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New Jersey Switches from Joyce to Finnigan Apportionment

Tax Development Jul 12, 2023

New Jersey Switches from Joyce to Finnigan Apportionment

The 2024 New Jersey budget bill, A.B. 5323, was recently signed by Governor Phil Murphy and includes important changes to corporate income tax provisions. The $54 billion budget bill includes a change in the combined reporting method from the Joyce1 method. Under the Joyce method, receipts of a combined member are only included in the receipts factor numerator if that member has nexus with the state. New Jersey has now adopted the Finnigan2 method, where all New Jersey-sourced receipts of all members are included in the apportionment formula, regardless of the nexus status of each member. In addition, the legislation adopts the Wayfair3 nexus standard for corporate business tax purposes, which imposes nexus when the threshold of $100,000 or 200 separate transactions occurs in New Jersey.

Other significant corporate business tax changes include the following:

  • Global intangible low-taxed income is treated as dividend income eligible for the dividend exclusion.
  • The 2.5% surtax on business income will expire as planned on December 31, 2023 and has not been extended.
  • The statute now conforms to the Internal Revenue Code Section 172 limitation of 80% on utilization of net operating losses (NOLs).
  • The director of taxation may make adjustments to NOLs in closed years going back 10 years to determine the correct tax liability in years open under the statute of limitations. (Retroactive to tax years ending on or after July 31, 2022.)
  • The due date of the New Jersey corporate business tax return is now the 15th day of the month immediately following the month of the original/extended federal corporate return due date.

Please reach out to Ryan professionals to learn how these changes impact your company.

1 In the Matter of the Appeal of Joyce, Inc., 66-SBE-070 (November 23, 1966).

2 In the Matter of the Appeal of Finnigan Corporation, 88-SBE-022 (August 25, 1988).

3 South Dakota v. Wayfair, Inc., 138 S. Ct. 2080.


Argi O’Leary

Joseph Schmidt

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