Richard’s Auto City, Inc., Plaintiff-Respondent v. Director, Division of Taxation, Defendant-Appellant

Summary

The Supreme Court of New Jersey held that the Director's regulation prohibiting a surviving corporation from carrying forward net‑operating losses incurred by a merged corporation is valid and that the Corporation Business Tax Act does not permit such carryovers. Accordingly, the Court reversed the Appellate Division and reinstated the Tax Court’s summary‑judgment disallowing the deduction. The decision rests on a strict construction of the tax statute and deference to the agency regulation.