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Exam 24: Multistate Corporate Taxation

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Question 101

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

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Question 102

Multiple Choice

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Valdez Corporation, a calendar-year taxpayer, owns property in States M and O. Both M and O require that the average value of assets be included in the property factor. M requires that the property be valued at its historical cost, and O requires that the property be included in the property factor at its net depreciated book value. Valdez's O property factor is:

A) 35.0%.
B) 37.2%.
C) 39.5%.
D) 53.8%.

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

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Question 103

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General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a customer in B. General has not established nexus with B. State A does not apply a throwback rule. In which state(s) will the sale be included in the sales factor numerator?

A unitary business applies a combined apportionment formula, including data from operations of all of the affiliates.

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 -Dividend income from P & G stock held.

A state sales tax usually falls upon:

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 -Computing services purchased by a business.

A ________________ tax is designed to complement the local sales tax structure, to prevent the consumer from making no- or low-tax purchases in another state, outside the U.S., or online, and then bringing the asset into the state.

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

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

An LLC apportions and allocates its annual taxable income in the same manner used by any other business operating in the state.

A typical state taxable income addition modification is for the state's NOL allowed the taxpayer for the tax year.

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to the State B office of the FBI, the Federal Bureau of Investigation. In which state(s) will the sale be included in the sales factor numerator?

Roughly five percent of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions.

A city might assess a recording tax when a business takes out a mortgage on its real estate.

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

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 general business credit.

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 -State-level NOL.

In conducting multistate tax planning, the taxpayer should:

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 -Groceries purchased by an individual and taken home for meal preparation there.