On February 6, 2017, the Tax Court of New Jersey granted partial summary judgment to the taxpayer in Elan Pharmaceuticals, Inc. v. Director, Division of Taxation. The court held that the New Jersey Division of Taxation (“Division”) improperly applied the state’s Throw-Out Rule by excluding receipts that were “subject to tax” in the originating state.  The decision clarifies the scope of the Throw-Out Rule’s “subject to tax” language by finding that receipts may be “subject to tax” even when the destination state is precluded from taxing the sale under Public Law 86-272.