Current through Register Vol. 56, No. 18, September 16, 2024
(a) A regular place of
business is any bona fide office (other than a statutory office), factory,
warehouse, or other space of the taxpayer which is regularly maintained, occupied
and used by the taxpayer in carrying on its business and in which one or more
regular employees are in attendance. The following factors will assist in the
determination of what is a regular place of business.
1. Bona fide office: An office in which an
employee in attendance performs significant duties related to the business of the
taxpayer. An office in name only, space of the taxpayer or any place where an
employee does not actually perform significant duties constituting part of
taxpayer's business does not constitute a regular place of business.
2. Space of the taxpayer: The taxpayer must be
directly responsible for the expenses incurred in maintaining the regular place of
business and must either own or rent the facility in its own name and not through a
related person or entity. The regular place of business should be identifiable as
belonging to the taxpayer by, for example, reflecting the taxpayer's name on the
exterior and interior of the building and being listed in the taxpayer's name in a
telephone book.
3. Regularly maintained,
occupied and used by the taxpayer in carrying on its business: The taxpayer must
regularly maintain, occupy and use the premises by employing one or more regular
employees who are in attendance during normal working hours. Premises are not
regularly maintained, occupied and used in the event employees are in attendance
only on a part time basis and, in their absence, telephone messages are received by
an answering service or recording device.
4. Regular employee: A regular employee must be
under the control and direction of the taxpayer in transacting the taxpayer's
business and/or performing work on behalf of the taxpayer. The officers of the
taxpayer are generally deemed to be regular employees of the taxpayer while
independent contractors and members of the taxpayer's board of directors are not
regular employees of the taxpayer. The method or procedure by which a taxpayer
reports the compensation paid to an individual (such as a W-2 form) shall not be
conclusive as to whether the individual is a regular employee (See
N.J.A.C.
18:7-8.14.):
i.
The facilities of a public warehouse located outside New Jersey and utilized to
store property of the taxpayer prior to shipment to customers shall not constitute a
regular place of business of the taxpayer where the warehouse is not the space of
the taxpayer.
ii. The facilities of an
independent contractor located outside of New Jersey and used to store, convert,
process, finish and/or improve the goods of the taxpayer prior to shipment to
customers shall not constitute a regular place of business of the
taxpayer.
iii. A job site, field office
or other facility which is not regularly maintained, occupied and used in taxpayer's
business or where administrative duties, such as performing payroll functions,
telephoning, recordkeeping, banking, accounting, the hiring and firing of employees
and similar functions are not performed, is not a regular place of
business.
iv. The location of
inventories outside New Jersey in the possession of employees in their homes, or in
trucks, or in coin-operated machines do not represent space regularly maintained,
occupied and used by the taxpayer in carrying on its business.
v. In the event that the taxpayer's business is
conducted by an independent agent or independent contractor, the place of business
of the independent agent or independent contractor shall not be considered a regular
place of business of the taxpayer. In addition, any employee of such independent
agent or independent contractor shall not be considered a regular employee of the
taxpayer.
(b) A
taxpayer does not have a regular place of business outside New Jersey solely by
consigning goods to an independent factor outside New Jersey for sale at the
direction of either the consignor or consignee.
(c) The mere fact that a taxpayer is subject to an
income or franchise tax in other jurisdictions shall not be determinative as to
whether the taxpayer maintains a regular place of business outside New Jersey where
taxable status in that jurisdiction is based on criteria other than a regular place
of business.
