The New Jersey Tax Court ruled that a corporation was entitled to apportion its corporate income based on a “regular place of business” outside of New Jersey. This now-repealed apportionment requirement was the source of several New Jersey Tax Court cases. For tax years beginning before July 1, 2010, N.J. Rev. Stat. § 54:10A-6 provided that corporations must maintain a regular place of business outside of New Jersey as a prerequisite to apportion its income. The court rejected the New Jersey Division of Taxation’s interpretation of its regulation, N.J.A.C. 18:7-7.2. Notably, the court disagreed with the Division’s contention that all of the regulation’s factors for finding a regular place of business must be met. And, the court also rejected the Division’s position that an employee’s employer is determined based on which entity is paying the employee, rather than which entity directs and controls the employee. (ADP Vehicle Registration, Inc. v. Division of Taxation, Dkt No. 014946-2014 (N.J. Tax Ct. Dec. 11, 2018)).
