The Division has issued Technical Bulletin TB-55R which discusses the partnership filing fee. In general, if a partnership has 3 or more owners and New Jersey source income or loss, it must pay a $150 per owner filing fee (to a maximum of $250,000).
The filing fee must be paid by the original due date for the NJ-1065 tax return. There is no extension for payment of the partnership filing fee, even if the partnership has an extension for the filing of the partnership return. Late filing and late payment penalties apply.
Partnerships must pay $150 for each individual, trust, estate or entity that owns a partnership interest during the return year. In addition, one-half of the filing fee is due as the prepayment of the filing fee for the next return year. When “Final Return” is checked off on the NJ-1065 return, no prepayment is required.
Nonprofit owners are not exempt from the fee. With regard to tiered partnerships, each partnership pays the filing fee required for its partners. The total fee amount due is generally determined by the number of K-1’s filed by (or due from) the partnership, including when a qualified investment partnership, tiered partnership or pass-through entity is involved. The fee is also due for owners that are not provided a K-1.
Part Year Partners/Partnerships. There is no exemption or pro-ration of the fee for partners who own an interest for only a portion of the year. There is no pro-ration for the fee if the partnership was in existence for only part of the tax year for which the NJ-1065 is due.
The full $150 filing fee is due for each nonresident partner that has physical nexus with New Jersey. If the partnership has income earned outside New Jersey, the filing fee for nonresident partners that do not have physical nexus with New Jersey may be apportioned based on New Jersey source income.
No New Jersey Source Income
To qualify for this exception, all operations and facilities must be located outside New Jersey. If a partnership has “hedge fund” status, a filing fee is due for all partners, unless all operations and facilities are located outside New Jersey.
Thebulletin provides several examples relating to New Jersey source income.
Partnership owning “raw” land in New Jersey, the partnership has New Jersey source income or expense due to expenses such as real property taxes.
Fees paid for a New Jersey checking account or to a New Jersey accounting firm are not sourced to New Jersey, for purposes of liability for the filing fee.
Fee paid for filing an annual report in New Jersey, without more, will not be sourced to New Jersey for purposes of filing fee liability.
If the partnership is a statutory “investment club”, the partnership is exempt from payment of filing fees.