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New Jersey Partnership Fee Challenge Tossed From Federal Court

Nov. 30, 2022, 7:06 PM

State court is a more appropriate forum for a suit challenging New Jersey’s partnership tax collection regime, a federal judge ruled.

The US District Court for the District of New Jersey dismissed Energy Transfer LP’s constitutional challenge to the law under the federal comity doctrine, which limits federal jurisdiction where there’s a risk of disrupting state tax administration.

The state Legislature wrapped the partnership fee in the state’s system of taxation that it relies on to fund the government, Judge Michael A. Shipp wrote in an opinion issued Tuesday. “Any injunction from this court would therefore necessarily ...