods ending before July 31, 2019, or taxable net income as defined in subsection (w) of section 4 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-4) for privilege periods ending on and after July 31, 2019.

(c) The surtax imposed pursuant to this section shall be imposed on allocated taxable net income, and shall be due and payable, in accordance with section 15 at P.L. 1945, c. 162 (N.J.S.A. 54:10A-15), and the surtax shall be administered pursuant to the provisions at P.L. 1945, c. 162 (N.J.S.A. 54:10A-1 et seq.). Notwithstanding the provisions of any other law to the contrary, no credits shall be allowed against the surtax liability computed pursuant to this section, except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, overpayments from prior privilege periods, or the tax credit allowed pursuant to N.J.S.A. 54:10A-5.43.

(d) New Jersey S corporations and public utility companies are not subject to the surtax.

(e) For the purposes of the surtax only, deemed repatriation dividends included in entire net income pursuant to I.R.C. § 965 are to be excluded from the allocated taxable net income computation.

(f) The surtax does not apply to non-operational income and non-unitary partnership income.

(g) For privilege periods ending on and after July 31, 2019, and ending before July 31, 2020, only the taxable members of the combined group are subject to the surtax. In computing the surtax, the taxable members shall take into account their proportionate share of allocated taxable net income of the combined group and their allocated taxable net income derived from their activities, independent of the combined group.

1. For privilege periods ending on and after July 31, 2020, a combined group shall be treated as one taxpayer for purposes of subsection (d) 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.

2. The combined group must keep accurate books and records to permit a proper accounting of the income for purposes of the surtax in order to exclude the portion of the income derived from includable public utilities.

(h) For all separate return taxpayers that are subject to the surtax, the taxpayer shall take into account their allocated taxable net income when computing the surtax.

N.J. Admin. Code § 18:7-3.29

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