The New Jersey Tax Court drafted a letter to the Superior Court of New Jersey, Appellate Division, to amplify the Tax Court’s August 9, 2013, taxpayer-favorable decision applying New Jersey’s “Throw-Out Rule” in Lorillard Licensing Co. LLC v. Division of Taxation, Docket No. A-2033-13T1. In Lorillard, the Tax Court held that the taxpayer must apply New Jersey’s economic nexus standard for purposes of calculating its receipts factor denominator pursuant to New Jersey’s Throw-Out Rule. Lorillard, a trademark holding company, did not have any physical presence in New Jersey but conceded that it had economic nexus based upon its licensing of trademarks in the state pursuant to the New Jersey Supreme Court’s decision in Lanco, Inc. v. Director, Div. of Tax., 879 A.2d 1234 (N.J. 2005), aff'd, 908 A.2d 176 (2006), cert. denied, 551 U.S. 1131 (2007). Although Lorillard conceded economic nexus, it argued the same rules that gave it nexus must be applied for purposes of calculating its receipts factor denominator pursuant to the Throw-Out Rule. In Whirlpool Props., Inc. v. Director, Div. of Taxation, 26 A.3d 446 (N.J. 2011), the New Jersey Supreme Court determined the Throw-Out Rule applied solely to receipts from sales to states that lacked jurisdiction to impose a tax. The Tax Court’s letter reaffirms its summary judgment decision and reiterates that the holdings in Lanco and Whirlpool must be applied consistently for purposes of applying New Jersey’s economic nexus standard. The Tax Court did not mince words in its letter, stating “[t]he Director tests the limits of his credibility by asserting that the same licensing agreement that makes [Lorillard] subject to tax in New Jersey does not also make [Lorillard] subject to tax elsewhere.”  The New Jersey Division of Taxation appealed the Tax Court’s Final Order on December 30, 2013. Lorillard Licensing Co. LLC v. Director, Division of Taxation, Letter to Superior Court of New Jersey, Appellate Division, January 14, 2014.