FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 24: Multistate Corporate Taxation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

A use tax applies when a State A resident purchases:

A) A new automobile from a State A dealership.
B) A used automobile from the web site of a State A dealership.
C) A new automobile from a State B dealership, then using the car back at home.
D) Hardware from sears.com rather than at the Best Buy store at the local mall.

E) A) and B)
F) B) and C)

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Simpkin Corporation owns manufacturing facilities in States A,B,and C.A uses a three-factor apportionment formula under which the sales,property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor,based solely on sales. Simpkin's operations generated $1,000,000 of apportionable income,and its sales and payroll activity and average property owned in each of the three states is as follows. Simpkin's apportionable income assigned to B is:

A) $611,100.
B) $600,000.
C) $500,000.
D) $458,300.
E) $444,400.

F) A) and D)
G) All of the above

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

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

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.

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

In unitary states,a(n)____________________ provision 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.

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

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

Typically,the state's payroll factor ____________________ (does/does not)include the fringe benefits provided to its sales force.

A unitary business is treated as a single entity for state tax purposes,with a combined apportionment formula including data from all of the operations of the business.

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

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.

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

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.

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

All of the U.S.states have adopted a tax based on net taxable income.

The throwback rule requires that:

Under P.L.86-272,which of the following transactions by itself would create nexus with a state?

Nonbusiness income includes dividends received from investment securities.

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. 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