Question 1

Which of the following is not one of the Complete Auto Transit's criteria for whether a state can tax nondomiciliary companies?

Accepted Answer

A)  Protected activities are exempt. 
B)  A sufficient connection exists. 
C)  Only a fair portion of income can be taxed. 
D)  Tax cannot discriminate against nondomiciliary businesses. 
A)  Protected activities are exempt. 
B)  A sufficient connection exists. 
C)  Only a fair portion of income can be taxed. 
D)  Tax cannot discriminate against nondomiciliary businesses.

Question 2

Tennis Pro has the following sales, payroll, and property factors:
   What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four-factor method and Maryland used a single-factor sales formula?

Accepted Answer

60 percent and 20 pe

Question 3

The annual value of rented property is not included in the property factor.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following law types is not a primary authority source?

Accepted Answer

A)  Legislative 
B)  Administrative 
C)  Judicial 
D)  Treatises 
A)  Legislative 
B)  Administrative 
C)  Judicial 
D)  Treatises

Question 5

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows:
   What is Tennis Pro's Virginia property numerator and property factor? (Round the property factor to two places.)

Accepted Answer

$1,385,179 and 87.47 percent.

Question 6

Many states are either starting to or are in the process of expanding the types of services subject to sales tax.

Accepted Answer

A) True 
 B)False

Question 7

Rental income is allocated to the state of commercial domicile.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a general rule for allocating nonbusiness income?

Accepted Answer

A)  Interest and dividends to the state of commercial domicile. 
B)  Rental income for investment property to state of commercial domicile. 
C)  Rental income for business property to state where property is located. 
D)  Capital gains from rental property to state where property is located. 
A)  Interest and dividends to the state of commercial domicile. 
B)  Rental income for investment property to state of commercial domicile. 
C)  Rental income for business property to state where property is located. 
D)  Capital gains from rental property to state where property is located.

Question 9

Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

Accepted Answer

A)  Any form of advertising. 
B)  Distribution of samples without charge. 
C)  Accepting a down payment. 
D)  Checking a customer's inventory. 
A)  Any form of advertising. 
B)  Distribution of samples without charge. 
C)  Accepting a down payment. 
D)  Checking a customer's inventory.

Question 10

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The shop sells, manufactures, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Tennessee has a 4 percent sales tax. Determine the sales and use tax liability that the shop must collect and remit if it sells a $500 racquet to a Tennessee resident that purchases the merchandise in the Virginia retail store?

Accepted Answer

The answer of Gordon operates the Tennis Pro Shop in...

Question 11

Which of the following is incorrect regarding nondomiciliary businesses?

Accepted Answer

A)  Subject to tax only where income tax nexus exists. 
B)  A business cannot be nondomiciliary where it is headquartered. 
C)  A business can be nondomiciliary in only one jurisdiction. 
D)  Subject to tax only where a sufficient connection exists. 
A)  Subject to tax only where income tax nexus exists. 
B)  A business cannot be nondomiciliary where it is headquartered. 
C)  A business can be nondomiciliary in only one jurisdiction. 
D)  Subject to tax only where a sufficient connection exists.

Question 12

Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.

Accepted Answer

A) True 
 B)False

Question 13

What was the Supreme Court's holding in National Bellas Hess?

Accepted Answer

A)  An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence. 
B)  Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers. 
C)  Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax. 
D)  Defined solicitation for purposes of Public Law 86-272. 
A)  An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence. 
B)  Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers. 
C)  Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax. 
D)  Defined solicitation for purposes of Public Law 86-272.

Question 14

List the steps necessary to determine an interstate business's state income tax liability.

Accepted Answer

Determine the state tax base, divide int

Question 15

Economic presence always creates sales tax nexus.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following state cases did the state not assert economic income tax nexus?

