New Jersey Supreme Court: Narrowly-construed "throwout" rule is facially constitutional

myStateTaxOffice
The "throwout" rule is facially constitutional when applied to untaxed receipts from states that lack jurisdiction to tax a corporation due to insufficient nexus or because of congressional actions, such as P.L. 86-272, the New Jersey Supreme Court unanimously held. However, the throwout rule violates the U.S. Constitution when applied to receipts that are not taxed by another state because the state chooses not to impose an income tax. [Whirlpool Properties, Inc. v. Director, Division of Taxation, N.J., Dkt. No. A-25, 7/28/11]


Return to Tax research and insights
State and Local Tax