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 41

Multiple Choice

Review LaterAdd Note

Review Later

Ting, a regional sales manager, works from her office in State W. Her region includes several states as indicated in the following sales report. Determine how much of Ting's $300,000 compensation is assigned to the payroll factor of State W. $\begin{array} { l r r } \text { State } & \text { Sales Generated } & \text { Ting's Time Spent There } \\\text { U } & \$ 1,000,000 & 15 \% \\\text { V } & 5,000,000 & 55 \% \\\text { W } & \underline { 4,000,000 } & \underline { 30 \% } \\& \$ 10,000,000 & 100 \%\end{array}$

A) $0.
B) $90,000.
C) $120,000.
D) $300,000.

E) B) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 42

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. -Prescription drugs and medicines purchased by a consumer.

A) Taxable
B) Not taxable

C) A) and B)
D) undefined

Correct Answer

verified

Show Answer

Question 43

Short Answer

Review LaterAdd Note

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

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

Your client, Hamlin Industries, wants to reduce its overall state/local income tax liability. Hamlin holds income- producing assets of various types, including tangible personal property, rental land and buildings, and high-yield stocks and bonds. You assess the asset portfolio and conclude that only the investment portfolio is "portable" and available for relocation at this time. What device might Hamlin use in a restructuring of its operations to achieve the desired tax result? Be specific.

Match each of the following items with the appropriate description in applying the P.L. 86-272 definition of solicitation. -Making a decision as to the creditworthiness of customers.

The sales/use tax that is employed by most U.S. states does not fall on all retail transactions. Identify at least five sales/use tax exemptions that states often allow that eliminate certain transactions from the tax base.

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

Garcia Corporation is subject to income tax in States G, H, and I. Garcia's compensation expense includes the following: $\begin{array} { l r r r r } & \text { State G } & \text { State H } & \text { State I } & \text { Total } \\\text { Salaries and wages for nonofficers } & \$ 600,000 & \$ 500,000 & \$ 500,000 & \$ 1,600,000 \\\text { Officers' salaries } & - 0 - & - 0 - & 800,000 & 800,000\end{array}$ Officers' salaries are included in the payroll factor for States G and H but not for I. Compute Garcia's payroll factors for G, H, and I.

Sylvia spends time working at the offices of her employer as a consultant to clients who are located in three different U.S. states. Sylvia's compensation is assigned to the payroll factors) of which states)? Apply the general UDITPA rules.

P.L. 86-272________ does/does not) create income-tax nexus when the sales representative approves a sale at the customer's location.

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

Discuss how a multistate business divides its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Match each of the following terms with the appropriate description in the state income tax formula. Apply the UDITPA rules in your responses. -Dividend income from P & G stock held.

The model law relating to the assignment of income among the states for corporations is:

Given the following transactions for the year, determine Comp Corporation's D payroll factor denominator. State D has adopted the principles of UDITPA. $\begin{array}{lr}\text { Compensation of sales force } & \$ 600,000 \\\text { Compensation paid to independent contractors } & 300,000 \\\text { Compensation paid to managers of nonbusiness rental property } & 100,000 \\\text { Total compensation } & \$ 1,000,000\end{array}$

A city might assess a recording tax when a business takes out a mortgage on its real estate.

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.

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

State and local politicians tend to apply new and increased taxes to taxpayers who are nonresident visitors to the jurisdiction, such as a tax on auto rentals and hotel stays, because the taxpayer cannot vote to reelect or oust) the lawmaker.