New Jersey § 54a:5-8

§ 54a:5-8.

a. Income from sources within this State for a nonresident individual, estate or trust

means the income from the categories of gross income enumerated and classified under

chapter 5 of this act to the extent that it is earned, received or acquired from sources

within this State: (1) By reason of ownership or disposition of any interest in real or tangible personal

property in this State; or (2) In connection with a trade, profession, occupation carried on in this State or

for the rendition of personal services performed in this State; or (3) As a distributive share of the income of an unincorporated business, profession,

enterprise, undertaking or other activity as the result of work done, services rendered

or other business activities conducted in this State except as allocated to another

state pursuant to regulations promulgated by the director under this act; or (4) From intangible personal property employed in a trade, profession, occupation

or business carried on in this State; or (5) As a result of any lottery or wagering transaction in this State other than that

excluded from taxation pursuant to N.J.S.54A:6-11 ; or (6) As S corporation income allocated to this State of a New Jersey S corporation. b. Income from sources within this State for a nonresident individual shall not include

income from pensions and annuities as set forth in subsection j. of N.J.S.54A:5-1 . c. For purposes of paragraphs (2) through (4) of subsection a. of this section, a

nonresident taxpayer shall not be deemed to be carrying on a trade, profession, occupation,

business, enterprise, undertaking or other activity in this State, or to be rendering

personal services in this State, solely as a result of the purchase, holding and sale

of intangible personal property by the trade, profession, occupation, business, enterprise

or undertaking, to the extent that (1) the activities related to the intangible personal

property are for the account of the trade, profession, occupation, business, enterprise,

or undertaking and (2) the trade, profession, occupation, business, enterprise, or

undertaking does not hold the intangible personal property for sale to customers. For the purposes of this subsection: “ intangible personal property ” includes, but is not limited to, “commodities”, as defined in paragraph (2) of subsection

(e), and “securities,” as defined in paragraph (2) of subsection (c), of section 475 of the federal Internal Revenue Code

of 1986 , 26 U.S.C. s.475 ; and “ purchase, holding and sale of intangible personal property ” includes activities incidental thereto giving rise to income, including commitment

fees, breakup fees, income from securities lending, and any other incidental activities

as prescribed or authorized by the director. The director shall adopt such regulations as the director deems necessary to accomplish

the purposes of this section. d. (1) The provisions of subsection c. of this section shall not apply to income from

investment management services provided to a partnership, S corporation, or other

entity. (2) As used in this subsection: “ Investment management services ” means providing a substantial quantity of any of the following services to a partnership,

S corporation, or other entity as a partner thereto: (a) advising as to the advisability of investing in, purchasing, or selling a specified

asset; (b) managing, acquiring, or disposing of a specified asset; (c) arranging financing with respect to acquiring specified assets; or (d) any activity in support of the services described in subparagraphs (a) through

(c) of this paragraph. A partner shall not be deemed to be providing investment management services under

this section if the partnership interest is held directly or indirectly by a corporation,

or any capital interest in the partnership, which provides the taxpayer with a right

to share in partnership capital commensurate with the amount of capital contributed,

determined at the time of receipt of such partnership interest, or the value of partnership

interest subject to tax under section 83 of the Internal Revenue Code ( 26 U.S.C. s.83 ), upon the receipt or vesting of such interest. “ Specified asset ” means certain securities, real estate held for rental or investment, interests in

partnerships, commodities, or options or derivatives contracts, except if at least

80 percent of the average fair market value of the specified assets of the partnership,

S corporation, or other entity during the taxable year consists of real estate. (3) This subsection shall remain inoperative until enactment into law by the states

of Connecticut, New York, and Massachusetts of legislation having an identical effect

with this subsection, sections 7 and 9 of P.L.2018, c. 45 ( C.54A:5-16 and C.54:10A-6.4 ), and subsection (D) of section 6 of P.L.1945, c. 162 ( C.54:10A-6 ), as shall be determined by the Director of the Division of Taxation in the Department

of the Treasury. e. For an individual who is a nonresident of this State and who has income from employee

compensation from a New Jersey employer for the performance of personal services performed

outside of New Jersey that were not required by the employer to be performed outside

of New Jersey, and whose state of residence imposes an income or wage tax that requires

employee compensation to be sourced to an employer's location if the nonresident renders

the personal services from an out-of-state location for the convenience of the nonresident

employee and not due to the necessity of the employer, this State shall impose a similar

New Jersey sourcing rule on that income of the nonresident. f. Notwithstanding the provisions of the “Administrative Procedure Act,” P.L.1968,

c. 410 ( C.52:14B-1 et seq. ), to the contrary, the Director of the Division of Taxation in the Department of

the Treasury may adopt, immediately upon filing with the Office of Administrative

Law, regulations that the director deems necessary to implement the provisions of

this section, which regulations shall be effective for a period not to exceed 180

from the date of filing. The director shall thereafter amend, adopt, or readopt the regulations in accordance

with the requirements of P.L.1968, c. 410 ( C.52:14B-1 et seq. ).