Hot of the press – major corporate income tax developments in both New York and New Jersey.
New York
New York significantly reformed its Corporation Franchise Tax back in 2014 (effective 2015). On August 9, 2023, the Department of Taxation finally published long awaited proposed regulations. The public has 60 days to submit comments before the regulations are finalized.
We are still reviewing the proposed regulations, but here’s a link to New York’s overview.
New Jersey
Similarly, on July 3, 2023, New Jersey just enacted significant tax changes affecting corporations (under the CBT) and partnerships (under the GIT). Among the many changes, New Jersey has adopted a bright-line economic nexus standard. For periods ending on or after July 31, 2023, a non-New Jersey corporation will have income tax nexus if it derives New Jersey receipts in excess of $100,000 or has 200 or more New Jersey transactions during the tax year. This mirrors the state’s Wayfair sales tax nexus standard.
We are still reviewing these changes as well, but here’s a link to New Jersey’s guidance issued on July 11, 2023.
Further, on August 14, 2023, New Jersey just issued updated guidance addressing the unitary business principle and combined reporting — broadening the definition of a unitary business.
Stay tuned for additional updates on these important developments.
