On December 15, 2008, the New Jersey Superior Court, Appellate Division, reversed the decision of the Tax Court of New Jersey in Praxair Technology, Inc. v. Director, Division of Taxation and held that Praxair was not subject to tax for the years 1994 to 1996.

The Appellate Division agreed with our arguments and ruled that the Division of Taxation’s 1996 regulation that interpreted the Corporation Business Tax “doing business” statute to include an economic presence standard for trademark royalty income could not be applied retroactively to the years 1994 to 1996. The Appellate Division remanded the case to the Tax Court with respect to the Division of Taxation’s application of 30% penalties for failure to file returns and failure to pay tax, its failure to waive the penalties and its automatic application of the 5% post-amnesty penalty.

This is the Opinion of the Superior Court of New Jersey, Appellate Division.