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I.R.C. § 318, shall apply for purposes of determining whether
the ownership requirements of this definition have been met. Schedule J
Computation of Allocation Factor
Intangible expenses and costs includes (1) expenses, All taxpayers must complete this schedule.
losses, and costs, for, related to, or in connection directly or in-
directly with the direct or indirect acquisition, use, maintenance Only activities related to operational activity are to be used in
or management, ownership, sale, exchange, or any other dis- computing the general allocation factors. If the taxpayer has
position of intangible property to the extent such amounts are nonoperational activity, see Schedule O. If the taxpayer has
allowed as deductions or costs in determining taxable income nonunitary partnership income, see Schedule P-1.
before operating loss deduction and special deductions for the
Lines 1a–1e – Receipts Fraction
tax year under the federal Internal Revenue Code of 1986, 26 Receipts from sales of tangible personal property are allo-
U.S.C. s.1 et seq., (2) losses related to, or incurred in connec- cated to New Jersey if the goods are shipped to points within
tion directly or indirectly with factoring transactions or discount- New Jersey. Receipts from the sale of goods are allocable to
ing transactions, (3) royalty, patent, technical and copyright New Jersey if shipped to a New Jersey or a non-New Jersey
fees, (4) licensing fees, and (5) other similar expenses and customer where possession is transferred in New Jersey.
costs. Receipts from the sale of goods shipped to a taxpayer from
Intangible Property means patents, patent applications, trade outside New Jersey to a New Jersey customer by a common
names, trademarks, service marks, copyrights, mask works, carrier are allocable to New Jersey. Receipts from the sale
trade secrets, and similar types of intangible assets. of goods shipped from outside New Jersey to a New Jersey
location where the goods are picked up by a common carrier
Intangible Interest Expenses and Costs means amounts and transported to a customer outside New Jersey are not allo-
directly or indirectly allowed as deductions under I.R.C. § 163 cable to New Jersey. Receipts from the following are allocable
for purposes of determining taxable income under the code to to New Jersey: services performed if the benefit of the service
the extent such expenses and costs are directly or indirectly is received in New Jersey; rentals from property situated in
for, related to, or in connection with the direct or indirect acqui- New Jersey; royalties from the use in New Jersey of patents,
sition, maintenance, management, ownership, sale, exchange, copyrights, and trademarks; all other business receipts earned
or disposition of intangible property. in New Jersey.
Receipts from Sales of Capital Assets: Receipts from sales
Part I – Interest of capital assets (property not held by the taxpayer for sale to
Interest paid, accrued, or incurred to related members that
was deducted in computing taxable net income on line 28, customers in the regular course of business), either within or
Part I, Schedule A, must be reported on Schedule G, Part I. If outside New Jersey, should be included in the numerator and
the taxpayer is claiming an exception to the disallowance, com- the denominator based on the net gain recognized and not on
plete and include Schedule G-2, and include the appropriate gross selling prices. If the taxpayer’s business is the buying
amount on Schedule G, Part I, line b. Schedule G-2 is available and selling of real estate or the buying and selling of securities
on the Division’s website. for trading purposes, gross receipts from the sale of such as-
sets should be included in the numerator and the denominator
Do not include interest expenses and costs that were deducted of the receipts fraction.
directly or indirectly for, related to, or in connection with the
direct or indirect acquisition, maintenance, management, own- For tax years ending on and after July 31, 2019, services are
ership, sale, exchange, or disposition of intangible property in sourced based on market sourcing not cost of performance.
Part I of Schedule G. Note: The amount of dividends (deemed and/or paid divi-
dends) excluded from entire net income pursuant to
Part II – Interest expenses and costs and N.J.S.A. 54:10A-4(k)(5), are not included in the numer-
intangible expenses and costs ator or denominator of the receipts fraction. However,
Interest expenses and costs and intangible expenses and the dividend (deemed and/or paid dividends) values
costs directly or indirectly paid, accrued, or incurred to, or in that are not excluded are included in the numerator or
connection directly or indirectly with one or more direct or in- denominator.
direct transactions with one or more related members which
were deducted in computing taxable net income on line 28, Schedule J must be completed after calculating the
Part I, Schedule A, must be reported on Schedule G, Part II. If DIVIDEND EXCLUSION line on Schedule R but
the taxpayer is claiming an exception to the disallowance, com- before calculating the line for the ALLOCATED
plete and include Schedule G-2, and include the appropriate DIVIDEND EXCLUSION. The amount from the
amount on Schedule G, Part II, line b. Schedule G-2 is avail- DIVIDEND EXCLUSION line from Schedule R is the amount to
able on the Division’s website. use when calculating the dividends and deemed dividends
excluded from the numerator and/or denominator for the
purposes of completing Schedule J.
Schedule H
Taxes GILTI and FDII: Include the GILTI and the receipts attribut-
Itemize all taxes that were in any way deducted in arriving at able to the FDII, net of the respective allowable I.R.C. §250(a)
taxable net income, whether reflected in Schedule A, Part I at deductions, in the allocation factor. The net amount of GILTI
line 2 (Cost of goods sold and/or operations), line 17 (Taxes), (i.e., the GILTI reduced by the I.R.C. § 250(a) GILTI deduc-
line 26 (Other deductions), or anywhere else on Schedule A. tion) and the net FDII (i.e., the receipts attributable to the FDII
reduced by the I.R.C. § 250(a) FDII deduction) amounts are
included in the numerator (if applicable) and the denominator.
Do not include the underlying receipts of the controlled foreign
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