54:8A-16. Credits for tax imposed by another critical area state

(A)(1) A nonresident of this State shall be allowed a credit against the tax otherwise due under this act for any income tax imposed for the taxable year by another critical area State, of which the taxpayer is a resident but such credit shall not exceed either:

(a) the percentage of the other tax determined by dividing the portion of the taxpayer's income subject to taxation under this act which is also subject to the other tax by the total amount of his income subject to such other tax, or

(b) the percentage of the tax otherwise due under this act, determined by dividing the portion of the taxpayer's income subject to taxation under this act which is also subject to the other tax by the total amount of the taxpayer's income which is taxable under this act.

(2) No credit shall be allowed under this section unless the jurisdiction of which the taxpayer is a resident:

(a) grants a substantially similar credit to residents of this State, or

(b) imposes an income tax on its own residents with respect to income derived from this State, and exempts from income tax the income of residents of this State.

(B) A resident of this State shall be allowed a credit against the tax otherwise due under this act for any income tax imposed for the taxable year by another critical area State, upon income both derived therefrom and subject to tax under this act.

(1) The credit allowable under this subsection shall not exceed the percentage otherwise due under this act determined by dividing the portion of the taxpayer's income subject to taxation by such other jurisdiction by the total amount of the taxpayer's income subject to taxation under this act.

(2) The credit allowable under this subsection shall not reduce the tax otherwise due under this act to an amount less than would have been due if the income subject to taxation by such other jurisdiction were excluded from the taxpayer's income subject to tax under this act.

(3) No credit shall be allowed under this subsection for a tax of a jurisdiction which allows residents of this State a credit against the taxes imposed by such other jurisdiction for the tax under this act, if such other credit is substantially similar to the credit granted to nonresident taxpayers by subsection (A) of this section.

L.1961, c. 32, p. 132, s. 16, eff. May 29, 1961. Amended by L.1961, c. 129, p. 758, s. 9; L.1962, c. 70, s. 4.