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Chapter 23 State and Local Taxes

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Question;Chapter 23;State and Local Taxes;True / False Questions;1. The;primary purpose of state and local taxes is to raise revenue to finance state;and local government.;True False;2. All;states employ some combination of sales and use tax, income or franchise tax;or property tax.;True False;3. State tax;law is comprised solely of legislative authority.;True False;4. Commercial;domicile is the location where a business is headquartered and directs its;operations from.;True False;5. Nondomiciliary;businesses are subject to tax everywhere they do business.;True False;6. Use tax;liability accrues in the state where purchased property will be used when the;seller is not required to collect sales tax.;True False;7. Businesses;engaged in interstate commerce are subject to tax in every state where they;operate.;True False;8. The state;tax base is computed by making adjustments to federal taxable income.;True False;9. Businesses;subject to income tax in more than one jurisdiction have the right to;apportionment.;True False;10. Business;income is allocated to the state of commercial domicile.;True False;11. All 50;states impose a sales and use tax system.;True False;12. Purchases;of inventory for resale are typically exempt from sales and use taxes.;True False;13. The sales;and use tax base varies from state to state.;True False;14. Many;states are expanding the types of services subject to sales tax.;True False;15. Businesses;must collect sales tax only in states where it has sales and use tax nexus.;True False;16. Failure to;collect and remit sales taxes often results in a larger tax liability than;failure to pay income taxes.;True False;17. Physical;presence does not always create sales and use tax nexus.;True False;18. The;National Bellas Hess decision held that an out-of-state mail-order company did;not have sales tax collection responsibility because it lacked physical;presence.;True False;19. 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.;True False;20. Wyoming;imposes an income tax on corporations.;True False;21. Businesses;must pay income tax in their state of commercial domicile.;True False;22. In;Complete Auto Transit the court determined eight criteria for determining;whether a state can tax a nondomiciliary company.;True False;23. Public Law;86-272 protects certain business activities from creating nexus.;True False;24. Public Law;86-272 was a congressional response to Northwestern States Portland Cement.;True False;25. Public Law;86-272 protects only companies selling tangible personal property.;True False;26. Delivery;of tangible personal property through common carrier is a protected activity.;True False;27. The;Wrigley case held that the sale of intangibles is protected by Public Law;86-272.;True False;28. Giving;samples and promotional materials without charge is a protected solicitation;activity.;True False;29. The;trade-show rule allows businesses to maintain a sample room for up to four;weeks per year.;True False;30. Sales;personnel investigating a potential customer's credit worthiness exceed boundaries;of solicitation.;True False;31. Immaterial;violations of the solicitation rules automatically create income tax nexus.;True False;32. Several;states are now asserting economic nexus.;True False;33. Separate;return states require each member of a consolidated group with nexus to file;their own state tax return.;True False;34. A unitary;return includes only companies included on a federal consolidated tax return.;True False;35. The Mobil;decision identified three factors to determine whether a group of companies are;unitary.;True False;36. Federal/state;adjustments correct for differences between two states tax laws.;True False;37. Most state;tax laws adopt the federal tax law as of a specific date in time.;True False;38. Business;income includes all income earned in the ordinary course of business.;True False;39. A state's;apportionment formula divides nonbusiness income among the states where nexus;exists.;True False;40. A state's;apportionment formula usually relies on some variation of sales, payroll, and;property factors.;True False;41. The throwback;rule includes inventory in transit in the numerator of the state where it was;shipped from.;True False;42. Most;services are sourced to the state where the services were performed.;True False;43. The;payroll factor includes payments to independent contractors.;True False;44. The;property factor is the average of beginning and ending property values.;True False;45. The annual;value of rented property is included in the property factor.;True False;46. Historically;most states used an equally weighted three-factor apportionment formula.;True False;47. In recent;years, states are weighting the sales factor because it is easier to calculate.;True False;48. Interest;and dividends are allocated to the state of commercial domicile.;True False;49. Rental;income is allocated to the state of commercial domicile.;True False;50. A gross;receipts tax is subject to Public Law 86-272.;True False;Multiple Choice Questions;51. Which of;the following is true regarding state and local taxes?;A. All;states impose a state income tax.;B. Every;jurisdiction imposes a sales or use tax.;C. The;primary purpose is to raise revenue.;D. Property;taxes are primarily used to finance a State's general revenue fund.;52. Which of;the following is not a primary revenue source for most states?;A. Income or;franchise taxes;B. Sales or;use taxes;C. Severance;taxes;D. Property;taxes;53. Which of;the following law types is not a primary source type?;A. Legislative;B. Administrative;C. Judicial;D. Treatises;54. Which of;the following statements regarding income tax commercial domicile is incorrect?;A. The;location where a business is headquartered;B. The;location where a business is incorporated;C. The;location from which a business directs its operations;D. None of;these;55. Which of;the following is incorrect regarding nondomiciliary businesses?;A. Subject;to tax only where nexus exists.;B. A;business cannot be nondomiciliary where headquartered.;C. A;business can be nondomiciliary in only one jurisdiction.;D. Subject;to tax only where a sufficient connection exists.;56. Which of;the items is correct regarding a use tax?;A. Use taxes;are imposed by every state.;B. Use taxes;only apply when the seller is not required to collect the sales tax.;C. Amazon;collects use taxes for all of its customers.;D. States choose;to implement either a sales tax or a use tax.;57. All of the;following are false regarding apportionment except?;A. Applies;to only business income.;B. Applies;to only nonbusiness income.;C. Applies;to both business and nonbusiness income.;D. Investment;income is subject to apportionment.;58. Which of;the following regarding the state tax base is incorrect?;A. It is;computed by making adjustments to federal taxable income.;B. It is;divided into business and nonbusiness income.;C. It is a;necessary step in the state income tax process.;D. It;applies only to interstate businesses.;59. Which of;the following sales is always subject to sales and use tax?;A. Tax;preparation services.;B. Automobiles.;C. Inventory.;D. Food.;60. Which of;the following businesses is likely to have taxable sales for purposes of sales;and use tax?;A. Campus;bookstore selling textbooks and university apparel.;B. An online;retailer of textbooks.;C. A local;accounting firm.;D. Mail;order clothing company.;61. Which of;the following activities will create sales tax nexus?;A. Advertising;using television commercials.;B. Salesmen;who only take orders.;C. Delivery;of sales by UPS.;D. Electronic;delivery of software.;62. 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, and Wisconsin. 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;A. Mighty;Manny is incorporated and headquartered in Michigan. It also has property;employees, sales personnel, and intangibles in Michigan.;B. Mighty;Manny has a warehouse in Illinois.;C. Mighty;Manny has independent sales representatives in Minnesota. The representatives;distribute ice scraper-related items for over a dozen companies.;D. Mighty;Manny has two customers in Wisconsin. Mighty Manny receives orders over the;phone and ships goods to its customers using FedEx.;63. 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;A. Mighty;Manny has sales personnel that visit Minnesota. These sales employees follow;procedures that comply with Public Law 86-272. The orders are received and sent;to Michigan for acceptance. The goods are shipped by FedEx into Minnesota.;B. Mighty Manny's;trucks drive through Nebraska to deliver goods to Mighty Manny's products to;customers in other states.;C. Mighty;Manny provides design services to another manufacturer located in Wisconsin.;While the services are performed in Michigan, Mighty Manny's designers visit;Wisconsin at least quarterly to deliver the new designs and receive feedback.;D. Mighty;Manny receives online orders from its Illinois client. Because the orders are;so large, the goods are delivered weekly on Mighty Manny's trucks.;64. Which of;the following is not one of the Complete Auto Transit's criteria for whether a;state can tax nondomiciliary companies?;A. Protected;activities are exempt.;B. A;sufficient connection exists.;C. Only a;fair portion of income can be taxed.;D. Tax;cannot discriminate against nondomiciliary