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Definitions Do not include interest expenses and costs that were deducted
Related member means a person that, with respect to the directly or indirectly for, related to, or in connection with the
taxpayer during all or any portion of the tax year is (1) a related direct or indirect acquisition, maintenance, management, own-
entity, (2) a component member as defined in subsection (b) of ership, sale, exchange, or disposition of intangible property in
I.R.C. § 1563, (3) a person to or from whom there is attribution Part I of Schedule G.
of stock ownership in accordance with subsection (e) of I.R.C.
§ 1563, or (4) a person that, notwithstanding its form of organi- Part II – Interest expenses and costs and
zation, bears the same relationship to the taxpayer as a person
intangible expenses and costs
described in (1) through (3) of this definition. Interest expenses and costs and intangible expenses and
costs directly or indirectly paid, accrued, or incurred to, or in
Related entity means (1) a stockholder who is an individual connection directly or indirectly with one or more direct or in-
or a member of the stockholder’s family enumerated in I.R.C. direct transactions with one or more related members which
§ 318, if the stockholder and the members of the stockholder’s were deducted in computing taxable net income on line 28,
family own, directly, indirectly, beneficially or constructively, Part I, Schedule A, must be reported on Schedule G, Part II. If
in the aggregate, at least 50% of the value of the taxpayer’s the taxpayer is claiming an exception to the disallowance, com-
outstanding stock; (2) a stockholder, or a stockholder’s partner- plete and include Schedule G-2, and include the appropriate
ship, limited liability company, estate, trust or corporation, if the amount on Schedule G, Part II, line b. Schedule G-2 is avail-
stockholder and the stockholder’s partnerships, limited liability able on the Division’s website.
companies, estates, trusts and corporations own directly, indi-
rectly, beneficially or constructively, in the aggregate, at least
50% of the value of the taxpayer’s outstanding stock; or (3) a
corporation, or a party related to the corporation in a manner Schedule H
that would require an attribution of stock from the corporation Taxes
to the party or from the party to the corporation under the Itemize all taxes that were in any way deducted in arriving at
attribution rules I.R.C. § 318, if the taxpayer owns, directly, in- taxable net income, whether reflected in Schedule A, Part I at
directly, beneficially or constructively, at least 50% of the value line 2 (Cost of goods sold and/or operations), line 17 (Taxes),
of the corporation’s outstanding stock. The attribution rules of line 26 (Other deductions), or anywhere else on Schedule A.
I.R.C. § 318, shall apply for purposes of determining whether
the ownership requirements of this definition have been met.
Schedule J
Intangible expenses and costs includes (1) expenses, Computation of Allocation Factor
losses, and costs, for, related to, or in connection directly or in-
directly with the direct or indirect acquisition, use, maintenance All taxpayers must complete this schedule.
or management, ownership, sale, exchange, or any other dis-
position of intangible property to the extent such amounts are Only activities related to operational activity are to be used in
allowed as deductions or costs in determining taxable income computing the general allocation factors. If the taxpayer has
before operating loss deduction and special deductions for the nonoperational activity, see Schedule O. If the taxpayer has
tax year under the federal Internal Revenue Code of 1986, 26 nonunitary partnership income, see Schedule P-1.
U.S.C. s.1 et seq., (2) losses related to, or incurred in connec-
tion directly or indirectly with factoring transactions or discount- Lines 1a–1e – Receipts Fraction
ing transactions, (3) royalty, patent, technical and copyright Receipts from sales of tangible personal property are allo-
fees, (4) licensing fees, and (5) other similar expenses and cated to New Jersey if the goods are shipped to points within
costs. New Jersey. Receipts from the sale of goods are allocable to
New Jersey if shipped to a New Jersey or a non-New Jersey
Intangible Property means patents, patent applications, trade customer where possession is transferred in New Jersey.
names, trademarks, service marks, copyrights, mask works, Receipts from the sale of goods shipped to a taxpayer from
trade secrets and similar types of intangible assets. outside New Jersey to a New Jersey customer by a common
carrier are allocable to New Jersey. Receipts from the sale
Intangible Interest Expenses and Costs means amounts of goods shipped from outside New Jersey to a New Jersey
directly or indirectly allowed as deductions under I.R.C. § 163 location where the goods are picked up by a common carrier
for purposes of determining taxable income under the code to and transported to a customer outside New Jersey are not allo-
the extent such expenses and costs are directly or indirectly cable to New Jersey. Receipts from the following are allocable
for, related to, or in connection with the direct or indirect acqui- to New Jersey: services performed if the benefit of the service
sition, maintenance, management, ownership, sale, exchange is received in New Jersey; rentals from property situated in
or disposition of intangible property. New Jersey; royalties from the use in New Jersey of patents,
copyrights, and trademark ; all other businesssreceipts earned
Part I – Interest in New Jersey.
Interest paid, accrued, or incurred to related members that
was deducted in computing taxable net income on line 28, Receipts from Sales of Capital Assets: Receipts from sales
Part I, Schedule A, must be reported on Schedule G, Part I. If of capital assets (property not held by the taxpayer for sale to
the taxpayer is claiming an exception to the disallowance, com- customers in the regular course of business), either within or
plete and include Schedule G-2, and include the appropriate outside New Jersey, should be included in the numerator and
amount on Schedule G, Part I, line b. Schedule G-2 is available the denominator based on the net gain recognized and not on
on the Division’s website. gross selling prices. If the taxpayer’s business is the buying
and selling of real estate or the buying and selling of securi-
ties for trading purposes, gross receipts from the sale of such
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