In an unpublished opinion, the Appellate Division of the New Jersey Superior Court affirmed the Tax Court’s holding that the New Jersey partnership filing fee does not violate the Commerce Clause of the U.S. Constitution. New Jersey statutes require partnerships with more than two owners and income derived from New Jersey sources to pay an annual partnership filing fee (PFF) of $150 for each owner, up to a maximum of $250,000. The taxpayer, Ferrellgas Partners, LP, had more than 67,000 owners and paid the maximum PFF for tax years 2009 through 2011. The taxpayer then challenged the PFF, arguing that it violated the Commerce Clause because it is not fairly apportioned and discriminates against interstate commerce, and is not internally consistent. The appellate court affirmed substantially for the reasons expressed by the Tax Court, noting that Ferrellgas did not present a prima facie case of disparate impact or other form of discrimination violative of the Commerce Clause. Rather, the appellate court found that the record demonstrated that the PFF funds the cost of the processing and reviewing of partnership and partner returns filed in New Jersey, which is a purely intrastate activity. As a result, the appellate court agreed with the Tax Court that the PFF does not implicate or violate the Commerce Clause.
