Question 1

The throwback rule requires that:

Accepted Answer

A) Sales of services are attributed to the state of commercial domicile. 
B) Capital gain/loss is attributed to the state of commercial domicile. 
C) Services are attributed to the state of commercial domicile of the taxpayer, and are not taxable in the state where they were performed. 
D) Sales of tangible personal property are attributed to the state where they originated, if the taxpayer is not taxable in the state of destination. 
A) Sales of services are attributed to the state of commercial domicile. 
B) Capital gain/loss is attributed to the state of commercial domicile. 
C) Services are attributed to the state of commercial domicile of the taxpayer, and are not taxable in the state where they were performed. 
D) Sales of tangible personal property are attributed to the state where they originated, if the taxpayer is not taxable in the state of destination. D

Question 2

-Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B.For the taxable year,the corporation's activities within the two states were as follows.
   
Dott has determined that it is subject to tax in both A and B.Both states utilize a three-factor apportionment formula equally weights sales,property,and payroll.The rates of corporate income tax imposed in A and B are 10% and 6%,respectively.Determine Dott's state income tax liability.

Accepted Answer

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Question 3

When the taxpayer operates in one or more unitary states:

Accepted Answer

A) Apportionment factors are computed on a group-wide basis. 
B) The tax incentive of creating nexus in a low-tax state is enhanced. 
C) The tax benefit of a passive investment subsidiary holding company is neutralized. 
D) The use of a water's edge election should be considered. 
E) All of the above are true. 
A) Apportionment factors are computed on a group-wide basis. 
B) The tax incentive of creating nexus in a low-tax state is enhanced. 
C) The tax benefit of a passive investment subsidiary holding company is neutralized. 
D) The use of a water's edge election should be considered. 
E) All of the above are true. E

Question 4

A use tax:

Accepted Answer

A) Applies when a State A resident purchases a new automobile from a State A dealership. 
B) Applies when a State A resident purchases a new automobile from a State B dealership, then driving the car home. 
C) Applies when a State A resident purchases groceries from a neighborhood store. 
D) Applies when a State A resident purchases hardware from sears.com rather than at the Sears store at the local mall. 
A) Applies when a State A resident purchases a new automobile from a State A dealership. 
B) Applies when a State A resident purchases a new automobile from a State B dealership, then driving the car home. 
C) Applies when a State A resident purchases groceries from a neighborhood store. 
D) Applies when a State A resident purchases hardware from sears.com rather than at the Sears store at the local mall.

Question 5

Bert Corporation,a calendar-year taxpayer,owns property in States M and O.Both M and O require that the average value of assets be included in the property factor.M requires that the property be valued at its historical cost,and O requires that the property be included in the property factor at its net depreciated book value.

Bert's M property factor is:

Accepted Answer

A) 41.67%. 
B) 55.0%. 
C) 56.2%. 
D) 58.33%. 
E) 77.0%. 
A) 41.67%. 
B) 55.0%. 
C) 56.2%. 
D) 58.33%. 
E) 77.0%.

Question 6

A capital stock tax usually is structured as an excise tax imposed on a corporation's "net worth," using balance sheet data to compute the tax.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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
-Spare parts for manufacturing machinery

Accepted Answer

The answer of Match each of the following items with...

Question 9

Valdez Corporation,a calendar-year taxpayer,owns property in States M and O.Both M and O require that the average value of assets be included in the property factor.M requires that the property be valued at its historical cost,and O requires that the property be included in the property factor at its net depreciated book value.

Valdez's property factor for State O is:

Accepted Answer

A) 41.25%. 
B) 44.44%. 
C) 45.0%. 
D) 48.53%. 
E) 51.47%. 
A) 41.25%. 
B) 44.44%. 
C) 45.0%. 
D) 48.53%. 
E) 51.47%.

Question 10

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 11

Ace Corporation owns all of the stock of Junior Corporation,a Delaware passive investment company.Ace operates strictly in nonunitary State B,which levies a 6% income tax.This year,Junior earned $200,000 of portfolio interest income and paid $150,000 of this amount to Ace in the form of a dividend.In which state(s)will the interest income create an income tax liability?

