In a unanimous decision issued today*, the New Jersey Supreme Court held that New Jersey could impose its Corporation Business Tax ("CBT") on an out-of-state corporation without a physical presence in New Jersey. Lanco, Inc. v. Director, Div. of Taxation, Docket No. A-89-05 (N.J. October 12, 2006). The decision affirms a 2005 New Jersey Superior Court (Appellate Division) decision and represents the first time since Geoffrey, Inc. v. South Carolina Tax Comm’n, 437 S.E. 2d 13 (S.C. 1993) that the highest court in a state has firmly concluded that the Quill physical presence nexus standard does not apply for corporate income tax purposes.¹

Lanco, Inc. ("Lanco") was a Delaware-based corporation that owned and managed certain intangible property, such as trademarks, trade names, and service marks....

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