Decided: April 7, 1977.
ASSOCIATES CONSUMER DISCOUNT COMPANY, PLAINTIFF-APPELLANT,
JOHN A. BOZZARELLO AND CARMELLA M. BOZZARELLO, DEFENDANTS-RESPONDENTS, V. LOTTERY PUBLICATIONS, INC., DONALD K. KARDON AND HERBERT PASKER, THIRD-PARTY DEFENDANTS-RESPONDENTS, V. DIRECTOR, DIVISION OF TAXATION, RESPONDENT-INTERVENOR
Lynch, Milmed and Antell.
[149 NJSuper Page 360]
Plaintiff appeals from a grant of a summary judgment in favor of defendants dismissing plaintiff's complaint for monies allegedly due to it on a credit agreement between the parties. Defendants had applied for the summary judgment on the ground that plaintiff, a Pennsylvania corporation, had failed to comply with N.J.S.A. 14A:13-15, part of the Corporation Business Activities Reporting Act, L. 1973, c. 171, N.J.S.A. 14A:13-14 et seq. , effective June 7, 1973. The motion was heard on a stipulation of facts and oral argument. The facts as stipulated between these parties are as follows:
(1) Defendants appeared, personally, at the office of the plaintiff in Morrisville, Pennsylvania at which time they executed the note, photocopy of which is annexed to the complaint, in accordance with the Consumer Discount Company Law of that state and received the consideration described in the note in the form of a check made payable to the defendants drawn on a Morrisville, Pennsylvania bank which they endorsed payable to "Lottery Publications." No part of the consideration or the interest described in the note had been paid to the plaintiff by the defendants.
(2) Plaintiff is a Pennsylvania corporation and does not have, nor has it applied for, a Certificate of Authority to transact business in this state as a foreign corporation.
(3) Plaintiff has not filed "Notice of Business Activities Report" as described in N.J.S.A. 14A:13-15/20.
(4) All loan transactions made by the plaintiff are consumated [ sic ] by execution of note and delivery of consideration in the State of Pennsylvania.
(5) The present loan portfolio of the plaintiff totals approximately $500,000 of which 25%, or $125,000, represents accounts receivable
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from debtors residing now, or in the past, in the State of New Jersey.
(6) Plaintiff does not maintain any offices or places of business in New Jersey. Plaintiff does use the U.S. mails and the telephone to advise debtors residing in New Jersey of delinquencies in an effort to collect past due accounts.
In essence, defendants contended that since plaintiff had not filed "a notice of business activities report" (notice) as required by N.J.S.A. 14A:13-15, it was barred from maintaining its suit in this State by the terms of N.J.S.A. 14A:13-20. On this appeal plaintiff argues that since it "is factually engaged in interstate commerce; has no minimal presence in New Jersey; and since the loan of money at a price is in fact a sale of tangible personal property, the imposition of an income tax by this state is an unconstitutional burden upon interstate commerce." We find no merit in the appeal.
Plaintiff misconceives the nature and scope of the Corporation Business Activities Report Act. That legislation provides, in pertinent part, that:
Every foreign corporation which during any calendar or fiscal accounting year ending after December 31, 1973, carried on any activity or owned or maintained any property in this State, unless specifically exempted under section 3 of this act, shall be required to file a notice of business activities report, as hereinafter provided.
Activities or property maintenance in this State which require corporations to file this report are:
e. receiving payments from persons residing in this State, or businesses located in this State, aggregating in excess of $25,000 regardless of any other connections with this State;
f. the derivation of income from any source or sources within this State;
[ N.J.S.A. 14A:13-15]
No foreign corporation carrying on any activity or owning or maintaining any property in this State which has not obtained a certificate
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of authority to do business in this State and disclaims liability for the corporation business tax and the corporation income tax shall maintain any action or proceeding in any State or Federal court in New Jersey, until such corporation shall have filed a timely notice of business activities report.
[ N.J.S.A. 14A:13-20(a)]
The statute is not a taxing measure. It is essentially an information gathering measure. Its clear purpose is to enable the Division of Taxation to obtain pertinent data from any foreign corporation which carries on an activity or owns or maintains property in this State but which has not obtained a certificate of authority to do business in New Jersey, to the end that a proper determination may be made as to whether such corporation is subject to any State tax. The legislation stems from a recommendation contained in the Report of the New Jersey Tax Policy Committee (February 23, 1972), Part V at 33, that
We discern no constitutional infirmity in either the notice requirement of the Act or the sanctions imposed therein for failure to file. These are entirely reasonable means designed
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to achieve an essential state purpose -- the strengthening of the enforcement of its tax laws.
Neither do we discern any conflict, as suggested by plaintiff, between 73 Stat. 555, 15 U.S.C.A. § 381(a)*fn2 and the subject legislation. The limited purposes of the federal statute, see Heublein v. South Carolina Tax Comm'n , 409 U.S. 275, 279, 93 S. Ct. 483, 34 L. Ed. 2d 472, 477 (1972) and Report of the New Jersey Tax Policy Committee, supra at 21-22, do not encompass any prohibition upon a state from inquiring into a corporation's activities to determine whether those activities are taxable.
The order for summary judgment under review is affirmed.