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>https://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1202427279972

Charles Toutant
New Jersey Law Journal
January 8, 2009

Gov. Jon Corzine has signed a bill that exempts New Jersey corporations from tax on income earned in other states, a measure designed to keep existing businesses in the state and to attract others to come here.

The bill, A-2722/S-3 , undoes a 2002 amendment that assesses corporate income tax based on a formula that includes income not taxed by other states.

At present, a company’s tax rate is determined through a series of weighted fractions — 50 times the amount of New Jersey sales over total sales, plus 25 times the amount of New Jersey payroll over total payroll and 25 times the amount of New Jersey real property over total real property.

But sales in other states that do not impose a corporate tax are excluded from the denominator of the sales fraction, resulting in higher taxes. The bill signed by Corzine eliminates that provision.

Businesses have criticized the exclusion as contrary to the U.S. Constitution’s Due Process and Commerce clauses because it results in taxation of activity that has no substantial nexus to the taxing state.

“During a time of national recession and economic uncertainty, this overhaul should be a welcome relief to businesses, particularly those that are struggling,” says Senate President Richard Codey, D-Essex, a prime sponsor.

The bill also permits corporations with no offices outside the state to use the same formula that will be permitted under elimination of the exclusion scheme. Currently, under what’s known as the regular-place-of-business rule, a company with a presence outside the state must attribute 100 percent of its income to New Jersey.

The Treasury Department estimates the state will lose $149 million in tax revenue each year for the first two fiscal years, under the legislation.

Even though the state has repealed the exclusion rule, an appeal by a group of multistate corporations will continue. Last May, the state Tax Court rejected the constitutional challenge in Pfizer v. Director, Division of Taxation, No. 000055-2006.

The Appellate Division refused to hear an interlocutory appeal, but on Oct. 30 the Supreme Court granted leave to appeal and summarily remanded the case to the Appellate Division to consider the appeal on its merits.

The case is still active because the plaintiffs want to recoup taxes paid from 2002 until the new law takes effect, says Paul Frankel of Morrison Foerster in New York, who represents Whirlpool Properties Inc. and Macy’s in the case.

The bill’s prime Assembly sponsors were Democrats Joseph Vas of Middlesex, Louis Greenwald of Camden and Albert Coutinho of Essex.

The bill, signed on Dec. 19, takes effect on July 1, 2010.

https://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1202427279972

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Here’s an aerial view of the vacant property on Paramus Road where the Baker Group wants to build a much debated multi-family housing complex.

This property has been the subject of past controversy with regard to zoning.

A self-storage facility was proposed and rejected, and Ridgewood resident Ned Cancellmo’s plan to move Brogan Cadillac to the location was met by blank stares and frowns from the previous Village Council. State DOT officials also talked about moving a salt shed to the property; this too was deemed as being “not appropriate.”

Now it is rumored that, in all likelihood, Zoning Board of Adjustment members will reject the Baker Group’s multi-family housing proposal.

So what do Village officials have in mind for this property? Certainly, they don’t expect anyone would build luxury housing there, do they? What then?

Rumors have circulated for several years now about a group of local investors wanting to build a hotel in Ridgewood. Now that the Schedler property is targeted for preservation as open space, could this be only remaining vacant site where construction of a hotel could be possible?

Please read this condensed biography of Albert J. Pucciarelli, Vice Chairman of Ridgewood’s Planning Board, and let The Fly know what you think about the possibility of a hotel being in Ridgewood’s future.

Albert J. Pucciarelli

Partner

McElroy, Deutsch, Mulvaney, and Carpenter, LLP Attorneys

Ridgewood, NJ

Chair of the Hotels and Resorts Practice Group

ALBERT J. PUCCIARELLI is admitted to practice law in both New York and New Jersey. His practice is concentrated in the areas of hotel and resort development and hotel operations, aviation law, general corporate law and real estate law. In 1999, he co-founded the law firm of Hooker Pucciarelli & Tibbs, L.L.P. in which he was a partner until joining McElroy, Deutsch, Mulvaney & Carpenter, LLP in 2005 as Chair of the firm’s Hotels and Resorts Practice Group. From 1988 through 1998, he was Executive Vice President and General Counsel of Inter-Continental Hotels & Resorts with over 200 hotels in 70 countries. He served on the Board of Directors of Inter-Continental, was chair of the company’s Life Safety and Security Committee and a member of the Development Committee and the Pension and Benefits Committee. Prior to joining Inter-Continental, Mr. Pucciarelli served as Vice President and Counsel to Grand Metropolitan (U.S.) and its publicly owned (NYSE) predecessor, Liggett Group, Inc. He has served as Chair of the Hotels, Restaurants and Tourism Committee of the Association of the Bar of the City of New York (2001-2004) and as Chair of the Aeronautics Law Committee of the Association of the Bar of the City of New York (1998-2001). He has served as a member of the Hospitality Law Council of the Conrad N. Hilton College of Hotel & Restaurant Management, University of Houston (2003-2004), and is a member of the Hotel Industry Liaison Committee of the ABA Committee on Hotels, Resorts and Tourism. He has taught International Business Law as an adjunct professor at the Fordham University Graduate School of Business, and was member of that school’s Advisory Board (1996-2004).

