Smith v. Director, Division of Taxation

The opinion of the Court was delivered by

GARIBALDI, J.

The issue in these cases is the proper method of taxing a partner on his or her “distributive share of partnership income” under the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 to 54A:10-12 (the “Act”). Specifically, we must determine whether all partnership income realized in the ordinary course of the business of a partnership actively engaged in the securities business is to be taxed to the partners on a net consolidated basis as a single category of income, i.e., “distributive share of partnership income” under N.J.S.A. 54A:5-1k,…