New Jersey Senators Lesniak (D), Greenstein (D), and Sarlo (D) held a press conference today concerning combined-reporting legislation that they are sponsoring.

Under current law, New Jersey’s corporation business tax is computed on a separate-company basis. The proposed legislation (S-61) would change this by requiring taxpayers to file combined returns. The combined group would include all entities with common ownership that are engaged in a unitary business. For this purpose, common ownership means that 50%-or-more of the voting control is directly or indirectly owned by a common owner (whether or not that owner is a member of the combined group). The proposed legislation does not address whether a corporation would have to file as part of two different combined returns if it has two independent owners and each owner has 50% voting control.

The proposed legislation requires mandatory worldwide combined reporting. There is no water’s-edge election. This would impact foreign corporations—particularly in light of the Division’s policy of including worldwide income in the tax base regardless of tax treaties or where a taxpayer is domiciled. (This policy is currently being challenged in the courts.)

Senator Lesniak estimated that the proposed legislation could generate as much as $200 million of additional revenue annually. The full text of the bill is available here.

Joining Senators Lesniak, Greenstein, and Sarlo at the press conference were representatives from New Jersey Policy Perspective, New Jersey Working Families, New Jersey Citizen Action, and New Jersey Main Street Alliance.