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BIS LP, Inc. v. Director, Div. of Taxation

Tax Court of New Jersey

July 30, 2009, Decided

DOCKET NO. 007847-2007


 [*91]  BIANCO, J.T.C.

This opinion shall serve as the court's determination of cross motions for summary judgment filed by the parties in the above matter. Plaintiff BIS LP, Inc. (hereinafter "BIS") seeks an abatement of $ 1,008,537 1 in New Jersey Corporation Business Tax (hereinafter "CBT") assessed by defendant, Director of the Division of Taxation (hereinafter "the Director"). BIS also seeks a refund of the $ 1,480,524 2 in CBT it paid on its 2003 CBT return for fiscal year 2003, 3 plus interest. The Director, in turn, seeks to affirm her final assessment determination and deny any refund.

For the reasons set forth below, the court finds that  [**2] BIS is entitled to an abatement of the $ 1,008,537 of CBT (including interest and penalties) assessed by the Director; and BIS is further entitled to a refund of the $ 1,480,524 in CBT it paid during fiscal year 2003. Accordingly, BIS' motion for summary judgment is granted and the Director's motion for summary judgment is denied.

The facts in this case are not in dispute. BISYS Group, Inc. (hereinafter "the BISYS Group") provides information processing and technology outsourcing services for its clients. Beginning in 1999, the BISYS Group reorganized certain of its divisions, including the insurance services, retirement services, document solutions and banking information solutions, to create a series of holding  [*92]  company/limited partnership entities. 4 After reorganization, BISYS, Inc. (hereinafter "BISYS") became one of the holding companies in the BISYS Group. BISYS was a wholly owned subsidiary of the BISYS Group. BIS was a wholly owned subsidiary of BISYS.

The reorganization of the banking information solutions division involved creating a limited partnership, known as BISYS Information Solutions (hereinafter "Solutions").  [**3] In November 1999, BISYS transferred 99% of the assets and liabilities of its banking information solutions division to BIS and 1% to Solutions. Thereafter, BIS contributed the assets and liabilities it received from BISYS to Solutions. BISYS and BIS entered into a limited partnership agreement whereby BISYS was the general partner with a 1% interest and BIS was the limited partner with a 99% interest. The limited partnership agreement provided that the general partner had "the sole and exclusive right to manage the business and affairs" of Solutions except for limited decisions specifically reserved to the limited partner. BIS did not have the right or the obligation to participate directly or indirectly in the active management of Solutions. Nor was BIS authorized to do or perform any act in the name of or on behalf of BISYS.

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25 N.J. Tax 88 *; 2009 N.J. Tax LEXIS 18 **


Subsequent History:  [**1] Approved for Publication in the New Jersey Tax Court Reports July 30, 2009.

Affirmed by, Remanded by BIS LP, Inc. v. Director, Div. of Taxation, 26 N.J. Tax 489, 2011 N.J. Super. LEXIS 238 (App.Div., 2011)


partnership, subsidiaries, unitary, entities, stock, franchise, taxation, patent, certif, clarified, royalty, refund, headquartered, retroactive, debentures, election, formula

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Genuine Disputes, Legal Entitlement, Burdens of Proof, Movant Persuasion & Proof, Nonmovant Persuasion & Proof, Tax Law, State & Local Taxes, Franchise Taxes, Imposition of Tax, Limitations, Business & Corporate Law, Corporate Formation, Corporate Existence, Powers & Purpose, Valid Purposes, Securities Law, Scope of Provisions, Definitions, Covered Securities, Administrative Law, Agency Rulemaking, State Proceedings, Governments, Legislation, Interpretation, Rule Application & Interpretation, Validity, Judicial Review, Standards of Review, Arbitrary & Capricious Standard of Review, Rule Interpretation, Deference to Agency Statutory Interpretation, Effect & Operation, Prospective Operation, Informal Rulemaking, Foreign Corporations, Qualifications, Business & Corporate Compliance, Business & Corporate Law, Limited Partnerships, Formation, General Partnerships, Formation, Elements