FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 23: State and Local Taxes

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

Public Law 86-272 was a congressional response to Northwestern States Portland Cement.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Public Law 86-272 protects a taxpayer from which of the following taxes?

A) Texas Margin Tax (a tax with net income, gross receipts, and capital worth components) .
B) Washington Business and Occupation Tax (a gross receipts tax) .
C) Ohio Commercial Activity Tax (an excise tax with a gross receipts base) .
D) California Franchise Tax (a net income tax) .

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

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, Wisconsin, and Wyoming. It has sales personnel only where discussed. Determine the state in which Mighty Manny does not have sales and use tax nexus given the following scenarios:

Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.

In recent years, states are weighting the sales factor because it is easier to calculate.

Immaterial violations of the solicitation rules automatically create income tax nexus.

A gross receipts tax is subject to Public Law 86-272.

Tennis Pro is headquartered in Virginia. Assume it has a state income tax base of $200,000. Of this amount, $60,000 was non-business income. Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent. The non-business income allocated to Virginia was $23,000. Assuming a Virginia corporate tax rate of 5.5 percent, what is Tennis Pro's Virginia state tax liability? (Round your answer to the nearest whole number)

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The Shop sells, manufacturers, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Assume that a District of Columbia customer picks up a $2,000 racquet order in the Blacksburg store and drives it back to the District of Columbia (where the sales tax rate is 8.5 percent). Determine the sales and use tax liability (assume the Shop has no sales personnel or property in District of Columbia) of the customer?

Businesses must pay income tax in their state of commercial domicile.

The Mobil decision identified three factors to determine whether a group of companies are unitary.

The Quill decision reaffirmed that out-of-state businesses must have physical presence within a state before the state may require the collection of sales taxes from in-state customers.

List the steps necessary to determine an interstate businesses' state income tax liability.

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The Shop sells, manufacturers, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Determine the sales and use tax liability that the Shop must collect and remit if it sells a $1,000 racquet order to an Alaska customer (assume the Shop has no sales personnel or property in Alaska) that purchases the merchandise over the internet?

Wyoming imposes an income tax on corporations.

Tennis Pro has the following sales, payroll and property factors: What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four factor method and Maryland used a single-factor sales formula?

Which of the following isn't a criteria used to determine whether a unitary relationship exists?

Sales personnel investigating a potential customer's credit worthiness generally are deemed to exceed protected boundaries of solicitation.

Most services are sourced to the state where the services were performed.

Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows: Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that was shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor?