The New Jersey Tax Court has held that a foreign corporation that consistently permits an employee to telecommute from her New Jersey residence is doing business in New Jersey and is subject to the New Jersey Corporation Business Tax. The opinion, released on March 2, 2012, is a warning to taxpayers and their accountants that this type of contact or nexus with New Jersey, thought by some to be negligible or harmless, may no longer be considered as such.

Telebright Corporation, Inc. v. Director, New Jersey Division of Taxation (Docket No. A-5096-09T2) is relatively straightforward. Telebright Corporation, Inc. (“ Telebright”), incorporated in Delaware, maintained offices in Maryland and none in New Jersey. Telebright’s business consisted of a web application, which permitted employers to track employer-provided cell phones, manage accounts, and pay bills through the use of Telebright’s proprietary product. The employee in question worked in Maryland before moving to New Jersey when her husband changed jobs. Telebright allowed her to telecommute as she was a valued employee. She signed an employment contract with a non-compete provision that restricted her future employment and prohibited her from disclosing Telebright’s proprietary information. The contract permitted Telebright to seek injunctive relief.