Reed Smith’s State Tax Group has one of the leading New Jersey state tax practices, with more than a dozen lawyers licensed to practice in the state.
We advise clients on corporation business tax, sales and use tax, and various New Jersey gross receipts taxes and fees. Unlike non-lawyer consulting firms, we are able to represent our clients at all appeal levels – from audit through litigation. Not only do we defend clients in connection with audits and assessments, we also conduct income tax and sales and use tax reviews to identify potential refund opportunities. We also advise clients on planning initiatives and the New Jersey tax implications of corporate reorganizations. Our team includes registered New Jersey lobbyists, which enables us to advocate for clients across all branches of government.
Our team has been at the forefront of New Jersey’s switch to combined reporting and market sourcing, which became effective in 2019. When combined reporting was first proposed, a member of our team met with each bill sponsor and testified before the Senate Budget Committee. We have continued to closely monitor the Division of Taxation’s informal policies and have conducted numerous training programs regarding potential taxpayer exposures and opportunities. To provide clients with the most sound and accurate advice, we maintain an extensive library of unpublished rulings and informal guidance.
Although we pride ourselves on having close working relationships with New Jersey auditors and top officials, we have extensive litigation experience in case a particular issue cannot be resolved amicably. This provides us with additional leverage in settlement negotiations.
We also pride ourselves on our commitment to innovation. This includes not only identifying novel refund opportunities and filing positions but also the innovative use of technology and automation. By leveraging various technology tools and platforms, we can more efficiently represent clients with regard to such matters as identifying sales and use tax overpayments; advising on the use of statistical sampling; evaluating filing positions and group composition for combined reporting; and analyzing alternative apportionment methods.
Here are several examples of recent New Jersey-related issues, opportunities, and strategies:
- Using artificial intelligence and data analytics platforms to identify potential corporation business tax opportunities and visualize the results in dynamic dashboards
- Recomputing the sales-fraction numerator by resourcing dock sales and leveraging third-party data sets to more fairly reflect taxpayers’ New Jersey activities and receipts
- Claiming sales tax refunds based on the plain language of the regulation, which provides that nearly all software-related services are nontaxable
- For manufacturers and wholesalers, claiming sales tax refunds related to purchases and rentals of wrapping supplies and pallets used to transport the purchaser’s goods
