Court Opinion

ID: 4563853
Source: CourtListenerOpinion
Date Created: 2020-09-09 14:08:16.005049+00
Date Added: 2024-06-11T12:26:09.220930
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-1331-17T3

PRESERVE II, INC.,

          Plaintiff-Appellant,

v.

DIRECTOR, DIVISION OF
TAXATION,

          Defendant-Respondent.

PULTE HOMES OF NJ, L.P.,

          Plaintiff/Cross-Respondent,

v.

DIRECTOR, DIVISION OF
TAXATION,

          Defendant-Respondent/
          Cross-Appellant.

PULTE COMMUNITIES OF NJ,
L.P.,
      Plaintiff/Cross-Respondent,
v.

DIRECTOR, DIVISION OF
TAXATION

     Defendant-Respondent/
     Cross-Appellant.
___________________________

            Argued October 10, 2019 – Decided September 9, 2020

            Before Judges Fuentes, Haas and Mayer

            On appeal from the Tax Court of New Jersey, Docket
            Nos. 010921-2013, 010920-2013, 010922-2013, whose
            opinion is reported at 30 N.J. Tax 133 (2017).

            Leah Robinson argued the cause for appellant/cross-
            respondent (Mayer Brown LLP, attorney; Leah
            Robinson, on the briefs).

            Michael J. Duffy, Deputy Attorney General, argued the
            cause for respondent/cross appellant (Gurbir S. Grewal,
            Attorney General, attorney; Melissa H. Raksa,
            Assistant Attorney General, of counsel; Michael J.
            Duffy, on the brief).

PER CURIAM

      Plaintiff, Preserve II, Inc., is a foreign corporation with limited

partnership interests in Pulte Homes of NJ, L.P. (Homes), and Pulte

Communities of NJ, L.P. (Communities), two partnerships that built and sold

homes in New Jersey. The Director of the Division of Taxation (Director) began

an audit of plaintiff's tax returns in 2010. On April 5, 2013, while the audit was

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pending, plaintiff applied for a tax refund of $2,084,656 for tax -years 2005

through 2007, based on an absence of nexus to this State. On April 11, 2013,

the Director made its final audit determination and determined plaintiff owed

$5,429,385.38 in outstanding taxes.

      On April 19, 2013, the Director separately assessed against Homes and

Communities $2,126,591.02 and $2,511,382.88, respectively, in outstanding

taxes for 2005 through 2010, and thereafter denied plaintiff's claim for a refund.

Plaintiff, Homes, and Communities (cross-respondents) each filed separate

complaints in the Tax Court challenging the Director's assessments. Judge Mala

Sunder consolidated the complaints and presided over a three-day trial that

began on March 28, 2016 and ended on March 30, 2016. The judge heard

testimony from a total of five witnesses, including two Director employees.

      On October 4, 2017, Judge Sunder issued an opinion published in the Tax

Court Reports, in which she affirmed the Director's assessments of the corporate

business tax (CBT) as well as the decision to deny a tax refund. Judge Sunder

also reversed the Director's assessments against cross-respondents. Pres. II, Inc.

v. Dir., Div. of Taxation, 30 N.J. Tax 133 (Tax 2017). The parties stipulated

that if plaintiff's CBT assessments were upheld, cross-respondents would not be

subject to additional taxation. Id. at 175.

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      In this appeal, plaintiff argues that New Jersey's statutes and regulations

prohibit the imposition of the CBT on a foreign corporation whose only

connection to New Jersey is its passive investments in limited partnerships over

which it had no control. Plaintiff contends that Judge Sunder misapprehended

the corporate structure of the entities at issue, which affected her legal analysis.

We disagree and affirm.       The Tax Court correctly construed the relevant

statutory scheme and its findings concerning the corporate structure were both

legally sound and supported by the record. The record supports Judge Sunder's

finding that plaintiff derived receipts from New Jersey sources and had a

sufficient nexus to the State during the relevant tax years to subject it to the CBT

for income it derived from those partnerships.

                                         I.

      The basic corporate structure of the entities at issue are not in dispute.

Throughout the audit years, Pulte Group, Inc. (Pulte), a publicly traded holding

company, registered and headquartered in Michigan 1 was the "apex parent" at

the top of the corporate hierarchy that owned approximately 200 subsidiaries.

Plaintiff's counsel read into evidence the deposition testimony of Vincent Frees,

1
  Pulte moved its corporate headquarters to Georgia in 2014, after the audit
period.

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Pulte's vice-president and "controller."      Frees characterized his role and

affiliation as "an officer of the parent company." Thus, although Pulte did not

have employees in the conventional understanding of the word, it pursued two

types of business endeavors during the audit years: homebuilding (its core

business) and financial services.2

      The majority of the subsidiaries, including Pulte Home Corporation

(PHC), were engaged in some form or aspect of homebuilding. In Pulte's

corporate structure, plaintiff was a holding company investing in homebuilding.

However, for tax reporting purposes, plaintiff was placed in the homebuilding

line of Pulte's businesses. Bruce Robinson, the treasurer for all of the entities

involved, testified that in order to comply with the reporting requirements of the

Securities and Exchange Commission (SEC), plaintiff was considered to be in

the homebuilding rather than the financial services line of business .        The

following portion of Robinson's trial testimony clarifies this issue:

            Q. So the two lines that you considered the consolidated
            group to be engaged in are home building and financial
            services. What would you describe as financial
            services?

2
  According to Frees, "financial services" encompassed "a mortgage company,
and several other title companies and also different operations internally, Puerto
Rico, Mexico. Over the course of the audit period, there was a lot of countries
as well."

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            A. Our financial services are predominantly our
            mortgage operations and they also manage title
            insurance operations for the company as well.

            Q And when you think of the group, is your view that
            every entity is going to fall into one of those two
            buckets, either financial services or home building?

            A. Yes. I predominately view with SEC focus and our
            lines of business are home building and financial
            services.

            Q. Okay. So is it fair to say that in your view, any entity
            that isn’t in the mortgage or title financial services area
            is therefore in the home building line of business?

            A. Yes. That is the way our SEC reporting documents
            run and that is the way I look at it from my perspective.

      What this testimony made clear was that this operation involved a

labyrinth of corporate entities. Below Pulte was Pulte Diversified Companies,

Inc. (Diversified), also a holding company without any employees . Beneath

Diversified was PHC, the direct corporate parent of both plaintiff and its two

general partners: Pulte Home Corporation of Delaware Valley (Delaware

General), and Preserve I, Inc. (Preserve General).

      Under the partnership agreements, Delaware General was the general

partner in Homes, and Preserve General was the general partner in Communities .

Communities built and sold houses and developed residential communities for

adults over age fifty-five. Conversely, Homes built and sold houses that were

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not marketed or restricted to any specific demographic. Plaintiff made an initial

capital contribution of $9900 in each partnership; the general partner contributed

$100 in capital contributions.    Plaintiff owned 99% of limited partnership

interests in both partnerships; the corporate headquarters had the same address

as the cross-respondents and approximately 170 other Pulte entities. Plaintiff

did not have physical office locations or property in New Jersey; the cross-

respondents maintained offices and owned land in this State.

      Pulte labeled "Divisions" markets in which it had established

homebuilding operations. "Areas" referred to a group of several Divisions

located in larger geographic regions like the northeast. Pulte's New Jersey

homebuilding activities were overseen by its Northeast Corridor Division

(NCD), headquartered in Pennsylvania. The NCD relied on cross-respondents

for daily decision-making at the home-building level. It is important to note that

neither plaintiff, cross-respondents, nor the general partner had employees.

      All employees who physically worked at the Pulte corporate offices in

Michigan were considered employees of PHC, while the employees who

physically worked in New Jersey were considered employees of another Pulte

subsidiary: Pulte Services Corporation (PSC). James Mullen, Director of Land

Entitlements for the NCD, testified that PSC employed about 200 people who

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worked in New Jersey on behalf of the NCD in land acquisition and development

during the audit years. Cross-respondents are merely landholding entities.

      The NCD maintained a principal office in Bernardsville, and, for a time,

a second smaller office in Somerset, which was closed during the audit period.

The NCD shared its Bernardsville office location during the audit years with

Pulte Mortgage, an entity in Pulte's financial division. All employees of Pulte

subsidiaries had access to Pulte's website. The users of the website had the

capability to upload and share files and access human resources information for

each subsidiary.