Mr. Pucciarelli is fluent in Russian. He is an instrument-rated commercial pilot, an FAA certified advanced ground instructor and an aircraft owner. He serves his local community as Vice Chairman of the Ridgewood, New Jersey, Planning Board and is a Director of the Board of the Ridgewood Public Library Foundation. Until 1998, he was Vice Chairman of the Ridgewood, New Jersey, Zoning Board of Adjustment on which he served for ten years.

Mr. Pucciarelli’s clients include the owners and developers of Marriott, Courtyard, Ritz-Carlton, Fairmont, Mandarin Oriental, Hyatt, St. Regis and Westin mixed-use hotel and resort projects, hotel management companies and owners, several closely held companies in a variety of businesses, including hotels and restaurants, the second largest dealer of Cessna aircraft in the U.S. and purchasers and sellers of general aviation aircraft.

Mr. Pucciarelli is nationally recognized for his expertise in hotel management agreements and hotel and resort development. He has recently published “Be Smart When You Negotiate” that appeared in the June 2008 edition of Lodging Hospitality, “Hotel Owner’s Budget Approval Rights in Hotel Management Agreements” in the October 2007 edition of Hospitality Lawyer Newsletter, “Smoothing the Legal Path to Development” that appeared in the April 2007 edition of Lodging Hospitality, a two-part article, “Structure of Mixed-Use Hotel Residential Resort Projects” for HospitalityLawyer.com (March, 2006), “Selling and Buying an Existing Hotel – Structure of an Asset Transaction” for Hospitality E-Newsletter (July, 2006) that he co-authored with Eunice Moon, “Recording Hotel Management Agreements – Why?” that he authored for the 16th Annual Real Property Symposium of the Real Property, Probate and Trusts Law Section of the American Bar Association in April, 2005, and “Hotel Mixed-Use Development Projects” that he co-authored for the 2004 Hospitality Law Conference sponsored by the University of Houston School of Law in February 2004. He participated in two panel discussions at the 2006 Phoenix Lodging Conference on hotel and resort development and led a panel discussion at the 2007 Hospitality Law Conference in Houston on the subject of hotel general counsel’s selection and utilization of outside counsel and will speak at that conference in 2009 on the subject of Incentive Fees in Hotel Management Agreements.

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January 5, 2009 Contact: John Gorman / (609) 292-5199

Senator Kevin J. O’Toole (R-40) Local Democrats Oppose Unfolding COAH NightmareTrenton

Democrat Leadership Silent as Chorus of Opposition Grows

Senator Kevin O’Toole (R-Bergen) called upon Trenton Democrats to reverse course and abandon their new subsidized housing law as the groups of officials calling for a change in policy has grown to include local Bergen County Democratic officials.

“Republicans have been saying for months that the new Democrat subsidized housing law would wreak economic disaster in our State,” said O’Toole. “Now local Bergen County Democrats are using terms like ‘Alice in Wonderland’ and ‘disaster’ to describe the impact of the COAH housing law that was rushed through the Legislature with little debate or deliberation. If the Trenton Democrats cannot listen to Republicans and work to repair the debacle they have created, maybe they should listen to the members of their own party who are ridiculing this incoherent and unworkable law.”

Media reports have indicated that the elimination of “regional contribution agreements” in the Council on Affordable Housing law has placed a home-improvement program that has helped 98 individuals and families in Garfield since 2004 in jeopardy.

“The Trenton Democrats must finally come to grips with the fact that members of their own party have concluded that the COAH law is now hurting the very middle class communities that it purports to help,” said O’Toole. “When a former member of the Assembly Democratic caucus calls the law a ‘disaster, ‘ you would think that somebody in the present legislative leadership would take notice.”

Under the newly adopted COAH law, municipalities such as Wallington would need to create 147 new affordable housing units, Woodridge 171 and Fort Lee 569.

“To use the words of one of my Democratic colleagues, the COAH law is pushing New Jersey into an ‘economic abyss’ at the worst possible time. Reasonable Democrats must tell their leadership to come to the table and work with Republicans to scrap this disastrous law before even more damage is done.”

Link to Post:

https://www.senatenj.com/index.php/otoole/local-democrats-oppose-unfolding-coah-nightmare/1953

>https://www.nj.com/news/index.ssf/2009/01/report_nj_may_consider_driving.html

A panel advising Gov. Jon Corzine on immigrant issues is considering recommending the state allow undocumented immigrants “driver privilege cards” and in-state college tuition rates.

Two Hispanic leaders told the Record that the state’s public advocate, Ron Chen, told them the measures would be included in a panel’s report to Corzine.

But a spokeswoman for Chen told the newspaper that it hasn’t been decided what would be included in the report.

The “driver privilege cards” and in-state tuition would need legislative approval before becoming law. Groups that support tighter immigration control have said they’d oppose the measures.

Corzine assembled a panel on immigrant rights with the idea of passing comprehensive immigration reform.

https://www.nj.com/news/index.ssf/2009/01/report_nj_may_consider_driving.html

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Schools Re-open
December Recess is December 24 – January 2. Schools will re-open on Monday, January 5, 2009.

