Question 1

The property factor is the average of beginning and ending property values.

Accepted Answer

A) True 
 B)False  True

Question 2

Discuss the steps necessary to determine whether a sales or use tax applies and how the tax is collected.

Accepted Answer

Determine whether the seller has sales tax nexus. If so, then sales tax will be collected and remitted by the seller. If not, then the buyer must pay the use tax on his or her individual income tax return or the business' sales tax return.

Question 3

The annual value of rented property is included in the property factor.

Accepted Answer

A) True 
 B)False  False

Question 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

Rental income is allocated to the state of commercial domicile.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

Determine the state tax base, divide int

Question 8

Moss Incorporated is a Washington corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: $$\begin{array} { l r l } 
\text { Item } & \text { Amount } & \text { Federal Treatment } \
\text { Oregon Income Taxes } & \$ 25,750 & \text { Deducted on federal return } \
\text { Washington B\&O Tax } & \$ 15,500 & \text { Deducted on federal return } \
\text { Oregon Bond Interest } & \$ 10,000 & \text { Excluded from federal return } \
\text { Washington Bond Interest } & \$ 15,000 & \text { Excluded from federal return } \
\text { Federal T-Note Interest } & \$ 7,500 & \text { Included on federal return } \
\text { Depreciation } & \$ 134,250 & \text { Deducted on federal return }
\end{array}$$ Moss' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

Accepted Answer

The answer of Moss Incorporated is a Washington corporation. It...

Question 9

Tennis Pro has the following sales, payroll and property factors: $$\begin{array} { l r r } 
& \text { Virginia } & \text { Maryland } \
\text { Sales } & 40 \% & 20 \% \
\text { Payroll } & 70 \% & 5 \% \
\text { Property } & 90 \% & 5 \%
\end{array}$$ 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

Question 10

A unitary return includes only companies included on a federal consolidated tax return.

Accepted Answer

A) True 
 B)False

Question 11

What was the Supreme Court's holding in Quill?

Accepted Answer

A)  An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence. 
B)  Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers. 
C)  Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax. 
D)  Defined solicitation for purposes of Public Law 86-272. 
A)  An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence. 
B)  Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers. 
C)  Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax. 
D)  Defined solicitation for purposes of Public Law 86-272.

Question 12

The Quill decision reaffirmed that out-of-state businesses must have physical presence within a state before the state may require the collection of sales taxes from in-state customers.

Accepted Answer

A) True 
 B)False

Question 13

Handsome Rob provides transportation services in several western states. Rob has sales as follows: $$\begin{array}{l}
\text { Rob's Payroll: }\
\begin{array} { l r } 
\underline{\text { State }} & \underline{\text { Sales }} \
\text { Arizona } & \$ 350,512 \
\text { California } & \$ 1,134,589 \
\text { Nevada } & \$ 849,142 \
\text { Washington } & \underline{\$ 323,032} \
\text { Totals } & \$ 2,657,275
\end{array}
\end{array}$$ Rob is a California Corporation and has the following facts. Rob has nexus in Arizona, California, Nevada, and Washington. The Washington drivers spend 25 percent of their time driving through Oregon. California payroll includes $200,000 of payroll for services provided in Nevada by California based drivers. What is Rob's California sale numerator?

Accepted Answer

A)  $934,589 
B)  $1,134,589 
C)  $1,215,347 
D)  $2,657,275 
A)  $934,589 
B)  $1,134,589 
C)  $1,215,347 
D)  $2,657,275

Question 14

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 15

Wacky Wendy produces gourmet cheese in Wisconsin. Wendy has sales as follows: $$\begin{array}{l}
\text { Wendy's Sales: }\
\begin{array} { l r } 
\underline{ \text { State } }  & \underline{\text { Sales }} \
{ \text { Iowa } } &\$ 350,512 \
\text { Michigan } & \$ 134,589 \
\text { Minnesota } & \$ 849,142 \
\text { Wisconsin } & \underline{\$ 1,323,032} \
\text { Totals } &  \$ 2,657,275 \
\end{array}
\end{array}$$ Wendy is a Wisconsin Corporation and has the following operations. Wendy has nexus in Iowa, Minnesota, and Wisconsin. The Michigan sales are shipped from Wisconsin (a throwback state). $100,000 of the Wisconsin sales were to the federal government. What is Wendy's Wisconsin sale numerator?

Accepted Answer

A)  $1,223,032 
B)  $1,323,032 
C)  $1,357,621 
D)  $1,457,621 
A)  $1,223,032 
B)  $1,323,032 
C)  $1,357,621 
D)  $1,457,621

Question 16

Which of the following is not a nonincome based tax?

Accepted Answer

A)  Ohio Commercial Activity Tax. 
B)  Texas Margin Tax. 
C)  Washington Business & Occupation Tax. 
D)  Wisconsin Separate Corporate Tax. 
A)  Ohio Commercial Activity Tax. 
B)  Texas Margin Tax. 
C)  Washington Business & Occupation Tax. 
D)  Wisconsin Separate Corporate Tax.

Question 17

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The Shop sells, manufacturers, 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 liability (assume the Shop has no sales personnel or property in District of Columbia) of the customer?

Accepted Answer

$100 of Virginia sal

Question 18

Bethesda Corporation is unprotected from income tax by Public Law 86-272. Which of the following characteristics creates a problem for Bethesda in states other than Maryland?

Accepted Answer

A)  Bethesda does business in Maryland and five other states. 
B)  Bethesda sells copier equipment and copy center services. 
C)  All orders are approved in Maryland. 
D)  All in-state services are limited to solicitation in states other than Maryland. 
A)  Bethesda does business in Maryland and five other states. 
B)  Bethesda sells copier equipment and copy center services. 
C)  All orders are approved in Maryland. 
D)  All in-state services are limited to solicitation in states other than Maryland.

Question 19

Nondomiciliary businesses are subject to tax everywhere they do business.

Accepted Answer

A) True 
 B)False

Question 20

On which of the following transactions should sales tax be collected?

Accepted Answer

A)  Architecture plans delivered through the mail. 
B)  Sales of woolen goods to a state without nexus delivered through common carrier. 
C)  Accounting services provided in Alaska. 
D)  Meal purchased at McDonald's. 
A)  Architecture plans delivered through the mail. 
B)  Sales of woolen goods to a state without nexus delivered through common carrier. 
C)  Accounting services provided in Alaska. 
D)  Meal purchased at McDonald's.

The property factor is the average of beginning and ending property values.

Discuss the steps necessary to determine whether a sales or use tax applies and how the tax is collected.

The annual value of rented property is included in the property factor.

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

Rental income is allocated to the state of commercial domicile.

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

A unitary return includes only companies included on a federal consolidated tax return.

What was the Supreme Court's holding in Quill?

The Quill decision reaffirmed that out-of-state businesses must have physical presence within a state before the state may require the collection of sales taxes from in-state customers.

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

Which of the following is not a nonincome based tax?

Bethesda Corporation is unprotected from income tax by Public Law 86-272. Which of the following characteristics creates a problem for Bethesda in states other than Maryland?

Nondomiciliary businesses are subject to tax everywhere they do business.

On which of the following transactions should sales tax be collected?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating 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 of the Cfa Institute

Filters

Exam 23: State and Local Taxes

The property factor is the average of beginning and ending property values.

Discuss the steps necessary to determine whether a sales or use tax applies and how the tax is collected.

The annual value of rented property is included in the property factor.

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

Rental income is allocated to the state of commercial domicile.

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

A unitary return includes only companies included on a federal consolidated tax return.

What was the Supreme Court's holding in Quill?

The Quill decision reaffirmed that out-of-state businesses must have physical presence within a state before the state may require the collection of sales taxes from in-state customers.

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

Which of the following is not a nonincome based tax?

Bethesda Corporation is unprotected from income tax by Public Law 86-272. Which of the following characteristics creates a problem for Bethesda in states other than Maryland?

Nondomiciliary businesses are subject to tax everywhere they do business.

On which of the following transactions should sales tax be collected?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating 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 of the Cfa Institute

Filters