Magazine article The CPA Journal

UBT Paid to New York Not Included in New Jersey Credit for Taxes Paid to Another Jurisdiction

Magazine article The CPA Journal

UBT Paid to New York Not Included in New Jersey Credit for Taxes Paid to Another Jurisdiction

Article excerpt

The New Jersey Division of Taxation has reported in its July/August 1990 edition of "State Tax News" that it has determined that tax paid to New York City as Unincorporated Business Tax (UBT) is not tax on an individual's income and cannot be included in New Jersey's calculation of credit for taxes paid to another jurisdiction. This reverses the position taken by the Division in the January/ Febuary 1988 "State Tax News." The change in position is based on a review of the UBT Statutes, N.J.S.A. 54A:4-1 and N.J.S.A. 54A:5-4.

N.J.S.A. 54A:5-4 provides that a partnership or association is not subject to the gross income tax, but each individual member or partner shall be subject to the tax imposed on his or her share, whether distributed or not.

N.J.S.A. 54A:4-1 provides to resident taxpayers a credit against the tax otherwise due under the New Jersey Gross Income Tax Act for the amount of any income tax or wage tax imposed for the tax year by another state or political subdivision of the U.S. The credit cannot exceed the proportion of the tax otherwise due that the amount of the taxpayer's income subject to tax by the other jurisdiction bears to his or her entire New Jersey income. …

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