New Jersey § 54a:8-3

§ 54a:8-3.

Accounting periods and methods. (a) Accounting periods.--A taxpayer's taxable year under this act shall be the same

as his taxable year for Federal income tax purposes. (b) Change of accounting periods.--If a taxpayer's taxable year is changed for Federal

income tax purposes, his taxable year for purposes of this act shall be similarly

changed. (c) Accounting methods.--A taxpayer's accounting method under this act shall be the

same as his accounting method for Federal income tax purposes. In the absence of any accounting method for Federal income tax purposes, New Jersey

taxable income shall be computed under such method as in the opinion of the director

clearly reflects income. (d) Change of accounting methods.--(1) If a taxpayer's accounting method is changed

for Federal income tax purposes, his accounting method for purposes of this act shall

be similarly changed. (2) If a taxpayer's accounting method is changed, other than from an accrual to an

installment method, any additional tax which results from adjustments determined to

be necessary solely by reason of the change shall not be greater than if such adjustments

were ratably allocated and included for the taxable year of the change and the preceding

taxable years, not in excess of two, during which the taxpayer used the accounting

method from which the change is made. (3) If a taxpayer's accounting method is changed from an accrual to an installment

method, any additional tax for the year of such change of method and for any subsequent

year which is attributable to the receipt of installment payments properly accrued

in a prior year, shall be reduced by the portion of tax for any prior taxable year

attributable to the accrual of such installment payments, in accordance with regulations

of the director.