New Jersey § 54a:5-16

§ 54a:5-16.

a. As used in this section: “ 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: (1) advising as to the advisability of investing in, purchasing, or selling a specified

asset; (2) managing, acquiring, or disposing of a specified asset; (3) arranging financing with respect to acquiring specified assets; or (4) any activity in support of the services described in paragraphs (1) through (3)

of this subsection. 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. b. Notwithstanding the provisions of the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. , to the contrary, in addition to the tax imposed on the income of a non-resident

taxpayer pursuant to N.J.S.54A:5-8 , there shall be imposed an additional surtax of 17 percent on income from investment

management services received during the taxpayer's taxable year. c. Notwithstanding the provisions of the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. , to the contrary, in addition to the tax imposed on the income of a resident taxpayer

from the categories of gross income enumerated and classified in N.J.S.54A:5-1 et seq. , there shall be imposed an additional surtax of 17 percent on income received during

the taxpayer's taxable year from investment management services provided to a partnership,

S corporation, or other entity. d. This section shall remain inoperative until enactment into law by the states of

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

with this section, subsection d. of N.J.S.54A:5-8, subsection (D) of section 6 of P.L.1945, c. 162 ( C.54:10A-6 ), and section 9 of P.L.2018, c. 45 ( C.54:10A-6.4 ), as shall be determined by the Director of the Division of Taxation in the Department

of the Treasury.