The New Jersey Division of Taxation is launching a two-year pilot mediation program on 1 October 2025.

The Pilot is set to run for 24 months from 1 October 2025 to 30 September 2027.

The program is open to all business entities involved in corporate tax or sales tax disputes of USD 5,000 or more, excluding penalties and interest.

Mediation will offer a new option allowing taxpayers to resolve certain types of state tax controversies with the expectation of reducing the number of protests progressing to the Conference and Appeals Branch (CAB) and the complaints filed with the New Jersey Tax Court. The Pilot seeks to provide a vehicle for taxpayers to resolve tax controversies quickly and with finality, without incurring costs generally associated with matters brought to the CAB or Tax Court.

Mediation will involve an informal meeting between Taxation representatives from Audit and a taxpayer or taxpayer representative with a trained Taxation mediator who will guide the discussion and process.

The mediator will not be empowered to impose a settlement on the parties, but will actively facilitate and encourage a discussion between the parties, thereby offering participants an opportunity to arrive at a mutually agreeable resolution of the pending tax controversy.

The assigned mediator, although employed by Taxation, will not advocate for or work to sustain Taxation’s position. The assigned mediator will serve as an unbiased and impartial facilitator working to enable the opposing parties to reach a fair and equitable settlement that both parties can voluntarily accept, understanding both the advantages and disadvantages of resolving the controversy.

Taxation will then analyse and evaluate the program to determine its utility and effectiveness, whether the program should be made permanent, and whether enabling legislation/regulations will be needed to finalise a permanent program.