A New Jersey Tax Court recently granted summary judgment to a nonresident limited partnership. One of the partners had originally consented to being taxed in New Jersey, and later amended the returns and requested a refund of taxes paid. This was based on an assertion of no nexus. The Division responded by denying the request and assessing additional tax for the partner that had not consented to be taxed in New Jersey. Contrary to the Division’s assertion, the court held that the refund claim does not constructively revoke the nonresident partner’s election to be exempt. The denial of the refund claim is still being litigated.
The number of changes states have made to sales tax has decreased for the fourth year in a row according to Vetex’s 2012 Sales Tax Report. Average state sales tax stayed at 5.488% from 2011 to 2012. States with the highest sales tax of 7% are Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee.