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Exam 16: Multistate Corporate Taxation

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Question 51

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Leased property,when included in the property factor,usually is valued at ____________________ times its annual rental,even though the taxpayer does not own the asset. or

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Question 52

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In most states,medical services are exempt from the sales/use tax base.

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Question 53

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A capital stock tax usually is structured as an excise tax imposed on a corporation's "net worth," using financial statement data to compute the tax.

If a gift card is unused after a specified period of time,the state can collect the amount of the card proceeds from the seller,as ____________________ property.

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

In conducting multistate tax planning,the taxpayer should:

Your supervisor has shifted your responsibilities from the Federal corporate income tax to a multistate corporate income tax practice.In what areas might your Federal income tax knowledge also be applicable in your new assignment?

The property factor includes land and buildings used for business purposes.

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:

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.

A number of court cases in the last several decades have involved the application of a state's nexus rules concerning a business taxpayer.What is the significance of the term nexus when discussing state income taxation?

Most states' consumer sales taxes apply directly to the final purchaser of the taxable asset,who then remits the tax to the state treasury.

Almost all of the states allow ____________________ treatment to an LLC for income tax purposes. or or

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

Typically included in the sales/use tax base is the purchase of computer and cell phone equipment by a large consulting firm that is incorporated in the state.

In the apportionment formula,most states assign more than a one-third weight to the ____________________ factor.

Most states begin the computation of taxable income with an amount from the Federal income tax return.

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.

A local business wants your help in making a decision about a large capital investment.Should your advice concentrate on tax or non-tax implications of the decision?

Under Public Law 86-272,a state is prohibited from taxing a business if the only connection with the state is the _____________________ of orders for sales of tangible personal property that are sent outside the state for approval or rejection and,if approved,are filled and shipped by the business from a point outside of the state.