Taxpayers may have celebrated too soon when the New Jersey
Division of Taxation announced that it was withdrawing TB-85 and
the GDP-based apportionment regime for global intangible low-taxed
income (GILTI) and foreign-derived intangible income (FDII) in
favor of a more fair apportionment regime. Read our first post on T8-85 here.
Yesterday, the Division issued a new Technical Bulletin (TB-92) on the state's treatment of GILTI
and FDII that is quite troubling. The guidance provides that GILTI
and FDII should be included in the general business income
apportionment factor and sourced as "other business
receipts" to New Jersey. The guidance then provides that
"to compute the New Jersey allocation factor on Schedule J,
the net amount of GILTI and the net FDII income amounts are
included in the numerator (if applicable) and the denominator. This
is to help prevent distortion to the allocation factor and arrive
at a reasonable and equitable determination of New Jersey
tax."