      Rodney Walsh, an NCD construction manager for New Jersey operations,

estimated that Pulte entities built more than 1000 homes in this State between

2005 and 2010. If Walsh became aware that a separate Pulte division in the

Area was constructing a similar type of house, he would often use a similar floor

configuration or architectural plan. Walsh did not remember whether he or any

of his colleagues ever used plaintiff's name, or the names of its partners, or

cross-respondents name in the course of daily business. He did not personally

know any of the people who had served as plaintiff's president.

      No entity within the NCD, including plaintiff and cross-respondents, had

the authority to purchase land for development until the acquisition was

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approved at the corporate level. Once the land was purchased, the NCD would

conduct a "feasibility study" of the timetable for developing the land, along with

construction costs, sales prices, and other considerations. Walsh testified that

the NCD's vice president of finance was primarily responsible for drafting

feasibility studies, subject to the approval of the NCD President. Everyone

involved in the feasibility studies for New Jersey development projects was

employed by PSC.

      After a feasibility study was completed, the NCD would seek approval up

the chain of corporate authority, starting with the Area. If the Area approved,

Pulte corporate officials in the asset management committee would make a final

review of the study. Once construction began, sales prices were set at the NCD

level, without prior approval from any entities outside the NCD management.

Plaintiff did not play any role in these business activities.

      Robinson, who in addition to treasurer was also vice president of Pulte,

testified that Pulte owned Pulte Realty Corporation (PRC), a subsidiary which

operated an internal, central depository and "payables" bank that funded each

Pulte subsidiary. When cross-respondents would sell a New Jersey property,

the closing proceeds would be "swept up" into PRC's consolidated internal bank

and "commingled" with other corporate funds. When any Pulte entity within the

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NCD had to pay for labor or services, PRC would draw a check on a zero balance

account and fund that amount the same date the check was presented. PRC

would then charge the NCD that same amount as an "inter-company receivable

payable[,]" plus interest.

      These "cash sweeps" would reduce a group member's liability to the bank,

thereby reducing its interest expenses.     Robinson testified that he did not

consider these transfers as the equivalent of the subsidiary "borrowing" from

PRC; it was viewed as Pulte borrowing cash from PRC and contributing that

amount to the subsidiary, which would then generate an intercompany payable.

Neither plaintiff, its general partners, nor cross-respondents attempted to obtain

third-party financing during the audit years. Plaintiff did not have a separate

bank account and was not authorized to make external investments with money

received from the internal bank.

      David Furstenberg, Director of Taxes for PHC, testified that the $9900

capital contributions plaintiff made when forming the partnerships could have

come from one of two places: from PRC or from the corporate parent 3 as a

capital contribution. In its 2005 tax return, plaintiff deducted $12.5 million in

3
  From the context of his testimony, it is not clear whether Furstenberg used
"parent" to refer to PHC, plaintiff's direct parent, or to Pulte, the apex parent.
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                                       10
interest payments made to the internal bank.        Though not entirely certain,

Furstenberg believed this could have been funds plaintiff received from the

internal bank for its initial capital contribution. No outside money was invested

in cross-respondents.

      Robinson was responsible to make short-term investments using any

excess cash found in the internal bank. This would typically involve money

market or commercial paper. The investments took place at the corporate level

with "consolidated cash balances."      Despite this commingling of corporate

funds, Robinson testified that specific money coming into or out of the PRC

bank was separately accounted for, depending on its source. Plaintiff's limited

partnership interests were its only assets during the audit period and provided

all of its income. Plaintiff did not have any other investments.

      Plaintiff shared certain officers and directors with its general partners and

with Pulte. Robinson was treasurer of Pulte, plaintiff, Delaware General, and

Preserve General, as well as an officer in "predominantly all of. . . [Pulte's]

subsidiaries." This was done "for ease of any banking arrangement," to allow

Robinson the ability to sign documents and access the subsidiaries' bank

accounts.

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                                       11
       Michael Schweninger served as president, chief financial officer (CFO),

and a board member on each of Communities' partners: Preserve General and

plaintiff. Steven Cook served as director, secretary, and senior vice president

for both of those companies and for Delaware General. As noted earlier, Vincent

Frees was vice president and controller of Pulte. He served in these capacities

from April 1995 until his retirement in 2009. Frees testified that during the audit

years, he was an officer for at least seventy-five percent of Pulte's subsidiaries,

including for plaintiff, where he served as president, and for plaintiff's two

partners--Preserve General and Delaware General--where he served as president

and vice president of finance, respectively. His responsibilities included "all of

accounting and finance policies, procedures, and systems" for Pulte. His office

was located in Michigan.

