State and Local Tax Alert - March 2014
On January 14, 2014, the New Jersey Tax Court issued a letter opinion to augment its August 9, 2013, bench opinion in Lorillard Licensing Co., LLC v. Director, Division of Taxation, Docket No. A-2033-13T1. From the bench, Presiding New Jersey Tax Court Judge Patrick DeAlmeida ruled that the New Jersey Division of Taxation must apply the nexus standard under the United States Constitution for purposes of determining whether the taxpayer – a company that licensed trademarks and trade names to an affiliate that used them in all fifty states – is “subject to tax” in such other states when applying the Corporation Business Tax (“CBT”) throw-out rule. While the holding in the letter opinion does not deviate from the bench opinion ruling, the letter opinion does provide important insight.