On appeal from the Tax Court of New Jersey, Docket No. 6659-2005.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Ashrafi and Fasciale.
Plaintiff Bracha Export Corporation appeals from a November 9, 2010 order of the Tax Court granting summary judgment in favor of defendant, Director, Division of Taxation (the Division). Plaintiff filed its complaint after the Division denied its S-corporation election and an allocation claim for the tax years 1998, 1999, and 2000. We affirm.
In 2002, the Division notified plaintiff that it could not file S-corporation Business Tax Returns (CBT-100S) for the tax years 1998, 1999, and 2000, and was instead required to file Corporation Business Tax Returns (CBT-100). The Division determined that plaintiff had not timely filed a valid New Jersey S-corporation election form, and that not all of plaintiff's consenting shareholders had filed New Jersey Gross Income Tax, Non-Resident returns for those years. Plaintiff formally protested the decision, and the Division arranged an administrative conference.
At the conference, plaintiff produced an S-corporation election form dated February 10, 1998. The Division issued a conference report finding that it had denied S-corporation status because one of plaintiff's three consenting shareholders named on the election form had not filed a personal income tax return for the three years in question, contrary to the jurisdictional requirements of N.J.S.A. 54:10A-5.22(b)(1)-(3). The Division noted that "[i]n not receiving any contrary notification, [plaintiff] began to file as an S-Corporation in NJ beginning in 1998." The Division concluded that even if the election form had been properly filed in February 1998, plaintiff remained an unauthorized foreign corporation until August 1998 and the S-corporation election form would therefore have been rejected anyway.
On April 2, 2003, the Division issued a final determination confirming the findings and conclusions made at the conference. The Division notified plaintiff that under N.J.S.A. 54:51A-13, plaintiff had ninety days to appeal the determination. Instead of appealing, plaintiff amended its tax returns for 1998, 1999, and 2000 and filed CBT-100 returns. In August 2003, the Division notified plaintiff that it was denying an allocation claim made on the amended CBT-100 returns, and that plaintiff's outstanding tax for 1998, 1999, and 2000 with penalties and interest was $234,708.50. In September 2003, the Division issued an inquiry response letter to plaintiff explaining that its allocation claim had been disallowed because "form W-2 withholdings are in NJ and the [amended] CBT returns show 100% wages are allocated in NJ."
In October 2003, plaintiff protested the allocation denial. Plaintiff claimed that it had maintained a regular place of business in New York during the three tax years in question. On February 10, 2005, the parties participated in a conference regarding the allocation claim. Plaintiff asserted that it employed two workers on a part-time basis in a New York City warehouse used for shipping and receiving. The Division requested proof "such as an employment agreement, exact duties performed, NY income tax returns, detailed work schedule including salary that depicts the actual times and dates the two employees were present at the said warehouse." The Division also requested unemployment records and shipping and billing documents from the warehouse. Plaintiff responded that its accountant had not been "very knowledgeable concerning interstate taxation and payroll requirements or multistate activities[,] and as a result did not file any NYS payroll returns subsequent to the company's relocation to NJ."
On May 17, 2005, the Division issued a conference report. The Division found that plaintiff had provided copies of W-2s of two employees who allegedly worked at the warehouse, but who were reported on the W-2s as New Jersey employees. The Division concluded that plaintiff's proofs were inadequate, and issued a final determination on May 23, 2005 denying the allocation and upholding plaintiff's tax liability for $221,797.
On August 16, 2005, plaintiff filed a three-count complaint alleging improper assessments and seeking an abatement. The Division filed a timely answer, and on April 19, 2010 moved for summary judgment. Plaintiff filed opposition.
on November 9, 2010, the judge conducted arguments, issued an oral opinion, and entered summary judgment in favor of the Division, dismissing plaintiff's complaint with prejudice. The judge concluded that plaintiff had not filed a timely appeal from the denial of S-corporation tax status, and that plaintiff had produced no evidence to show that it had two employees working at a New York City warehouse. This appeal followed.
On appeal, plaintiff contends that the judge erred by granting the Division's motion for summary judgment. Plaintiff argues that it maintained a regular place of business outside New Jersey and was therefore entitled to allocate a portion of its income. Plaintiff also contends that the judge should not have concluded that plaintiff's appeal of the Division's final determination denying S-corporation election was time-barred by the ninety-day appeal period, pursuant to N.J.S.A. 54:51A-14 and Rule 8:4-1(b). We disagree.
Our review of a grant of summary judgment is de novo, and we apply the same Rule 4:46 standard that governs the trial court. LVNV Funding, L.L.C. v. Colvell, 421 N.J. Super. 1, 6 (App. Div. 2011) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)); Coastal Eagle Point Oil Co. v. West Deptford Twp., 19 N.J. Tax 301, 304 (App. Div. 2001). Rule 4:46-2(c) provides that summary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law. An issue of fact is genuine only if, considering the burden of persuasion at ...