Gov. Murphy signed bill S3737 / A5323 into law last week. The reforms may make New Jersey’s corporate tax policies more competitive with other states.
Key points include:
- Changes to the method for apportioning the taxable income on unitary combined reporting groups to New Jersey from the so-called Joyce Rule to the Finnigan Rule;
- Ending special treatment, including net income exclusions, of Real Estate Investment Trusts (REIT), regulated investment companies and investment companies;
- Eliminating the 37.5 percent foreign-derived intangible income deduction;
- Increasing from 50 percent to 95 percent the exclusion from New Jersey taxable income of GILTI;
- Establishing new nexus standards by determining that an out-of-state business is subject to the corporate business tax if it derives more than $100,000 of its receipts from sales to New Jersey or makes more than 200 sales in the state;
- Shifting the net deferred tax liability deduction from a 10-year amortization schedule to a 27-year schedule.
Go online to view the bill at njleg.state.nj.us/bill-search/2022/S3737/bill-text?f=S4000&n=3737_S3