      Frees testified that he did not have any "daily responsibilities" in his

capacity as president of plaintiff or of Preserve General, because both entities

were merely holding companies.         He never considered selling plaintiff's

partnership interests or diversifying its investment portfolio because

homebuilding was the "core business of the parent company."                 Cross-

respondents were the "hands-on builder[s]" during the audit years. Plaintiff did

not have a voice in management in either partnership.          Delaware General

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                                       12
managed Homes, while Communities acted as its own general partner with

respect to managing daily operations.

      Plaintiff's directors and officers did not receive a salary in their capacity

as officers and directors, but each were separately employed and paid by other

Pulte entities and received the benefit of the group's common medical and 401(k)

plans through such employment. According to Furstenberg, there were no

"outside directors" for any of the entities discussed who were not separately

employed by a Pulte entity.

      PHC's tax department provided accounting services and prepared the

federal and state tax returns on behalf of Pulte and each of its subsidiaries.

Twenty-two people worked in the tax department, each of whom were employed

by PHC. PHC charged cross-respondents a "Pulte business charge" in order to

cover the cost of PHC's overhead for the tax department, among other things.

Furstenberg considered PHC, Delaware General, and cross-respondents to be

homebuilding companies; PSC to be an "employee service entity" for employees

who perform homebuilding services; Preserve General to be a holding company

in the homebuilding line of business; and plaintiff to be an investment company

that invests in homebuilders.

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                                         II.

      We start our analysis by acknowledging that, unlike a corporation, a

partnership is not subject to taxation in New Jersey for its earnings. However,

earnings are "'passed through' to the partners," Reck v. Dir., Div. of Taxation,

345 N.J. Super. 443, 449 (App. Div. 2001), whose income "shall be subject to

the tax . . . imposed on [its] share" of the partnership gains. N.J.S.A. 54A:5-4.

      The Corporation Business Tax Act, N.J.S.A. 54:10A-1 to -41, as amended

by the Business Tax Reform Act, L. 2002, c. 40 (BTRA), states that "[e]very

domestic or foreign corporation which is not hereinafter exempted shall pay an

annual franchise tax . . . for the privilege of deriving receipts from sources within

this State, or for the privilege of engaging in contacts within this State, or for

the privilege of doing business . . . in this State." N.J.S.A. 54:10A-2. The statute

then exempts from the definition of "deriving receipts" or "doing business"

certain categories of transactions not at issue. N.J.S.A. 54:10A-2. The statute

further adds that a taxpayer, including a foreign corporation, is subject to paying

the CBT for the "exercise of its franchise in this State . . . if the taxpayer's

business activity in this State is sufficient to give this State jurisdiction to

impose the tax under the Constitution and statutes of the United States."

N.J.S.A. 54:10A-2.

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      The Tax Court found "undisputed" that plaintiff, a limited partner in two

partnerships doing business in New Jersey, earned New Jersey sourced income

from its partnership interests. Preserve, 30 N.J. Tax at 161. The court also

found that the partnerships' New Jersey business involved the "production and

sales of a tangible product (improved real property) in New Jersey," which was

the New Jersey source of plaintiff's income. Ibid. Plaintiff does not challenge

these settled principles of tax law in this appeal. 4 The court found cross-

respondents' homebuilding and selling operations in this State resulted in New

Jersey sourced income for plaintiff. Consequentially, plaintiff "is undoubtedly

subject to CBT for the 'privilege of deriving receipts from' New Jersey."

Preserve, 30 N.J. Tax at 161.

      Plaintiff argues Judge Sunder erred when she held that plaintiff had an

"automatic economic nexus" to this State upon its receipt of partnership income

from New Jersey sources. According to plaintiff, as a foreign limited partner,

it was not subject to the CBT for passively receiving income from a New Jersey

source.   The Legislature did not intend, plaintiff argues, for the "deriving

4
  Plaintiff also does not challenge the constitutionality of the tax nor the factual
question of whether it derived New Jersey sourced income from the
partnerships. We thus consider these issues waived. See Midland Funding LLC
v. Thiel, 446 N.J. Super. 537, 542 n.1 (App. Div. 2016).
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                                        15
receipts" clause in N.J.S.A. 54:10A-2 to "broadly" apply to foreign limited

partners, whose taxability is governed by separate statutory provisions enacted

at the same time: N.J.S.A. 54:10A-15.7(a) and -15.11. In plaintiff's view, these

statutes would be rendered superfluous, illogical, or absurd if a foreign

corporation became subject to CBT "automatically" under N.J.S.A. 54:10A-2

merely by deriving receipts from New Jersey sources. Plaintiff's argument

misconstrues the statutory language.

