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P.L. 2024, c. 20, imposes a 2.5% Corporate Transit Fee for privilege periods beginning on and after January 1, 2024 through December 31, 2028, on Corporation Business Tax returns with a taxable net income over $10 million and is in addition to the annual Corporation Business Tax. Tax credits cannot be used against the Corporate Transit Fee. The revenues received from the Corporate Transit Fee will be used to support New Jersey Transit.
Separate Return Filers (Form CBT-100/Form CBT-100S). The Corporate Transit Fee generally applies to all taxpayers with a taxable net income in excess of $10 million. The Corporate Transit Fee does not apply to public utilities (defined in N.J.S.A. 54:10A-4(q)) filing CBT-100 returns nor does it apply to New Jersey S Corporations filing CBT-100S returns.
Combined Group Filers (Form CBT-100U). For purposes of the Corporate Transit Fee, a combined group filing the CBT-100U is a taxpayer and the Corporate Transit Fee is imposed at the group level. The income attributable to a combined group member that is a public utility company or S corporation cannot be excluded when determining whether the group is subject to the Corporate Transit Fee and, if applicable, when calculating the Corporate Transit Fee. If the combined group’s taxable net income is greater than $10 million, the combined group is liable for the Corporate Transit Fee.
Filing Returns
Short Period Returns filed on a 2023 Corporation Business Tax Return. If a taxpayer has a short period return for a privilege period that began on or after January 1, 2024, and ended on or before June 30, 2024, with a taxable net income in excess of $10 million, the taxpayer must file the 2023 CBT-100 or 2023 CBT-100U, as applicable, and submit the Corporate Transit Fee. Taxpayers must attach a rider showing the mathematical calculations.
Form CBT-100. To properly account for the fee on a short period of a separate return filer, multiply the amount on Schedule A, Part III, line 2a, 2b, or 2c (as applicable) by 2.5% to arrive at the Corporate Transit Fee amount. On line 6 of page 1, enter the total of line 4 and the calculated Corporate Transit Fee amount.
Form CBT-100U. To properly account for the fee on a short period of a combined group return filer, multiply the amount on Schedule A, Section II, Part III, line 1 by 2.5% to arrive at the Corporate Transit Fee amount. On line 5 of page 1, enter the total of line 3 and the calculated Corporate Transit Fee amount.
2024 Corporation Business Tax Returns (and onwards). The Division will include a dedicated line for the Corporate Transit Fee on the 2024 Corporation Business Tax returns, and on returns for the subsequent tax years.
Penalties and Interest
No penalties and interest will be imposed on an underpayment that results from the Corporate Transit Fee during the first year of enactment. If the penalties and interest resulting from an underpayment are charged to the taxpayer, the Division will waive the penalties and interest as a result of the law change. In such cases, the taxpayer should contact the Division in writing at the address listed in the notice requesting an abatement of penalties and interest due to underpayment.
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