New Jersey – Intangible Asset Voluntary Disclosure Opportunity

SALT Report 1734 – The New Jersey Division of Taxation is offering a limited voluntary disclosure program for companies that have nexus with New Jersey as a result of income derived from the use of intangible assets in the state.

The voluntary disclosure period started on September 15, 2012 and will run through January 15, 2013.  The program is open to any company that owns intangible assets and has derived income from the use of those assets in New Jersey.

The following conditions will apply for taxpayers with approved voluntary disclosure agreements (VDA):

  • The look back period will be limited to taxable periods beginning after December 31, 2003, or the date the business started,
  • The taxpayer must file all returns and remit the full payment due within 90 days of the execution of the VDA,
  • A 5% amnesty penalty will be assessed for all returns due prior to February 1, 2009; however all other penalties will be waived, and
  • The 5% penalty plus any interest must be paid within 30 days of the final assessment

The Division’s notice addresses provisions for discretionary throw-out relief and any monies paid towards royalties that were added back to the businesses New Jersey net income.

Please note that all returns will be subject to audit for any issues that were not specifically covered in the voluntary disclosure agreement.

For Further Information:

New Jersey Division of Taxation – Intangible Asset Nexus Initiative