Due to the enactment of New Jersey mandatory combined reporting, managerial members of each combined group are required to register with the Division of Taxation. Registration will generate an identification number that will serve as the combined group’s tax identification number. Any managerial member’s preexisting tax identification number cannot be used as the primary identification number for the combined group filing.
Mandatory Combined Reporting Enacted
Combined reporting is mandated for tax years ending on and after July 31, 2019 (beginning on and after August 1, 2018, if the managerial member has a 12-month tax year that ends July 31, 2019). Commonly owned companies engaged in a unitary business are required to calculate their Corporation Business Tax on a combined basis.
A combined group is a group of companies that have a common ownership and are engaged in a unitary business, if at least one company is subject to New Jersey Corporation Business Tax.
Determination of Managerial Member
If a combined group has a common parent corporation and that common parent corporation is a taxable group member, the common parent corporation must register as the managerial member. If the common parent member is not a taxable member, the combined group must designate a taxable member as its managerial member. The election is for 10 tax years.
Managerial Member Responsibilities
The managerial member is required to address all tax matters including, but not limited to:
– filing/amending tax returns;
– filing extensions;
– making estimated tax payments and/or any tax liability payment on behalf of its taxable members; and
– responding to notices and assessments for the combined group.
Notice: Unitary Business Questionnaire and Combined Group Index and Mandatory Registration of a Combined Group by Managerial Member, New Jersey Division of Taxation, January 22, 2019