Exam 12: State and Local Taxes

Assume Tennis Pro attends a sports equipment expo in Washington state. Assume this activity creates nexus for the Business & Occupation (B&O) tax. Assume the tax is 0.5percent of gross receipts for retailers and 1.5percent of gross receipts on services. If Tennis Pro has $27,000 of Washington retail sales and $1,600 of services performed, calculate Tennis Pro's B&O tax.

The throwback rule requires a company, for apportionment purposes, to include all sales of inventory sold into a state without income tax nexus rather than from the state from where the inventory was shipped.

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

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

Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $2,600 dress that is shipped to her Maryland residence using a common carrier. Roxy's total Maryland sales are $33,800 on 15 transactions. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 7 percent, what is Roxy's sales and use tax collection obligation?

Mighty Manny, Incorporated manufactures and services deli machinery and distributes it across the United States. Mighty Manny is incorporated and headquartered in New Jersey. It has sales tax nexus in Connecticut, New Jersey, New York, Pennsylvania, Rhode Island, and South Carolina. Mighty Manny has sales as follows: Assume the following sales tax rates: Connecticut (6.75 percent), New Jersey (7.5 percent), New York (8.5 percent), Pennsylvania (6.5 percent), Rhode Island (7.25 percent), and South Carolina (5.5 percent). Assume that only Connecticut taxes Mighty Manny's services. What is Mighty Manny's total sales and use tax liability?

Mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Michigan, Minnesota, Wisconsin, and Wyoming. It has sales personnel only in the states discussed and all these states have adopted Wayfair legislation. Determine the state in which Mighty Manny does not have sales tax nexus given the following scenarios:

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

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows: Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that were shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor? (Round the sales factor to two decimal places.)

Which of the items is correct regarding a use tax?

Lefty provides demolition services in several southern states. Lefty has property as follows: Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $63,000 and $28,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.)

The Mobil decision identified three factors to determine whether a group of companies are unitary.

The payroll factor includes payments to independent contractors.

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

Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. Assume sales transactions in all states, except New York, are under 200 and that all states have adopted Wayfair legislation. 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 (0 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit?

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

Economic presence always creates sales tax nexus.

All states employ some combination of sales and use tax, income or franchise tax, or property tax to fund their government operations.

Tennis Pro has the following sales, payroll, and property factors: What are Tennis Pro's Virginia and Maryland apportionment factors if both states use an equally weighted three-factor formula?

Federal/state adjustments correct for differences between two states' tax laws.