N.J. Div. of Taxation TB-108(R) (rev. June 5, 2026) — Nexus for Corporation Business Tax — bright-line economic nexus and P.L. 86-272 (TB-108(R))

# Scope — privilege periods ending on and after July 31, 2023

P.L. 2023, c.96, signed July 3, 2023, made technical corrections, clarifications, and changes to the Corporation Business Tax Act (CBT) and Gross Income Tax Act, and enacted a bright-line economic nexus standard. This Technical Bulletin provides general guidelines for determining whether the activities of a corporation create nexus with New Jersey for purposes of the Corporation Business Tax for privilege periods ending on and after July 31, 2023. For privilege periods ending before July 31, 2023, see TB-79(R). Revised June 5, 2026, to clarify that when a transfer of non-fungible tokens (NFTs) solely represents a transfer of the legal ownership rights in underlying tangible personal property, the transaction does not exceed the protections of Public Law 86-272.

# Corporation Business Tax nexus — taxable privileges and doing business

The CBT Act requires every domestic or foreign corporation to pay an annual franchise tax for having or exercising its corporate franchise in New Jersey or for: existing under New Jersey law; or, for a foreign corporation — holding a general Certificate of Authority to do business; holding a certificate, license, or other authorization from a State department or agency; doing business in New Jersey; employing or owning capital in New Jersey; employing or owning property in New Jersey; maintaining an office; deriving receipts from New Jersey sources that meet the bright-line economic nexus thresholds; engaging in contacts within the State; or maintaining a stock of goods. Doing-business factors include the nature and extent of activities in New Jersey, the location of offices, the continuity, frequency, and regularity of activities, employment of agents, officers, and employees, and the location of the actual seat of management or control. It is immaterial whether the activities result in profit or loss. A foreign corporation is not deemed to be doing business merely by maintaining cash balances with New Jersey banks, owning stock or securities kept in New Jersey safekeeping or custody accounts, actions by such banks or brokers incidental to safekeeping, or any combination of these.

# Bright-line economic nexus — $100,000 in receipts or 200 transactions

Section 6 of P.L. 2023, c.96 provides a bright-line economic nexus standard. In addition to the existing nexus rules, a business is deemed to have substantial nexus and is subject to the Corporation Business Tax if: (1) the corporation derives receipts from sources within New Jersey (per N.J.S.A. 54:10A-6 through 54:10A-10) in excess of $100,000 during the corporation's fiscal or calendar year; or (2) the corporation has 200 or more separate transactions delivered to customers in New Jersey during the year. For service transactions, 'delivered to a customer' means where the benefit is received. The thresholds apply to any CBT taxpayer regardless of filing method. Receipts and transactions are sourced under the statutory sourcing rules (N.J.S.A. 54:10A-6 through -10; N.J.A.C. 18:7-8.1 through -8.17); service receipts follow market-based sourcing (N.J.A.C. 18:7-8.10A). Excluded or exempt receipts do not count toward the thresholds. A corporation that does not meet the bright-line thresholds may still have nexus under other statutory, regulatory, or case-law standards. A corporate partner unitary with a partnership that has New Jersey receipts has nexus if its proportionate share of the partnership's New Jersey activities satisfies the bright-line thresholds.

# Nexus in the context of combined reporting; Finnigan method

The combined group and its members are both taxpayers, and the combined group is taxed as one taxpayer. A member may have nexus by deriving New Jersey receipts from the unitary business or independently. For privilege periods ending on and after July 31, 2023, a member may also be a taxable member if it derives receipts from New Jersey sources meeting the bright-line threshold, whether its own receipts or receipts from intercompany transactions with other members, regardless of elimination. All combined groups must use the Finnigan method to allocate receipts: New Jersey receipts of all members not eliminated under N.J.S.A. 54:10A-4.7.c are included in the numerator.

# Nexus and tax treaties

With the exception of returns filed using the world-wide group filing method, New Jersey follows federal tax treaties. Non-U.S. corporations in a world-wide combined return must include treaty-protected income (or loss) and are taxable members if they have New Jersey nexus. For all other filers, income exempt from federal tax under a U.S. treaty is exempt from Corporation Business Tax. A treaty-protected non-U.S. corporation in a water's-edge or affiliated group is a taxable member if it has nexus, though treaty-protected income is excluded from the group's income. A separate-return non-U.S. corporation with New Jersey nexus whose income is entirely treaty-protected must still file and pay the CBT minimum tax.

# Disregarded entities and nexus

An entity treated as a disregarded entity for federal income tax purposes is disregarded for New Jersey CBT purposes (N.J.S.A. 42:2C-92), including legal partnerships disregarded federally. The attributes and activities of a disregarded entity are treated as the owner's for both federal and New Jersey purposes, and are included when evaluating whether the taxpayer has nexus.

# Public Law 86-272 — general application

The Federal Interstate Income Act, 15 U.S.C.A. Section 381 ('Public Law 86-272'), prohibits a state from imposing a net income based tax on income of a foreign corporation earned within its borders from interstate commerce, if the corporation's only business activity within the state is the solicitation of orders by the corporation or its representatives for tangible personal property, the orders are sent outside the state for approval and, if approved, are filled by shipment or delivery from outside the state. To meet the standard, in-State activities must either be limited solely to speech or conduct that invites an order, or be ancillary activities related to requests for an order. P.L. 86-272 does not apply to services or intangible personal property. Sales and activities involving financial products, financial instruments, and financial services are not protected because they are not tangible personal property; a financial business corporation, banking corporation, or credit card company with New Jersey nexus is subject to CBT measured by income. Offering, soliciting, selling, accepting, or buying digital assets such as virtual currency or NFTs, and offering services pertaining to them, is the offering and selling of financial products or other intangibles and is not protected. A foreign corporation whose New Jersey activity exceeds P.L. 86-272 protection is subject to CBT measured by net income. Even where activities are protected, a corporation registered or otherwise having nexus in New Jersey is subject to the CBT minimum tax and must file a return. Independent contractors may solicit or make sales or maintain an office without subjecting a company to income-based CBT; representatives of a single principal are not independent contractors; consigned stock (other than for display and solicitation) removes protection. Because all combined groups use the Finnigan method, a combined group cannot claim P.L. 86-272 protection if any member has unprotected activities.

# In-State activities that EXCEED P.L. 86-272 protection

Activities that exceed the protections include, but are not limited to: 1. Repairs, maintenance, and installations; 2. Collection or repossession activities; 3. Credit investigations; 4. Conducting training courses, seminars, or lectures for personnel (other than personnel involved only in solicitation); 5. Providing technical assistance; 6. Resolving customer complaints for a purpose other than to ingratiate sales personnel with the customer; 7. Approving or accepting orders or securing deposits on sales; 8. Acquiring personnel for purposes other than solicitation activities; 9. Maintaining a display at a single location in excess of two weeks during the tax year; 10. Carrying samples for sale, exchange, or distribution for consideration; 11. Picking up or replacing damaged or returned property; 12. Owning, leasing, or maintaining in-State facilities such as a warehouse or telephone answering service; 13. Consigning tangible personal property; 14. Soliciting credit cards and other financial products and services to New Jersey customers; 15. Offering, soliciting, selling, accepting, or buying digital assets such as virtual currency or NFTs (except where an NFT solely transfers legal ownership of tangible personal property); 16. Offering, selling, providing maintenance, or performing duties under a warranty or extended warranty service contract, in person or through the internet; 17. Contracting with a marketplace facilitator that maintains the corporation's products at fulfillment centers in New Jersey; 18. Transmitting code or electronic instructions through the internet to repair or upgrade products as part of a purchased service subscription or warranty contract; 19. Placing software or ancillary data (apps or internet cookies) on devices in New Jersey to gather market or product research that is packaged and sold to data-brokers or other third parties; 20. Selling internet advertising services to New Jersey business customers using information mined from software or cookies the taxpayer placed on New Jersey devices; 21. Providing certain post-sales assistance through electronic chat, email, or applications (e.g., troubleshooting chat rooms, complaint resolution, internet help desks with remote repair); 22. Contracting with in-State customers to stream (not download) videos and music; 23. Contracting with in-State customers for subscription services; 24. Contracting with in-State customers to provide business services (quality control, production line maintenance, R&D, product design, logistics, regulatory, and similar) through internet-connected devices where services run on the taxpayer's computers using data from the customer's in-State devices; 25. Inviting or accepting employment applications through an internet platform targeted to in-State residents or for in-State non-sales positions.

# In-State activities that DO NOT EXCEED P.L. 86-272 protection

Activities that do not exceed the protections include, but are not limited to: 1. Soliciting through advertising; 2. Carrying samples and promotional materials for display or free distribution; 3. Providing vehicles to sales personnel for protected activities; 4. Checking customer inventories without charge; 5. Maintaining a display at a single location for less than two weeks during the tax year; 6. Recruiting, training, or evaluating sales personnel; 7. Soliciting orders from an in-State sales employee's in-home work space not paid for by the company; 8. Mediating customer complaints in order to ingratiate sales personnel with the customer; 9. Posting frequently asked questions (FAQs) on a webpage to assist customers; 10. Placing software or ancillary data (apps or internet cookies) on New Jersey devices that is ancillary to the solicitation of orders and neither sold to data-brokers nor used to gather data to sell services to business customers; 11. Offering only tangible personal property for sale on a website that enables customers to search, read product descriptions, select items, choose delivery options, and pay, without other in-State business activities; 12. Accepting electronic payment (credit card, Bitpay, Paypal, Venmo, Zelle) for tangible personal property on the taxpayer's online store — but not receiving a digital asset as payment and reselling it to in-State customers; 13. Inviting or accepting employment applications through an internet platform if the only in-State positions offered are solicitation-only sales jobs; 14. Using NFTs in a transaction whose sole use and purpose is to transfer ownership of an item of tangible personal property (not intangible property, intellectual property, real estate, or a service). Note: a corporation that does not exceed the protections of Public Law 86-272 is not subject to the income component of the CBT, but is still subject to the statutory minimum tax.

# Voluntary Disclosure Program and further references

Taxpayers who discover business activities creating New Jersey nexus are encouraged to voluntarily register and bring their accounts into compliance through the Division's Voluntary Disclosure Program. See N.J.A.C. 18:7-1.6 through 1.25 for the nexus regulations; for privilege periods ending before July 31, 2023, see TB-79(R). A Technical Bulletin is an informational document accurate as of its issue date; subsequent changes to laws, regulations, or Division interpretation may affect its accuracy.