Carolina's Hats has the following sales, payroll and property factors: \[\begin{array} { l c c } & \begin{array} { c } \text { North } \\ \underline{\text { Carolina }} \end{array} & \begin{array} { c } \text { South } \\ \underline{\text { Carolina }} \end{array} \\ \text { Sales } & 75.03 \% & 22.51 \% \\ \text { Payroll } & 68.62 \% & 21.28 \% \\ \text { Proprty } & 78.45 \% & 14.56 \% \end{array}\] 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?

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.

Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store which ships to out of state customers. The ski tours operate in Maine, New Hampshire, and Vermont where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales: $\begin{array}{l} \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Mahre Sales }\\ \begin{array}{lrrrr} \underline{\text { State }} & \underline{\text { Goods }} & \underline{\text { Services }} & \underline{\text { Total }} \\ \text{Alaska} & \$ 23,194 & \$ 0 & \$ 23,194 \\ \text { Colorado } & 10,612 & 0 & 10,612 \\ \text { Maine } & 35,913 & 156,084 & 191,997 \\ \text { New Hampshire } & 26,721 & 325,327 & 352,048 \\ \text { New York } & 65,431 & 0 & 65,431 \\ \text { Vermont } & \underline{41,982} & \underline{277,441} & \underline{319,423} \\ \text { Totals } & \$ 203,853 & \$ 758,852 & \$ 962,705 \end{array} \end{array}$ Assume the following tax rates: Alaska (6.6 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (6.75 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit in Maine?

A) $0 B) $3,053 C) $13,267 D) $16,319 A) $0 B) $3,053 C) $13,267 D) $16,319

Lefty provides demolition services in several southern states. Lefty has property as follows: \[\begin{array} { l r r r } & { \text { Property } } \\ \text { State } & \underline { \text { Beginning } } & \underline{ \text { Ending } } \\ \text { Alabama } & \$ 123,032 & \$ 204,235 \\ \text { Kentucky } & \$ 203,311 & \$ 185,102 \\ \text { Mississippi } & \$ 881,921 & \$ 1,002,384 \\ \text { Louisiana } & \$ 243,945 & \$ 350,304 \\ \text { Tennessee } & \underline{\$ 143,198} & \underline{\$ 143,198} \\ \text { Total } & \$ 1,595,407 & \$ 1,885,223 \end{array}\] Lefty is a Mississippi Corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $50,000 and $15,000, respectively. What is Lefty's Mississippi property numerator?

A) $942,153 B) $1,002,384 C) $1,052,384 D) $1,342,153 A) $942,153 B) $1,002,384 C) $1,052,384 D) $1,342,153

Exam 23: State and Local Taxes

Carolina's Hats has the following sales, payroll and property factors: North South Sales 75.03\% 22.51\% Payroll 68.62\% 21.28\% Proprty 78.45\% 14.56\% 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?

(Multiple Choice)

4.8/5

(74)

Question 21

Public Law 86-272 was a congressional response to Northwestern States Portland Cement.

(True/False)

4.8/5

(79)

Question 22

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.

(True/False)

4.7/5

(94)

Question 23

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

(True/False)

4.8/5

(69)

Question 24

The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

(True/False)

5.0/5

(83)

Question 25

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: Tennis Pro's Property: DC \ 43,021 \ 41,983 Georgia \ 92,385 \ 83,024 Virginia \ 1,331,919 \ 1,438,439 Other Totals \ 1,535,528 \ 1,631,649 What is Tennis Pro's Virginia property numerator and property factor?

(Essay)

4.8/5

(80)

Question 26

A state's apportionment formula usually relies on some variation of sales, payroll, and property factors.

(True/False)

4.8/5

(68)

Question 27

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

(Multiple Choice)

4.9/5

(70)

Question 28

Which of the following statements regarding income tax commercial domicile is incorrect?

(Multiple Choice)

4.9/5

(75)

Question 29

Delivery of tangible personal property through common carrier is a protected activity.

(True/False)

5.0/5

(73)

Question 30

Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store which ships to out of state customers. The ski tours operate in Maine, New Hampshire, and Vermont where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales: Mahre Sales Alaska \ 23,194 \ 0 \ 23,194 Colorado 10,612 0 10,612 Maine 35,913 156,084 191,997 New Hampshire 26,721 325,327 352,048 New York 65,431 0 65,431 Vermont Totals \ 203,853 \ 758,852 \ 962,705 Assume the following tax rates: Alaska (6.6 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (6.75 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit in Maine?

(Multiple Choice)

4.9/5

(73)

Question 31

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

(True/False)

4.8/5

(79)

Question 32

Assume Tennis Pro discovered that one salesman has gone into Arkansas once each year of the past 4 years and performed activities creating both sales and use tax nexus and income tax nexus. Assume that Arkansas sales were $25,000 each year. Assume that Arkansas business income would be 200,000 each year and that Tennis Pro's Arkansas apportionment percentage would be 1 percent. Assume there would be no Arkansas nonbusiness income. Assume that Arkansas sales and use tax rate was 6.5 percent and corporate income tax rate was 5 percent. What would Tennis Pro's Arkansas sales and use tax and income tax liability be ignoring any possible penalties and interest?

(Essay)

4.8/5

(89)

Question 33

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

(True/False)

4.9/5

(74)

Question 34

All states employ some combination of sales and use tax, income or franchise tax, or property tax.

(True/False)

4.8/5

(89)

Question 35

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

(Multiple Choice)

4.9/5

(78)

Question 36

Several states are now asserting economic nexus.

(True/False)

4.8/5

(81)

Question 37

Separate return states require each member of a consolidated group with nexus to file their own state tax return.

(True/False)

4.8/5

(82)

Question 38

Lefty provides demolition services in several southern states. Lefty has property as follows: Property State Alabama \ 123,032 \ 204,235 Kentucky \ 203,311 \ 185,102 Mississippi \ 881,921 \ 1,002,384 Louisiana \ 243,945 \ 350,304 Tennessee Total \ 1,595,407 \ 1,885,223 Lefty is a Mississippi Corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $50,000 and $15,000, respectively. What is Lefty's Mississippi property numerator?

(Multiple Choice)

4.8/5

(97)

Question 39

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. Determine the sales and use tax liability that the Shop must collect and remit if it sells a $500 racquet to a Tennessee customer that purchases the merchandise in the retail store?

(Short Answer)

4.7/5

(75)

Question 40

Public Law 86-272 was a congressional response to Northwestern States Portland Cement.

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.

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

The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

A state's apportionment formula usually relies on some variation of sales, payroll, and property factors.

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

Which of the following statements regarding income tax commercial domicile is incorrect?

Delivery of tangible personal property through common carrier is a protected activity.

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

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

All states employ some combination of sales and use tax, income or franchise tax, or property tax.

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

Several states are now asserting economic nexus.

Separate return states require each member of a consolidated group with nexus to file their own state tax return.

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

Filters