businesses.;65. On which;of the following transactions should sales tax be collected?;A. Architecture;plans delivered through the mail.;B. Sales of;woolen goods to a state without nexus delivered through common carrier.;C. Accounting;services provided in Alaska.;D. Meal;purchased at McDonald's.;66. Roxy;operates a dress shop in Arlington, Virginia. Roxy also ships dresses;nationwide upon request. Roxy's Virginia sales are $1,000,000 and out of state;sales are $200,000. Assuming that Virginia's sales tax rate is 5 percent, what;is Roxy's Virginia sales and use tax liability?;A. $0.;B. $10,000.;C. $50,000.;D. $60,000.;67. Roxy;operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes;in for a measurement and purchases a $1,500 dress that is shipped to her;Maryland residence using a common carrier. Assuming that Virginia's sales tax;rate is 5 percent and that Maryland's sales tax rate is 7 percent, what is;Roxy's sales and use tax liability?;A. $0.;B. $75 to;Virginia.;C. $75 sales;tax to Virginia and $15 use tax to Maryland.;D. $90 to;Maryland.;68. Roxy;operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes;in for a measurement and purchases a $1,500 dress. Lisa returns to Virginia a;few weeks later to pick up the dress and drive it back to her Maryland;residence where she will use the property. Assuming that Virginia's sales tax;rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is;Roxy's sales and use tax liability?;A. $0.;B. $75 to;Virginia.;C. $75 sales;tax to Virginia and $15 use tax to Maryland.;D. $90 to;Maryland.;69. What was;the Supreme Court's holding in National Bellas Hess?;A. An;out-of-state mail-order company did not have a sales tax collection;responsibility because it lacked physical presence.;B. Reaffirmed;that an out-of-state business must have physical presence in the state before;the state may require the business to collect sales tax from in-state;customers.;C. Spelled;out four criteria for determining whether states may subject nondomiciliary;companies to an income tax.;D. Defined;solicitation for purposes of Public Law 86-272.;70. What was;the Supreme Court's holding in Quill?;A. An;out-of-state mail-order company did not have a sales tax collection;responsibility because it lacked physical presence.;B. Reaffirmed;that an out-of-state business must have physical presence in the state before;the state may require the business to collect sales tax from in-state;customers.;C. Spelled;out four criteria for determining whether states may subject nondomiciliary;companies to an income tax.;D. Defined;solicitation for purposes of Public Law 86-272.;71. Mahre;Incorporated, a New York corporation, runs ski tours in a several states. Mahre;also has a New York retail store and an Internet store which ships to out of;state customers. The ski tours operate in Maine, New Hampshire, and Vermont;where Mahre has employees and owns and uses tangible personal property. Mahre;has real property only in New York. Mahre has the following sales;Assume the following tax rates: Alaska (6.6 percent);Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (6.75 percent), New;York (8 percent), and Vermont (5 percent). How much sales and use tax must;Mahre collect and remit in Maine?;A. $0;B. $3,053;C. $13,267;D. $16,319;72. Mahre;Incorporated, a New York corporation, runs ski tours in a several states. Mahre;also has a New York retail store and an Internet store which ships to out of;state customers. The ski tours operate in Maine, New Hampshire, and Vermont;where Mahre has employees and owns and uses tangible personal property. Mahre;has real property only in New York. Mahre has the following sales;Assume the following tax rates: Alaska (6.6 percent);Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (6.75 percent), New;York (8 percent), and Vermont (5 percent). How much sales and use tax must;Mahre collect and remit?;A. $10,386;B. $14,543;C. $26,733;D. $61,289;73. Which of;the following isn't a requirement of Public Law 86-272?;A. The tax;is based on net income.;B. The;taxpayer sells only tangible personal property.;C. The;taxpayer is an intrastate business.;D. The;taxpayer is nondomiciliary.;74. Bethesda;Corporation is unprotected from income tax by Public Law 86-272. Which of the;following characteristics creates a problem for Bethesda in states other than;Maryland?;A. Bethesda;does business in Maryland and five other states.;B. Bethesda;sells copier equipment and copy center services.;C. All;orders are approved in Maryland.;D. All;in-state services are limited to solicitation in states other than Maryland.;75. Public Law;86-272 protects solicitation from income taxation. Which of the following;activities exceeds the solicitation threshold?;A. Any form;of advertising.;B. Distribution;of samples without charge.;C. Accepting;a down payment.;D. Checking;a customer's inventory.;76. 