Regular Place of Business Not a Form NJ-NR-A Requirement
Who is impacted: Unincorporated businesses doing business inside and outside of New Jersey.
What changed: To be consistent with the Corporate Business Tax rules, New Jersey has changed the regular place of business requirement necessary for unincorporated businesses to use Form NJ-NR-A (Business Allocation Schedule). Unincorporated businesses doing business both inside and outside New Jersey may allocate business income to determine the amount from New Jersey sources. Maintaining a regular place of business outside of New Jersey is not required in order to allocate income.
What to do: Businesses impacted must complete Form NJ-NR-A, allocating income, gains, losses and expenses. If the taxpayer believes the form does not provide an equitable allocation of income, gains, losses, expenses, and the business activities of the entity at issue, they can submit a written request to use a substitute method of allocation which must include the basis for the request and the method they wish to use.
What to consider: Taxpayers who filed returns for tax periods beginning on or after July 1, 2010 and apportioned 100% to New Jersey due to the regular place of business rule on Form NJ-NR-A may want to speak with their tax advisor about an amended return.