Charley O's Inc. v. Director, Division of Taxation

MENYUK, J.T.C.

Plaintiff contests defendant’s assessment of sales tax under the Sales and Use Tax Act, N.J.S.A. 54:32B-1 to -29. The principal issue is the reasonableness of the methodology employed by the defendant in its audit of plaintiff. For the reasons set forth below, I find that defendant employed an arbitrary methodology in determining that plaintiff owed additional sales tax and that plaintiff has presented sufficient evidence to overcome the presumed correctness of the defendant’s assessment and to establish that the assessment should be reduced.

The parties submitted a partial…