Accepted Answer

A)  South Dakota with the Wayfair rule. 
B)  South Carolina in the Geoffrey case. 
C)  West Virginia in the MBNA case. 
D)  Wisconsin in Wrigley. 
A)  South Dakota with the Wayfair rule. 
B)  South Carolina in the Geoffrey case. 
C)  West Virginia in the MBNA case. 
D)  Wisconsin in Wrigley.

Question 17

Tennis Pro is headquartered in Virginia. Assume it has a Kentucky state income tax base of $220,000. Of this amount, $40,000 was nonbusiness income. Assume that Tennis Pro's Kentucky sales, payroll, and property apportionment factor are 12, 5, and 3 percent, respectively. Assume that Kentucky uses a single-factor sales formula apportionment method. The nonbusiness income allocated to Kentucky was $1,000. Assuming Kentucky's corporate tax rate is 6 percent, what is Tennis Pro's Kentucky state income tax liability?

Accepted Answer

$1,356.
$220,000 (state tax base) − $40,

Question 18

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The shop sells, manufactures, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Arizona has a 6 percent sales tax, but Arizona sales thresholds don't exceed the Wayfair limits. Determine the sales tax liability that the shop must collect and remit if it sells a $1,000 racquet order to an Arizona customer (assume the shop has no sales personnel or property in Arizona) that purchases the merchandise from the Virginia store over the internet?

Accepted Answer

$0.
The shop has no physical p

Question 19

A state's apportionment formula usually is applied using some variation of sales, payroll, and property factors.

Accepted Answer

A) True 
 B)False

Question 20

Tennis Pro is headquartered in Virginia. Assume it has a state income tax base of $200,000. Of this amount, $60,000 was nonbusiness income. Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent. The nonbusiness income allocated to Virginia was $23,000. Assuming a Virginia corporate tax rate of 5.5 percent, what is Tennis Pro's Virginia state income tax liability? (Round your answer to the nearest whole number.)

Accepted Answer

$6,908.
$200,000 (state tax base) − $60,

Which of the following is not one of the Complete Auto Transit's criteria for whether a state can tax nondomiciliary companies?

Tennis Pro has the following sales, payroll, and property factors: What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four-factor method and Maryland used a single-factor sales formula?

The annual value of rented property is not included in the property factor.

Which of the following law types is not a primary authority source?

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: What is Tennis Pro's Virginia property numerator and property factor? (Round the property factor to two places.)

Many states are either starting to or are in the process of expanding the types of services subject to sales tax.

Rental income is allocated to the state of commercial domicile.

Which of the following is not a general rule for allocating nonbusiness income?

Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

Which of the following is incorrect regarding nondomiciliary businesses?

Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.

What was the Supreme Court's holding in National Bellas Hess?

List the steps necessary to determine an interstate business's state income tax liability.

Economic presence always creates sales tax nexus.

In which of the following state cases did the state not assert economic income tax nexus?

A state's apportionment formula usually is applied using some variation of sales, payroll, and property factors.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 12: State and Local Taxes

Which of the following is not one of the Complete Auto Transit's criteria for whether a state can tax nondomiciliary companies?

Tennis Pro has the following sales, payroll, and property factors: What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four-factor method and Maryland used a single-factor sales formula?

The annual value of rented property is not included in the property factor.

Which of the following law types is not a primary authority source?

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: What is Tennis Pro's Virginia property numerator and property factor? (Round the property factor to two places.)

Many states are either starting to or are in the process of expanding the types of services subject to sales tax.

Rental income is allocated to the state of commercial domicile.

Which of the following is not a general rule for allocating nonbusiness income?

Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

Which of the following is incorrect regarding nondomiciliary businesses?

Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.

What was the Supreme Court's holding in National Bellas Hess?

List the steps necessary to determine an interstate business's state income tax liability.

Economic presence always creates sales tax nexus.

In which of the following state cases did the state not assert economic income tax nexus?

A state's apportionment formula usually is applied using some variation of sales, payroll, and property factors.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters