NJ Governor Christie Signs Legislation Phasing in Single Sales Fraction and Establishing Revenue Miles Fraction for Airlines


On April 28, 2011, New Jersey Gov. Chris Christie signed into law apportionment legislation, P.L. 2011, c.59, that phases in a single sales factor for the corporation business tax beginning next year. The current apportionment formula, by contrast, is comprised of a property fraction, payroll fraction, and double-weighted sales fraction.

The new formula is projected to save New Jersey-based manufacturers at least $75 million annually. Accordingly, it was broadly supported by both the governor and the legislature, which unanimously passed the underlying bill (S-2753) in early March. Of course, out-of-state taxpayers whose New Jersey sales are proportionately higher than their New Jersey property and payroll will face a significant tax increase. A taxpayer with low property and payroll fractions could see its tax nearly double.

The phase-in would occur under the following schedule...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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