N.J. Slaps More Tax on Multinationals With Foreign-Income Levy

New Jersey is taking an aggressive new stance to raise taxes on foreign income from multinational companies.

Johnson & Johnson and Merck & Co. Inc. are the largest companies headquartered in the state, but even companies not based there could be affected.

New Jersey is including a new federal category of foreign income in its tax base, and is the first state to tax 50 percent of that income, while choosing to grab its share of the income pool through a special—and surprising—calculation involving its gross domestic product. Lobbying groups, like the State Taxes After Reform (STAR) Partnership and the ...