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The New Jersey Division of Taxation announced an important revision to the allocation methodology of reporting GILTI income, which should provide some much needed tax relief for larger companies in the state. NJBIA had been advocating for such a change since the Division initially released guidance in December of 2018.

Previously, all CBT taxpayers were to calculate the portion of the Global Intangible Low-Taxed Income (GILTI) and Foreign Derived Intangible Income (FDII) that was subject to New Jersey tax based on a separate special accounting method, “equal to the ratio of New Jersey’s gross domestic product (GDP) over the total GDP of every US state in which the taxpayer has economic nexus.”

However, the Division revised the methodology by requiring taxpayers to report GILTI and FDII income, and the corresponding IRC §250(a) deductions, on Schedule A, making the previously the TB-85 obsolete.

Currently, New Jersey is an outlier in the nation by taxing 50 percent of GILTI.

“While we still have concerns about New Jersey taxing 50 percent of GILTI because it discourages companies from placing their headquarters here, this is an important technical change that we actively supported,” said Andrew Musick, NJBIA Vice President of Government Affairs. “These changes will put New Jersey more in line with some of our neighboring states relating to GILTI.

“We thank our members who provided feedback on the impacts of the Division’s previous guidance and we are hopeful this change will provide them with some tax relief.”

As the Division previously indicated, they would be releasing a new Technical Bulletin to provide further details to explain the Division’s revised allocation methodology of GILTI and FDII, and to replace TB-85(R).  The new Technical Bulletin (TB-92) is now available.  To access it, please click here.

Based on the release of this Technical Bulletin, we are soliciting feedback on the impact that the guidance may have on NJBIA members. To submit any feedback or comments you have, please reach out to me at


This article was originally published on August 20, 2019, and updated on August 23, 2019.