      When this court reviews a Tax Court decision, it "generally extend[s]

enhanced deference to the expertise of the Tax Court." BIS LP, Inc. v. Dir., Div.

of Taxation, 26 N.J. Tax 489, 493 (App. Div. 2011). The Tax Court's factual

"findings will not be disturbed unless they are plainly arbitrary or there is a lack

of substantial evidence to support them."        Glenpointe Assocs. v. Twp. of

Teaneck, 241 N.J. Super. 37, 46 (App. Div. 1990). Accord Hackensack City v.

Bergen Cty., 405 N.J. Super. 235, 243 (App. Div. 2009). However, "the judge's

interpretation of a statute is not entitled to such deference and is subject to . . .

de novo review." Waksal v. Dir., Div. of Taxation, 215 N.J. 224, 231 (2013)

(quoting Advance Hous., Inc. v. Twp. of Teaneck, 422 N.J. Super. 317, 327

(App. Div. 2011)).

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      As an appellate court, we "also recognize the expertise of the Director,

particularly when the Director's expertise is exercised in the 'specialized and

complex area' of the tax statutes." BIS II, 26 N.J. Tax at 493 (quoting

Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 327 (1984)). For this

reason, this court's "review of the Director's decisions regarding the imposition

of tax is 'limited.'" Wells Reit II-80 Park Plaza, LLC v. Dir., Div. of Taxation,

414 N.J. Super. 453, 461 (App. Div. 2010) (quoting Quest Diagnostics, Inc. v.

Dir., Div. of Taxation, 387 N.J. Super. 104, 109 (App. Div. 2006)).              The

Director's "interpretation of the operative law is entitled to prevail, so long as it

is not plainly unreasonable." Waksal, 215 N.J. at 231 (quoting Metromedia, 97

N.J. at 327).

      As our Supreme Court has made clear that when courts interpret a statute,

"the paramount goal" is to carry out the legislative intent and "generally, the

best indicator of that intent is the statutory language." DiProspero v. Penn, 183

N.J. 477, 492 (2005).      Courts should "ascribe to the statutory words their

ordinary meaning and significance."          Ibid.   "Where a statute is clear and

unambiguous on its face and admits of only one interpretation, a court must infer

the Legislature's intent from the statute's plain meaning." O'Connell v. State,

171 N.J. 484, 488 (2002).       "If the language is not clear, [courts] look to

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                                        17
the legislative history to aid in determining the legislative intent of the statute."

Oberhand v. Dir., Div. of Taxation, 193 N.J. 558, 568 (2008).

      Plaintiff argues that the Tax Court erroneously concluded that plaintiff's

receipt of New Jersey sourced income provided "automatic economic nexus" to

the State. This argument mischaracterizes Judge Sunder's decision. Although

Judge Sunder found that plaintiff was "subject to the CBT simply by virtue of

having unquestionably derived income from New Jersey sources," that did not

end her analysis. Judge Sunder conducted an extensive analysis under the

heading "Preserve's Nexus To New Jersey" to determine whether plaintiff had

a sufficient constitutional nexus to New Jersey to subject it to taxation as a

foreign corporation. Preserve, 30 N.J. Tax at 164. At the conclusion of this

constitutional due process analysis, Judge Sunder held:

             In sum, the record amply supports a finding that the
             lines between the partnerships, the general partner,
             Preserve and PHC were far from sharp and distinct and
             in fact were completely blurred. Preserve was not a
             mere passive investor, actively involved in an unrelated
             business, as was the finding for the foreign corporate
             limited partner in BIS. . . . Indeed, Preserve had no
             authority to make, sell, or diversify any investments let
             alone have its own independently held/operated
             external bank/financial account. The court concludes
             that under all of the facts, Preserve had nexus to New
             Jersey.

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                                        18
            [Preserve, 30 N.J. Tax at 168 (internal citations
            omitted).]