Accepted Answer

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

Question 12

José Corporation realized $600,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales,payroll,and property among the states include the following.
 
Z utilizes a double-weighted sales factor in its three-factor apportionment formula.How much of José's taxable income is apportioned to Z?

Accepted Answer

A) $1,000,000. 
B) $600,000. 
C) $120,000. 
D) $80,000. 
E) $0. 
A) $1,000,000. 
B) $600,000. 
C) $120,000. 
D) $80,000. 
E) $0.

Question 13

Identify some state/local income tax issues facing pass-through entities such as S corporations,partnerships,and LLCs.

Accepted Answer

The answer of Identify some state/local income tax issues facing...

Question 14

Shaker Corporation operates in two states,as indicated below.All goods are manufactured in State A.Determine the sales to be assigned to both states to be used in computing Shaker's sales factor for the year.Both states follow the UDITPA and the MTC regulations in this regard.
   
* Excess warehouse space
** Land held for speculation

Accepted Answer

@#IMG-DLM& 
* Excess warehouse

Question 15

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

Accepted Answer

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

Question 16

City and county governments depend heavily on collections from a property tax..

Accepted Answer

A) True 
 B)False

Question 17

P.L.86-272 ____________________ (does/does not)create nexus when the seller provides its sales personnel with a company-owned computer and Blackberry for order submission.

Accepted Answer

The answer of P.L.86-272 ____________________ (does/does not)create nexus when the...

Question 18

State D has adopted the principles of UDITPA.Given the following transactions for the year,determine Comp Corporation's D payroll factor denominator.

Accepted Answer

A) $800,000. 
B) $700,000. 
C) $600,000. 
D) $500,000. 
E) $200,000. 
A) $800,000. 
B) $700,000. 
C) $600,000. 
D) $500,000. 
E) $200,000.

Question 19

Typically exempt from the sales/use tax base is the purchase by a church of printed music for its choir.

Accepted Answer

A) True 
 B)False

Question 20

A typical state taxable income addition modification is the Federal income tax expense.

Accepted Answer

A) True 
 B)False

The throwback rule requires that:

When the taxpayer operates in one or more unitary states:

A use tax:

A capital stock tax usually is structured as an excise tax imposed on a corporation's "net worth," using balance sheet data to compute the tax.

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

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 -Spare parts for manufacturing machinery

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

Identify some state/local income tax issues facing pass-through entities such as S corporations,partnerships,and LLCs.

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

City and county governments depend heavily on collections from a property tax..

P.L.86-272 ____________________ (does/does not)create nexus when the seller provides its sales personnel with a company-owned computer and Blackberry for order submission.

State D has adopted the principles of UDITPA.Given the following transactions for the year,determine Comp Corporation's D payroll factor denominator.

Typically exempt from the sales/use tax base is the purchase by a church of printed music for its choir.

A typical state taxable income addition modification is the Federal income tax expense.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and 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

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 15: Multistate Corporate Taxation

The throwback rule requires that:

When the taxpayer operates in one or more unitary states:

A use tax:

A capital stock tax usually is structured as an excise tax imposed on a corporation's "net worth," using balance sheet data to compute the tax.

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

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 -Spare parts for manufacturing machinery

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

Identify some state/local income tax issues facing pass-through entities such as S corporations,partnerships,and LLCs.

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

City and county governments depend heavily on collections from a property tax..

P.L.86-272 ____________________ (does/does not)create nexus when the seller provides its sales personnel with a company-owned computer and Blackberry for order submission.

State D has adopted the principles of UDITPA.Given the following transactions for the year,determine Comp Corporation's D payroll factor denominator.

Typically exempt from the sales/use tax base is the purchase by a church of printed music for its choir.

A typical state taxable income addition modification is the Federal income tax expense.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and 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

Exempt Entities

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters