The New Jersey Tax Court ruled that the Division of Taxation (“Division”) properly required a foreign (non-New Jersey domesticated) corporation to file corporation business tax (“CBT”) returns reporting licensing revenue from its parent attributable to New Jersey, based on New Jersey’s economic presence nexus standard, despite the parent’s royalty expense addback in computing its CBT liability. The licensing subsidiary filed CBT returns before New Jersey’s enactment of the addback provision; once the parent corporation became obligated to add back the royalty expenses to its income, the licensing subsidiary ceased filing CBT returns, asserting that the parent’s royalty expense addback captured the income. In rejecting the subsidiary’s position, the court explained that the subsidiary was taxable under New Jersey’s CBT subjectivity provisions (specifically, the economic presence nexus standard), and that such provision and the royalty addback provision do not operate in the alternative, as neither provision contains a cross-reference to or an exception with respect to the other provision. The court also rejected the argument that requiring the subsidiary to file a return when the parent had already added back the royalty payments it made to the subsidiary would result in unconstitutional double taxation. The court explained that statutory and regulatory mechanisms existed to eliminate the possibility of double taxation, including the payor’s ability to assert relief under the unreasonableness exception to the addback statute and the Division’s “subject to tax” exception, as well as the payee’s ability to request discretionary relief from the Division (“Section 8” relief). Failing to take advantage of any of the relief mechanisms made the subsidiary’s claim of unconstitutional double taxation “questionable.” The court, nevertheless, left open the possibility for Section 8 relief once the subsidiary filed the returns and emphasized that the Division must ensure that it taxes such income only once. Spring Licensing Grp., Inc. v. Dir., Div. of Taxation, No. 010001-2010 (N.J. Tax Ct. Aug. 14, 2015).