Question 1

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 2

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: $$\begin{array}{l}
\text { Tennis Pro's Property: }\
\begin{array} { l r r r } 
\underline{\text { State }} & \underline{\text { Beginning }} & & \underline{\text { Ending }} \
\text { DC } & \$ 43,021 & & \$ 41,983 \
\text { Georgia } & \$ 92,385 & & \$ 83,024 \
\text { Virginia } & \$ 1,331,919 & & \$ 1,438,439 \
\text { Other } & \underline { \$ 68,203 } & & \underline{\$ 68,203} \
\text { Totals } & \$ 1,535,528 & & \$ 1,631,649
\end{array}
\end{array}$$ Tennis Pro also rents Virginia property at an annual rent of $24,000. What is Tennis Pro's Virginia property numerator and property factor?

Accepted Answer

$1,577,179

Question 3

Tennis Pro is headquartered in Virginia. Assume it has a state income tax base of $200,000. Of this amount, $60,000 was non-business income. Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent. The non-business income allocated to Virginia was $23,000. Assuming a Virginia corporate tax rate of 5.5 percent, what is Tennis Pro's Virginia state tax liability?

Accepted Answer

The answer of Tennis Pro is headquartered in Virginia. Assume...

Question 4

Which of the following is not a primary revenue source for most states?

Accepted Answer

A)  Income or franchise taxes 
B)  Sales or use taxes 
C)  Severance taxes 
D)  Property taxes 
A)  Income or franchise taxes 
B)  Sales or use taxes 
C)  Severance taxes 
D)  Property taxes

Question 5

A state's apportionment formula divides nonbusiness income among the states where nexus exists.

Accepted Answer

A) True 
 B)False

Question 6

Mighty Manny, Incorporated manufactures and services deli machinery and distributes them across the United States. Mighty Manny is incorporated and headquartered in New Jersey. It has product sales in all 50 states. Mighty Manny service employees work in Connecticut, New Jersey, New York, Pennsylvania, and Rhode Island. Mighty Manny also has an executive training seminar each year in South Carolina. Determine the states in which Mighty Manny has sales and use tax nexus.

Accepted Answer

Connecticut, New Jer

Question 7

Use tax liability accrues in the state where purchased property will be used when the seller is not required to collect sales tax.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are false regarding apportionment except?

Accepted Answer

A)  Applies to only business income. 
B)  Applies to only nonbusiness income. 
C)  Applies to both business and nonbusiness income. 
D)  Investment income is subject to apportionment. 
A)  Applies to only business income. 
B)  Applies to only nonbusiness income. 
C)  Applies to both business and nonbusiness income. 
D)  Investment income is subject to apportionment.

Question 9

Mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin. It has sales personnel only where discussed. Determine the state in which Mighty Manny does not have sales and use tax nexus given the following scenarios:

Accepted Answer

A)  Mighty Manny is incorporated and headquartered in Michigan. It also has property, employees, sales personnel, and intangibles in Michigan. 
B)  Mighty Manny has a warehouse in Illinois. 
C)  Mighty Manny has independent sales representatives in Minnesota. The representatives distribute ice scraper-related items for over a dozen companies. 
D)  Mighty Manny has two customers in Wisconsin. Mighty Manny receives orders over the phone and ships goods to its customers using FedEx. 
A)  Mighty Manny is incorporated and headquartered in Michigan. It also has property, employees, sales personnel, and intangibles in Michigan. 
B)  Mighty Manny has a warehouse in Illinois. 
C)  Mighty Manny has independent sales representatives in Minnesota. The representatives distribute ice scraper-related items for over a dozen companies. 
D)  Mighty Manny has two customers in Wisconsin. Mighty Manny receives orders over the phone and ships goods to its customers using FedEx.

Question 10

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Accepted Answer

A) True 
 B)False

Question 11

Wyoming imposes an income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following activities will create sales tax nexus?

Accepted Answer

A)  Advertising using television commercials. 
B)  Salesmen who only take orders. 
C)  Delivery of sales by UPS. 
D)  Electronic delivery of software. 
A)  Advertising using television commercials. 
B)  Salesmen who only take orders. 
C)  Delivery of sales by UPS. 
D)  Electronic delivery of software.

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 for all of its customers. 
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 for all of its customers. 
D)  States choose to implement either a sales tax or a use tax.

Question 16

Big Company and Little Company are both owned by Mrs. Big. Big and Little file a consolidated federal tax return. Big manufactures office paper and other paper supplies and is based in Washington. Little operates a logging operation in Montana. Sixty percent of Little's sales are made to Big. Ten percent of Big's raw materials come from Little. There are no common officers or board members. There are no common service providers. What are the factors for and against filing a unitary tax return?

Accepted Answer

For a unitary tax return: func

Question 17

Which of the following is true regarding state and local taxes?

Accepted Answer

A)  All states impose a state income tax. 
B)  Every jurisdiction imposes a sales or use tax. 
C)  The primary purpose is to raise revenue. 
D)  Property taxes are primarily used to finance a State's general revenue fund. 
A)  All states impose a state income tax. 
B)  Every jurisdiction imposes a sales or use tax. 
C)  The primary purpose is to raise revenue. 
D)  Property taxes are primarily used to finance a State's general revenue fund.

Question 18

Businesses engaged in interstate commerce are subject to tax in every state where they operate.

Accepted Answer

A) True 
 B)False

Question 19

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 $1,000 racquet order to an Alaska customer (assume the Shop has no sales personnel or property in Alaska) that purchases the merchandise over the internet?

Accepted Answer

The answer of Gordon operates the Tennis Pro Shop in...

Question 20

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. Is Tennis Pro subject to Ohio's Commercial Activity Tax?

Accepted Answer

The answer of Gordon operates the Tennis Pro Shop in...

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

Which of the following is not a primary revenue source for most states?

A state's apportionment formula divides nonbusiness income among the states where nexus exists.

Use tax liability accrues in the state where purchased property will be used when the seller is not required to collect sales tax.

All of the following are false regarding apportionment except?

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Wyoming imposes an income tax on corporations.

Which of the following activities will create sales tax nexus?

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

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

Which of the items is correct regarding a use tax?

Which of the following is true regarding state and local taxes?

Businesses engaged in interstate commerce are subject to tax in every state where they operate.

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

Exam 23: State and Local Taxes

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

Which of the following is not a primary revenue source for most states?

A state's apportionment formula divides nonbusiness income among the states where nexus exists.

Use tax liability accrues in the state where purchased property will be used when the seller is not required to collect sales tax.

All of the following are false regarding apportionment except?

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Wyoming imposes an income tax on corporations.

Which of the following activities will create sales tax nexus?

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

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

Which of the items is correct regarding a use tax?

Which of the following is true regarding state and local taxes?

Businesses engaged in interstate commerce are subject to tax in every state where they operate.

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