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Exam 16: Multistate Corporate Taxation

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Question 51

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A(n) ____________________ business operates its separate companies as a whole. It cannot be segregated into independently operating divisions or branches.

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Question 52

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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.

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Question 53

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

Perez Corporation is subject to tax only in State a Perez generated the following income and deductions. Federal taxable income is the starting point in computing A taxable income. State income taxes are not deductible for A tax purposes. Perez's A taxable income is:

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

Under common terminology, a unitary group files a ____________________ state income tax return.

The typical local property tax falls on both an investor's real estate and her stock portfolio.

Under P.L. 86-272, which of the following transactions by itself would create nexus with a state?

An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000. The payroll factor assigns $30,000 for this employee.

Double weighting the sales factor effectively increases the tax burden on taxpayers based in the state, such as corporations with in-state headquarters.

Typical indicators of nexus include the presence of employees based in the state, and the ownership or lease of realty there.

A state or local tax on a corporation's income might be called a franchise tax or a business privilege tax.

When the taxpayer has exposure to a capital stock tax:

State and local politicians tend to apply new and increased taxes to taxpayers who are visitors to the jurisdiction and cannot vote to reelect the lawmaker.

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

A typical state taxable income addition modification is the Federal net operating loss (NOL) deduction.

The property factor includes business assets that the taxpayer owns, but also those merely used under a lease agreement.

A capital stock tax usually is structured as an excise tax imposed on a corporation's "net worth," using financial statement data to compute the tax.

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

Britta Corporation's entire operations are located in State A. Eighty percent ($800,000) of Britta's sales are made in A and the remaining sales ($200,000) are made in State B. B has not adopted a corporate income tax. If A has adopted a throwback rule, the numerator of Britta's A sales factor is: