TAX NEWS - January 2010

Income/Franchise Tax - New Jersey: Amended rule implements new law that extends the corporation business tax 4% surcharge and decouples from IRC §108(i)

Amended Rule N.J.A.C. 18:7, N. J. Div. of Tax. (eff. 12/21/09). Pursuant to legislation enacted during 2009 [A.B. 4105], the department has issued an amended rule reflecting new law that extends through corporation tax years ending before July 1, 2010, the 4% surcharge on corporation business tax liability.

The revised rule also explains how New Jersey has decoupled the state corporation business tax from the deferral of recognition of income from discharge of certain business indebtedness as enacted by the federal American Recovery and Reinvestment Act of 2009 under Internal Revenue Code (IRC) Sec. 108(i).