Question 1

The payroll factor includes payments to independent contractors.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 4

Moss Incorporated is a Washington corporation.It properly included,deducted,or excluded the following items on its federal tax return in the current year:
   Moss's Oregon depreciation was $145,500.Moss's federal taxable income was $549,743.Calculate Moss's Oregon state tax base.

Accepted Answer

$571,743.$549,743 +

Question 5

Most states have shifted away from an equally weighted three-factor to a heavily weighted sales apportionment formula.

Accepted Answer

A) True 
 B)False

Question 6

Commercial domicile is the location where a business is headquartered and from whence it directs its operations.

Accepted Answer

A) True 
 B)False

Question 7

Big Company and Little Company are both owned by Mrs.Smith.Big and Little file a consolidated federal tax return.Big manufactures office paper and other paper supplies and is based in Washington.Little operates a logging operation in Montana.Sixty percent of Little's sales are made to Big.Ten percent of Big's raw materials come from Little.There are no common officers or board members.There are no common service providers.What are the factors for and against filing a unitary tax return?

Accepted Answer

For a unitary tax return: functional int

Question 8

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)− $60,00

Question 9

Gordon operates the Tennis Pro Shop in Blacksburg,Virginia.Tennis Pro has payroll as follows:
   The other total includes $10,000 of salary of a Virginia employee that works part time in another state.What is Tennis Pro's Virginia payroll numerator and payroll factor? (Round the payroll factor to two places.)

Accepted Answer

$260,000 and 55.85 percent.$26

Question 10

In Complete Auto Transit the U.S.Supreme Court determined eight criteria for determining whether a state can tax a nondomiciliary company.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

Determine the state tax base,divide into

Question 12

Mahre,Incorporated,a New York corporation,runs ski tours in several states.Mahre also has a New York retail store and an Internet store,which ships to out-of-state customers.The ski tours operate in Maine,New Hampshire,and Vermont,where Mahre has employees and owns and uses tangible personal property.Mahre has real property only in New York.Mahre has the following sales:   Assume the following sales tax rates: Alaska (0 percent),Colorado (7.75 percent),Maine (8.5 percent),New Hampshire (6.75 percent),New York (8 percent),and Vermont (5 percent).How much sales and use tax must Mahre collect and remit in Maine?

Accepted Answer

A) $0 
B) $3,053 
C) $13,267 
D) $16,319 
A) $0 
B) $3,053 
C) $13,267 
D) $16,319

Question 13

Which of the following regarding the state tax base is incorrect?

Accepted Answer

A) It is computed by making adjustments to federal taxable income. 
B) It is divided into business and nonbusiness income. 
C) It is a necessary step in the state income tax process. 
D) It applies only to interstate businesses. 
A) It is computed by making adjustments to federal taxable income. 
B) It is divided into business and nonbusiness income. 
C) It is a necessary step in the state income tax process. 
D) It applies only to interstate businesses.

Question 14

A gross receipts tax is subject to Public Law 86-272.

Accepted Answer

A) True 
 B)False

Question 15

Interest and dividends are allocated to the state of commercial domicile.

Accepted Answer

A) True 
 B)False

Question 16

Delivery of tangible personal property through common carrier is a protected activity.

Accepted Answer

A) True 
 B)False

Question 17

Immaterial violations of the solicitation rules automatically create income tax nexus.

Accepted Answer

A) True 
 B)False

Question 18

Which of the items is correct regarding a use tax?

Accepted Answer

A) Use taxes are imposed by every state. 
B) Use taxes only apply when the seller is not required to collect the sales tax. 
C) Amazon collects use taxes on behalf of all its resellers. 
D) States choose to implement either a sales tax or a use tax but not both. 
A) Use taxes are imposed by every state. 
B) Use taxes only apply when the seller is not required to collect the sales tax. 
C) Amazon collects use taxes on behalf of all its resellers. 
D) States choose to implement either a sales tax or a use tax but not both.

Question 19

All of the following are false regarding apportionment except?

Accepted Answer

A) Applies to only business income. 
B) Applies to only nonbusiness income. 
C) Applies to both business and nonbusiness income. 
D) Investment income is subject to apportionment. 
A) Applies to only business income. 
B) Applies to only nonbusiness income. 
C) Applies to both business and nonbusiness income. 
D) Investment income is subject to apportionment.

Question 20

Public Law 86-272 protects a taxpayer from which of the following taxes?

Accepted Answer

A) Texas Margin Tax (a tax with net income,gross receipts,and capital worth components). 
B) Washington Business & Occupation Tax (a gross receipts tax). 
C) Ohio Commercial Activity Tax (an excise tax with a gross receipts base). 
D) California Franchise Tax (a net income tax). 
A) Texas Margin Tax (a tax with net income,gross receipts,and capital worth components). 
B) Washington Business & Occupation Tax (a gross receipts tax). 
C) Ohio Commercial Activity Tax (an excise tax with a gross receipts base). 
D) California Franchise Tax (a net income tax).

Exam 23: State and Local Taxes

The payroll factor includes payments to independent contractors.

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

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.)

Moss Incorporated is a Washington corporation.It properly included,deducted,or excluded the following items on its federal tax return in the current year: Moss's Oregon depreciation was $145,500.Moss's federal taxable income was $549,743.Calculate Moss's Oregon state tax base.

Most states have shifted away from an equally weighted three-factor to a heavily weighted sales apportionment formula.

Commercial domicile is the location where a business is headquartered and from whence it directs its operations.

In Complete Auto Transit the U.S.Supreme Court determined eight criteria for determining whether a state can tax a nondomiciliary company.

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

Which of the following regarding the state tax base is incorrect?

A gross receipts tax is subject to Public Law 86-272.

Interest and dividends are allocated to the state of commercial domicile.

Delivery of tangible personal property through common carrier is a protected activity.

Immaterial violations of the solicitation rules automatically create income tax nexus.

Which of the items is correct regarding a use tax?

All of the following are false regarding apportionment except?

Public Law 86-272 protects a taxpayer from which of the following taxes?

An Introduction to Tax

Tax Compliance,the Irs,and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

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 Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters