The Supreme Court Upholds J&J’s Tax Victory

Johnson & Johnson v. Director, Division of Taxation, ___ N.J. ___ (2020). As summarized here, the Appellate Division, in an opinion by Judge Haas, reversed a Tax Court ruling against Johnson & Johnson on cross-motions for summary judgment, giving the company a significant victory. The Supreme Court granted certification. Today, in a 5-1 per curiam decision, the Court affirmed. The majority opinion read as follows:

“The judgment of the Appellate Division is affirmed substantially for the reasons expressed in Judge Haas’s thoughtful opinion, which rests heavily on the plain language of N.J.S.A. 17:22-6.64. Johnson & Johnson v. Dir., Div. of Tax’n, 461 N.J. Super. 148, 162-64 (App. Div. 2019). The Legislature, of course, may amend the statute if it chooses to do so.”

Chief Justice Rabner and Justices Albin, Fernandez-Vina, Solomon, and Pierre-Louis (who cast her first merits vote in a civil case here) formed the majority. Justice Patterson did not participate.

Justice Lavecchia, the lone dissenter, would have reinstated the Tax Court’s ruling. In her view, a 2011 amendment to N.J.S.A. 17:22-6.64 and legislative history evidenced a legislative intent that, along with deference to the interpretation of the statute by the Division of Taxation, overcame the reliance of the majority on plain language. To her, “the plain language argument asks the Court to put on blinders and ignore the effort the Legislature has made to achieve taxation of premiums on nationwide risks insured by entities for which New Jersey is the home state.”