New Jersey Final Rule Expands Scope of Corporate Income Tax

Tax officials in New Jersey decided to extend corporate income taxes to out-of-state companies that sell goods and services within the state, potentially setting the stage for a lawsuit from business interests.

In a final rule effective Monday, the Garden State’s Department of Taxation said its tax is legal because it’s in line with other state tax rules that say New Jersey can tax other activities, products, and services.

At issue is a Multistate Tax Commission interpretation of a 1959 federal law (Public Law 86-272) that bars states from taxing interstate commerce if their only business activity ...