Boot Corporation is subject to income tax in States A and B. Boot's operations generated $200,000 of apportionable income, and its sales and payroll activity and average property owned in each of the states is as follows. \[\begin{array} { l r r r } & \text { State A } & \text { State B } & \text { Totals } \\ \text { Sales } & \$ 200,000 & \$ 600,000 & \$ 800,000 \\ \text { Payroll } & 100,000 & 50,000 & 150,000 \\ \text { Property } & 200,000 & 50,000 & 250,000 \end{array}\] ? How much more (less) of Boot's income is subject to A income tax if, instead of using an equally-weighted three-factor apportionment formula, A uses a formula with a double-weighted sales factor?

A) ($50,000) B) $50,000 C) $16,100 D) ($16,100) A) ($50,000) B) $50,000 C) $16,100 D) ($16,100)

Hopper Corporation's property holdings in State E are as follows. $\begin{array}{lc} &\text { Property factor}\\ \text { Item }&\text { valuation (\$M)}\\ \text { Manufacturing equipment } & 100 \\ \text { Land held for potential appreciation } & 25 \\ \text { Manufacturing equipment that is not currently needed and sits idle } & 15 \\ \text { Manufacturing equipment that is not currently needed and is leased } & 20 \\ \text { to another taxp ayer } & \end{array}$ Compute the numerator of Hopper's E property factor.

A) $100 million. B) $135 million. C) $140 million. D) $160 million. A) $100 million. B) $135 million. C) $140 million. D) $160 million.

Exam 16: Multi-State Corporate Taxations

Typically exempt from the sales/use tax base is the purchase of lumber by a do-it-yourself homeowner, when she builds a deck onto her patio. This exemption is known as the "homestead rule."

(True/False)

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Question 21

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. -Purchasing ads that show up on search-result screens for internet browsers.

(Multiple Choice)

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Question 22

Sales/use tax in most states applies to a restaurant meal.

(True/False)

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Question 23

Match each of the following events, considered independently, to its likely effect on WillCo's various apportionment factors. WillCo is based in Q and has customers in Q, R, and S. To this point, WillCo has not established nexus with S. More than one choice may be correct. -Q adopts a sales-only apportionment formula.

(Multiple Choice)

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Question 24

Boot Corporation is subject to income tax in States A and B. Boot's operations generated $200,000 of apportionable income, and its sales and payroll activity and average property owned in each of the states is as follows. State A State B Totals Sales \ 200,000 \ 600,000 \ 800,000 Payroll 100,000 50,000 150,000 Property 200,000 50,000 250,000 ? How much more (less) of Boot's income is subject to A income tax if, instead of using an equally-weighted three-factor apportionment formula, A uses a formula with a double-weighted sales factor?

(Multiple Choice)

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Question 25

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

(True/False)

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Question 26

In conducting multistate tax planning, the taxpayer should:

(Multiple Choice)

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Question 27

Usually a business chooses a location where it will build a new plant based chiefly on tax considerations.

(True/False)

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Question 28

Hopper Corporation's property holdings in State E are as follows. Property factor Item valuation ( \M ) Manufacturing equipment 100 Land held for potential appreciation 25 Manufacturing equipment that is not currently needed and sits idle 15 Manufacturing equipment that is not currently needed and is leased 20 to another taxp ayer Compute the numerator of Hopper's E property factor.

(Multiple Choice)

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Question 29

Under common terminology, a unitary group files a ____________________ (combined/consolidated) state income tax return.

(Short Answer)

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Question 30

List at least five items that are included in the payroll factor of a typical state. Consider all forms of compensation that an employee might receive. Apply the general UDITPA rules.

(Essay)

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Question 31

An ad valorem property tax is based on the asset's current ____________________.

(Short Answer)

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Question 32

The typical state sales/use tax falls on sales of both real and personal property.

(True/False)

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Question 33

Mercy Corporation, headquartered in State F, sells wireless computer devices, including keyboards and bar code readers. Mercy's degree of operations is sufficient to establish nexus only in States E and F. Determine its sales factor in those states. State E applies a throwback rule to sales, while State F does not. State G has not adopted an income tax to date. Mercy reported the following sales for the year. All of the goods were shipped from Mercy's F manufacturing facilities. Customer Customer's Location This Year's Sales NorCo E \ 60,000,000 Tools, Inc. F 20,000,000 UniBell G 50,000,000 U.S. Department of Defense All 50 U.S. States 20,000,000 Total

(Essay)

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Question 34

The sales/use tax that is employed by most U.S. states does not fall on all retail transactions. Identify at least five sales/use tax exemptions that states often allow, eliminating certain transactions from the tax base.

(Essay)

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Question 35

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. -Checking the customer's inventory to determine whether a reorder is needed.

(Multiple Choice)

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Question 36

Double weighting the sales factor effectively decreases the corporate income tax burden on taxpayers based in the state, such as entities with in-state headquarters.

(True/False)

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Question 37

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected. -A garment purchased by a self-employed actress.

(Multiple Choice)

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Question 38

The model law relating to the assignment of income among the states for corporations is:

(Multiple Choice)

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Question 39

The starting point in computing state taxable income generally is ____________________.

(Short Answer)

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Question 40

Showing 21 - 40 of 182

Typically exempt from the sales/use tax base is the purchase of lumber by a do-it-yourself homeowner, when she builds a deck onto her patio. This exemption is known as the "homestead rule."

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. -Purchasing ads that show up on search-result screens for internet browsers.

Sales/use tax in most states applies to a restaurant meal.

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

In conducting multistate tax planning, the taxpayer should:

Usually a business chooses a location where it will build a new plant based chiefly on tax considerations.

Under common terminology, a unitary group files a ____________________ (combined/consolidated) state income tax return.

List at least five items that are included in the payroll factor of a typical state. Consider all forms of compensation that an employee might receive. Apply the general UDITPA rules.

An ad valorem property tax is based on the asset's current ____________________.

The typical state sales/use tax falls on sales of both real and personal property.

The sales/use tax that is employed by most U.S. states does not fall on all retail transactions. Identify at least five sales/use tax exemptions that states often allow, eliminating certain transactions from the tax base.

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. -Checking the customer's inventory to determine whether a reorder is needed.

Double weighting the sales factor effectively decreases the corporate income tax burden on taxpayers based in the state, such as entities with in-state headquarters.

Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected. -A garment purchased by a self-employed actress.

The model law relating to the assignment of income among the states for corporations is:

The starting point in computing state taxable income generally 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

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