Dunkin’ Donuts Unit Succeeds in Nixing NJ Sales Tax Regulation

A New Jersey tax department regulation that created a threshold test defining taxable sales of food is invalid because it extends beyond and conflicts with the related statute, the state tax court ruled.

A Dunkin’ Donuts franchise owner asked the New Jersey Tax Court to find that a statute taxing prepared foods and the tax department’s interpretation of the statute were both unconstitutional. The court said the plain meaning of the statute was at odds with the department’s threshold test established in a regulation.

“It would be impossible to infer from the statute that the Legislature intended there to be ...