New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 7 - CORPORATION BUSINESS TAX ACT
Subchapter 17 - PARTNERSHIPS
Section 18:7-17.8 - Certain corporate partners; exemption form
Current through Register Vol. 56, No. 18, September 16, 2024
(a) In order for a nonresident corporate partner to establish that the partnership is not required to pay tax on its behalf, the partner must file annually with the partnership a statement making its claim for exemption. The claim shall be on a form specified by the Director. It must be filed annually and must be received by the partnership on or before the 15th day of the fourth month succeeding the close of the privilege period, or on or before the filing date of the return, if that occurs earlier.
(b) If a partnership erroneously makes a tax payment to the Division of Taxation on behalf of an entity that is exempt, the exempt entity must establish that the money has actually been paid to the State by the partnership, and the entity is actually exempt, in order to qualify for a refund.
(c) If a New Jersey S corporation, that does not have a place of business in New Jersey is a partner in a partnership, a tax payment is made on its behalf at the nine percent rate, since the corporation does not have a regular place of business in New Jersey.
(d) For purposes of this subchapter, each regular place of business of a partnership that is unitary with a corporate partner is to be treated as a regular place of business of the corporate partner. See N.J.A.C. 18:7-7.6(g) and (h)1.
(e) If a partner in a partnership is a qualified I.R.C. § 501(c)(3) charity or any retirement plan approved by the Internal Revenue Service, the partner may file Form 1065E with the partnership to relieve the partnership from making a payment measured by the partner's share. At present, New Jersey does not impose a tax on unrelated business income.
Example: A New Jersey general partnership has a unitary relationship under the criteria set forth at N.J.A.C. 18:7-7.6(g)3 with a corporate partner located in Illinois. As a result of this relationship the corporate partner is considered to have a regular place of business in the State and is not a "nonresident corporate partner." This partner may file a Form 1065E with the partnership so that no tax payments will be made by the partnership on the partner's behalf.
