Justices’ Ferrellgas Denial Clouds Fee Apportionment Rules
The U.S. Supreme Court's decision not to hear a multistate business' challenge to New Jersey's partnership filing fees leaves unanswered questions about when state levies are considered to be locally focused and not subject to apportionment.
[...]
Fred Nicely, senior tax counsel for the Council on State Taxation, which also filed an amicus brief backing Ferrellgas, said he had hoped the justices would have taken the case to provide further clarity on what the distinction is between a fee and a tax. According to court documents, the revenue the fee generated exceeded the New Jersey division's salaries for its employees, which he said could have rendered the levy as a revenue-raising mechanism rather than a charge used to defray regulatory costs.
Regarding that point, Mitchell Newmark, partner with Blank Rome LLP, said there were "insufficient facts" in the case regarding how the fee was related to the costs of processing returns. He also agreed that more clarification of ATA v. Michigan could be beneficial, specifically where the line is drawn for determining if a levy is local when there are "out-of-state actors having activity that relates to in-state activity and out-of-state activity."
To read the full article, please click here.
"Justices’ Ferrellgas Denial Clouds Fee Apportionment Rules," by Paul Williams was published in Law360 on April 7, 2022.