Question 1

Under common terminology, a unitary group files a ____________________ state income tax return.

Accepted Answer

The answer of Under common terminology, a unitary group files...

Question 2

Double weighting the sales factor effectively increases the tax burden on taxpayers based in the state, such as corporations with in-state headquarters.

Accepted Answer

A) True 
 B)False

Question 3

Britta Corporation's entire operations are located in State A. Eighty percent ($800,000) of Britta's sales are made in A and the remaining sales ($200,000) are made in State B. B has not adopted a corporate income tax. If A has adopted a throwback rule, the numerator of Britta's A sales factor is:

Accepted Answer

A)  $0. 
B)  $200,000. 
C)  $800,000. 
D)  $1,000,000. 
A)  $0. 
B)  $200,000. 
C)  $800,000. 
D)  $1,000,000.

Question 4

When a _________________________ is in effect, out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

Accepted Answer

The answer of When a _________________________ is in effect, out-of-state...

Question 5

The property factor includes business assets that the taxpayer owns, but also those merely used under a lease agreement.

Accepted Answer

A) True 
 B)False

Question 6

Typical indicators of nexus include the presence of employees based in the state, and the ownership or lease of realty there.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A state or local tax on a corporation's income might be called a franchise tax or a business privilege tax.

Accepted Answer

A) True 
 B)False

Question 9

Perez Corporation is subject to tax only in State a Perez generated the following income and deductions.   Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

Accepted Answer

A)  $400,000. 
B)  $450,000. 
C)  $600,000. 
D)  $650,000. 
A)  $400,000. 
B)  $450,000. 
C)  $600,000. 
D)  $650,000.

Question 10

State and local politicians tend to apply new and increased taxes to taxpayers who are visitors to the jurisdiction and cannot vote to reelect the lawmaker.

Accepted Answer

A) True 
 B)False

Question 11

An LLC apportions and allocates its annual taxable income in the same manner used by any other business operating in the state.

Accepted Answer

A) True 
 B)False

Question 12

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000. The payroll factor assigns $30,000 for this employee.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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

Accepted Answer

The answer of An ad valorem property tax is based...

Question 15

When the taxpayer has exposure to a capital stock tax:

Accepted Answer

A)  The pricing of inventory sales should reflect no more than inflation increases. 
B)  Subsidiary operations should be funded through direct capital contributions. 
C)  Expansions should be funded with retained earnings. 
D)  Dividends should be paid regularly to a parent based in a low-tax state. 
A)  The pricing of inventory sales should reflect no more than inflation increases. 
B)  Subsidiary operations should be funded through direct capital contributions. 
C)  Expansions should be funded with retained earnings. 
D)  Dividends should be paid regularly to a parent based in a low-tax state.

Question 16

A typical state taxable income addition modification is the Federal net operating loss (NOL) deduction.

Accepted Answer

A) True 
 B)False

Question 17

The typical local property tax falls on both an investor's real estate and her stock portfolio.

Accepted Answer

A) True 
 B)False

Question 18

The ____________________ tax levied by a state usually is based on the book value of a corporation's "net worth."

Accepted Answer

The answer of The ____________________ tax levied by a state...

Question 19

A(n) ____________________ business operates its separate companies as a whole. It cannot be segregated into independently operating divisions or branches.

Accepted Answer

The answer of A(n) ____________________ business operates its separate companies...

Question 20

Typically exempt from the sales/use tax base is the purchase by a symphony orchestra of printed music for its players.

Accepted Answer

A) True 
 B)False

Under common terminology, a unitary group files a ____________________ state income tax return.

Double weighting the sales factor effectively increases the tax burden on taxpayers based in the state, such as corporations with in-state headquarters.

Britta Corporation's entire operations are located in State A. Eighty percent ($800,000) of Britta's sales are made in A and the remaining sales ($200,000) are made in State B. B has not adopted a corporate income tax. If A has adopted a throwback rule, the numerator of Britta's A sales factor is:

When a _________________________ is in effect, out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

The property factor includes business assets that the taxpayer owns, but also those merely used under a lease agreement.

Typical indicators of nexus include the presence of employees based in the state, and the ownership or lease of realty there.

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

A state or local tax on a corporation's income might be called a franchise tax or a business privilege tax.

Perez Corporation is subject to tax only in State a Perez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

State and local politicians tend to apply new and increased taxes to taxpayers who are visitors to the jurisdiction and cannot vote to reelect the lawmaker.

An LLC apportions and allocates its annual taxable income in the same manner used by any other business operating in the state.

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000. The payroll factor assigns $30,000 for this employee.

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

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

When the taxpayer has exposure to a capital stock tax:

A typical state taxable income addition modification is the Federal net operating loss (NOL) deduction.

The typical local property tax falls on both an investor's real estate and her stock portfolio.

The ____________________ tax levied by a state usually is based on the book value of a corporation's "net worth."

A(n) ____________________ business operates its separate companies as a whole. It cannot be segregated into independently operating divisions or branches.

Typically exempt from the sales/use tax base is the purchase by a symphony orchestra of printed music for its players.

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

Filters

Exam 16: Multistate Corporate Taxation

Under common terminology, a unitary group files a ____________________ state income tax return.

Double weighting the sales factor effectively increases the tax burden on taxpayers based in the state, such as corporations with in-state headquarters.

Britta Corporation's entire operations are located in State A. Eighty percent ($800,000) of Britta's sales are made in A and the remaining sales ($200,000) are made in State B. B has not adopted a corporate income tax. If A has adopted a throwback rule, the numerator of Britta's A sales factor is:

When a _________________________ is in effect, out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

The property factor includes business assets that the taxpayer owns, but also those merely used under a lease agreement.

Typical indicators of nexus include the presence of employees based in the state, and the ownership or lease of realty there.

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

A state or local tax on a corporation's income might be called a franchise tax or a business privilege tax.

Perez Corporation is subject to tax only in State a Perez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

State and local politicians tend to apply new and increased taxes to taxpayers who are visitors to the jurisdiction and cannot vote to reelect the lawmaker.

An LLC apportions and allocates its annual taxable income in the same manner used by any other business operating in the state.

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000. The payroll factor assigns $30,000 for this employee.

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

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

When the taxpayer has exposure to a capital stock tax:

A typical state taxable income addition modification is the Federal net operating loss (NOL) deduction.

The typical local property tax falls on both an investor's real estate and her stock portfolio.

The ____________________ tax levied by a state usually is based on the book value of a corporation's "net worth."

A(n) ____________________ business operates its separate companies as a whole. It cannot be segregated into independently operating divisions or branches.

Typically exempt from the sales/use tax base is the purchase by a symphony orchestra of printed music for its players.

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

Filters