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).;77. Which of;the following states is not asserting economic nexus?;A. New York;with the Amazon rule.;B. South;Carolina in the Geoffrey case.;C. West;Virginia in the MBNA case.;D. Wisconsin;in Wrigley.;78. Which of;the following isn't a criteria used to determine whether a unitary relationship;exists?;A. Functional;integration.;B. Centralized;management.;C. Economies;of scale.;D. Consolidated;return status.;79. Which of;the following isn't a typical federal/state adjustment?;A. Dividends;received deduction.;B. Depreciation.;C. Meals and;entertainment.;D. U.S.;obligation interest income.;80. PWD;Incorporated is an Illinois corporation. It properly included, deducted, or;excluded the following items on its federal tax return in the current year;PWD's Federal Taxable Income was $100,000. Calculate PWD's;Illinois state tax base.;A. $116,000;B. $130,833;C. $131,000;D. $140,833;81. Hoosier;Incorporated is an Indiana corporation. It properly included, deducted, or;excluded the following items on its federal tax return in the current year;State depreciation expense was $50,000. Hoosier's Federal;Taxable Income was $150,300. Calculate Hoosier's Illinois state tax base.;A. $171,300;B. $173,800;C. $204,633;D. $207,133;82. Which of;the following is not a general rule for calculating the sales factor?;A. Tangible;personal property sales are sourced to the destination state.;B. If the;business does not have nexus in the destination state, the sales are thrown;back to the state where the goods were shipped from.;C. Services;are sourced to the destination state.;D. Government;sales are sourced to the state where they were shipped from.;83. Wacky;Wendy produces gourmet cheese in Wisconsin. Wendy has sales as follows;Wendy is a Wisconsin Corporation and has the following;operations.;Wendy has nexus in Iowa, Minnesota, and Wisconsin. The;Michigan sales are shipped from Wisconsin (a throwback state). $100,000 of the;Wisconsin sales were to the federal government. What is Wendy's Wisconsin sale;numerator?;A. $1,223,032;B. $1,323,032;C. $1,357,621;D. $1,457,621;84. Which of;the following is not a general rule for calculating the payroll factor?;A. Includes;salaries, commissions, and bonuses.;B. Excludes;compensation to independent contractors.;C. Allocates;compensation for employees working in more than one state.;D. Assigns;the payroll of each employee to a single state.;85. Handsome;Rob provides transportation services in several western states. Rob has sales;as follows;Rob is a California Corporation and has the following facts.;Rob has nexus in Arizona, California, Nevada, and;Washington. The Washington drivers spend 25 percent of their time driving;through Oregon. California payroll includes $200,000 of payroll for services;provided in Nevada by California based drivers. What is Rob's California sale;numerator?;A. $934,589;B. $1,134,589;C. $1,215,347;D. $2,657,275;86. Which of;the following is not a general rule for calculating the property factor?;A. Uses the;average property values for the year.;B. Values;property at historical cost.;C. Excludes;property in transit from the calculation.;D. Includes;rented property at eight times the annual rent.;87. Lefty;provides demolition services in several southern states. Lefty has property as;follows;Lefty is a Mississippi Corporation. Lefty also rents;property in Mississippi and Tennessee with annual rents of $50,000 and $15,000;respectively. What is Lefty's Mississippi property numerator?;A. $942,153;B. $1,002,384;C. $1,052,384;D. $1,342,153;88. What was;the Supreme Court's holding in Complete Auto Transit?;A. An;out-of-state mail-order company did not have a sales tax collection;responsibility because it lacked physical presence.;B. Reaffirmed;that an out-of-state business must have physical presence in the state before;the state may require the business to collect sales tax from in-state;customers.;C. Spelled;out four criteria for determining whether states may subject nondomiciliary;companies to an income tax.;D. Defined;solicitation for purposes of Public Law 86-272.;89. Carolina's;Hats has the following sales, payroll and property factors;What is Carolina's Hats North and South Carolina;apportionment factors if North Carolina uses an equally-weighted three-factor;formula and South Carolina uses a double-weighted sales factor formula?;A. North;Carolina 74.03 percent, and South Carolina 19.45 percent.;B. North;Carolina 74.03 percent, and South Carolina 20.22 percent.;C. North;Carolina 74.28 percent, and South Carolina 19.45 percent.;D. North;Carolina 74.28 percent, and South Carolina 22.51 percent.;90. Which of;the following is not a general rule for allocating nonbusiness income?;A. Interest;and dividends to the state of commercial domicile.;B. Rental;income for investment property to state of commercial domicile.;C. Rental;income for business property to state where property is located.;D. Capital;gains from rental property to state where property is located.;91. Della;Corporation is headquartered in Carlisle, Pennsylvania. Della has a;Pennsylvania state income tax base of $425,000. Of this amount, $75,000 was;nonbusiness income. Della's Pennsylvania apportionment factor is 28.52 percent.;The nonbusiness income allocated to Pennsylvania was $61,000. Assuming a Pennsylvania;corporate tax rate of 7.75 percent, what is Della's Pennsylvania state tax;liability?;A. $8,821;B. $9,084;C. $12,464;D. $13,549;92. Which of;the following is not a nonincome based tax?;A. Ohio;Commercial Activity Tax.;B. Texas;Margin Tax.;C. Washington;Business & Occupation Tax.;D. Wisconsin;Separate Corporate Tax.;Essay Questions;93. Discuss;the steps necessary to determine whether a sales or use tax applies and how the;tax is collected.;94. List the;steps necessary to determine an interstate businesses' state income tax;liability.;95. Super;Sadie, Incorporated manufactures sandals and distributes them across the;southwestern United States. Super Sadie is incorporated and headquartered in;Arizona. It has product sales to customers in Arizona, California, Colorado;New Mexico, Oregon, Texas, and Utah. It has sales personnel in California;Colorado, and New Mexico. It also owns an office building in Arizona and a;Warehouse in Texas. Determine the states in which Super Sadie has sales and use;tax nexus.;96. Super;Sadie, Incorporated manufactures sandals and distributes them across the;southwestern United States. Assume that Super Sadie has sales and use tax nexus;in Arizona, California, Colorado, New Mexico, and Texas. Super Sadie has sales;as follows;Assume the following sales tax rates: Arizona (6 percent);California (8 percent), Colorado (7 percent), New Mexico (6.5 percent), Oregon;(7.25 percent), Texas (8 percent), and Utah (5 percent). What is Super Sadie's;total sales and use tax liability?;97. Mighty;Manny, Incorporated manufactures and services deli machinery and distributes;them across the United States. Mighty Manny is incorporated and headquartered;in New Jersey. It has product sales in all 50 states. Mighty Manny service;employees work in Connecticut, New Jersey, New York, Pennsylvania, and Rhode;Island. Mighty Manny also has an executive training seminar each year in South;Carolina. Determine the states in which Mighty Manny has sales and use tax;nexus.;98. Mighty;Manny, Incorporated manufactures and services deli machinery and distributes;them across the United States. Mighty Manny is incorporated and headquartered;in New Jersey. It has sales and use tax nexus in Connecticut, New Jersey, New;York, Pennsylvania, Rhode Island, and South Carolina. Mighty Manny has sales as;follows;Assume the following sales tax rates: Connecticut (6.75;percent), New Jersey (7.5 percent), New York (8.5 percent), Pennsylvania (6.5;percent), Rhode Island (7.25 percent), and South Carolina (5.5 percent). Assume;that Connecticut also taxes Mighty Manny's services. What is Mighty Manny's;total sales and use tax liability?;99. 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 $500 racquet to a Tennessee customer;that purchases the merchandise in the retail store?;100. 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?;101. 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?;102. Moss;Incorporated is a Washington corporation. It properly included, deducted, or;excluded the following items on its federal tax return in the current year;Moss' Oregon depreciation was $145,500. Moss' Federal;Taxable Income was $549,743. Calculate Moss' Oregon state tax base.;103. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro sells;manufacturers, and customizes tennis racquets for serious amateurs. Tennis;Pro's business has expanded significantly over the last few years. Currently;it has sales personnel in 10 states (Virginia, North Carolina, South Carolina;Georgia, Tennessee, Kentucky, Ohio, Maryland, District of Columbia, New;Jersey). All in state activity is limited to solicitation. Orders are taken by;the sales team and forwarded to Blacksburg for approval. All orders are sent by;common carrier to customers. Tennis Pro owns retail and warehouse space in;Virginia and has another warehouse in Kentucky. Where does Tennis Pro have;income tax nexus?;104. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis pro decides to;expand into Pennsylvania during the current year and try some new sales;techniques. Tennis pro advertises on local radio and television as well as;national tennis magazines sent into PA. Salesmen give away promotional;materials and occasionally sell demonstration models to local shop employees to;build goodwill for Tennis Pro. It holds sales meetings at rented space in local;hotels. Personnel occasionally fix minor problems such as tape and strings;without charge. One employee performed a credit check for a major account who;needed merchandise immediately. Each sales person is allowed an allowance for a;car and office equipment to be maintained in an in-home office. Do any of;Tennis Pro activities have the potential to create income tax nexus?;105. Big Company;and Little Company are both owned by Mrs. Big. Big and Little file a;consolidated federal tax return. Big manufactures office paper and other paper;supplies and is based in Washington. Little operates a logging operation in;Montana. Sixty percent of Little's sales are made to Big. Ten percent of Big's;raw materials come from Little. There are no common officers or board members.;There are no common service providers. What are the factors for and against;filing a unitary tax return?;106. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro sells;manufacturers, and customizes tennis racquets for serious amateurs. Tennis;Pro's business has expanded significantly over the last few years. Currently;it has sales personnel in 10 states (Virginia, North Carolina, South Carolina;Georgia, Tennessee, Kentucky, Ohio, Maryland, District of Columbia, New;Jersey). All in state activity is limited to solicitation. Orders are taken by;the sales team and forwarded to Blacksburg for approval. All orders are sent by;common carrier to customers. Tennis Pro owns retail and warehouse space in;Virginia and has another warehouse in Kentucky. Is Tennis Pro subject to Ohio's;Commercial Activity Tax?;107. 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?;108. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as;follows;The other total includes $10,000 of salary of a Virginia;employee that works part time in another state. What is Tennis Pro's Virginia;payroll numerator and payroll factor?;109. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property;as follows;What is Tennis Pro's Virginia property numerator and;property factor?;110. Gordon;operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property;as follows;Tennis Pro also rents Virginia property at an annual rent of;$24,000. What is Tennis Pro's Virginia property numerator and property factor?;111. Tennis Pro;has the following sales, payroll and property factors;What is Tennis Pro's Virginia and Maryland apportionment;factors if both states use an equally-weighted three-factor formula?;112. 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?;113. Tennis Pro;a Virginia Corporation, has the following items of income: $5,000 of dividend;income, $15,000 of interest income, $10,000 of rental income from Georgia;property, $30,000 of royalty income for an intangible used in Maryland (where;nexus exists). Determine how much income is allocated to Virginia.;114. 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?;115. Tennis Pro;is headquartered in Virginia. Assume it has a Kentucky state income tax base of;$220,000. Of this amount, $40,000 was non-business income. Assume that Tennis;Pro's Kentucky sales, payroll and property apportionment factor are 12, 5, and;3 percent, respectively. Assume that Kentucky uses a single-factor sales;formula apportionment method. The non-business income allocated to Kentucky was;$1,000. Assuming Kentucky's corporate tax rate of 6 percent, what is Tennis;Pro's Kentucky state tax liability?;116. Assume;Tennis Pro attends a sports equipment expo in Washington State. Assume this;activity creates nexus of the Business and Occupation (B&O) tax. Assume the;tax is.5% of gross receipts for retailers and 1.5% of gross receipts on;services. If Tennis Pro has $20,000 of Washington retail sales and $2,000 of;services performed, calculate Tennis Pro's B&O tax.;117. Assume;Tennis Pro discovered that one salesman has gone into Arkansas once each year;of the past 4 years and performed activities creating both sales and use tax;nexus and income tax nexus. Assume that Arkansas sales were $25,000 each year.;Assume that Arkansas business income would be 200,000 each year and that Tennis;Pro's Arkansas apportionment percentage would be 1 percent. Assume there would;be no Arkansas nonbusiness income. Assume that Arkansas sales and use tax rate;was 6.5 percent and corporate income tax rate was 5 percent. What would Tennis;Pro's Arkansas sales and use tax and income tax liability be ignoring any;possible penalties and interest?

 

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