Question 1

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: 
State depreciation expense was $50,000. Hoosier's Federal Taxable Income was $150,300. Calculate Hoosier's Illinois state tax base.

Accepted Answer

A)   $171,300
B)   $173,800
C)   $204,633
D)   $207,133E) A) and B)
F) A) and D)

Question 2

Which of the following isn't a requirement of Public Law 86-272?

Accepted Answer

A)   The tax is based on net income.
B)   The taxpayer sells only tangible personal property.
C)   The taxpayer is an intrastate business.
D)   The taxpayer is nondomiciliary.E) B) and D)
F) A) and B)

Question 3

Which of the following is not a general rule for calculating the sales factor?

Accepted Answer

A)   Tangible personal property sales are sourced to the destination state.
B)   If the business does not have income tax nexus in the destination state, the sales are thrown back to the state where the goods were shipped from.
C)   Services are sourced to the destination state.
D)   Government sales are sourced to the state where they were shipped from.E) A) and C)
F) B) and C)

Question 4

Which of the following is True regarding state and local taxes?

Accepted Answer

A)   All states impose a state income tax.
B)   Every jurisdiction imposes a sales or use tax.
C)   The primary purpose of state and local taxes is to raise revenue.
D)   Property taxes are primarily used to finance a State's general revenue fund.E) All of the above
F) A) and C)

Question 5

Businesses must pay income tax in their state of commercial domicile.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is incorrect regarding nondomiciliary businesses?

Accepted Answer

A)   Subject to tax only where income tax nexus exists.
B)   A business cannot be nondomiciliary where headquartered.
C)   A business can be nondomiciliary in only one jurisdiction.
D)   Subject to tax only where a sufficient connection exists.E) C) and D)
F) A) and B)

Question 7

Tennis Pro, a Virginia Corporation domiciled in Virginia, has the following items of income: $5,000 of dividend income, $15,000 of interest income, $10,000 of rental income from Georgia property, $30,000 of royalty income for an intangible used in Maryland (where income tax nexus exists). Determine how much income is allocated to Virginia.

Accepted Answer

$20,000.
$5,000 of d...

Question 8

Wyoming imposes an income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

Accepted Answer

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

Question 11

A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements regarding income tax commercial domicile is incorrect?

Accepted Answer

A)   The location where a business is headquartered.
B)   The location where a business is incorporated.
C)   The location from which a business directs its operations.
D)   None of the choices are correct.E) A) and B)
F) B) and D)

Question 13

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?

Accepted Answer

$1,385,179 and 87.47 percent.
...

Question 14

Business income includes all income earned in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 15

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?

Accepted Answer

$260,000 and 55.85 percent.
$2...

Question 16

Physical presence does not always create sales tax nexus.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following law types is not a primary authority source?

Accepted Answer

A)   Legislative
B)   Administrative
C)   Judicial
D)   TreatisesE) B) and C)
F) None of the above

Question 18

State tax law is comprised solely of legislative authority.

Accepted Answer

A) True 
 B)False

Question 19

The primary purpose of state and local taxes is to raise revenue to finance state and local government.

Accepted Answer

A) True 
 B)False

Question 20

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Accepted Answer

A) True 
 B)False

Exam 12: State and Local Taxes

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

Correct Answer
verified

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Correct Answer
verified

Which of the following is not a general rule for calculating the sales factor?

Correct Answer
verified

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: State depreciation expense was $50,000. Hoosier's Federal Taxable Income was $150,300. Calculate Hoosier's Illinois state tax base.

Correct Answer
verified

Which of the following law types is not a primary authority source?

Correct Answer
verified

Which of the following statements regarding income tax commercial domicile is incorrect?

Correct Answer
verified

Physical presence does not always create sales tax nexus.

Correct Answer
verified

Which of the following is incorrect regarding nondomiciliary businesses?

Correct Answer
verified

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?

Correct Answer
verified
$1,385,179 and 87.47 percent.
...
View Answer

Correct Answer
verified
$20,000.
$5,000 of d...
View Answer

Business income includes all income earned in the ordinary course of business.

Correct Answer
verified

State tax law is comprised solely of legislative authority.

Correct Answer
verified

Which of the following is True regarding state and local taxes?

Correct Answer
verified

The primary purpose of state and local taxes is to raise revenue to finance state and local government.

Correct Answer
verified

A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

Correct Answer
verified

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?

Correct Answer
verified
$260,000 and 55.85 percent.
$2...
View Answer

Which of the following isn't a requirement of Public Law 86-272?

Correct Answer
verified

Businesses must pay income tax in their state of commercial domicile.

Correct Answer
verified

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' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

Correct Answer
verified
$571,743.
$549,743 +...
View Answer

Wyoming imposes an income tax on corporations.

Correct Answer
verified

Exam 12: State and Local Taxes

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

Correct AnswerverifiedShow Answer

Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

Correct AnswerverifiedShow Answer

Which of the following is not a general rule for calculating the sales factor?

Correct AnswerverifiedShow Answer

Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: State depreciation expense was $50,000. Hoosier's Federal Taxable Income was $150,300. Calculate Hoosier's Illinois state tax base.

Correct AnswerverifiedShow Answer

Which of the following law types is not a primary authority source?

Correct AnswerverifiedShow Answer

Which of the following statements regarding income tax commercial domicile is incorrect?

Correct AnswerverifiedShow Answer

Physical presence does not always create sales tax nexus.

Correct AnswerverifiedShow Answer

Which of the following is incorrect regarding nondomiciliary businesses?

Correct AnswerverifiedShow Answer

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?

Correct Answerverified$1,385,179 and 87.47 percent....View AnswerShow Answer

Correct Answerverified$20,000.$5,000 of d...View AnswerShow Answer

Business income includes all income earned in the ordinary course of business.

Correct AnswerverifiedShow Answer

State tax law is comprised solely of legislative authority.

Correct AnswerverifiedShow Answer

Which of the following is True regarding state and local taxes?

Correct AnswerverifiedShow Answer

The primary purpose of state and local taxes is to raise revenue to finance state and local government.

Correct AnswerverifiedShow Answer

A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

Correct AnswerverifiedShow Answer

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?

Correct Answerverified$260,000 and 55.85 percent.$2...View AnswerShow Answer

Which of the following isn't a requirement of Public Law 86-272?

Correct AnswerverifiedShow Answer

Businesses must pay income tax in their state of commercial domicile.

Correct AnswerverifiedShow Answer

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' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

Correct Answerverified$571,743.$549,743 +...View AnswerShow Answer

Wyoming imposes an income tax on corporations.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
$1,385,179 and 87.47 percent.
...
View Answer

Correct Answer
verified
$20,000.
$5,000 of d...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$260,000 and 55.85 percent.
$2...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$571,743.
$549,743 +...
View Answer

Correct Answer
verified