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Exam 23: State and Local Taxes

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Question 21

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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's Oregon depreciation was $145,500.Moss's federal taxable income was $549,743.Calculate Moss's Oregon state tax base.

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$571,743.$549,743 + ...

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Question 22

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The annual value of rented property is not included in the property factor.

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B) False

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Question 23

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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? (Round the payroll factor to two places.)

Immaterial violations of the solicitation rules automatically create income tax nexus.

Which of the items is correct regarding a use tax?

Which of the following regarding the state tax base is incorrect?

In Complete Auto Transit the U.S.Supreme Court determined eight criteria for determining whether a state can tax a nondomiciliary company.

Big Company and Little Company are both owned by Mrs.Smith.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?

The payroll factor includes payments to independent contractors.

Public Law 86-272 protects a taxpayer from which of the following taxes?

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? (Round the property factor to two places.)

A gross receipts tax is subject to Public Law 86-272.

All of the following are false regarding apportionment except?

Tennis Pro is headquartered in Virginia.Assume it has a state income tax base of $200,000.Of this amount,$60,000 was nonbusiness income.Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent.The nonbusiness income allocated to Virginia was $23,000.Assuming a Virginia corporate tax rate of 5.5 percent,what is Tennis Pro's Virginia state income tax liability? (Round your answer to the nearest whole number.)

Most states have shifted away from an equally weighted three-factor to a heavily weighted sales apportionment formula.

Mahre,Incorporated,a New York corporation,runs ski tours in 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 sales tax rates: Alaska (0 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?

Interest and dividends are allocated to the state of commercial domicile.

List the steps necessary to determine an interstate business's state income tax liability.

Delivery of tangible personal property through common carrier is a protected activity.

Commercial domicile is the location where a business is headquartered and from whence it directs its operations.