In a rare challenge involving the US Constitution's Supremacy Clause, Mayer Brown lawyers successfully argued that New Jersey's Corporate Business Tax alternative minimum assessment has been unconstitutional since 2006. 

The US Supremacy Clause prevents states from enforcing laws that circumvent federal restrictions and frustrate Congress' intent. As part of the Business Tax Reform Act of 2002, New Jersey required corporations to pay the higher of the regularly computed corporate income tax or the then-new alternative minimum assessment ("AMA"). Beginning in 2006, the AMA was effectively eliminated for most corporations but stayed in place for corporations protected from income tax by P.L. 86-272. The Tax Court determined that New Jersey, by having a tax imposed exclusively on P.L. 86-272-protected companies, which could not be taxed under the general corporate income tax, made an end-run around the federal prohibition, violating the Supremacy Clause.

(The full Tax Court decision on Stanislaus Food Products Company v. Director, Division of Taxation)

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