N.J. Admin. Code § 18:7-17.2

Current through Register Vol. 56, No. 21, November 4, 2024

Section 18:7-17.2 - Subjectivity

(a) For privilege periods beginning on or after January 1, 2002, a partnership, including any entity that is classified as a partnership for Federal income tax purposes, except a qualified investment partnership as defined herein (see N.J.A.C. 18:7-1.21) or a partnership listed on a United States national stock exchange, shall file a return on a form prescribed by the Director and remit tax under these rules.

(b) Entities that meet the requirements of N.J.S.A. 54A:5-8(c) are commonly referred to as "hedge funds." Income received by a nonresident individual, estate, or trust from a "hedge fund" is exempt from tax under the New Jersey gross income tax because it is not deemed to be carrying on from a trade or business.

1. In those situations in which partnerships do not meet the definition of qualified investment partnerships in N.J.S.A. 54:10A-4(r) (which would automatically exempt partnerships from partnership payments under N.J.S.A. 54:10A-15.11a), and if all of the income derived from the hedge fund partnership by the partners is not subject to New Jersey gross income tax, the partnership is not required to remit a payment of tax on behalf of its nonresident, noncorporate partners, since the income to the nonresidents is not considered subject to tax in New Jersey.

(c) P.L. 2001, c. 136, applies to privilege periods beginning on and after January 1, 2001, and before January 1, 2002.

N.J. Admin. Code § 18:7-17.2

Amended by 49 N.J.R. 1694(a), effective 6/19/2017