Jurisdictional Issues In Business Taxation

This question bank verified by Studydeets

Questions Bank

Taxes and Taxing Jurisdictions
Policy Standards for a Good Tax
Taxes as Transaction Costs
Maxims of Income Tax Planning
Tax Research
Taxable Income from Business Operations
Property Acquisitions and Cost Recovery Deductions
Property Dispositions
Nontaxable Exchanges
Sole Proprietorships
The Corporate Taxpayer
The Choice of Business Entity
Jurisdictional Issues in Business Taxation
The Individual Tax Formula
Compensation and Retirement Planning
Investment and Personal Financial Planning
Tax Consequences of Personal Activities
The Tax Compliance Process

All Questions

Question 1

Free

True/False

In the United States, corporations are subject only to taxes imposed by the federal government.

Choose correct answer/s

True

False

Check answer

Question 2

Free

True/False

The federal income tax deduction allowed for state income taxes paid decreases the cost of the state taxes.

Choose correct answer/s

True

False

Check answer

Question 3

Free

True/False

If a corporation with a 21% marginal federal income tax rate pays $20,000 state income tax, the after-tax cost of the state tax is $15,800.

Choose correct answer/s

True

False

Check answer

Question 4

Free

True/False

Multi-state businesses can reduce their overall tax cost to the extent they can shift income from a low-tax state to a high-tax state.

Choose correct answer/s

True

False

Check answer

Question 5

Free

True/False

A corporation is usually subject to tax by any state in which it engages in any business transactions.

Choose correct answer/s

True

False

Check answer

Question 6

True/False

Article 1 of the U.S. Constitution, referred to as the commerce clause, prohibits state governments from using a tax to discriminate against interstate commerce.

Choose correct answer/s

True

False

To unlock the question

Question 7

True/False

Article 1 of the U.S. Constitution, referred to as the commerce clause, prohibits a state from charging an extra 10 cent tax per gallon on gasoline sold to trucks with out-of-state license plates.

Choose correct answer/s

True

False

To unlock the question

Question 8

True/False

According to Public Law 86-272, the sale of tangible goods to residents of a state is not sufficient to establish nexus in that state.

Choose correct answer/s

True

False

To unlock the question

Question 9

True/False

If Gamma Inc. is incorporated in Ohio and has its commercial domicile in Cleveland, the state of Ohio has jurisdiction to tax 100% of Gamma's business income.

Choose correct answer/s

True

False

To unlock the question

Question 10

True/False

Non-resident firms selling tangible goods to in-state residents can use P.L. 86-272 to avoid having income tax nexus in a state.

Choose correct answer/s

True

False

To unlock the question

Question 11

True/False

The UDITPA formula for state income tax apportionment consists of three factors: sales, payroll, and profit.

Choose correct answer/s

True

False

To unlock the question

Question 12

True/False

The UDITPA formula for apportioning income among states is based on four equally weighted factors.

Choose correct answer/s

True

False

To unlock the question

Question 13

True/False

The sales factor in the UDITPA state income tax apportionment formula equals in-state sales divided by total sales.

Choose correct answer/s

True

False

To unlock the question

Question 14

True/False

The sales factor in the UDITPA state income tax apportionment formula equals out-of-state sales divided by total sales.

Choose correct answer/s

True

False

To unlock the question

Question 15

True/False

All states assessing an income tax use the same formula for apportionment purposes.

Choose correct answer/s

True

False

To unlock the question

Question 16

True/False

The payroll factor in the UDITPA state income tax apportionment formula always includes executive compensation.

Choose correct answer/s

True

False

To unlock the question

Question 17

True/False

Multi-State, Inc. does business in two states. Its apportionment percentage in state A is 63%. Its apportionment percentage in the other state can be no more than 37%.

Choose correct answer/s

True

False

To unlock the question

Question 18

True/False

Luttrix Inc. does business in Nebraska (6% tax rate) and Colorado (3% tax rate). All other factors being equal, Luttrix will reduce state taxes if it constructs a new manufacturing plant in Colorado.

Choose correct answer/s

True

False

To unlock the question

Question 19

True/False

The foreign tax credit is available only for foreign income, excise, value-added, sales, property and transfer taxes.

Choose correct answer/s

True

False

To unlock the question

Question 20

True/False

International tax treaties generally allow a government to tax a non-resident firm that maintains a permanent residence in the treaty country.

Choose correct answer/s

True

False

To unlock the question