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Exam 24: Multistate Corporate Taxation

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Question 91

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

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Question 92

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​In applying the typical apportionment formula: ​

A) ​The aggregate of state taxable incomes equals Federal taxable income.
B) ​The aggregate of state taxable incomes may not equal Federal taxable income.
C) ​When Federal taxable income is negative, all states' taxable incomes are negative.
D) ​When Federal taxable income is negative, aggregate state taxable incomes total to zero.

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

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Question 93

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Match each of the following terms with the appropriate description, in the state income tax formula. Apply the UDITPA rules in your responses. a.Addition modification b.Subtraction modification c.No modification -Federal depreciation deduction in excess of state amount.

Typically exempt from the sales/use tax base is the purchase by a symphony orchestra of printed music for its players.

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

In the broadest application of the unitary theory,the U.S.unitary business files a combined tax return using factors and income amounts for all affiliates:

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.

All of the U.S.states have adopted a tax based on the net taxable income of corporations.

Hill Corporation is subject to tax only in State X.Hill generated the following income and deductions.State income taxes are not deductible for X income tax purposes. ​ a.​The starting point in computing the State X income tax base is Federal taxable income. Derive this amount. b.​Determine Hill's State X taxable income, assuming that interest on X obligations is exempt from State X income tax. c.​Determine Hill's taxable income, assuming that interest on X obligations is subject to State X income tax.

Typically included in the sales/use tax base is the purchase of tablet computers and cell phone equipment by a large manufacturing firm,whose sales force uses the items.

Given the following transactions for the year,determine Comp Corporation's D payroll factor denominator.State D has adopted the principles of UDITPA.

For most taxpayers,which of the traditional apportionment factors yields the greatest opportunities for tax reduction?

Typically,the state's payroll factor ____________________ (does/does not) include the salaries and bonuses paid to its corporate executives.

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

The individual seller of shares of stock in Facebook is liable for sales tax on the transaction.

A unitary group of entities files a combined return that includes all of the affiliates' income and apportionment data.

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L sales tax.

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

When a _________________________ is in effect,out-of-state sales that are not subject to tax in the destination state are pulled back into the sales factor numerator of the origination state.

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