      Plaintiff further argues that the Legislature did not intend N.J.S.A.

54:10A-2 to apply "broadly" to foreign limited partners. This approach is

irreconcilable with the language of N.J.S.A. 54:10A-2, which requires "[e]very

domestic or foreign corporation" to pay the CBT for the privilege of, among

other things, deriving receipts from New Jersey sources, unless an express

statutory exemption applies or the tax exceeds the State's constitutional power

to levy the tax. A corporation's status as a foreign limited partner is not one of

the listed exemptions. Ibid.

      The legislative history and judicial precedent confirms Judge Sunder's

construction of the statute. The BTRA was designed "to increase equity among

business taxpayers and close[] numerous loopholes that allow many profitable

companies to reduce their taxable New Jersey income."          Assembly Budget

Comm. Statement to A. 2501 (June 27, 2002). "By extending the reach of the

CBT to the income of all corporations that derive income from New Jersey," the

law was designed to "extend[] the reach of the CBT to the full extent permitted

under the United States Constitution and federal statute." Id. at 4. See also

Springs Licensing Grp., Inc. v. Dir., Div. of Taxation, 29 N.J. Tax 1, 16 (2015)

(noting that, under the BTRA, the application of the CBT to foreign corporations

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under N.J.S.A. 54:10A-2 "is explicitly limited only by the mandates of the

federal Constitution and statutes.").

      This interpretation does not, as plaintiff contends, render N.J.S.A.

54:10A-15.7 and -15.11 illogical or absurd. N.J.S.A. 54:10A-15.11 directs

partnerships to remit tax payments on behalf of any nonresident foreign

corporate partners, unless the nonresident has consented to pay tax on its own.

N.J.S.A. 54:10A-15.7 explains that a different allocation formula applies to

payments owed by a partnership on a foreign partner's behalf, depending on

factors such as whether the partner is unitary with the partnership and on

whether the partnership is a qualified investment partnership. Stated differently,

N.J.S.A. 54:10A-15.11 provides an exception to the general rule that a

partnership is generally not subject to taxation and N.J.S.A. 54:10A-15.7

describes how to determine the amount of CBT liability. National Auto Dealers

Exchange, L.P. v. Dir., Div. of Taxation, 30 N.J. Tax 343, 351-52 (2018)

(discussing how, under N.J.S.A. 54:10A-15.7 and -15.11, the CBT remitted by

a partnership on behalf of a nonresident corporate limited partner is attributable

to the partner, not the partnership).

      These statutes are silent, however, about what types of business activities

or generated income will subject a foreign corporation to the CBT. The answer

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to this threshold question is found in N.J.S.A. 54:10A-2, which provides that

"every" foreign corporation is subject to the CBT "for the privilege of deriving

receipts from sources within this State, or for the privilege of engaging in

contacts within this State, or for the privilege of doing business . . . in this State"

as long as that business activity is taxable under federal law. Similarly, N.J.S.A.

54:10A-2 does not address the questions addressed by sections 15.11 and 15.7,

respectively--whether a partnership should remit payment on behalf of its

foreign corporate partner's taxable business activities and how to allocate the

partner's share of receipts. Because the latter statutory provisions concern

different topics than those at issue in N.J.S.A. 54:10A-2, there is no merit to

plaintiff's argument that the Tax Court's interpretation would render N.J.S.A.

54:10A-15.7 or -15.11 superfluous or absurd.

      In short, plaintiff offers no countervailing interpretation of N.J.S.A.

54:10A-2 that would construe the statute to mean anything other than what its

plain language suggests: a foreign corporation shall pay the CBT for "the

privilege of deriving receipts from sources within this State" as long as such

taxation falls within federal constitutional limits and no statutory exemption

applies. Because no statutory exemption applies and plaintiff has not challenged

either the constitutionality of the tax or the court's finding that plaintiff

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                                         21
undisputedly derived receipts from New Jersey sources, Preserve, 30 N.J. Tax

at 161, we affirm the court's holding that plaintiff was subject to the CBT under

the plain language of N.J.S.A. 54:10A-2.

      Plaintiff's arguments predicated on the regulations promulgated by the

Director pursuant to N.J.S.A. 54:10A-27 lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for

the reasons expressed by Judge Sunder in her well-reasoned written opinion.

      Affirmed.

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