Question 1

Which of the following isn't a criteria used to determine whether a unitary relationship exists?

Accepted Answer

A)  Functional integration. 
B)  Centralized management. 
C)  Economies of scale. 
D)  Consolidated return status. 
A)  Functional integration. 
B)  Centralized management. 
C)  Economies of scale. 
D)  Consolidated return status.

Question 2

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 3

Gordon operates the Tennis Pro Shop in Blacksburg,Virginia.Tennis Pro has property as follows:
   Tennis Pro also rents Virginia property at an annual rent of $24,000.What is Tennis Pro's Virginia property numerator and property factor?

Accepted Answer

$1,577,179 and 88.83 percent.
The annual

Question 4

All 50 states impose a sales and use tax system.

Accepted Answer

A) True 
 B)False

Question 5

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 and 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 and 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).

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

In which of the following state cases did the state not assert economic nexus?

Accepted Answer

A)  New York with the Amazon rule. 
B)  South Carolina in the Geoffrey case. 
C)  West Virginia in the MBNA case. 
D)  Wisconsin in Wrigley. 
A)  New York with the Amazon rule. 
B)  South Carolina in the Geoffrey case. 
C)  West Virginia in the MBNA case. 
D)  Wisconsin in Wrigley.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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.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 (6.6 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 11

Roxy operates a dress shop in Arlington,Virginia.Lisa,a Maryland resident,comes in for a measurement and purchases a $1,500 dress that is shipped to her Maryland residence using a common carrier.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 liability?

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Businesses must collect sales tax only in states where it has sales and use tax nexus.

Accepted Answer

A) True 
 B)False

Question 15

Tennis Pro has the following sales,payroll and property factors:
   What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four factor method and Maryland used a single-factor sales formula?

Accepted Answer

60 percent and 20 pe

Question 16

Wyoming imposes an income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

Determine the state tax base,divide into

Question 20

Gordon operates the Tennis Pro Shop in Blacksburg,Virginia.Tennis pro decides to expand into Pennsylvania during the current year and try some new sales techniques.Tennis pro advertises on local radio and television as well as national tennis magazines sent into PA.Salesmen give away promotional materials and occasionally sell demonstration models to local shop employees to build goodwill for Tennis Pro.It holds sales meetings at rented space in local hotels.Personnel occasionally fix minor problems such as tape and strings without charge.One employee performed a credit check for a major account who needed merchandise immediately.Each sales person is allowed an allowance for a car and office equipment to be maintained in an in-home office.Do any of Tennis Pro activities have the potential to create income tax nexus?

Accepted Answer

The sale of demonstration models,repairs

Which of the following isn't a criteria used to determine whether a unitary relationship exists?

Gordon operates the Tennis Pro Shop in Blacksburg,Virginia.Tennis Pro has property as follows: Tennis Pro also rents Virginia property at an annual rent of $24,000.What is Tennis Pro's Virginia property numerator and property factor?

All 50 states impose a sales and use tax system.

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

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

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

In which of the following state cases did the state not assert economic nexus?

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

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

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

Businesses must collect sales tax only in states where it has sales and use tax nexus.

Tennis Pro has the following sales,payroll and property factors: What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four factor method and Maryland used a single-factor sales formula?

Wyoming imposes an income tax on corporations.

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

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

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

Business Income,Deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Neorganization, 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

Exam 12: State and Local Taxes

Which of the following isn't a criteria used to determine whether a unitary relationship exists?

Gordon operates the Tennis Pro Shop in Blacksburg,Virginia.Tennis Pro has property as follows: Tennis Pro also rents Virginia property at an annual rent of $24,000.What is Tennis Pro's Virginia property numerator and property factor?

All 50 states impose a sales and use tax system.

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

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

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

In which of the following state cases did the state not assert economic nexus?

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

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

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

Businesses must collect sales tax only in states where it has sales and use tax nexus.

Tennis Pro has the following sales,payroll and property factors: What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four factor method and Maryland used a single-factor sales formula?

Wyoming imposes an income tax on corporations.

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

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

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

Business Income,Deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Neorganization, 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