Question 1

A city might assess a recording tax when a business takes out a mortgage on its real estate.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses
-State income tax expense.

Accepted Answer

A) Addition modification 
B) Subtraction modification 
C) No modification 
A) Addition modification 
B) Subtraction modification 
C) No modification

Question 3

Trayne Corporation's sales office and manufacturing plant are located in State X. Trayne also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, X defines payroll as all compensation paid to employees, including elective contributions to § 401(k) deferred compensation plans. Under the statutes of W, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Trayne incurred the following personnel costs.   Trayne's payroll factor for State X is:

Accepted Answer

A)  100.00%. 
B)  66.67%. 
C)  62.50%. 
D)  50.00%. 
A)  100.00%. 
B)  66.67%. 
C)  62.50%. 
D)  50.00%.

Question 4

A taxpayer has nexus with a state for sales and use tax purposes if it has a physical presence in the state.

Accepted Answer

A) True 
 B)False

Question 5

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses
-Federal general business credit.

Accepted Answer

A) Addition modification 
B) Subtraction modification 
C) No modification 
A) Addition modification 
B) Subtraction modification 
C) No modification

Question 6

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a customer in B. This activity is not sufficient for General to create nexus with B. State B applies a throwback rule, but State A does not. In which state(s) will the sale be included in the sales factor numerator?

Accepted Answer

A)  $0 in both A and B. 
B)  $100,000 in A. 
C)  $100,000 in B. 
D)  In both A and B, according to the apportionment formulas of each. 
A)  $0 in both A and B. 
B)  $100,000 in A. 
C)  $100,000 in B. 
D)  In both A and B, according to the apportionment formulas of each.

Question 7

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected
a.Taxable
b.Not taxable
-A textbook purchased by a State University student.

Accepted Answer

A) Taxable 
B) Not taxable 
A) Taxable 
B) Not taxable

Question 8

Under P.L. 86-272, the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 9

Parent Corporation owns all of the stock of Junior Corporation, a Delaware passive investment company. Parent operates strictly in nonunitary State B, which levies a 9% income tax. This year, Junior earned $200,000 of portfolio interest income and paid a $150,000 dividend to Parent. In which state(s) will the interest income create an income tax liability?

Accepted Answer

A)  Only in B. 
B)  Only in Delaware. 
C)  In neither state. 
D)  In both B and Delaware, according to the apportionment formulas of each. 
A)  Only in B. 
B)  Only in Delaware. 
C)  In neither state. 
D)  In both B and Delaware, according to the apportionment formulas of each.

Question 10

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected
a.Taxable
b.Not taxable
-Earthmoving equipment used by the purchaser in construction business.

Accepted Answer

A) Taxable 
B) Not taxable 
A) Taxable 
B) Not taxable

Question 11

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

Accepted Answer

A)  $0 in A. 
B)  $50,000 in A, with the balance exempted from other states' sales factors under the Colgate doctrine. 
C)  $100,000 in A. 
D)  In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states. 
A)  $0 in A. 
B)  $50,000 in A, with the balance exempted from other states' sales factors under the Colgate doctrine. 
C)  $100,000 in A. 
D)  In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states.

Question 12

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a customer in B. This activity is not sufficient for General to create nexus with B. State A applies a throwback rule, but State B does not. In which state(s) will the sale be included in the sales factor numerator?

Accepted Answer

A)  $0 in both A and B. 
B)  $100,000 in A. 
C)  $100,000 in B. 
D)  In both A and B, according to the apportionment formulas of each. 
A)  $0 in both A and B. 
B)  $100,000 in A. 
C)  $100,000 in B. 
D)  In both A and B, according to the apportionment formulas of each.

Question 13

If a state follows Federal income tax rules, the state's tax compliance and enforcement become easier to accomplish.

Accepted Answer

A) True 
 B)False

Question 14

All of the U.S. states use an apportionment formula based on the sales, property, and payroll factors.

Accepted Answer

A) True 
 B)False

Question 15

A state can levy an income tax on a business only if the business was incorporated in the state.

Accepted Answer

A) True 
 B)False

Question 16

Most states exempt consumer purchases of groceries from the collection of the local sales tax.

Accepted Answer

A) True 
 B)False

Question 17

For most taxpayers, which of the traditional apportionment factors yields the greatest opportunities for tax reduction?

Accepted Answer

A)  Payroll. 
B)  Property. 
C)  Sales (gross receipts). 
D)  Unitary. 
A)  Payroll. 
B)  Property. 
C)  Sales (gross receipts). 
D)  Unitary.

Question 18

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

Accepted Answer

A) True 
 B)False

Question 19

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Accepted Answer

A) True 
 B)False

Question 20

Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions.   ​
Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez's A taxable income is:

Accepted Answer

A)  $495,000. 
B)  $500,000. 
C)  $545,000. 
D)  $595,000. 
A)  $495,000. 
B)  $500,000. 
C)  $545,000. 
D)  $595,000.

A city might assess a recording tax when a business takes out a mortgage on its real estate.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses -State income tax expense.

A taxpayer has nexus with a state for sales and use tax purposes if it has a physical presence in the state.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses -Federal general business credit.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected a.Taxable b.Not taxable -A textbook purchased by a State University student.

Under P.L. 86-272, the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of stocks and bonds.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected a.Taxable b.Not taxable -Earthmoving equipment used by the purchaser in construction business.

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

If a state follows Federal income tax rules, the state's tax compliance and enforcement become easier to accomplish.

All of the U.S. states use an apportionment formula based on the sales, property, and payroll factors.

A state can levy an income tax on a business only if the business was incorporated in the state.

Most states exempt consumer purchases of groceries from the collection of the local sales tax.

For most taxpayers, which of the traditional apportionment factors yields the greatest opportunities for tax reduction?

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez's A taxable income is:

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 16: Multistate Corporate Taxation

A city might assess a recording tax when a business takes out a mortgage on its real estate.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses -State income tax expense.

A taxpayer has nexus with a state for sales and use tax purposes if it has a physical presence in the state.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses -Federal general business credit.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected a.Taxable b.Not taxable -A textbook purchased by a State University student.

Under P.L. 86-272, the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of stocks and bonds.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected a.Taxable b.Not taxable -Earthmoving equipment used by the purchaser in construction business.

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

If a state follows Federal income tax rules, the state's tax compliance and enforcement become easier to accomplish.

All of the U.S. states use an apportionment formula based on the sales, property, and payroll factors.

A state can levy an income tax on a business only if the business was incorporated in the state.

Most states exempt consumer purchases of groceries from the collection of the local sales tax.

For most taxpayers, which of the traditional apportionment factors yields the greatest opportunities for tax reduction?

Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions. ​ Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez's A taxable income is:

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Ramirez Corporation is subject to tax only in State A. Ramirez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Ramirez's A taxable income is: