Question 1

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

Accepted Answer

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

Question 2

A state sales tax usually falls upon:

Accepted Answer

A) Sales of groceries. 
B) Sales of widgets made to out-of-state customers. 
C) Sales of widgets made to the ultimate consumer of the product or service. 
D) Sales of real estate. 
A) Sales of groceries. 
B) Sales of widgets made to out-of-state customers. 
C) Sales of widgets made to the ultimate consumer of the product or service. 
D) Sales of real estate.

Question 3

You are preparing to make a presentation to a client who has some familiarity with state income tax rules. At a general level, list for the client the principles of multistate tax planning.

Accepted Answer

· State and local tax planning often inv

Question 4

All of the U.S.states use an apportionment formula based on the sales, property, and payroll factors.

Accepted Answer

A) True 
 B)False

Question 5

In most states, Federal S corporations must make a separate state-level election of the flow-through status.

Accepted Answer

A) True 
 B)False

Question 6

Under the UDITPA's ____________________ concept, 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 7

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

Accepted Answer

A) $1,000,000. 
B) $900,000. 
C) $700,000. 
D) $600,000. 
A) $1,000,000. 
B) $900,000. 
C) $700,000. 
D) $600,000.

Question 8

Node Corporation is subject to tax only in State X.Node generated the following income and deductions.State income taxes are not deductible for X income tax purposes.

Accepted Answer

The answer of Node Corporation is subject to tax only...

Question 9

In most states, medical services are exempt from the sales/use tax base.

Accepted Answer

A) True 
 B)False

Question 10

A state wants to increase its income tax collections, but politically it would be unwise to raise taxes on in-state individuals or businesses. Identify some changes to the income tax apportionment formula that would shift the scheduled income tax increases to out-of-state businesses.

Accepted Answer

The answer of A state wants to increase its income...

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

Although apportionment formulas vary among jurisdictions, most states use the same three factors in the formula.The factors are ____________________, ____________________, and ____________________.
or
or

Accepted Answer

sales, property, pay

Question 14

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 15

In determining taxable income for state income tax purposes, the Federal NOL deduction typically constitutes a(n) ____________________ modification.

Accepted Answer

The answer of In determining taxable income for state income...

Question 16

A state sales tax usually falls upon:

Accepted Answer

A) The sale of a used dinette set sold at a rummage sale. 
B) The sale of a dinette set by the manufacturer to a furniture retailer. 
C) The sale of a case of Bibles by the publisher to a church bookstore. 
D) The sale of a Bible to a member of the church. 
E) All of the above are exempt transactions. 
A) The sale of a used dinette set sold at a rummage sale. 
B) The sale of a dinette set by the manufacturer to a furniture retailer. 
C) The sale of a case of Bibles by the publisher to a church bookstore. 
D) The sale of a Bible to a member of the church. 
E) All of the above are exempt transactions.

Question 17

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 18

In some states, an S corporation must withhold Federal income tax for its shareholders who ____________________ (are/are not) state residents.

Accepted Answer

The answer of In some states, an S corporation must...

Question 19

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 20

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%.

Exam 24: Multistate Corporate Taxation

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

A state sales tax usually falls upon:

You are preparing to make a presentation to a client who has some familiarity with state income tax rules. At a general level, list for the client the principles of multistate tax planning.

All of the U.S.states use an apportionment formula based on the sales, property, and payroll factors.

In most states, Federal S corporations must make a separate state-level election of the flow-through status.

Under the UDITPA's ____________________ concept, sales are assumed to take place at the point of delivery, as opposed to the location at which the shipment originates.

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

Node Corporation is subject to tax only in State X.Node generated the following income and deductions.State income taxes are not deductible for X income tax purposes.

In most states, medical services are exempt from the sales/use tax base.

A state wants to increase its income tax collections, but politically it would be unwise to raise taxes on in-state individuals or businesses. Identify some changes to the income tax apportionment formula that would shift the scheduled income tax increases to out-of-state businesses.

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

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

Although apportionment formulas vary among jurisdictions, most states use the same three factors in the formula.The factors are ____________________, ____________________, and ____________________. or or

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.

In determining taxable income for state income tax purposes, the Federal NOL deduction typically constitutes a(n) ____________________ modification.

A state sales tax usually falls upon:

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.

In some states, an S corporation must withhold Federal income tax for its shareholders who ____________________ (are/are not) state residents.

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.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Exempt Entities

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters

Although apportionment formulas vary among jurisdictions, most states use the same three factors in the formula.The factors are , , and . or or