Court Opinion

ID: 4428209
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:02:33.224159+00
Date Added: 2024-06-11T14:23:22.780728
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NOT FOR PUBLICATION WITHOUT THE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-4522-17T2

ROCKLAND ELECTRIC
COMPANY,

          Plaintiff-Appellant,

v.

DIRECTOR, DIVISION OF
TAXATION,

     Defendant-Respondent.
_________________________

                    Argued June 4, 2019 – Decided June 24, 2019

                    Before Judges Messano, Gooden Brown and Rose.

                    On appeal from the Tax Court of New Jersey, Docket
                    No. 8111-2016, whose opinion is reported at 30 N.J.
                    Tax 448 (Tax 2018).

                    Alysse McLoughlin argued the cause for appellant
                    (McDermott Will & Emery LLP, attorneys; Alysse
                    McLoughlin, on the briefs).

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

PER CURIAM

       Plaintiff Rockland Electric Company appeals from the April 30, 2018 Tax

Court order, granting defendant Director, Division of Taxation, summary

judgment, and denying plaintiff's motion for summary judgment. In a written

opinion, Judge Vito L. Bianco accepted defendant's position that the

Transitional Energy Facility Assessment (TEFA) add-back provision embodied

in N.J.S.A. 54:10A-4.1,1 which allowed the TEFA to be deducted for federal

income tax purposes, required that the TEFA be added back to entire net income

(ENI) for the purpose of calculating State corporate business tax (CBT) liability

pursuant to the CBT add-back provision, N.J.S.A. 54:10A-4(k)(2)(C),2 requiring

that certain taxes paid be added back when calculating ENI.

1
    N.J.S.A. 54:10A-4.1 provides:

             Notwithstanding the use of the term assessment, the
             [TEFA] is a State tax within the meaning of . . . 26
             U.S.C. [§] 164, pursuant to which a deduction is
             allowed in arriving at federal taxable income for the
             taxable year within which it is paid or accrued and such
             amount shall be added back to entire net income
             pursuant to [N.J.S.A. 54:10A-4(k)(2)(C)].
2
    N.J.S.A. 54:10A-4(k)(2)(C) provides:

                                                                         A-4522-17T2
                                        2
      On appeal, arguing principles of statutory interpretation and relying on

PPL Electric Utilities Corporation v. Director, Division of Taxation, 28 N.J. Tax

128 (Tax 2014), Duke Energy Corporation v. Director, Division of Taxation, 28

N.J. Tax 226 (Tax 2014), and Ross Fogg Fuel Oil Company v. Director, Division

of Taxation, 22 N.J. Tax 372 (Tax 2005), plaintiff renews its challenge to

defendant's interpretation of the TEFA and CBT add-back provisions. However,

like the Tax Court judge, we reject plaintiff's challenge, and affirm substantially

for the reasons expressed in Judge Bianco's May 9, 2018 corrected opinion,

reported at 30 N.J. Tax 448 (Tax 2018).

      Affirmed.

            (2) [ENI] shall be determined without the exclusion,
            deduction or credit of:

                   ....

             (C) Taxes paid or accrued to the United States, . . . or
            subdivision thereof, on or measured by profits or
            income, or business presence or business activity, or the
            tax imposed by this act, or any tax paid or accrued with
            respect to subsidiary dividends excluded from [ENI] as
            provided in paragraph (5) of subsection (k) of this
            section.
                                                                           A-4522-17T2
                                        3