Regent Corporation of Union, Inc. v. Director, Division of Taxation

NUGENT, J.T.C.

This matter brought before the court on cross-motions for summary judgment presents a question of statutory interpretation. Specifically, whether regulation N.J.A.C. 18:7-1.15 enacted by the Division of Taxation (“Division”) to qualify an “investment company” constitutes a reasonable interpretation of N.J.S.A. 54:10A-4(f), a provision of the New Jersey Corporation Business Tax Act (CBT), N.J.S.A. 54:10A-1 to 41. The Division denied taxpayer’s election as an investment company based on taxpayer’s failure to meet the deduction test, one part of the three-pronged business test set…