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Intangible Asset Nexus Initiative

The Division continues to discover companies that have nexus with New Jersey as a result of having derived income from the use of intangible assets in this State.  Often, the intangible assets have been “embedded” into companies with other business operations beyond merely owning intellectual property or the fee for the use of an intangible asset has been integrated into an intercompany pricing analysis.

Beginning on March 15, 2014 and running through May 15, 2014, companies that own intangible assets and derived income from the use of those assets in New Jersey will have the opportunity to come forward and voluntarily comply with their corporation business tax filing requirements.  In addition to the standard procedures and requirements for voluntary disclosure agreements (VDA’s) for business taxes the following principles will apply:

            •  The look back period will be limited to the periods beginning after July 1, 2010, or the date business commenced, whichever is                 later. Returns for prior periods will not be required.

            •  The taxpayer must file all required returns and remit payment of the full tax liability reported within 45 (forty five) days of the                 execution of its VDA.

            •  The Division will waive all penalties.

            •  The taxpayer will remit payment of interest within 30 (thirty) days of assessment.

            •  Operating companies or those companies that have paid royalties and added same back to their New Jersey entire net income                 may submit amended returns for any period for which the statute of limitations remains open in order to claim an exception to                 the add back.

            •  All returns will be subject to routine audit with respect to issues not specifically covered in the VDA.

Requests for disclosure should be submitted to Nicholas J. Solimando, Auditor.

Questions may be addressed to Mr. Solimando at (609)633-7837 or e-mail at Nicholas.Solimando@treas.state.nj.us or to Lee Evans, Chief, Office Audit Branch at (609)292-5927 or e-mail Lee.Evans@treas.state.nj.us.

Last Updated: Monday, 02/24/14



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