Question 1

States collect the most tax dollars from the sales/use tax.

Accepted Answer

A) True 
 B)False  True

Question 2

States use a common apportionment formula and set of factors,known as the Streamlined Sales Tax Method.

Accepted Answer

A) True 
 B)False  False

Question 3

In conducting multistate tax planning,the taxpayer should:

Accepted Answer

A) Review tax opportunities in light of their effect on the overall business. 
B) Consider additional administrative costs generated by the plan. 
C) Exploit inconsistencies among the statutes and formulas of the states. 
D) Recognize that minimizing state tax costs may not always be prudent. 
E) All of the above are true. 
A) Review tax opportunities in light of their effect on the overall business. 
B) Consider additional administrative costs generated by the plan. 
C) Exploit inconsistencies among the statutes and formulas of the states. 
D) Recognize that minimizing state tax costs may not always be prudent. 
E) All of the above are true. E

Question 4

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 5

Typically exempt from the sales/use tax base is the purchase of inventory from a competitor who is closing down a long-lived business.

Accepted Answer

A) True 
 B)False

Question 6

A state cannot levy a tax on a business unless the business was incorporated in the state.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not immune from state income taxation,even if P.L.86-272 is in effect?

Accepted Answer

A) Sale of a share of corporate stock. 
B) Sale of office equipment that constitutes inventory to the purchaser. 
C) Sale of office equipment to be used in the taxpayer's business. 
D) All of the above are protected by P.L.86-272 immunity provisions. 
A) Sale of a share of corporate stock. 
B) Sale of office equipment that constitutes inventory to the purchaser. 
C) Sale of office equipment to be used in the taxpayer's business. 
D) All of the above are protected by P.L.86-272 immunity provisions.

Question 8

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) $630,000. 
B) $600,000. 
C) $430,000. 
D) $400,000. 
A) $630,000. 
B) $600,000. 
C) $430,000. 
D) $400,000.

Question 9

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

Accepted Answer

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

Question 10

Under P.L.86-272,the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of tangible personal property in the state.

Accepted Answer

A) True 
 B)False

Question 11

All but a few states have adopted a tax based on net taxable income.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) $700,000. 
B) $800,000. 
C) $900,000. 
D) $1,000,000. 
A) $700,000. 
B) $800,000. 
C) $900,000. 
D) $1,000,000.

Question 13

The corporate income tax provides about one-half of the annual tax revenues for the typical U.S.state.

Accepted Answer

A) True 
 B)False

Question 14

A state sales tax is designed to be collected by the ____________________ (seller/purchaser)of the product and then remitted to the state.

Accepted Answer

The answer of A state sales tax is designed to...

Question 15

Flake Corporation's property holdings in State E are as follows.   Compute the numerator of Flake's E property factor.

Accepted Answer

A) $150 million. 
B) $145 million. 
C) $125 million. 
D) $120 million. 
E) $100 million. 
A) $150 million. 
B) $145 million. 
C) $125 million. 
D) $120 million. 
E) $100 million.

Question 16

In multistate income taxation,the sales factor applies the "ultimate destination concept." Define this term,and identify at least two of its most important exceptions.

Accepted Answer

Under the ultimate destination concept,a

Question 17

A typical state taxable income addition modification is the Federal income tax expense.

Accepted Answer

A) True 
 B)False

Question 18

Under most local property tax laws,the value of an asset is fixed after an appraisal by the taxing jurisdiction.

Accepted Answer

A) True 
 B)False

Question 19

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 place an order online and 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 20

In the broadest application of the unitary theory,the U.S.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 anywhere in the world. 
C) Organized in NAFTA countries. 
D) Owned more than 50% by other affiliates in the group. 
A) Organized in the U.S. 
B) Organized anywhere in the world. 
C) Organized in NAFTA countries. 
D) Owned more than 50% by other affiliates in the group.

Exam 24: Multistate Corporate Taxation

States collect the most tax dollars from the sales/use tax.

States use a common apportionment formula and set of factors,known as the Streamlined Sales Tax Method.

In conducting multistate tax planning,the taxpayer should:

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 inventory from a competitor who is closing down a long-lived business.

A state cannot levy a tax on a business unless the business was incorporated in the state.

Which of the following is not immune from state income taxation,even if P.L.86-272 is in effect?

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:

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

Under P.L.86-272,the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of tangible personal property in the state.

All but a few states have adopted a tax based on net taxable income.

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

The corporate income tax provides about one-half of the annual tax revenues for the typical U.S.state.

A state sales tax is designed to be collected by the ____________________ (seller/purchaser)of the product and then remitted to the state.

Flake Corporation's property holdings in State E are as follows. Compute the numerator of Flake's E property factor.

In multistate income taxation,the sales factor applies the "ultimate destination concept." Define this term,and identify at least two of its most important exceptions.

A typical state taxable income addition modification is the Federal income tax expense.

Under most local property tax laws,the value of an asset is fixed after an appraisal by the taxing jurisdiction.

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

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

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

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

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

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters