Exam 16: Multistate Corporate Taxation

Match each of the following events, considered independently, to its likely effect on WillCo's various apportionment factors. WillCo is based in Q and has customers in Q, R, and S. To this point, WillCo has not established nexus with S. More than one choice may be correct. a. No change in apportionment factors b. Q apportionment factor increases c. Q apportionment factor decreases d. R apportionment factor increases e. R apportionment factor decreases f. S apportionment factor increases g. S apportionment factor decreases -Q adopts a sales-only apportionment formula.

(Short Answer)

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Question 101

Most states' consumer sales taxes are paid by the final purchaser of the taxable asset.

(True/False)

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Question 102

Typically, the state's payroll factor (does/does not) include the salaries and bonuses paid to its corporate executives.

(Short Answer)

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Question 103

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 -Groceries purchased by a consumer and taken home for preparation there.

(Short Answer)

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Question 104

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses. a. Addition modification b. Subtraction modification c. No modification -State-level NOL.

(Short Answer)

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Question 105

When the taxpayer has exposure to a capital stock tax:

(Multiple Choice)

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Question 106

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

(Essay)

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Question 107

The throwback rule requires that:

(Multiple Choice)

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Question 108

A(n) business operates in concert with its affiliated companies. As a result, the affiliates' data are included in the parent's apportionment computations.

(Short Answer)

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Question 109

State Q wants to increase its income tax collections, but politically it would be unwise to raise taxes on in-state individuals or businesses. Q currently follows all UDITPA rules and employs an equally weighted three-factor apportionment formula. Q allocates nonbusiness income amounts. Identify some changes to the income tax apportionment formula that would shift the scheduled income tax increases to out-of-state businesses.

(Essay)

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Question 110

Match each of the following events, considered independently, to its likely effect on WillCo's various apportionment factors. WillCo is based in Q and has customers in Q, R, and S. To this point, WillCo has not established nexus with S. More than one choice may be correct. a. No change in apportionment factors b. Q apportionment factor increases c. Q apportionment factor decreases d. R apportionment factor increases e. R apportionment factor decreases f. S apportionment factor increases g. S apportionment factor decreases -R adopts an increase in its statutory corporate income tax rates.

(Short Answer)

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Question 111

When the taxpayer operates in one or more unitary states:

(Multiple Choice)

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Question 112

A unitary business applies a combined apportionment formula, including data from operations of all of the affiliates.

(True/False)

4.8/5

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Question 113

The property factor includes land and buildings used for business purposes.

(True/False)

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Question 114

State Q has adopted sales-factor-only apportionment for its corporate income tax. As a result, a (larger/smaller) percentage of an outofstate corporation's income is assigned to tax in the state.

(Short Answer)

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Question 115

Hendricks Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 3% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Hendricks should:

(Multiple Choice)

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Question 116

Overall tax liabilities typically (increase/decrease) if the members of a unitary group begin to include affiliates that generate net operating losses.

(Short Answer)

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Question 117

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

(Multiple Choice)

4.9/5

(81)

Question 118

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 -Checking the customer's inventory to determine whether a reorder is needed.

(Short Answer)

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(66)

Question 119

Roughly five percent of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions.

(True/False)

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Question 120

Showing 101 - 120 of 187

Most states' consumer sales taxes are paid by the final purchaser of the taxable asset.

Typically, the state's payroll factor (does/does not) include the salaries and bonuses paid to its corporate executives.

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 -Groceries purchased by a consumer and taken home for preparation there.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses. a. Addition modification b. Subtraction modification c. No modification -State-level NOL.

When the taxpayer has exposure to a capital stock tax:

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

The throwback rule requires that:

A(n) business operates in concert with its affiliated companies. As a result, the affiliates' data are included in the parent's apportionment computations.

When the taxpayer operates in one or more unitary states:

A unitary business applies a combined apportionment formula, including data from operations of all of the affiliates.

The property factor includes land and buildings used for business purposes.

State Q has adopted sales-factor-only apportionment for its corporate income tax. As a result, a (larger/smaller) percentage of an outofstate corporation's income is assigned to tax in the state.

Hendricks Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 3% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Hendricks should:

Overall tax liabilities typically (increase/decrease) if the members of a unitary group begin to include affiliates that generate net operating losses.

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

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 -Checking the customer's inventory to determine whether a reorder is needed.

Roughly five percent of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions.

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

Most states' consumer sales taxes are paid by the final purchaser of the taxable asset.

Typically, the state's payroll factor (does/does not) include the salaries and bonuses paid to its corporate executives.

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 -Groceries purchased by a consumer and taken home for preparation there.

Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses. a. Addition modification b. Subtraction modification c. No modification -State-level NOL.

When the taxpayer has exposure to a capital stock tax:

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

The throwback rule requires that:

A(n) business operates in concert with its affiliated companies. As a result, the affiliates' data are included in the parent's apportionment computations.

When the taxpayer operates in one or more unitary states:

A unitary business applies a combined apportionment formula, including data from operations of all of the affiliates.

The property factor includes land and buildings used for business purposes.

State Q has adopted sales-factor-only apportionment for its corporate income tax. As a result, a (larger/smaller) percentage of an out­of­state corporation's income is assigned to tax in the state.

Hendricks Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 3% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Hendricks should:

Overall tax liabilities typically (increase/decrease) if the members of a unitary group begin to include affiliates that generate net operating losses.

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

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 -Checking the customer's inventory to determine whether a reorder is needed.

Roughly five percent of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions.

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

State Q has adopted sales-factor-only apportionment for its corporate income tax. As a result, a (larger/smaller) percentage of an outofstate corporation's income is assigned to tax in the state.