New Jersey Statutes 54:10A-6.4. Definitions
Terms Used In New Jersey Statutes 54:10A-6.4
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
“Investment management services” means providing a substantial quantity of any of the following services to a partnership, S corporation, or other entity as a partner thereto:
(1) advising as to the advisability of investing in, purchasing, or selling a specified asset;
(2) managing, acquiring, or disposing of a specified asset;
(3) arranging financing with respect to acquiring specified assets; or
(4) any activity in support of the services described in paragraphs (1) through (3) of this subsection.
A partner shall not be deemed to be providing investment management services under this section if the partnership interest is held directly or indirectly by a corporation, or any capital interest in the partnership, which provides the taxpayer with a right to share in partnership capital commensurate with the amount of capital contributed, determined at the time of receipt of such partnership interest, or the value of partnership interest subject to tax under section 83 of the Internal Revenue Code (26 U.S.C. § 83), upon the receipt or vesting of such interest.
“Specified asset” means certain securities, real estate held for rental or investment, interests in partnerships, commodities, or options or derivatives contracts, except if at least 80 percent of the average fair market value of the specified assets of the partnership, S corporation, or other entity during the taxable year consists of real estate.
b. Notwithstanding the provisions of the “Corporation Business Tax Act (1945),” P.L.1945, c.162 (C. 54:10A-1 et seq.), to the contrary, in addition to the tax imposed on the entire net income of a taxpayer pursuant to the provisions of section 6 of P.L.1945, c.162 (C. 54:10A-6), there shall be imposed an additional surtax of 17 percent on income received from investment management services during the taxpayer’s accounting or privilege period.
c. This section shall remain inoperative until enactment into law by the states of Connecticut, New York, and Massachusetts of legislation having an identical effect with this section, section 7 of P.L.2018, c.45 (C. 54A:5-16), subsection (D) of section 6 of P.L.1945, c.162 (C. 54:10A-6), and subsection d. of N.J.S.54A:5-8, as shall be determined by the Director of the Division of Taxation in the Department of the Treasury.
L.2018, c.45, s.9.