New Jersey issues guidance related to bright-line nexus and P.L. 86-272

In brief

The New Jersey Division of Taxation (division) on September 5 issued bulletin TB-108, which updates the state’s corporate business tax nexus guidance for privilege periods ending on or after July 31, 2023. Specifically, the new guidance incorporates bright-line economic nexus thresholds enacted this past summer (L. 2023, c. 96) and modifies the state’s application of P.L. 86-272 by listing additional activities that are deemed to exceed the Public Law’s protections and providing a nonexclusive list of protected activities.

Action item: The guidance related to P.L. 86-272 marks the state’s response to the 2021  revised policy statement adopted by the Multistate Tax Commission (MTC) addressing activities conducted via the internet. The MTC provides that “as a general rule, when a business interacts with a customer via the business' website or app, the business engages in a business activity within the customer’s state.” The New Jersey bulletin should prompt businesses to evaluate whether their operations are considered protected by the Public Law or whether the business may be subject to the Corporate Business Tax (CBT).