New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 7 - CORPORATION BUSINESS TAX ACT
Subchapter 21 - COMBINED RETURNS
Section 18:7-21.5 - Determining the managerial member of the combined group and the managerial member's responsibilities

Universal Citation: NJ Admin Code 18:7-21.5

Current through Register Vol. 56, No. 18, September 16, 2024

(a) If the combined group has a common parent corporation within the meaning of the Corporation Business Tax Act, P.L. 1945, c. 162 (N.J.S.A. 54:10A-1 et seq.), and that common parent corporation is a taxable member of the combined group, the managerial member shall be the common parent corporation. In other cases, the combined group shall select a taxable member as its managerial member or, at the discretion of the Director, or upon failure of the combined group to select its managerial member, the Director shall designate a taxable member of the combined group as the managerial member. Once the election of the managerial member is made, the election shall be binding for 10 successive privilege periods, pursuant to N.J.S.A. 54:10A-4.10(a), except as otherwise provided for by the Director (based on the facts and circumstances of the combined group and the specific business entity).

(b) The managerial member of the combined group shall file the mandatory combined return on behalf of the members of the combined group. The managerial member shall be required to: file member returns; file member extensions for filing tax returns and other documents with the Director; pay member liabilities; receive member findings, assessments, and notices; make and receive member claims or file member protests and appeals; and shall be the responsible party liable for filing and paying the tax on behalf of the combined group.

1. A combined group shall file a mandatory combined return in a form and manner prescribed by the Director. If a member of a combined group does not have any activities or income outside of the unitary business, the combined return filed by the managerial member shall constitute the member's New Jersey corporation business tax return.

(c) Each taxable member of a combined group shall be jointly and severally liable for the tax due from any taxable member pursuant to P.L. 1945, c. 162 (N.J.S.A. 54:10A-1 et seq.), whether that tax has been self-assessed, and for any interest, penalties, or additions to tax due.

(d) The privilege period for the combined group is the privilege period of the managerial member. If a member of a combined group has a different fiscal or calendar accounting period from the combined group's privilege period, that member with a different period shall report amounts from its return for its fiscal or calendar accounting year that ends during the group privilege period.

(e) If a combined group is eligible to elect the managerial member of the combined group, notice of the election shall be submitted, in writing, to the Director (by registering for a unitary I.D. number on the online portal) not later than the due date or, if an extension of time to file has been requested and granted, not later than the extended due date of the mandatory combined return for the initial privilege period for which a return is required. The managerial member shall be the designated agent and the responsible person for filing the combined return and paying the tax for the combined group. If another taxable member is subsequently designated as the managerial member, the subsequent designation shall be subject to the approval of the Director.

(f) For privilege periods ending on and after July 31, 2019, a combined group must file a mandatory combined return. However, if privilege periods of the members of the combined group differ, the first mandatory combined return for the combined group shall be required, in accordance with the privilege period of the managerial member.

(g) If a managerial member leaves the combined group, the unitary I.D. number (NU number) shall stay with the group. The NU number shall be used for filing the return, making estimated payments, and requesting payments.

(h) The members of a combined group shall notify the Director of a change in the combined group composition as described in further detail at N.J.A.C. 18:7-21.29. Such notification shall satisfy the requirements at N.J.A.C. 18:7-14.1, 14.2, 14.3, 14.4, and 14.5.

(i) Any notice shall be sent to the managerial member of the combined group at the last known address of the managerial member as indicated on either the last filing required or made pursuant to this section or a subsequent electronic or written notice provided by the managerial member under rules prescribed by the Director.

(j) For more information on situations where the Director of the Division of Taxation may appoint a managerial member, see N.J.A.C. 18:7-21.26.

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