Smith v. Director, Division of Taxation

Plaintiffs are members of partnerships which trade in securities and which in the ordinary course of business produce among other kinds of income, dividends, net gains from the disposition of property and non-taxable income related to federal obligations.

Plaintiffs are taxed on their distributive share of partnership income. The statutory term “distributive share of partnership income” as set forth in N.J.S.A. 54A:5-lk is not defined in the New Jersey Gross Income Tax Statute and therefore the Director of the Division of Taxation adopted regulations to provide details for calculation and…