1. Tax Notes Newsletter Two Voluntary Disclosure Initiatives Available for New Jersey Taxpayers Due by May 15, 2014 Sandy Weinberg, Principal, Director of State and Local Taxation Intangible Asset Nexus Companies that own intangible assets and derive income from the use of those assets in New Jersey can now comply, penalty free, with corporation business tax reporting and payment obligations they may have missed in the past. However, the New Jersey Division of Taxation (the Division) has announced that the opportunity only runs through May 15, 2014. The Division noted that it continues to discover non-filing companies that have nexus with New Jersey as a result of deriving income from the use of intangible assets in the state. Often, the intangible assets have been embedded into companies with other business operations beyond merely owning intellectual property. Corporations deriving income from the use of intangible assets in New Jersey are required to file New Jersey Corporate Business Tax Returns and pay the appropriate tax due. In addition to the standard procedures for voluntary disclosure agreements (VDAs), the following also apply: Look-back period will be limited to periods beginning after July 1, 2010 Taxpayer must file all required returns and remit payment of the full tax liability within 45 days of the execution of its VDA The Division will waive all penalties Taxpayer must remit interest within 30 days of assessment All returns will be subject to routine audit with respect to issues not specifically covered in the VDA. Partnership Tax The Division has also announced a Partnership Tax & Partner Fees Initiative permitting partnerships that have New Jersey sourced income that have not filed the relevant forms (PART-100, PART-200T & NJ-1065) and/or remitted tax and fees to voluntarily come forward and comply. The same deadline, May 15, 2014, and similar procedures as the intangible asset nexus initiative apply. The Division stated it continues to discover partnerships with New Jersey sourced income that have failed to file the required returns and remit the partnership tax due under the Corporation Business Tax and the per partner fee due under the Gross Income Tax. Partnerships deriving income from New Jersey sources are generally required to pay a $150 filing fee per partner and are also generally required to withhold income tax on behalf Sandy Weinberg Principal sweinberg@odpkf.com 203.323.2400

2. of non-resident partners. By complying with these tax requirements, taxpayers will receive a potential limited look- back and penalty waiver. ***** Participating in a voluntary disclosure program provides taxpayers with an opportunity to limit exposure to tax liabilities and penalties that may be otherwise due. Taxpayers should review their New Jersey activities and filings to determine whether participating in the 2014 voluntary disclosure initiative is beneficial. Contact Us: If you have any questions regarding the New Jersey Intangible Asset Nexus or the Partnership Tax & Partner Fees voluntary disclosure initiatives, please contact your OConnor Davies representative or Sandy Weinberg at sweinberg@odpkf.com. About OConnor Davies, LLP: O'Connor Davies, LLP is a full service Certified Public Accounting and consulting firm that has a long history of serving clients both domestically and internationally and providing specialized professional services of the highest quality. With roots tracing to 1891, seven offices located in New York, New Jersey and Connecticut, and approximately 500 professionals including 84 partners, the Firm provides a complete range of accounting, auditing, tax and management advisory services. OConnor Davies is ranked as number 32 in Accounting Today's 2014 "Top 100 Firms" in the United States. The Firm is also within the 20 largest accounting firms in the New York Metropolitan area according to Crain's New York Business and the Westchester and Fairfield County Business Journals. OConnor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Our firm provides the information in this e-newsletter for general guidance only, and it does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. IRS CIRCULAR 230 DISCLOSURE: To comply with IRS regulations, we are required to inform you that unless expressly stated otherwise, any discussion of U.S. federal tax issues in this correspondence (including any attachments) is not intended or written to be used, and cannot be used, (i) to avoid any penalties imposed under the Internal Revenue Code, or (ii) to promote, market, or recommend to another party any transaction or matter addressed herein. Contact: New York, NY 212.286.2600 212.867.8000 Harrison, NY 914.381.8900 Stamford, CT 203.323.2400 Paramus, NJ 201.712.9800 Cranford, NJ 908.272.6200 New Windsor, NY 845.220.2400 Wethersfield, CT 860.257.1870