Friday, July 26, 2013

Recent New Jersey Law: Charitable Contributions Do Not a Resident Make

As reported in today’s State Tax Today (subscription required), New Jersey has recently passed legislation clarifying that charitable contributions are not relevant in determining the domicile of the donor under the New Jersey gross income tax.  Portions of the statement accompanying the Act include the following:

This bill clarifies in the New Jersey gross income tax statutes that donors' contributions to charities are not a factor in determining where a person is domiciled under New Jersey gross income tax for the purpose of defining who is a resident taxpayer or nonresident taxpayer.  This is the informal position taken by the New Jersey Division of Taxation since 2005 but this position has not since been officially communicated to taxpayers.  Whether a person lives in Florida or Arizona, giving to charities in New Jersey, in and of itself, should not subject the person to New Jersey income tax as a New Jersey resident. …

Taxpayers now make contributions to local, regional, and national charities via modern financial and communication networks. …This bill recognizes these changes in patterns of giving and wishes to encourage contributions to charities, regardless of the locations of the charities, from both New Jersey residents and nonresidents.  Although domicile is usually determined from all the evidence and circumstances, under this bill the Division of Taxation is formally instructed in statute to no longer consider a taxpayer's charitable contributions as relevant or applicable in determinations of domicile.


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This looks like a good common sense pronouncement and clarification. Thanks for this formal announcement.

Posted by: Steven J Fromm | Jul 27, 2013 8:24:28 AM

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