Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Assume Tennis Pro discovered that one salesperson has gone into Arkansas once each year for the past four years and performed activities that create both sales tax nexus and income tax nexus. Assume that Arkansas sales were $25,000 each year. Assume that Tennis Pro business income would be $200,000 each year and that Tennis Pro's Arkansas apportionment percentage would be 1 percent. Assume there would be no Arkansas nonbusiness income. Assume that Arkansas sales and use tax rate was 6.5 percent and corporate income tax rate was 5 percent. What would Tennis Pro's Arkansas sales and use tax and income tax liability be, ignoring any possible penalties and interest?

Accepted Answer

$6,500 and $400, respectively.

Question 3

Tennis Pro is headquartered in Virginia. Assume it has a state income tax base of $216,000. Of this amount, $92,000 was nonbusiness income. Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent. The nonbusiness income allocated to Virginia was $31,000. 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

${{[a(9)]:#,###}}.
${{[a(1)]:#,###}} (st

Question 4

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year:   State depreciation expense was $50,000. Hoosier's federal taxable income was $150,300. Calculate Hoosier's Indiana state tax base.

Accepted Answer

A)  $171,300 
B)  $173,800 
C)  $199,633 
D)  $207,133 
A)  $171,300 
B)  $173,800 
C)  $199,633 
D)  $207,133

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

${{[a(11)]:#,###}} and {{[a(13)]:##.00}}

Question 6

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 $50,000 and $15,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.)

Accepted Answer

A)  $942,153 
B)  $1,002,384 
C)  $1,052,384 
D)  $1,342,153 
A)  $942,153 
B)  $1,002,384 
C)  $1,052,384 
D)  $1,342,153

Question 7

The state tax base is computed by making adjustments to federal taxable income.

Accepted Answer

A) True 
 B)False

Question 8

All 50 states impose a sales and use tax system.

Accepted Answer

A) True 
 B)False

Question 9

In recent years, states are weighting the sales factor because it is easier to calculate.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a general rule for calculating the payroll factor?

Accepted Answer

A)  Includes salaries, commissions, and bonuses 
B)  Excludes compensation to independent contractors 
C)  Allocates compensation for employees working in more than one state 
D)  Assigns the payroll of each employee to a single state 
A)  Includes salaries, commissions, and bonuses 
B)  Excludes compensation to independent contractors 
C)  Allocates compensation for employees working in more than one state 
D)  Assigns the payroll of each employee to a single state

Question 11

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?

Accepted Answer

A)  $10,386 
B)  $14,543 
C)  $26,733 
D)  $61,289 
A)  $10,386 
B)  $14,543 
C)  $26,733 
D)  $61,289

Question 12

Public Law 86-272 protects only companies selling tangible personal property.

Accepted Answer

A) True 
 B)False

Question 13

Business income is allocated to the state of commercial domicile.

Accepted Answer

A) True 
 B)False

Question 14

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. Assume that a District of Columbia customer picks up a $2,000 racquet order in the Blacksburg store and drives it back to the District of Columbia (where the sales tax rate is 8.5 percent). Determine the sales and use tax liabilityof the customer. (Assume the shop has no sales personnel or property in District of Columbia, and District of Columbia sales don't exceed the Wayfair thresholds.)

Accepted Answer

$100 of Virginia sales tax and $70 Distr

Question 15

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows:
   The other total includes $20,000 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

${{[s(7)]:#,###}} and {{[s(8)]:#,###.##}

Question 16

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

Accepted Answer

Determine the state tax base, divide int

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Which of the following activities will create sales tax nexus?

Accepted Answer

A)  Advertising using television commercials. 
B)  Salespeople physically located in a state from which they only take orders. 
C)  Delivery of sales by UPS. 
D)  $90,000 of sales on 190 online sales transactions. 
A)  Advertising using television commercials. 
B)  Salespeople physically located in a state from which they only take orders. 
C)  Delivery of sales by UPS. 
D)  $90,000 of sales on 190 online sales transactions.

Question 19

A unitary-return group includes only companies included in the federal consolidated tax return filing.

Accepted Answer

A) True 
 B)False

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

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: State depreciation expense was $50,000. Hoosier's federal taxable income was $150,300. Calculate Hoosier's Indiana state tax base.

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.)

The state tax base is computed by making adjustments to federal taxable income.

All 50 states impose a sales and use tax system.

In recent years, states are weighting the sales factor because it is easier to calculate.

Which of the following is not a general rule for calculating the payroll factor?

Public Law 86-272 protects only companies selling tangible personal property.

Business income is allocated to the state of commercial domicile.

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

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

Which of the following activities will create sales tax nexus?

A unitary-return group includes only companies included in the federal consolidated tax return filing.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating 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

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

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: State depreciation expense was $50,000. Hoosier's federal taxable income was $150,300. Calculate Hoosier's Indiana state tax base.

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.)

The state tax base is computed by making adjustments to federal taxable income.

All 50 states impose a sales and use tax system.

In recent years, states are weighting the sales factor because it is easier to calculate.

Which of the following is not a general rule for calculating the payroll factor?

Public Law 86-272 protects only companies selling tangible personal property.

Business income is allocated to the state of commercial domicile.

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

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

Which of the following activities will create sales tax nexus?

A unitary-return group includes only companies included in the federal consolidated tax return filing.

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating 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