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Exam 24: Multistate Corporate Taxation

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Question 31

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List which items are included in the payroll factor of a state.Consider all forms of compensation that an employee might receive.Apply the general UDITPA rules.

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The following items,...

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Question 32

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You attend a tax webinar in which the presenter mentions the "ultimate destination concept." Define this term,and identify at least two of the most important exceptions to the general rule.

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Under the ultimate destination concept,a...

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Question 33

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In determining taxable income for state income tax purposes,the Federal NOL deduction typically constitutes a(n)____________________ modification.

For most taxpayers,which of the traditional apportionment factors yields the greatest opportunities for tax reduction?

General Corporation is taxable in a number of states.This year,General made a $100,000 sale from its A headquarters to a State B office of an agency of the U.S.government.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 typical state taxable income addition modification is the interest income from U.S.Treasury bonds.

Typically exempt from the sales/use tax base is the purchase of lumber by a do-it-yourself homeowner,when she builds a deck onto her patio.

____________________ is a method under which a corporation's nonbusiness income is directly assigned to the specific states where the income is derived.

Most states waive the collection of sales tax on groceries.

Indicate for each transaction whether a sales (S)or use (U)applies,or whether the transaction is nontaxable (N).Where the laws vary among various states,assume that the most common rules apply.All taxpayers are individuals.

Garcia Corporation is subject to tax in States G,H,and I.Garcia's compensation expense includes the following.

Compute Quail Corporation's State Q taxable income for the year.

Shaker 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 Shaker's sales factor for the year. Both states follow the UDITPA and the MTC regulations in this regard.

A state sales/use tax is designed to be collected by the ____________________ (seller/purchaser)of the product and then remitted to the state.

Pail Corporation is a merchandiser.It purchases overstock garments from various suppliers and sells the goods in its State L retail store.Determine the total sales that are subject to the L consumer sales tax.

In most states,Federal S corporations must make a separate state-level election of the flow-through status.

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

P.L.86-272 ____________________ (does/does not)create nexus when the seller runs a booth with inventory samples,at a one-week trade show in the state.

Which of the following is not immune from state income taxation,even if P.L.86-272 is in effect?

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates.Hint: use the terms allocation and apportionment in your comments.