ROCKLAND ELECTRIC COMPANY VS. DIRECTOR, DIVISION OF TAXATION (TAX COURT OF NEW JERSEY)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4522-17T2
ROCKLAND ELECTRIC
COMPANY,
Plaintiff-Appellant,
v.
DIRECTOR, DIVISION OF
TAXATION,
Defendant-Respondent.
_________________________
Argued June 4, 2019 – Decided June 24, 2019
Before Judges Messano, Gooden Brown and Rose.
On appeal from the Tax Court of New Jersey, Docket
No. 8111-2016, whose opinion is reported at 30 N.J.
Tax 448 (Tax 2018).
Alysse McLoughlin argued the cause for appellant
(McDermott Will & Emery LLP, attorneys; Alysse
McLoughlin, on the briefs).
Michael J. Duffy, Deputy Attorney General, argued the
cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, Assistant
Attorney General, of counsel; Michael J. Duffy, on the
brief).
PER CURIAM
Plaintiff Rockland Electric Company appeals from the April 30, 2018 Tax
Court order, granting defendant Director, Division of Taxation, summary
judgment, and denying plaintiff's motion for summary judgment. In a written
opinion, Judge Vito L. Bianco accepted defendant's position that the
Transitional Energy Facility Assessment (TEFA) add-back provision embodied
in N.J.S.A. 54:10A-4.1,1 which allowed the TEFA to be deducted for federal
income tax purposes, required that the TEFA be added back to entire net income
(ENI) for the purpose of calculating State corporate business tax (CBT) liability
pursuant to the CBT add-back provision, N.J.S.A. 54:10A-4(k)(2)(C),2 requiring
that certain taxes paid be added back when calculating ENI.
1
N.J.S.A. 54:10A-4.1 provides:
Notwithstanding the use of the term assessment, the
[TEFA] is a State tax within the meaning of . . . 26
U.S.C. [§] 164, pursuant to which a deduction is
allowed in arriving at federal taxable income for the
taxable year within which it is paid or accrued and such
amount shall be added back to entire net income
pursuant to [N.J.S.A. 54:10A-4(k)(2)(C)].
2
N.J.S.A. 54:10A-4(k)(2)(C) provides:
A-4522-17T2
2
On appeal, arguing principles of statutory interpretation and relying on
PPL Electric Utilities Corporation v. Director, Division of Taxation, 28 N.J. Tax
128 (Tax 2014), Duke Energy Corporation v. Director, Division of Taxation, 28
N.J. Tax 226 (Tax 2014), and Ross Fogg Fuel Oil Company v. Director, Division
of Taxation, 22 N.J. Tax 372 (Tax 2005), plaintiff renews its challenge to
defendant's interpretation of the TEFA and CBT add-back provisions. However,
like the Tax Court judge, we reject plaintiff's challenge, and affirm substantially
for the reasons expressed in Judge Bianco's May 9, 2018 corrected opinion,
reported at 30 N.J. Tax 448 (Tax 2018).
Affirmed.
(2) [ENI] shall be determined without the exclusion,
deduction or credit of:
....
(C) Taxes paid or accrued to the United States, . . . or
subdivision thereof, on or measured by profits or
income, or business presence or business activity, or the
tax imposed by this act, or any tax paid or accrued with
respect to subsidiary dividends excluded from [ENI] as
provided in paragraph (5) of subsection (k) of this
section.
A-4522-17T2
3