Tax Court: Cargill Meat Solution, Corp. v. Dir., Div. of Tax’n; Docket No. 008146-2018, opinion by Cimino, J.T.C., decided December 15, 2021. For plaintiff - Kyle O. Sollie (Reed Smith LLP, attorneys; Kylie O. Sollie and Matthew L. Setzer on the brief); for defendant – Joseph A. Palumbo, Deputy Attorney General (Andrew J. Bruck, Acting Attorney General of New Jersey, attorney).
Held: The Clean Communities and Recycling Grant Act imposes a user fee, commonly referred to as the litter tax. The fee is based upon the sales of litter-generating products by manufacturers, wholesalers and retailers. Wholesaler-to-wholesaler sales are exempt. While plaintiff admits it manufactures the products at issue, it also asserts the wholesaler-to-wholesaler exemption applies for sales it makes to wholesalers.
The court noted that under plaintiff’s argument, all manufacturers that sell to wholesalers would claim the exemption thus rendering the statutory reference to manufacturer sales superfluous. In addition, the court held that the plain language of the Act provides that the fee is based upon sales within the state, not whether the manufacturing occurred in-state. Moreover, the Legislature did not intend to put local manufacturers at a disadvantage. Finally, the longstanding regulations adopted by the Director provide that the location of where the manufacturing takes place is not determinative.