Question 1

Typically included in the sales/use tax base is the purchase of computer and cell phone equipment by a large consulting firm that is incorporated in the state.

Accepted Answer

A) True 
 B)False

Question 2

The model law relating to the assignment of income among the states for corporations is:

Accepted Answer

A)  The Multistate Tax Treaty. 
B)  The Uniform Division of Income for Tax Purposes Act (UDITP
A) . 
C)  Public Law 86-272. 
D)  The Multistate Tax Commission (MT
C) . 
A)  The Multistate Tax Treaty. 
B)  The Uniform Division of Income for Tax Purposes Act (UDITP
A) . 
C)  Public Law 86-272. 
D)  The Multistate Tax Commission (MT
C) .

Question 3

Mandy Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z. Mandy's activities establish nexus for income tax purposes only in Z. Mandy's sales, payroll, and property among the states include the following.   X utilizes a sales-only factor in its three-factor apportionment formula. How much of Mandy's taxable income is apportioned to X?

Accepted Answer

A)  $0. 
B)  $333,333. 
C)  $543,333. 
D)  $1,000,000. 
A)  $0. 
B)  $333,333. 
C)  $543,333. 
D)  $1,000,000.

Question 4

Judy, a regional sales manager, has her office in State X. Her region includes several states, as indicated in the sales report below. Determine how much of Judy's $200,000 compensation is assigned to the payroll factor of State X.

Accepted Answer

A)  $0. 
B)  $66,667. 
C)  $80,000. 
D)  $200,000. 
A)  $0. 
B)  $66,667. 
C)  $80,000. 
D)  $200,000.

Question 5

The use tax is designed to complement the sales tax. A use tax typically covers purchases made out of state and brought into the jurisdiction.

Accepted Answer

A) True 
 B)False

Question 6

Most states begin the computation of taxable income with an amount from the Federal income tax return.

Accepted Answer

A) True 
 B)False

Question 7

A few states recognize an entity's S corporation status, such that taxable income flows through directly to shareholders, but they also assess a state-level tax on the entity.

Accepted Answer

A) True 
 B)False

Question 8

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 O property factor is:

Accepted Answer

A)  35.0%. 
B)  37.2%. 
C)  39.5%. 
D)  53.8%. 
A)  35.0%. 
B)  37.2%. 
C)  39.5%. 
D)  53.8%.

Question 9

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Accepted Answer

Generally, business income is apportione

Question 10

Typically, a sales/use tax is applied to a retail sale of ____________________ property.

Accepted Answer

The answer of Typically, a sales/use tax is applied to...

Question 11

The corporate income tax provides about 5 percent of the annual tax revenues for the typical U.S. state.

Accepted Answer

A) True 
 B)False

Question 12

Condor Corporation generated $450,000 of state taxable income from selling its product in States A and
B. Both states utilize a three-factor apportionment formula that equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 5% and 3%, respectively. Determine Condor's state income tax liability.
Condor's total state income tax liability is determined as follows.
STATE A INCOME TAX LIABILITY

B. For the taxable year, the corporation's activities within the two states were as follows.
   Condor has determined that it is subject to tax in both A and

Accepted Answer

STATE B INCOME TAX L

Question 13

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 14

____________________ is a method under which a corporation's nonbusiness income is directly assigned to the specific states where the income is derived.

Accepted Answer

The answer of ____________________ is a method under which a...

Question 15

States collect the most tax dollars from the corporate income tax.

Accepted Answer

A) True 
 B)False

Question 16

In determining a corporation's taxable income for state income tax purposes, which of the following does not constitute a subtraction from Federal income?

Accepted Answer

A)  Interest on U.S. obligations. 
B)  Expenses that are directly or indirectly related to state and municipal interest that is taxable for state purposes. 
C)  The amount by which the Federal deduction for depreciation exceeds the depreciation deduction permitted for state tax purposes. 
D)  The amount by which the state loss from the disposal of assets exceeds the Federal loss from such disposal. 
A)  Interest on U.S. obligations. 
B)  Expenses that are directly or indirectly related to state and municipal interest that is taxable for state purposes. 
C)  The amount by which the Federal deduction for depreciation exceeds the depreciation deduction permitted for state tax purposes. 
D)  The amount by which the state loss from the disposal of assets exceeds the Federal loss from such disposal.

