Dinsmore Partner Kelvin Lawrence Discusses N.J. Partnership Filing Fees

Dinsmore tax partner Kelvin Lawrence recently spoke with Law360 about the issues surrounding New Jersey’s partnership filing fees, which Ferrellgas Partners LP has contested in its petition to the U.S. Supreme Court. An excerpt is below.

But smaller entities are also affected by New Jersey's fee, and Ferrellgas is likely bringing a challenge that other businesses have considered but didn't possess the resources to bankroll, said Kelvin Lawrence, a partner at Dinsmore & Shohl LLP.

Lawrence said it's easier for smaller businesses to just pay the fee even if they disagree with it, and that Ferrellgas' petition has the potential to provide those entities with critical guidance on the fee's legitimacy.

"It's a fascinating case," Lawrence said. "It's one that brings to light something that I'm sure a lot of companies have probably thought was unfair but didn't really have the opportunity to challenge."

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Lawrence of Dinsmore referenced Ferrellgas' arguments in its petition that 12 states currently impose unapportioned levies that raise similar internal consistency test concerns. Further clarification of what types of unapportioned state levies are permissible could be significant, he said, especially in light of the high court's South Dakota v. Wayfair decision, which allowed states to collect sales and use tax on sales from out-of-state entities.

In the wake of Wayfair, many small businesses are compelled to file returns in more states, Lawrence noted, adding that opens them up to more tax and fee exposure and can present compliance challenges under the varying interpretations of the high court's American Trucking rulings.

"The conflicting authorities on some of the court's own decisions, and how state courts have construed those, has led to some confusion," Lawrence said. "This is an opportunity to set that confusion right."

Read the full article here.