FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Multistate Corporate Taxation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Match each of the following items with the appropriate description in determining whether sales/use tax typically must be collected. -A garment purchased for resale.

A) Taxable
B) Not taxable

C) A) and B)
D) undefined

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

In applying the typical apportionment formula:

A) The aggregate of state taxable incomes equals Federal taxable income.
B) The aggregate of state taxable incomes may not equal Federal taxable income.
C) When Federal taxable income is positive, all states' taxable incomes are positive.
D) When Federal taxable income is negative, aggregate state taxable incomes total to zero.

E) B) and D)
F) None of the above

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

When the taxpayer operates in one or more unitary states:

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

Net Corporation's sales office and manufacturing plant are located in State X. Net also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, State X defines payroll as all compensation paid to employees, including contributions to § 401k) deferred compensation plans. Under State W's statutes, neither compensation paid to officers nor contributions to § 401k) plans are included in the payroll factor. Net incurred the following personnel costs:

In________ states, an)_________ election permits a multinational corporation to elect to limit the reach of the state's taxing jurisdiction to activities occurring within the boundaries of the United States.

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

Match each of the following items with the appropriate description in applying the P.L. 86-272 definition of solicitation. -Operating a warehouse for inventory that is held in the state.

Match each of the following items with the appropriate description in determining whether sales/use tax typically must be collected. -A textbook purchased by a State University student.

Property taxes generally are collected by local taxing jurisdictions, not the state or Federal governments.

Match each of the following terms with the appropriate description in the state income tax formula. Apply the UDITPA rules in your responses. -State income tax expense.

Parent and Junior form a unitary group of corporations. Parent is located in a state with an effective tax rate of 3% and Junior's effective tax rate is 9%. Acting in concert to reduce overall tax liabilities, the group should:

In determining taxable income for state income tax purposes, interest income from another state's bonds typically constitutes an)_________ modification.

Match each of the following items with the appropriate description in determining whether sales/use tax typically must be collected. -A meal eaten at a restaurant while conducting business.

A ________tax is designed to complement the local sales tax structure, to prevent the consumer from making no- or low-tax purchases in another state, outside the United States, or online and then bringing the asset into the state.

In some states, an S corporation must withhold Federal income tax for the proportionate flow-through income of its shareholders who ____________are/are not) state residents.

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:

Flint Corporation is subject to a corporate income tax only in State X. The starting point in computing X taxable income is Federal taxable income which is $750,000. This amount includes a $50,000 deduction for state income taxes. During the year, Flint received $10,000 interest on Federal obligations. X tax law does not allow a deduction for state income tax payments. Flint's taxable income for X purposes is:

Condor Corporation generated $450,000 of state taxable income from selling its product in States A and B. For the taxable year, the corporation's activities within the two states were as follows: $\begin{array} { l r r r } & \text { State A } & \text { State B } & \text { Total } \\\text { Sales } & \$ 800,000 & \$ 200,000 & \$ 1,000,000 \\\text { Property } & 300,000 & - 0 - & 300,000 \\\text { Payroll } & 200,000 & 800,000 & 1,000,000\end{array}$ Condor has determined that it is subject to tax in both 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 States A and B are 5% and 3%, respectively. Determine Condor's state income tax liability.

Compute Still Corporation's State Q taxable income and tax liability for the year. $\begin{array} { l r } \text { Addition modifications } & \$ 70,000 \\\text { Allocated income - total } & \$ 80,000 \\\text { Allocated income - State Q } & \$ 60,000 \\\text { Allocated income - State P } & \$ 20,000 \\\text { Apportionment percentage - State Q } & 40 \% \\\text { Federal taxable income } & \$ 500,000 \\\text { State tax credits } & \$ 11,000 \\\text { Subtraction modifications } & \$ 30,000 \\\text { Tax rate } & 5 \%\end{array}$