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The payroll factor includes payments to independent contractors.

A) True
B) False

Correct Answer

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Which of the items is correct regarding a use tax?


A) Use taxes are imposed by every state.
B) Use taxes only apply when the seller is not required to collect the sales tax.
C) Amazon collects use taxes on behalf of all its resellers.
D) States choose to implement either a sales tax or a use tax but not both.

E) C) and D)
F) All of the above

Correct Answer

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The Wrigley case held that the sale of intangibles is protected by Public Law 86-272.

A) True
B) False

Correct Answer

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Which of the following is not a primary revenue source for most states?


A) Income or franchise taxes
B) Sales or use taxes
C) Severance taxes
D) Property taxes

E) All of the above
F) A) and C)

Correct Answer

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


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 B)
F) None of the above

Correct Answer

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


A) Includes salaries, commissions, and bonuses
B) Excludes compensation to independent contractors
C) Allocates compensation for employees working in more than one state
D) Assigns the payroll of each employee to a single state

E) A) and C)
F) B) and C)

Correct Answer

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Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $3,100 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation?


A) $0
B) $155 to Virginia
C) $155 sales tax to Virginia and $31 use tax to Maryland
D) $186 to Maryland

E) A) and C)
F) None of the above

Correct Answer

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Nondomiciliary businesses are subject to tax everywhere they do business.

A) True
B) False

Correct Answer

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Which of the following isn't a typical federal/state adjustment?


A) Dividends received deduction
B) Depreciation
C) Meals
D) U.S. obligation interest income

E) B) and C)
F) All of the above

Correct Answer

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Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,500 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence, where she will use the dress. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax collection obligation?


A) $0
B) $75 to Virginia
C) $75 sales tax to Virginia and $15 use tax to Maryland
D) $90 to Maryland

E) A) and B)
F) B) and D)

Correct Answer

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Hoosier Incorporated is an Indiana corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: 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 $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base. A) $172,509 B) $174,983 C) $200,933 D) $208,433 State depreciation expense was $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base.


A) $172,509
B) $174,983
C) $200,933
D) $208,433

E) All of the above
F) B) and C)

Correct Answer

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Della Corporation is headquartered in Carlisle, Pennsylvania. Della has a Pennsylvania state income tax base of $425,000. Of this amount, $75,000 was nonbusiness income. Della's Pennsylvania apportionment factor is 28.52 percent. The nonbusiness income allocated to Pennsylvania was $61,000. Assuming a Pennsylvania corporate tax rate of 7.75 percent, what is Della's Pennsylvania state tax liability? (Round your answer to the nearest whole number.)


A) $8,821
B) $9,084
C) $12,464
D) $13,549

E) B) and D)
F) B) and C)

Correct Answer

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Sales personnel investigating a potential customer's creditworthiness generally are deemed to exceed protected boundaries of solicitation.

A) True
B) False

Correct Answer

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Lefty provides demolition services in several southern states. Lefty has property as follows: Lefty provides demolition services in several southern states. Lefty has property as follows: Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $50,000 and $15,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.) A) $942,153 B) $1,002,384 C) $1,052,384 D) $1,342,153 Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $50,000 and $15,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.)


A) $942,153
B) $1,002,384
C) $1,052,384
D) $1,342,153

E) A) and B)
F) A) and C)

Correct Answer

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


A) Legislative
B) Administrative
C) Judicial
D) Treatises

E) A) and B)
F) B) and C)

Correct Answer

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Failure by a seller to collect and remit sales taxes often results in a larger tax liability than failure to pay income taxes.

A) True
B) False

Correct Answer

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Giving samples and promotional materials without charge is a protected solicitation activity.

A) True
B) False

Correct Answer

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Which of the following is incorrect regarding nondomiciliary businesses?


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

E) None of the above
F) A) and B)

Correct Answer

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Lefty provides demolition services in several southern states. Lefty has property as follows: Lefty provides demolition services in several southern states. Lefty has property as follows: Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $63,000 and $28,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.) A) $942,178 B) $1,002,410 C) $1,065,410 D) $1,446,178 Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $63,000 and $28,000, respectively. What is Lefty's Mississippi property numerator? (Round your answer to the nearest whole number.)


A) $942,178
B) $1,002,410
C) $1,065,410
D) $1,446,178

E) B) and D)
F) A) and D)

Correct Answer

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Many states are either starting to or are in the process of expanding the types of services subject to sales tax.

A) True
B) False

Correct Answer

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Showing 41 - 60 of 114

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