CTA Reaches Voluntary Agreement with State of New Jersey on CBT

Posted on Mon, 2015-11-16 16:52

The State of New Jersey continues to seize both US and Canadian-plated trucks for failure to pay the state Corporate Business Tax, but, thanks to the Canadian Trucking Alliance, has agreed to renew a voluntary compliance arrangement.

NJ applies the CBT to all trucking companies making any pickups or deliveries in the state regardless of whether they have a terminal in the US or not. However, the NJ Division of Taxation is offering CTA members the opportunity to voluntarily come forward to register their businesses and file the appropriate taxes starting in November 2015 and ending December 31, 2015 (a BCTA membership includes membership in CTA).

For members, the benefit of taking part in this program is that carriers are eligible for favourable terms offered under the Voluntary Disclosure Program. Only CTA members will be processed under this specific agreement.

Limited Look-Back – Under the agreement with the CTA, New Jersey will only require payment of the CBT for the current tax year (2015) plus the prior three years (2012-2014). A statutory 5 percent penalty and interest charge will also apply.

No Corporate Tax Returns Required for Previous Tax years for CBT Minimum Tax Filers – New Jersey will not require carriers who qualify for the minimum tax payment (presently US$500) to file a CBT return for previous tax years (2012-2015), but will require returns for 2016 and future years. In order to minimize the administrative cost of compliance, New Jersey has agreed to accept a statement on company letterhead certifying the company:

  • has no property or employees in New Jersey;
  • has little relative activity (miles) in the state; and
  • is a minimum tax filer.

New Jersey will then fill out the tax forms for each company to denote that you are a minimum filer for tax years 2012-2015. The New Jersey Division of Taxation has extended this offer in good faith. New Jersey retains the right to pursue any company participating in this program that is in fact liable for greater-than-minimum tax.

Opportunity for Previously Assessed Companies – The agreement is available to carriers who have not been previously contacted by the state. However, New Jersey has indicated to CTA that it will consider potential remedies for Canadian carriers previously assessed on a case-by-case basis.

To obtain the instructions to participate in the CTA-NJ voluntary disclosure program, please contact BCTA’s Lindsay Samson, Policy Analyst, at 604-888-5319, ext. 219, or lindsays@bctrucking.com.

For recent background on this issue, see the September 7, 2015, Bulletin article, “Reminder: Failure to Comply with NJ Tax Requirements is Costly.”

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