N.J. Admin. Code § 18:7-7.5

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

Section 18:7-7.5 - Allocation factor; application

(a) If the taxpayer had a regular place of business outside New Jersey during the period covered by the return, its tax liability under the New Jersey Corporation Business Tax Act is measured by that part of its entire net income allocated to New Jersey according to a formula called the business allocation factor.

(b) If the taxpayer is deemed to be a "part year allocating" taxpayer because it had a regular place of business outside New Jersey for less than 50 percent of the period of time covered by the return, it will determine its overall business allocation factor by prorating the overall business allocation factor computed by the number of months, or part thereof, that a regular place of business was maintained and adding this to 100 percent prorated by the number of months, or part thereof, a regular place of business was not maintained.

Example: Corporation X establishes its only regular place of business outside New Jersey on November 16 of its 12 month calendar year. The overall business allocation factor computed on Schedule J for the entire period was 62.2424 percent. The prorated allocation factor would be 93.7071 percent computed as follows:

62. 2424 x 2) + (100 x 10)

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N.J. Admin. Code § 18:7-7.5

Amended by R. 1994 d. 186, effective 4/18/1994.
See 26 N.J.R. 761(a), 26 N.J.R. 1696(b).
Amended by R. 2004 d. 367, effective 10/4/2004.
See 36 N.J.R. 1680(a), 36 N.J.R. 4484(a).
Designated paragraph as (a), added (b).
Amended by R. 2017 d. 123, effective 6/19/2017.
See 49 N.J.R. 52(b), 49 N.J.R. 1694(a).
In (b), inserted a comma following the second occurrence of "months" and "thereof".
HISTORICAL NOTE:
Laws of 1968, Chapter 250 eliminated the use of the asset factor for the purpose of allocating net worth, effective with respect to privilege periods commencing after December 31, 1968.
STATUTORY REFERENCES:
See Laws 1968, Chapter 250 as to elimination of asset factor for purpose of allocating net worth, effective with respect to privilege periods commencing after December 31, 1968. See N.J.S.A. 54:10A-4(b) as to definition of "allocation factor". See N.J.S.A. 54:10A-6 as to how to determine allocation factor for taxpayer maintaining regular place of business outside New Jersey.