The New Jersey Division of Taxation (Division) has announced a new mediation pilot program aimed to streamline tax dispute resolution and reduce litigation. Starting October 1, 2025, businesses will have the option to settle disputes over Corporation Business Tax (CBT) and Sales and Use tax (S&U) without going into the formal appeals process or going to tax court. During the two-year program, taxpayers and Division representatives will participate in informal mediation sessions facilitated by a neutral, trained mediator. The mediator will guide the conversation between the two parties but will not have the power to make a final decision. Their responsibility is to help both sides work towards a solution they can agree on. All discussions during mediation are confidential.
To be eligible for the program the following criteria must be met:
Businesses will get a chance to apply for mediation during a post-audit conference before a final decision is issued. To move forward, they will need to agree to extend the statute of limitations by 210 days, giving time for the mediation to take place. The Division estimates mediations will conclude within 180 days from application, with limited extensions. If mediation fails, normal audit closing procedures will resume, preserving the taxpayer’s appeal rights. Mediation will be considered successful if a genuine, good faith effort is made to complete the mediation in a timely manner with the execution of a closing agreement that resolves at least some, if not all the issues.
To apply for the mediation process, the following must be submitted:
The pilot program will run through September 2027, after which the Division will evaluate its success and determine if it should formalize it through legislation or permanent regulations. If you are in business in New Jersey dealing with CBT or S&U tax issues, this might be a chance to resolve things faster and with less friction. (Tax Bulletin No. TB-115, New Jersey Department of Taxation, April 15, 2025)