Exam 12: State and Local Taxes

Tennis Pro, a Virginia Corporation domiciled in Virginia, has the following items of income: $5,000 of dividend income, $15,000 of interest income, $10,000 of rental income from Georgia property, $30,000 of royalty income for an intangible used in Maryland (where income tax nexus exists). Determine how much income is allocated to Virginia.

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Which of the following is True regarding state and local taxes?

Businesses must pay income tax in their state of commercial domicile.

Which of the following statements regarding income tax commercial domicile is incorrect?

Which of the following is incorrect regarding nondomiciliary businesses?

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

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

Which of the following isn't a requirement of Public Law 86-272?

A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

Physical presence does not always create sales tax nexus.

Business income includes all income earned in the ordinary course of business.

Wyoming imposes an income tax on corporations.

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?

The primary purpose of state and local taxes is to raise revenue to finance state and local government.

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?

State tax law is comprised solely of legislative authority.

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' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

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 Illinois state tax base.