United States:
New Jersey Tax Court Finds Payments Made By Subsidiary Qualify For Exception To Addback Rule
11 August 2017
Grant Thornton LLP
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On May 24, 2017, the New Jersey Tax Court granted a
taxpayer's motion for summary judgment and allowed deductions
for royalty payments made by a subsidiary to its parent company.
Specifically, the court found that the payments qualified for the
unreasonable exception to the addback rule because they were
substantively equivalent to payments made by the subsidiary and/or
the parent to unrelated third parties under transactions involving
the same subject and object (the sale of pre-written computer
software license and service contracts).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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