Question 1

Physical presence does not always create sales and use tax nexus.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following businesses is likely to have taxable sales for purposes of sales and use tax?

Accepted Answer

A)  Campus bookstore selling textbooks and university apparel. 
B)  An online retailer of textbooks. 
C)  A local accounting firm. 
D) Mail order clothing company. 
A)  Campus bookstore selling textbooks and university apparel. 
B)  An online retailer of textbooks. 
C)  A local accounting firm. 
D) Mail order clothing company.

Question 3

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

Accepted Answer

A)  Tax preparation services. 
B)  Automobiles. 
C)  Inventory. 
D) FooD.Automobiles are tangible personal property included in the sales tax base of every state which chooses to tax sales. 
A)  Tax preparation services. 
B)  Automobiles. 
C)  Inventory. 
D) FooD.Automobiles are tangible personal property included in the sales tax base of every state which chooses to tax sales.

Question 4

Super Sadie, Incorporated manufactures sandals and distributes them across the southwestern United States. Super Sadie is incorporated and headquartered in Arizona. It has product sales to customers in Arizona, California, Colorado, New Mexico, Oregon, Texas, and Utah. It has sales personnel in California, Colorado, and New Mexico. It also owns an office building in Arizona and a Warehouse in Texas. Determine the states in which Super Sadie has sales and use tax nexus.

Accepted Answer

Arizona, California, Colorado, New Mexic

Question 5

In recent years, states are weighting the sales factor because it is easier to calculate.
Weighting the sales factor tends to decrease taxes on in-state businesses and increase taxes on out-of-state businesses.

Accepted Answer

A) True 
 B)False

Question 6

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows:
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?

Accepted Answer

@#IMG-DLM& $260,000 and 55.85 percent.
E

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A state's apportionment formula divides nonbusiness income among the states where nexus exists.
Business income is apportioned among the states; whereas, nonbusiness income is allocated to a specific state (usually the state of commercial domicile).

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows:
What is Tennis Pro's Virginia property numerator and property factor?

Accepted Answer

@#IMG-DLM& $1,385,179 and 87.47 percent.

Question 11

Nondomiciliary businesses are subject to tax everywhere they do business.
Nondomiciliary businesses are only subject to tax where they have nexus.

Accepted Answer

A) True 
 B)False

Question 12

The National Bellas Hess decision held that an out-of-state mail-order company did not have sales tax collection responsibility because it lacked physical presence.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Public Law 86-272 protects certain business activities from creating income tax nexus.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Most state tax laws adopt the federal tax law as of a specific date in time.

Accepted Answer

A) True 
 B)False

Question 17

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro sells, manufacturers, and customizes tennis racquets for serious amateurs. Tennis Pro's business has expanded significantly over the last few years. Currently, it has sales personnel in 10 states (Virginia, North Carolina, South Carolina, Georgia, Tennessee, Kentucky, Ohio, Maryland, District of Columbia, New Jersey). All in state activity is limited to solicitation. Orders are taken by the sales team and forwarded to Blacksburg for approval. All orders are sent by common carrier to customers. Tennis Pro owns retail and warehouse space in Virginia and has another warehouse in Kentucky. Where does Tennis Pro have income tax nexus?

Accepted Answer

Virginia and Kentucky.
Explana

Question 18

Carolina's Hats has the following sales, payroll and property factors:
What is Carolina's Hats North and South Carolina apportionment factors if North Carolina uses an equally-weighted three-factor formula and South Carolina uses a double-weighted sales factor formula? (Round your answers to two decimal places)
$$\begin{array} { | l | c | c | } 
\hline & \text { North Carolina } & \text { South Carolna } \
\hline \text { Sales } & 75.03 \% & 22.51 \% \
\hline \text { Payroll } & 68.62 \% & 21.28 \% \
\hline \text { Property } & 78.45 \% & 14.56 \% \
\hline
\end{array}$$

Accepted Answer

A)  North Carolina 74.03 percent, and South Carolina 19.45 percent. 
B)  North Carolina 74.03 percent, and South Carolina 20.22 percent. 
C)  North Carolina 74.28 percent, and South Carolina 19.45 percent. 
D) North Carolina 74.28 percent, and South Carolina 22.51 percent. 
A)  North Carolina 74.03 percent, and South Carolina 19.45 percent. 
B)  North Carolina 74.03 percent, and South Carolina 20.22 percent. 
C)  North Carolina 74.28 percent, and South Carolina 19.45 percent. 
D) North Carolina 74.28 percent, and South Carolina 22.51 percent.

Question 19

Federal/state adjustments correct for differences between two states tax laws.
Federal/state adjustments reconcile between federal taxable income and state taxable income.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

Determine the state tax base, divide int

Physical presence does not always create sales and use tax nexus.

Which of the following businesses is likely to have taxable sales for purposes of sales and use tax?

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

In recent years, states are weighting the sales factor because it is easier to calculate. Weighting the sales factor tends to decrease taxes on in-state businesses and increase taxes on out-of-state businesses.

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows: 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?

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

A state's apportionment formula divides nonbusiness income among the states where nexus exists. Business income is apportioned among the states; whereas, nonbusiness income is allocated to a specific state (usually the state of commercial domicile).

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

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: What is Tennis Pro's Virginia property numerator and property factor?

Nondomiciliary businesses are subject to tax everywhere they do business. Nondomiciliary businesses are only subject to tax where they have nexus.

The National Bellas Hess decision held that an out-of-state mail-order company did not have sales tax collection responsibility because it lacked physical presence.

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

Public Law 86-272 protects certain business activities from creating income tax nexus.

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

Most state tax laws adopt the federal tax law as of a specific date in time.

Federal/state adjustments correct for differences between two states tax laws. Federal/state adjustments reconcile between federal taxable income and state taxable income.

List the steps necessary to determine an interstate businesses' 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, 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

Physical presence does not always create sales and use tax nexus.

Which of the following businesses is likely to have taxable sales for purposes of sales and use tax?

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

In recent years, states are weighting the sales factor because it is easier to calculate. Weighting the sales factor tends to decrease taxes on in-state businesses and increase taxes on out-of-state businesses.

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows: 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?

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

A state's apportionment formula divides nonbusiness income among the states where nexus exists. Business income is apportioned among the states; whereas, nonbusiness income is allocated to a specific state (usually the state of commercial domicile).

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

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: What is Tennis Pro's Virginia property numerator and property factor?

Nondomiciliary businesses are subject to tax everywhere they do business. Nondomiciliary businesses are only subject to tax where they have nexus.

The National Bellas Hess decision held that an out-of-state mail-order company did not have sales tax collection responsibility because it lacked physical presence.

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

Public Law 86-272 protects certain business activities from creating income tax nexus.

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

Most state tax laws adopt the federal tax law as of a specific date in time.

Federal/state adjustments correct for differences between two states tax laws. Federal/state adjustments reconcile between federal taxable income and state taxable income.

List the steps necessary to determine an interstate businesses' 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, 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