Article: New Jersey Superior Court Reverses Pro-Taxpayer Decision in Lanco and Finds Nexus.

The Superior Court of New Jersey, Appellate Division has further stacked the odds against intellectual property holding companies in the ongoing nexus battle with the states. In Lanco, Inc. v. Director, Division of Taxation, 1 the Court found that the licensing of intangibles to a company doing business in the state was sufficient contact to create nexus for corporation business tax purposes, in spite of the lack of physical contact with the state. In so doing, the Court aligned itself with other state courts in concluding that the physical presence test set forth in Quill 2 is inapplicable to any tax but sales and use tax, notwithstanding guidance to the contrary from ...

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