N.J. Stat. § 54A:12-2

Current through L. 2024, c. 80.

Section 54A:12-2 - Definitions relative to pass-through entity business alternative income tax

As used in P.L. 2019, c. 320(C.54A:12-1 et al.):

"Direct share of the tax paid" means the portion of business alternative income tax calculated on the sum of each member's share of distributive proceeds attributable to the pass-through entity.

"Director" means the Director of the Division of Taxation in the Department of the Treasury.

"Distributive proceeds" means

(1) in the case of a pass-through entity classified as a partnership for purposes of federal income tax law, the sum of (a) the distributive share of partnership income derived from sources both inside and outside New Jersey of all partners who are resident individuals, estates, or trusts that the partnership is required to report to the director under N.J.S. 54A:5-4 plus (b) the distributive share of partnership income derived from sources inside New Jersey of all partners of the pass-through entity who are not resident individuals, estates, or trusts that the partnership is required to report to the director under section N.J.S. 54A:5-4; and

(2) in the case of an electing S corporation, the pro rata share of S corporation income allocated to this State as determined under section 12 of P.L. 1993, c.173 (C.54A:5-10). For purposes of determining distributive proceeds, a pass-through entity shall apply the allocation factors determined under N.J.S. 54A:5-7.

"Limited liability company" means an entity organized pursuant to the "Revised Uniform Limited Liability Company Act," P.L. 2012, c. 50(C.42:2C-1 et seq.), or prior law providing for the formation of a limited liability company in this State, or formed as a limited liability company under similar statutes of other states, that is classified as a partnership or an S Corporation for purposes of federal income tax law.

"Member" means a shareholder of an S corporation; a partner in a general, limited, or limited liability partnership; or a member of a limited liability company.

"Partnership" means a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on in this State.

"Pass-through business alternative income tax" means the tax set forth in subsection b. of section 3 of P.L. 2019, c. 320(C.54A:12-3).

"Pass-through entity" means a partnership, an S corporation, or a limited liability company, with at least one member who is liable for tax on distributive proceeds pursuant to the "New Jersey Gross Income Tax Act,"N.J.S. 54A:1-1 et seq., in a taxable year.

"Share of distributive proceeds" means the portion of distributive proceeds attributable to a member of a pass-through entity in a taxable year.

"Taxable year" means the same as in N.J.S. 54A:1-2.

"Taxed at the business entity level" means taxed pursuant to an election made under P.L. 2019, c. 320(C.54A:12-1 et al.).

N.J.S. § 54A:12-2

Amended by L. 2021, c. 419, s. 1, eff. 1/1/2022.

Added by L. 2019, c. 320, s. 2, eff. 1/13/2020.