INCOME TAXES (Notes)

9 Months Ended

Jun. 30, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

NJR evaluates its tax positions to determine the appropriate accounting and recognition of potential future obligations associated with unrecognized tax benefits. As of June 30, 2011, the Company believes, based on its analysis, that there is no need to recognize any liabilities associated with uncertain tax positions.

NJRES has amended its New Jersey State Income Tax returns for the periods ended September 30, 2004, 2005, 2006 and 2007, requesting refunds related to a dispute over certain rules surrounding a company's ability to apportion income away from the state. Discussions between NJR and the State of New Jersey on the interpretation of the apportionment rules and relevant case law are substantially complete and the State has indicated that they will agree to a refund of approximately $4.3 million. Accordingly, in the three months endedJune 30, 2011, NJRES recognized a $4.3 million state tax benefit. After fees and federal income taxes, the net impact is $2.4 million, or $0.06 per share.

The effective tax rates for the nine months endedJune 30, 2011 and 2010, are 30.9 percent and 35 percent, respectively. The decrease in the rate is due primarily to federal investment tax credits (ITC) generated by NJRCEV's and NJRHS' solar investments placed into service as of June 30, 2011, and solar investments forecasted to be completed before the end of the fiscal year.

To calculate the estimated annual effective tax rate, NJR considers projects that are probable of being completed and available for use during the current fiscal year based on the best information available at each reporting period. The estimate includes an assessment of various factors, such as board of director approval, status of contractual agreements, permitting and interconnection. Adjustments to the effective tax rate and management's estimates will occur as information and assumptions change. For a more detailed discussion of risks associated with the effective tax rate, see Part II, Item 1A, Risk Factors.