Question 17

Almost all of the states treat a general partnership as a ____________________ entity for income tax purposes.
or

Accepted Answer

flow-throu

Question 18

In most states, a limited liability company (LLC) is subject to the state income tax:

Accepted Answer

A)  As a flow-through entity, similar to its Federal income tax treatment. 
B)  As though it were a unitary business. 
C)  As though it were a C corporation. 
D)  LLCs typically are exempted from state income taxation. 
A)  As a flow-through entity, similar to its Federal income tax treatment. 
B)  As though it were a unitary business. 
C)  As though it were a C corporation. 
D)  LLCs typically are exempted from state income taxation.

Question 19

A local business wants your help in making a decision about a large capital investment. Should your advice concentrate on tax or non-tax implications of the decision?

Accepted Answer

Businesses operating in a mult

Question 20

Hermann Corporation is based in State A (corporate income tax rate 10%). It sells its goods to customers in both A and State B (corporate income tax rate 4%). Hermann's state taxable income for the year is $1 million, 30% of which relates to B customers. Hermann's level of activities in B is insufficient to create nexus there, but A has adopted a throwback rule as to multistate sales. Would Hermann reduce its total state income tax liability by creating nexus with B, say by allowing its sales force to make credit decisions? Elaborate.

Accepted Answer

Creating nexus with

Typically included in the sales/use tax base is the purchase of computer and cell phone equipment by a large consulting firm that is incorporated in the state.

The model law relating to the assignment of income among the states for corporations is:

Judy, a regional sales manager, has her office in State X. Her region includes several states, as indicated in the sales report below. Determine how much of Judy's $200,000 compensation is assigned to the payroll factor of State X.

The use tax is designed to complement the sales tax. A use tax typically covers purchases made out of state and brought into the jurisdiction.

Most states begin the computation of taxable income with an amount from the Federal income tax return.

A few states recognize an entity's S corporation status, such that taxable income flows through directly to shareholders, but they also assess a state-level tax on the entity.

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Typically, a sales/use tax is applied to a retail sale of ____________________ property.

The corporate income tax provides about 5 percent of the annual tax revenues for the typical U.S. state.

____________________ is a method under which a corporation's nonbusiness income is directly assigned to the specific states where the income is derived.

States collect the most tax dollars from the corporate income tax.

In determining a corporation's taxable income for state income tax purposes, which of the following does not constitute a subtraction from Federal income?

Almost all of the states treat a general partnership as a ____________________ entity for income tax purposes. or

In most states, a limited liability company (LLC) is subject to the state income tax:

A local business wants your help in making a decision about a large capital investment. Should your advice concentrate on tax or non-tax implications of the decision?

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

Typically included in the sales/use tax base is the purchase of computer and cell phone equipment by a large consulting firm that is incorporated in the state.

The model law relating to the assignment of income among the states for corporations is:

Judy, a regional sales manager, has her office in State X. Her region includes several states, as indicated in the sales report below. Determine how much of Judy's $200,000 compensation is assigned to the payroll factor of State X.

The use tax is designed to complement the sales tax. A use tax typically covers purchases made out of state and brought into the jurisdiction.

Most states begin the computation of taxable income with an amount from the Federal income tax return.

A few states recognize an entity's S corporation status, such that taxable income flows through directly to shareholders, but they also assess a state-level tax on the entity.

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Typically, a sales/use tax is applied to a retail sale of ____________________ property.

The corporate income tax provides about 5 percent of the annual tax revenues for the typical U.S. state.

____________________ is a method under which a corporation's nonbusiness income is directly assigned to the specific states where the income is derived.

States collect the most tax dollars from the corporate income tax.

In determining a corporation's taxable income for state income tax purposes, which of the following does not constitute a subtraction from Federal income?

Almost all of the states treat a general partnership as a ____________________ entity for income tax purposes. or

In most states, a limited liability company (LLC) is subject to the state income tax:

A local business wants your help in making a decision about a large capital investment. Should your advice concentrate on tax or non-tax implications of the decision?

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