New Jersey: REITs, RICs, and Investment Companies Not Included in Unitary Group

New Jersey requires combined reporting for privilege periods ending on and after July 31, 2019 and has issued much guidance on the law change in the form of Technical Bulletins.  In previously-issued TB-86, which addresses the types of  entities that are included and excluded from the combined group, the Division of Taxation included the language “for 2019” when it excluded REITs, RICs, and Investment Companies from the unitary combined group.  This created some uncertainty as to whether this was a 2019 only exclusion, or an exclusion for 2019 and later years. On December 16, 2019, the Division of Taxation revised TB-86 to make clear that these entities are not excluded from the combined group for the 2019 tax year only. Because REITs, RICs, and Investment Companies are excluded from the combined group, they are required to file separate returns if they have New Jersey nexus. Please contact Jim Venere at 973-912-6349 with questions.