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New Jersey Tax Court finds customer-based sourcing appropriate for apportioning service fee income

The New Jersey Tax Court has ruled that receipts received by credit card issuers from interest and interchange fees derived from New Jersey cardholders should be treated as New Jersey receipts for purposes of computing the state’s Corporate Business Tax. The Court further determined that service fees received from New Jersey cardholders should also be treated as New Jersey receipts as limited under the New Jersey Division of Taxation’s 25-50-25 rule governing the sourcing of service fee income.