Question 1

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 2

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 3

The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following is not a primary revenue source for most states?

Accepted Answer

A)  Income or franchise taxes 
B)  Sales or use taxes 
C)  Severance taxes 
D)  Property taxes 
A)  Income or franchise taxes 
B)  Sales or use taxes 
C)  Severance taxes 
D)  Property taxes

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 $63,000 and $28,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.)

Accepted Answer

A)  $942,178 
B)  $1,002,410 
C)  $1,065,410 
D)  $1,446,178 
A)  $942,178 
B)  $1,002,410 
C)  $1,065,410 
D)  $1,446,178

Question 7

Della Corporation is headquartered in Carlisle, Pennsylvania. Della has a Pennsylvania state income tax base of $425,000. Of this amount, $75,000 was nonbusiness income. Della's Pennsylvania apportionment factor is 28.52 percent. The nonbusiness income allocated to Pennsylvania was $61,000. Assuming a Pennsylvania corporate tax rate of 7.75 percent, what is Della's Pennsylvania state tax liability? (Round your answer to the nearest whole number.)

Accepted Answer

A)  $8,821 
B)  $9,084 
C)  $12,464 
D)  $13,549 
A)  $8,821 
B)  $9,084 
C)  $12,464 
D)  $13,549

Question 8

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 $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base.

Accepted Answer

A)  $172,509 
B)  $174,983 
C)  $200,933 
D)  $208,433 
A)  $172,509 
B)  $174,983 
C)  $200,933 
D)  $208,433

Question 9

Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $3,100 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation?

Accepted Answer

A)  $0 
B)  $155 to Virginia 
C)  $155 sales tax to Virginia and $31 use tax to Maryland 
D)  $186 to Maryland 
A)  $0 
B)  $155 to Virginia 
C)  $155 sales tax to Virginia and $31 use tax to Maryland 
D)  $186 to Maryland

Question 10

Nondomiciliary businesses are subject to tax everywhere they do business.

Accepted Answer

A) True 
 B)False

Question 11

Giving samples and promotional materials without charge is a protected solicitation activity.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Sales personnel investigating a potential customer's creditworthiness generally are deemed to exceed protected boundaries of solicitation.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,500 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation?

Accepted Answer

A)  $0 
B)  $75 to Virginia 
C)  $75 sales tax to Virginia and $15 use tax to Maryland 
D)  $90 to Maryland 
A)  $0 
B)  $75 to Virginia 
C)  $75 sales tax to Virginia and $15 use tax to Maryland 
D)  $90 to Maryland

Question 16

Failure by a seller to collect and remit sales taxes often results in a larger tax liability than failure to pay income taxes.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The payroll factor includes payments to independent contractors.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following isn't a typical federal/state adjustment?

Accepted Answer

A)  Dividends received deduction 
B)  Depreciation 
C)  Meals 
D)  U.S. obligation interest income 
A)  Dividends received deduction 
B)  Depreciation 
C)  Meals 
D)  U.S. obligation interest income

Question 20

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

Accepted Answer

A)  Tangible personal property sales are sourced to the destination state. 
B)  If the business does not have income tax nexus in the destination state, the sales are thrown back to the state where the goods were shipped from. 
C)  Services are sourced to the destination state. 
D)  Government sales are sourced to the state where they were shipped from. 
A)  Tangible personal property sales are sourced to the destination state. 
B)  If the business does not have income tax nexus in the destination state, the sales are thrown back to the state where the goods were shipped from. 
C)  Services are sourced to the destination state. 
D)  Government sales are sourced to the state where they were shipped from.

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

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

The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

Which of the items is correct regarding a use tax?

Which of the following is not a primary revenue source for most states?

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 $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base.

Nondomiciliary businesses are subject to tax everywhere they do business.

Giving samples and promotional materials without charge is a protected solicitation activity.

Which of the following is incorrect regarding nondomiciliary businesses?

Sales personnel investigating a potential customer's creditworthiness generally are deemed to exceed protected boundaries of solicitation.

Failure by a seller to collect and remit sales taxes often results in a larger tax liability than failure to pay income taxes.

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

The payroll factor includes payments to independent contractors.

Which of the following isn't a typical federal/state adjustment?

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

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

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

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

The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

Which of the items is correct regarding a use tax?

Which of the following is not a primary revenue source for most states?

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 $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base.

Nondomiciliary businesses are subject to tax everywhere they do business.

Giving samples and promotional materials without charge is a protected solicitation activity.

Which of the following is incorrect regarding nondomiciliary businesses?

Sales personnel investigating a potential customer's creditworthiness generally are deemed to exceed protected boundaries of solicitation.

Failure by a seller to collect and remit sales taxes often results in a larger tax liability than failure to pay income taxes.

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

The payroll factor includes payments to independent contractors.

Which of the following isn't a typical federal/state adjustment?

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

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