Question 1

Rental income is allocated to the state of commercial domicile.
Allocate rental income to the state where the rental property is located.

Accepted Answer

A) True 
 B)False

Question 2

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.Since the dress is shipped to Maryland, Roxy owes no tax. Lisa will owe Maryland use tax. 
A)  $0. 
B)  $75 to Virginia. 
C)  $75 sales tax to Virginia and $15 use tax to Maryland. 
D) $90 to MarylanD.Since the dress is shipped to Maryland, Roxy owes no tax. Lisa will owe Maryland use tax.

Question 3

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

Accepted Answer

A)  Legislative 
B)  Administrative 
C)  Judicial 
D) Treatises 
A)  Legislative 
B)  Administrative 
C)  Judicial 
D) Treatises

Question 4

In Complete Auto Transit the court determined eight criteria for determining whether a state can tax a nondomiciliary company.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

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. 
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.

Question 7

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

Accepted Answer

A)  Uses the average property values for the year. 
B)  Values property at historical cost. 
C)  Excludes property in transit from the calculation. 
D) Includes rented property at eight times the annual rent. 
A)  Uses the average property values for the year. 
B)  Values property at historical cost. 
C)  Excludes property in transit from the calculation. 
D) Includes rented property at eight times the annual rent.

Question 8

Public Law 86-272 protects only companies selling tangible personal property.

Accepted Answer

A) True 
 B)False

Question 9

What was the Supreme Court's holding in Complete Auto Transit?

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 10

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows:
Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that was shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor?

Accepted Answer

@#IMG-DLM& $1,053,293 and 46.98 percent.

Question 11

Historically, most states used an equally weighted three-factor apportionment formula.

Accepted Answer

A) True 
 B)False

Question 12

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 sales tax and $70 Distr

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Most services are sourced to the state where the services were performed.

Accepted Answer

A) True 
 B)False

Question 16

Business income is allocated to the state of commercial domicile.
Business income is apportioned based on the extent of business's activity and property in various states.

Accepted Answer

A) True 
 B)False

Question 17

The throwback rule includes inventory in transit in the numerator of the state from where it was shipped.

Accepted Answer

A) True 
 B)False

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.The sale of services is not a protected activity. 
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.The sale of services is not a protected activity.

Question 19

The annual value of rented property is not included in the property factor.
The annual value of rental property is multiplied by eight and then added to the property factor.

Accepted Answer

A) True 
 B)False

Question 20

The trade-show rule allows businesses to maintain a sample room for up to four weeks per year.
The time limit is typically two weeks or less.

Accepted Answer

A) True 
 B)False

Rental income is allocated to the state of commercial domicile. Allocate rental income to the state where the rental property is located.

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

In Complete Auto Transit the court determined eight criteria for determining whether a state can tax a nondomiciliary company.

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

Which of the items is correct regarding a use tax?

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

Public Law 86-272 protects only companies selling tangible personal property.

What was the Supreme Court's holding in Complete Auto Transit?

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows: Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that was shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor?

Historically, most states used an equally weighted three-factor apportionment formula.

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

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

Most services are sourced to the state where the services were performed.

Business income is allocated to the state of commercial domicile. Business income is apportioned based on the extent of business's activity and property in various states.

The throwback rule includes inventory in transit in the numerator of the state from where it was shipped.

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?

The annual value of rented property is not included in the property factor. The annual value of rental property is multiplied by eight and then added to the property factor.

The trade-show rule allows businesses to maintain a sample room for up to four weeks per year. The time limit is typically two weeks or less.

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, 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

Rental income is allocated to the state of commercial domicile. Allocate rental income to the state where the rental property is located.

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

In Complete Auto Transit the court determined eight criteria for determining whether a state can tax a nondomiciliary company.

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

Which of the items is correct regarding a use tax?

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

Public Law 86-272 protects only companies selling tangible personal property.

What was the Supreme Court's holding in Complete Auto Transit?

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows: Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that was shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor?

Historically, most states used an equally weighted three-factor apportionment formula.

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

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

Most services are sourced to the state where the services were performed.

Business income is allocated to the state of commercial domicile. Business income is apportioned based on the extent of business's activity and property in various states.

The throwback rule includes inventory in transit in the numerator of the state from where it was shipped.

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?

The annual value of rented property is not included in the property factor. The annual value of rental property is multiplied by eight and then added to the property factor.

The trade-show rule allows businesses to maintain a sample room for up to four weeks per year. The time limit is typically two weeks or less.

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, 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