New Jersey Statutes 54:10A-4.11. Determination, combined group, world-wide, affiliated group basis
Terms Used In New Jersey Statutes 54:10A-4.11
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- State: extends to and includes any State, territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
- territory: extends to and includes any territory or possession of the United States, the District of Columbia and the Canal Zone. See New Jersey Statutes 1:1-2
(1) each member incorporated in the United States, or formed under the laws of the United States, any state, the District of Columbia, or any territory or possession of the United States, excluding such a member if eighty per cent or more of both its property and payroll during the privilege period are located outside the United States, the District of Columbia, and any territory or possession of the United States;
(2) each member incorporated or formed under the laws of a foreign nation, if twenty per cent or more of both its property and payroll during the privilege period are located in the United States, the District of Columbia, or any territory or possession of the United States;
(3) any member that earns more than 20% of its income, directly or indirectly, from intangible property or related service activities that are deductible against the income of other members of the combined group;
(4) (Deleted by amendment, P.L.2023, c.96)
(5) any member, wherever incorporated or formed, that is not included in paragraphs (1) through (3) of this subsection, if that member has effectively connected income or loss within the meaning of the federal Internal Revenue Code, as modified by the provisions of the Corporation Business Tax Act (1945), P.L.1945, c.162 (C. 54:10A-1 et seq.). For any member that is included pursuant to this paragraph, the member shall be included in the combined group only to the extent of its effectively connected income or loss, taking into account items of expense and allocation factors associated with the effectively connected income or loss.
b. A world-wide election or an affiliated group election is effective only if made on a timely filed, original return for a privilege period by the managerial member of the combined group. Such election is binding for, and applicable to, the privilege period for which it is made and for the five immediately succeeding privilege periods. Provided however, the election can be revoked prior to the expiration of the binding period by written request to the Director of Taxation for reasonable cause including but not limited to a substantial change in ownership, members of the combined group or principal business, or changes in tax law, regulation or policy.
c. If the managerial member elects to determine the members of a combined group on an affiliated group basis, the taxable members shall take into account the entire net income or loss and allocation factors of all of the members of its affiliated group, regardless of whether such members are engaged in a unitary business, that are subject to tax or would be subject to tax under this chapter, if doing business in this State.
d. The director shall promulgate rules and regulations necessary to carry out the provisions of this section.
L.2018, c.48, s.23; amended 2023, c.96, s.5.