Question 1

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

Accepted Answer

A) Inspection by a sales employee of the customer's inventory for specific product lines. 
B) Using an independent contractor who acts as a manufacturer's representative for the taxpayer through a sales office in the state. 
C) Executing a sales campaign, using an advertising agency acting as an independent contractor for the taxpayer. 
D) Maintenance of inventory in the state by an independent contractor under a consignment plan. 
A) Inspection by a sales employee of the customer's inventory for specific product lines. 
B) Using an independent contractor who acts as a manufacturer's representative for the taxpayer through a sales office in the state. 
C) Executing a sales campaign, using an advertising agency acting as an independent contractor for the taxpayer. 
D) Maintenance of inventory in the state by an independent contractor under a consignment plan.

Question 2

In determining the numerator of the sales factor,most states follow UDITPA's ____________________ ____________________ concept,whereunder sales are assumed to take place at the point of delivery,as opposed to the location at which the shipment originates.

Accepted Answer

ultimate d

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

In a few states,a Federal S corporation is exempt from state corporate income tax only if ____________________ of its shareholders are state residents.

Accepted Answer

The answer of In a few states,a Federal S corporation...

Question 5

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation.
a.More than solicitation, creates nexus
b.Solicitation only, no nexus created
-Conducting an advertising campaign on local TV stations

Accepted Answer

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

Question 6

Parent and Junior form a unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Accepted Answer

A) Execute an intercompany loan, such that Junior pays deductible interest to Parent. 
B) Have Parent charge Junior an annual management fee. 
C) Shift Parent's high-cost assembly and distribution operations to Junior. 
D) None of the above is an effective technique. 
E) All of the above are effective techniques. 
A) Execute an intercompany loan, such that Junior pays deductible interest to Parent. 
B) Have Parent charge Junior an annual management fee. 
C) Shift Parent's high-cost assembly and distribution operations to Junior. 
D) None of the above is an effective technique. 
E) All of the above are effective techniques.

Question 7

Most states waive the collection of sales tax on groceries.

Accepted Answer

A) True 
 B)False

Question 8

Match each of the following terms with the appropriate description, in the state income tax formula.
a.Addition modification
b.Subtraction modification
c.No modification
-Federal R & D credit

Accepted Answer

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

Question 9

In the apportionment formula,most states assign more than a one-third weight to the ____________________ factor.

Accepted Answer

The answer of In the apportionment formula,most states assign more...

Question 10

A typical state taxable income addition modification is the income tax paid to the state for the year.

Accepted Answer

A) True 
 B)False

Question 11

In the broadest application of the unitary theory,the unitary business files a combined tax return using factors and income amounts for all affiliates:

Accepted Answer

A) organized in the U.S. 
B) organized in North America. 
C) organized anywhere in the world. 
D) owned more than 50% by other affiliates in the group. 
E) owned more than 80% by any other affiliate in the group. 
A) organized in the U.S. 
B) organized in North America. 
C) organized anywhere in the world. 
D) owned more than 50% by other affiliates in the group. 
E) owned more than 80% by any other affiliate in the group.

Question 12

Boot Corporation is subject to income tax in States A and B.Boot's operations generated $1,200,000 of apportionable income,and its sales and payroll activity and average property owned in each of the states is as follows.
 
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?

Accepted Answer

A) ($450,000). 
B) ($71,640). 
C) $71,640. 
D) $450,000. 
A) ($450,000). 
B) ($71,640). 
C) $71,640. 
D) $450,000.

Question 13

Although Bowl Corporation's manufacturing facility,distribution center,and retail store are located in State K,Bowl sells its products to residents located in States K,M,and N.Sales to residents of K are conducted through a retail store.Sales to residents of M are obtained by Bowl's sales representative,who has the authority to accept and approve sales orders.Residents of N can purchase Bowl's product only if they arrange to take delivery of the product at Bowl's shipping dock.Bowl's sales were as follows.
   
Bowl's activities within the three states are limited to those described above.All of the states have adopted a throwback provision and utilize a three-factor apportionment formula under which sales,property,and payroll are equally weighted.K sources dock sales to the destination state.Determine Bowl's sales factors for K,M,and N.

Accepted Answer

Sales Factor for State K
 @#IMG-DLM& 
Sales factor

Question 14

Match each of the following terms with the appropriate description, in the state income tax formula.
a.Addition modification
b.Subtraction modification
c.No modification
-Federal NOL deduction

Accepted Answer

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

Question 15

State A does not apply a throwback rule.General Corporation is taxable in a number of states and made a $100,000 sale from its A headquarters to a State B office of an agency of the U.S.government.General has not established nexus with B.In which state(s)will the sale be included in the sales factor?

Accepted Answer

A) All in A. 
B) All in B. 
C) In none of the states. 
D) In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states. 
A) All in A. 
B) All in B. 
C) In none of the states. 
D) In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states.

Question 16

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

Accepted Answer

Pail must collect L sales tax on $900,00

Question 17

States use the same apportionment factors and formula.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

Falseedera

Question 19

The property factor includes real property and construction in progress.

Accepted Answer

A) True 
 B)False

Question 20

Only a few states require that Federal S corporations make a separate state-level election of the flow-through status.

Accepted Answer

A) True 
 B)False

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

In determining the numerator of the sales factor,most states follow UDITPA's concept,whereunder sales are assumed to take place at the point of delivery,as opposed to the location at which the shipment originates.

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.

In a few states,a Federal S corporation is exempt from state corporate income tax only if ____________________ of its shareholders are state residents.

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Conducting an advertising campaign on local TV stations

Parent and Junior form a unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Most states waive the collection of sales tax on groceries.

Match each of the following terms with the appropriate description, in the state income tax formula. a.Addition modification b.Subtraction modification c.No modification -Federal R & D credit

In the apportionment formula,most states assign more than a one-third weight to the ____________________ factor.

A typical state taxable income addition modification is the income tax paid to the state for the year.

In the broadest application of the unitary theory,the unitary business files a combined tax return using factors and income amounts for all affiliates:

Match each of the following terms with the appropriate description, in the state income tax formula. a.Addition modification b.Subtraction modification c.No modification -Federal NOL deduction

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

States use the same apportionment factors and formula.

The starting point in computing state taxable income generally is .

The property factor includes real property and construction in progress.

Only a few states require that Federal S corporations make a separate state-level election of the flow-through status.

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

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

In determining the numerator of the sales factor,most states follow UDITPA's ____________________ ____________________ concept,whereunder sales are assumed to take place at the point of delivery,as opposed to the location at which the shipment originates.

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.

In a few states,a Federal S corporation is exempt from state corporate income tax only if ____________________ of its shareholders are state residents.

Match each of the following items with the appropriate description, in applying the P.L. 86-272 definition of solicitation. a.More than solicitation, creates nexus b.Solicitation only, no nexus created -Conducting an advertising campaign on local TV stations

Parent and Junior form a unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:

Most states waive the collection of sales tax on groceries.

Match each of the following terms with the appropriate description, in the state income tax formula. a.Addition modification b.Subtraction modification c.No modification -Federal R & D credit

In the apportionment formula,most states assign more than a one-third weight to the ____________________ factor.

A typical state taxable income addition modification is the income tax paid to the state for the year.

In the broadest application of the unitary theory,the unitary business files a combined tax return using factors and income amounts for all affiliates:

Match each of the following terms with the appropriate description, in the state income tax formula. a.Addition modification b.Subtraction modification c.No modification -Federal NOL deduction

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

States use the same apportionment factors and formula.

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

The property factor includes real property and construction in progress.

Only a few states require that Federal S corporations make a separate state-level election of the flow-through status.

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

In determining the numerator of the sales factor,most states follow UDITPA's concept,whereunder sales are assumed to take place at the point of delivery,as opposed to the location at which the shipment originates.

The starting point in computing state taxable income generally is .