PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: \[\begin{array} { l r l } \underline{\text { Item }} & \underline{\text { Amount }} & \underline{\text { Federal Treatment }} \\ \text { Illinois Income Taxes } & \$ 33,333 & \text { Deducted on federal return } \\ \text { Indiana Income Taxes } & \$ 18,500 & \text { Deducted on federal return } \\ \text { Ohio Commercial Activity Tax } & \$ 4,000 & \text { Deducted on federal return } \\ \text { Illinois Bond Interest } & \$ 10,000 & \text { Excluded from federal return } \\ \text { Indiana Bond Interest } & \$ 15,000 & \text { Excluded from federal return } \\ \text { Federal T-Note Interest } & \$ 2,500 & \text { Included on federal return } \end{array}\] PWD's Federal Taxable Income was $100,000. Calculate PWD's Illinois state tax base.

A) $116,000 B) $130,833 C) $131,000 D) $140,833 A) $116,000 B) $130,833 C) $131,000 D) $140,833

Exam 23: State and Local Taxes

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows: Tennis Pro's Payroll: DC Georgia Virginia Other Totals PavroIl \ 45,500 \ 80,000 \ 250,000 \ 465,500 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?

(Essay)

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Question 61

Which of the following regarding the state tax base is incorrect?

(Multiple Choice)

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Question 62

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

(True/False)

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Question 63

Which of the following sales is always subject to sales and use tax?

(Multiple Choice)

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Question 64

The Mobil decision identified three factors to determine whether a group of companies are unitary.

(True/False)

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Question 65

Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

(Multiple Choice)

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Question 66

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

(Multiple Choice)

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Question 67

Assume Tennis Pro attends a sports equipment expo in Washington State. Assume this activity creates nexus of the Business and Occupation (B&O) tax. Assume the tax is .5% of gross receipts for retailers and 1.5% of gross receipts on services. If Tennis Pro has $20,000 of Washington retail sales and $2,000 of services performed, calculate Tennis Pro's B&O tax.

(Essay)

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Question 68

Which of the following states is not asserting economic nexus?

(Multiple Choice)

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Question 69

PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: Illinois Income Taxes \ 33,333 Deducted on federal return Indiana Income Taxes \ 18,500 Deducted on federal return Ohio Commercial Activity Tax \ 4,000 Deducted on federal return Illinois Bond Interest \ 10,000 Excluded from federal return Indiana Bond Interest \ 15,000 Excluded from federal return Federal T-Note Interest \ 2,500 Included on federal return PWD's Federal Taxable Income was $100,000. Calculate PWD's Illinois state tax base.

(Multiple Choice)

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Question 70

Mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, Wisconsin, and Wyoming. It has sales personnel only where discussed. Determine the state in which Mighty Manny does not have sales and use tax nexus given the following scenarios:

(Multiple Choice)

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Question 71

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

(True/False)

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Question 72

Federal/state adjustments correct for differences between two states tax laws.

(True/False)

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Question 73

Which of the following is not a general rule for allocating nonbusiness income?

(Multiple Choice)

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Question 74

Purchases of inventory for resale are typically exempt from sales and use taxes.

(True/False)

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Question 75

The sales and use tax base varies from state to state.

(True/False)

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Question 76

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

(True/False)

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Question 77

Business income is allocated to the state of commercial domicile.

(True/False)

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Question 78

Interest and dividends are allocated to the state of commercial domicile.

(True/False)

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Question 79

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

(Multiple Choice)

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Question 80

Exam 23: State and Local Taxes

Which of the following regarding the state tax base is incorrect?

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

Which of the following sales is always subject to sales and use tax?

The Mobil decision identified three factors to determine whether a group of companies are unitary.

Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

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

Which of the following states is not asserting economic nexus?

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

Federal/state adjustments correct for differences between two states tax laws.

Which of the following is not a general rule for allocating nonbusiness income?

Purchases of inventory for resale are typically exempt from sales and use taxes.

The sales and use tax base varies from state to state.

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

Business income is allocated to the state of commercial domicile.

Interest and dividends are allocated to the state of commercial domicile.

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

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

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