Question 1

You are completing the State A income tax return for Quaint Company, LLC. Quaint operates in various states, showing the following results.
  In A, all interest is treated as business income. A uses a sales­only apportionment factor. Compute Quaint's A
taxable income.

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Question 2

Flip Corporation operates in two states, as indicated below. All goods are manufactured in State A. Determine the sales to be assigned to both states to be used in computing Flip's sales factor for the year. Both states follow the UDITPA and the MTC regulations in this regard.
State A State B
Gross sales to purchasers in state $400,000 $350,000
Sales returns 9,000 11,000
Discounts allowed 21,000 31,000
Carrying charges collected back from customers, separately stated 20,000 10,000
Rental income 60,000 * 25,000 **
* Excess warehouse space, seasonal rental to a competitor.
** Land held for speculation.

Accepted Answer

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Question 3

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.

Accepted Answer

The answer of If a gift card is unused after...

Question 4

Provide the required information for Orange Corporation, whose Federal taxable income totals $100 million. Orange apportions 70% of its business income to State C. Orange generates $10 million of nonbusiness income each year. Forty percent of that income is attributable to rentals of buildings located in C. Orange's business income this year totals $90 million.
a. State C taxes how much of Orange's business income?
b. State C taxes how much of Orange's nonbusiness income?
c. Explain your results.

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Question 5

An ad valorem property tax is based on the asset's current .

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Question 6

Kim Corporation, a calendar year taxpayer, has manufacturing facilities in States A and B. A summary of Kim's
property holdings follows.
Beginning of Year
  End of Year
  Determine Kim's property factors for the two states. A's statutes provide that the average historical cost of business property is to be included in the property factor. B's statutes provide that the property factor is based on the average depreciated basis of in-state business property.

Accepted Answer

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Question 7

A state might levy a(n) tax when an investor sells shares of stock.

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Question 8

Compute Still Corporation's State Q taxable income and tax liability for the year.

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Question 9

The sale of groceries to an individual probably is exempt from sales/use tax under the _________________________ rule.

Accepted Answer

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Question 10

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.

Accepted Answer

The answer of A tax is designed to complement the...

Question 11

Garcia Corporation is subject to tax in States G, H, and I. Garcia's compensation expense includes the following.
  
Officers' salaries are included in the payroll factor for States G and H, but not for I. Compute Garcia's payroll
factors for G, H, and I.

Accepted Answer

The answer of Garcia Corporation is subject to tax in...

Question 12

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 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.

Accepted Answer

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Question 13

The tax levied by a state usually is based on the book value of a corporation's "net worth."

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Question 14

Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B. For the taxable year, the corporation's activities within the two states were as follows.
  Dott has determined that it is subject to tax in both A and B. Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 7% and 10%, respectively. Determine Dott's state income tax liability.

Accepted Answer

The answer of Dott Corporation generated $300,000 of state taxable...

Question 15

Condor Corporation generated $450,000 of state taxable income from selling its product in States A and B. For the taxable year, the corporation's activities within the two states were as follows.
  Condor has determined that it is subject to tax in both A and B. Both states utilize a three-factor apportionment formula that equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 5% and 3%, respectively. Determine Condor's state income tax liability.

Accepted Answer

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Question 16

Mercy Corporation, headquartered in State F, sells wireless computer devices, including keyboards and bar code readers. Mercy's degree of operations is sufficient to establish nexus only in States E and F. Determine its sales factor in those states.
State E applies a throwback rule to sales, while State F does not. State G has not adopted an income tax to date. Mercy reported the following sales for the year. All of the goods were shipped from Mercy's F manufacturing facilities.

Accepted Answer

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Question 17

The tax usually is applied at the city or county level, as its main source of revenue.

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Question 18

Milt Corporation owns and operates two facilities that manufacture paper products. One of the facilities is located in State D, and the other is located in State E. Milt generated $1,200,000 of taxable income, comprised of $1,000,000 of income from its manufacturing facilities and a $200,000 gain from the sale of nonbusiness property located in E. E does not distinguish between business and nonbusiness property. D apportions business income. Milt's activities within the two states are outlined below.
  Both D and E utilize a three-factor apportionment formula, under which sales, property, and payroll are equally weighted. Determine the amount of Milt's income that is subject to income tax by each state.

Accepted Answer

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Question 19

Troy, an S corporation, is subject to tax only in State A. On Schedule K of its Federal Form 1120S, Troy reported ordinary income of $2,000,000 from its business, municipal bond interest of $150,000, taxable interest of $150,000, and charitable contributions of $300,000. A does not recognize S status, but it does follow the Federal provisions with respect to the determination of taxable income for a corporation. Determine Troy's A taxable income.

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Question 20

Determine Drieser's sales factors for States K, M, and N.
Drieser Corporation's manufacturing facility, distribution center, and retail store are located in State K. Drieser sells its products to residents located in States K, M, and N.
Sales to residents of K are conducted through a retail store. Sales to residents of M are obtained by Drieser's sales representative, who has the authority to solicit, accept, and approve sales orders in State M. Residents of N can purchase Drieser's product only if they place an order online and arrange to take delivery of the product at Drieser's shipping dock.
  Drieser's activities within the three states are limited to those described above. All of the states have adopted a throwback provision and utilize a three-factor apportionment formula under which sales, property, and payroll are equally weighted. State K sources dock sales to the destination state.

Accepted Answer

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Quiz 16: Multistate Corporate Taxation

You are completing the State A income tax return for Quaint Company, LLC. Quaint operates in various states, showing the following results. In A, all interest is treated as business income. A uses a salesonly apportionment factor. Compute Quaint's A taxable income.

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.

An ad valorem property tax is based on the asset's current .

A state might levy a(n) tax when an investor sells shares of stock.

Compute Still Corporation's State Q taxable income and tax liability for the year.

The sale of groceries to an individual probably is exempt from sales/use tax under the _________________________ rule.

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.

Garcia Corporation is subject to tax in States G, H, and I. Garcia's compensation expense includes the following. Officers' salaries are included in the payroll factor for States G and H, but not for I. Compute Garcia's payroll factors for G, H, and I.

The tax levied by a state usually is based on the book value of a corporation's "net worth."

The tax usually is applied at the city or county level, as its main source of revenue.

Quiz 16: Multistate Corporate Taxation

You are completing the State A income tax return for Quaint Company, LLC. Quaint operates in various states, showing the following results. In A, all interest is treated as business income. A uses a sales­only apportionment factor. Compute Quaint's A taxable income.

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.

An ad valorem property tax is based on the asset's current .

A state might levy a(n) tax when an investor sells shares of stock.

Compute Still Corporation's State Q taxable income and tax liability for the year.

The sale of groceries to an individual probably is exempt from sales/use tax under the _________________________ rule.

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.

Garcia Corporation is subject to tax in States G, H, and I. Garcia's compensation expense includes the following. Officers' salaries are included in the payroll factor for States G and H, but not for I. Compute Garcia's payroll factors for G, H, and I.

The tax levied by a state usually is based on the book value of a corporation's "net worth."

The tax usually is applied at the city or county level, as its main source of revenue.

You are completing the State A income tax return for Quaint Company, LLC. Quaint operates in various states, showing the following results. In A, all interest is treated as business income. A uses a salesonly apportionment factor. Compute Quaint's A taxable income.