Friends of Music Scholarship Benefit Happens January 9
Friends in the Business is the popular musical review put on each year by John Lange and Ridgewood Friends of Music. This year, nationally-acclaimed musicians from Broadway, jazz and opera will come together on Friday, January 9, at George Washington Middle School at 8 p.m. The artists will donate their talents to raise money for scholarships for Ridgewood music students. Tickets are on sale at Town & Country Apothecary, or by mail at “Friends in the Business” Concert, 197 Lincoln Avenue, Ridgewood, NJ 07450. Prices are $20 for adults, $15 for students and seniors. Make checks payable to “Ridgewood Friends of Music.”

Fourth Annual RHS Alumni Art Show Opens
The Ridgewood High School Department of Art and Design is holding its annual Alumni Art Show in the RHS Carroll Art Gallery, Room 135, through January 9, 2009. A public reception will be held for the artists on Tuesday, January 6, 2009, from 3-5 p.m. The gallery will be open during school hours for the duration of the show.

January Board of Education Meetings
The Ridgewood Board of Education will hold regular public meetings on January 12 and 26, 2009. The Board meets on Floor 3 of the Ed Center, 49 Cottage Place, at 7:30 p.m.

>Obama should look here to see what high taxes do.

https://online.wsj.com/article_email/SB123059756486341161-lMyQjAxMDI5MzAwMjUwOTI3Wj.html

Madison, N.J.

When Barack Obama makes his New Year’s resolutions, at the top of his list ought to be the following: “I will not allow America to become New Jersey.”

Think of it as our gift to the nation. Other states offer promising experiments in areas such as Medicaid, taxes, education and regulatory reform. In contrast, the People’s Republic of New Jersey offers America something truly unique: the perfect bad example.

As harmful as this has been for our own prosperity, our example could be invaluable for President-elect Obama. That’s especially true given that his team appears to be considering some of the same things that have long been popular in Trenton. For years, the solons in our state capital have operated on the assumption that you can have high taxes everywhere — on income, on property, on business — without suffering any consequences.

Well, Gov. Jon Corzine is now dealing with those consequences, and his budgets show it. Earlier this year, he pushed through a budget that was one of the few in New Jersey history to be less than the one that preceded it. With revenues now running $1.2 billion short of what was expected, the next budget will undoubtedly be tougher still.
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Not all of Mr. Corzine’s choices have been good ones. In fairness, however, he is dealing with huge problems that have been years in the making. In some ways, we are a mini-California. That is to say, where New Jersey was once a national leader in terms of economic growth and job creation, more recently we have become a national laggard.

It seems not to have dented the consciousness of our political class that New Jersey’s dismal economic performance might be linked to the state’s tax policy. According to the nonpartisan Tax Foundation, New Jersey is home to the most hostile tax environment for business in the nation. We also bear the nation’s highest burden of state and local taxes. And on the list of the 10 counties with the highest median property tax, we claim seven of them.

During the last recession, we began to feel the full weight of these burdens. Other states responded by cutting back on spending and getting their houses in order. Not New Jersey. Then-Gov. Jim McGreevey added to the burden by borrowing and spending and raising the corporate tax — including the imposition of an alternative minimum tax on business. And we’ve been paying for these bad choices ever since.

Mr. Obama might pay special attention to what these measures have meant for jobs, especially given his expressed concern for the struggling middle class. Though the state did ultimately emerge from recession in 2003, private-sector job creation since then has been a pale shadow of what we enjoyed after the recessions of the 1980s and 1990s.

Of course, there was one area where jobs did grow. From 2000 to 2007, says the New Jersey Business & Industry Association, the government added 54,800 jobs. To put that in proper perspective, that works out to 93% of all jobs created in New Jersey over those seven years.
In Today’s Opinion Journal

So how do we respond to these new hard times? Beginning New Year’s Day, New Jersey workers will see even more money taken from their paychecks. The money will support a new mandate offering six weeks of paid family leave to almost all New Jersey employees — right on down to those working in very small operations. In itself, the family-leave tax will not be the ruin of the state economy. But the imposition of yet another new tax at this moment bespeaks a lack of seriousness about what both New Jersey workers and businesses can afford.

For the moment, Mr. Corzine, like Mr. Obama, is putting his faith in public-works spending. Indeed, he has even called on the president-elect to expand his own plans for an infrastructure stimulus to $1 trillion. And it would be hard to deny that our tired infrastructure could use some attention.

But amid all the debate over jump-starting the economy through public works, we risk losing sight of a larger truth: What governors and citizens alike need most is a growing economy that is creating jobs for the people and sending revenue to the capital. Over the long run, the only way to have a healthy and growing economy is to do exactly what New Jersey has not: Trust the people with their own money, and create an environment where initiative and enterprise are rewarded rather than penalized.

Absent a thorough-going revolution in Trenton, New Jersey may be lost for some time to come. But if Mr. Obama can learn from our bad example and do the opposite, New Jersey’s loss might yet be America’s gain.

Write to [email protected]