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Exam 24: Multistate Corporate Taxation

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Question 91

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Match each of the following items with the appropriate description, in determining whether sales/use tax typically must be collected. a.Taxable b.Not taxable -Computer equipment purchased by a charity.

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Question 92

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

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B) False

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Question 93

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Provide the required information for Orange Corporation,whose Federal taxable income totals $100 million.Orange apportions 70% of its business income to State C.Orange generates $10 million of nonbusiness income each year.Forty percent of that income is attributable to rentals of buildings located in C.Orange's business income this year totals $90 million. a.State C taxes how much of Orange's business income? b.State C taxes how much of Orange's nonbusiness income? c.Explain your results.

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

Allocation is a method under which a corporation's _________________________ income is directly assigned to the specific states where the income is derived.

Garcia Corporation is subject to tax in States G,H,and I.Garcia's compensation expense includes the following. State G State H State I Total Salaries and wages for nonofficers $600,000 $500,000 $500,000 $1,600,000 Officers' salaries -0- -0- 800,000 800,000 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.

Typical indicators of income-tax nexus include the presence of customers in the state.

General Corporation is taxable in a number of states.This year,General made a $100,000 sale from its A headquarters to an agency of the U.S.government.State A applies a throwback rule.In which state(s) will the sale be included in the sales factor numerator?

Match each of the following terms with the appropriate description, in the state income tax formul a. Apply the UDITPA rules in your responses. a.Addition modification b.Subtraction modification c.No modification -Deduction for advertising expenditures.

In conducting multistate tax planning,the taxpayer should:

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. ​ State A State B Total Sales $800,000 $200,000 $1,000,000 Property 300,000 -0- 300,000 Payroll 200,000 800,000 1,000,000 ​ Condor has determined that it is subject to tax in both 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.

Apportionment is a means by which a corporation's _________________________ income is divided among the states in which it conducts business.

A service engineer spends 80% of her time maintaining the employer's productive business property and 20% maintaining the employer's nonbusiness rental properties.This year,her compensation totaled $90,000.The payroll factor assigns $90,000 to the state in which the employer is based.