Chapter 12 State And Local Taxes Exam Prep

Taxation of Business Entities, 11e (Spilker)

Chapter 12 State and Local Taxes

1) The primary purpose of state and local taxes is to raise revenue to finance state and local government.

2) All states employ some combination of sales and use tax, income or franchise tax, or property tax to fund their government operations.

3) State tax law is comprised solely of legislative authority.

4) Commercial domicile is the location where a business is headquartered and from whence it directs its operations.

5) Nondomiciliary businesses are subject to tax everywhere they do business.

6) Use tax liability accrues in the state where purchased property will be used when the seller of the property is not required to collect sales tax.

7) Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.

8) The state tax base is computed by making adjustments to federal taxable income.

9) Businesses subject to income tax in more than one jurisdiction have the right to apportionment.

10) Business income is allocated to the state of commercial domicile.

11) All 50 states impose a sales and use tax system.

12) Purchases of inventory for resale are typically exempt from sales and use taxes.

13) The sales and use tax base varies from state to state.

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

15) Businesses must collect sales tax only in states where they have sales tax nexus.

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

17) Economic presence always creates sales tax nexus.

18) The Wayfair decision held that an out-of-state mail-order company did not have sales tax collection responsibility because it lacked physical presence.

19) The Wayfair decision reversed the Quill decision, which had affirmed that out-of-state businesses must have physical presence within a state before the state may require the collection of sales taxes from in-state customers.

20) Wyoming imposes an income tax on corporations.

21) Businesses must pay income tax in their state of commercial domicile.

22) In Complete Auto Transit the U.S. Supreme Court determined eight criteria for determining whether a state can tax a nondomiciliary company.

23) Public Law 86-272 protects certain business activities from creating income tax nexus.

24) Public Law 86-272 was a congressional response to Northwestern States Portland Cement.

25) Public Law 86-272 protects only companies selling tangible personal property.

26) Delivery of tangible personal property through common carrier is a protected activity.

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

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

29) The trade show rule allows businesses to maintain a sample room for up to four weeks per year.

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

31) Immaterial violations of the solicitation rules automatically create income tax nexus.

32) Several states are now moving from a strict physical presence test toward an economic presence test for income taxes.

33) Separate-return states require each member of a consolidated group with income tax nexus to file their own state income tax return.

34) A unitary-return group includes only companies included in the federal consolidated tax return filing.

35) The Mobil decision identified three factors to determine whether a group of companies are unitary.

36) Federal/state adjustments correct for differences between two states' tax laws.

37) Most state tax laws adopt the federal tax law as of a specific date in time.

38) Business income includes all income earned in the ordinary course of business.

39) A state's apportionment formula divides nonbusiness income among the states where income tax nexus exists.

40) A state's apportionment formula usually is applied using some variation of sales, payroll, and property factors.

41) The throwback rule requires a company, for apportionment purposes, to include all sales of inventory sold into a state without income tax nexus rather than from the state from where the inventory was shipped.

42) Most services are sourced to the state where the services were performed.

43) The payroll factor includes payments to independent contractors.

44) The property factor is generally calculated as being the average of the beginning and ending property values.

45) The annual value of rented property is not included in the property factor.

46) Most states have shifted away from an equally weighted three-factor to a heavily weighted sales apportionment formula.

47) In recent years, states are weighting the sales factor because it is easier to calculate.

48) Interest and dividends are allocated to the state of commercial domicile.

49) Rental income is allocated to the state of commercial domicile.

50) A gross receipts tax is subject to Public Law 86-272.

51) Which of the following is true regarding state and local taxes?

A) All states impose a state income tax.

B) Every jurisdiction imposes a sales or use tax.

C) The primary purpose of state and local taxes is to raise revenue.

D) Property taxes are primarily used to finance a state's general revenue fund.

52) 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

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

A) Legislative

B) Administrative

C) Judicial

D) Treatises

54) Which of the following statements regarding income tax commercial domicile is incorrect?

A) The location where a business is headquartered.

B) The location where a business is incorporated.

C) The location from which a business directs its operations.

D) None of the choices are correct.

55) 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.

56) 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.

57) All of the following are false regarding apportionment except?

A) Applies to only business income.

B) Applies to only nonbusiness income.

C) Applies to both business and nonbusiness income.

D) Investment income is subject to apportionment.

58) Which of the following regarding the state tax base is incorrect?

A) It is computed by making adjustments to federal taxable income.

B) It is divided into business and nonbusiness income.

C) It is a necessary step in the state income tax process.

D) It applies only to interstate businesses.

59) Which of the following sales is always subject to sales and use tax in a state that assesses a sales and use tax?

A) Tax preparation services.

B) Automobiles.

C) Inventory.

D) Food.

60) Which of the following businesses is likely to have taxable sales for purposes of sales and use tax?

A) Campus bookstore selling textbooks and university apparel.

B) An online retailer of textbooks with less than $100,000 in sales on 150 transactions.

C) A local accounting firm.

D) Mail-order clothing company.

61) Which of the following activities will create sales tax nexus?

A) Advertising using television commercials.

B) Salespeople physically located in a state from which they only take orders.

C) Delivery of sales by UPS.

D) $90,000 of sales on 190 online sales transactions.

62) Mighty Manny, Incorporated, manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin. It has sales personnel only in the states discussed and all these states have adopted Wayfair legislation. Determine the state in which Mighty Manny does not have sales and nexus given the following scenarios:

A) Mighty Manny is incorporated and headquartered in Michigan. It also has property, employees, sales personnel, and intangibles in Michigan.

B) Mighty Manny has a warehouse in Illinois.

C) Mighty Manny has independent sales representatives in Minnesota that make $150,000 of sales on 100 transactions. The representatives distribute ice scraper–related items for over a dozen companies.

D) Mighty Manny has two customers in Wisconsin. Mighty Manny receives $50,000 on 20 orders over the phone and ships goods to its customers using FedEx.

63) Mighty Manny, Incorporated, manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Iowa, Michigan, Minnesota, Wisconsin, and Wyoming. It has sales personnel only in the states discussed and all these states have adopted Wayfair legislation. Determine the state in which Mighty Manny does not have sales tax nexus given the following scenarios:

A) Mighty Manny has sales personnel that visit Minnesota. These sales employees follow procedures that comply with Public Law 86-272. The orders are received and sent to Michigan for acceptance. The goods are shipped by FedEx into Minnesota.

B) Mighty Manny's trucks drive through Nebraska to deliver goods to Mighty Manny's customers in other states, but the company has no Nebraska sales.

C) Mighty Manny provides design services to another manufacturer located in Wisconsin. While the services are performed in Michigan, Mighty Manny's designers visit Wisconsin at least quarterly to deliver the new designs and receive feedback.

D) Mighty Manny receives online orders from its Illinois client. Because the orders are so large, the goods are delivered weekly on Mighty Manny's trucks.

64) Which of the following is not one of the Complete Auto Transit's criteria for whether a state can tax nondomiciliary companies?

A) Protected activities are exempt.

B) A sufficient connection exists.

C) Only a fair portion of income can be taxed.

D) Tax cannot discriminate against nondomiciliary businesses.

65) On which of the following transactions should sales tax generally be collected?

A) Architecture plans delivered through the mail.

B) Sales of woolen goods to a state without economic sales tax nexus delivered through common carrier.

C) Accounting services provided in Alaska.

D) Meal purchased at McDonald's.

66) Roxy operates a dress shop in Arlington, Virginia. Roxy also ships dresses nationwide upon request. Roxy's Virginia sales are $1,000,000 and out-of-state sales are $200,000. Assuming that Virginia's sales tax rate is 5 percent, what is Roxy's Virginia sales and use tax liability?

A) $0.

B) $10,000.

C) $50,000.

D) $60,000.

67) Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $1,500 dress that is shipped to her Maryland residence using a common carrier. Roxy's total Maryland sales are $20,000 on 15 transactions. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 7 percent, what is Roxy's sales and use tax liability?

A) $0.

B) $75 to Virginia.

C) $75 sales tax to Virginia and $15 use tax to Maryland.

D) $90 to Maryland.

68) 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 liability?

A) $0.

B) $75 to Virginia.

C) $75 sales tax to Virginia and $15 use tax to Maryland.

D) $90 to Maryland.

69) What was the Supreme Court's holding in National Bellas Hess?

A) An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence.

B) Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers.

C) Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax.

D) Defined solicitation for purposes of Public Law 86-272.

70) What was the Supreme Court's holding in Wayfair?

A) An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence.

B) Reversed the Quill decision that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers.

C) Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax.

D) Defined solicitation for purposes of Public Law 86-272.

71) Mahre, Incorporated, a New York corporation, runs ski tours in several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. The ski tours operate in Maine, New Hampshire, and Vermont, where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales:

Assume the following sales tax rates: Alaska (0 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (6.75 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit in Maine?

A) $0

B) $3,053

C) $13,267

D) $16,319

72) Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. Assume sales transactions in all states, except New York, are under 200 and that all states have adopted Wayfair legislation. The ski tours operate in Maine, New Hampshire, and Vermont, where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales:

Assume the following sales tax rates: Alaska (0 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (0 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit?

A) $10,386

B) $14,543

C) $26,733

D) $61,289

73) Which of the following isn't a requirement of Public Law 86-272?

A) The tax is based on net income.

B) The taxpayer sells only tangible personal property.

C) The taxpayer is an intrastate business.

D) The taxpayer is nondomiciliary.

74) Bethesda Corporation is unprotected from income tax by Public Law 86-272. Which of the following characteristics creates a problem for Bethesda in states other than Maryland?

A) Bethesda does business in Maryland and five other states.

B) Bethesda sells copier equipment and copy center services.

C) All orders are approved in Maryland.

D) All in-state services are limited to solicitation in states other than Maryland.

75) Public Law 86-272 protects solicitation from income taxation. Which of the following activities exceeds the solicitation threshold?

A) Any form of advertising.

B) Distribution of samples without charge.

C) Accepting a down payment.

D) Checking a customer's inventory.

76) Public Law 86-272 protects a taxpayer from which of the following taxes?

A) Texas Margin Tax (a tax with net income, gross receipts, and capital worth components).

B) Washington Business & Occupation Tax (a gross receipts tax).

C) Ohio Commercial Activity Tax (an excise tax with a gross receipts base).

D) California Franchise Tax (a net income tax).

77) In which of the following state cases did the state not assert economic income tax nexus?

A) South Dakota with the Wayfair rule.

B) South Carolina in the Geoffrey case.

C) West Virginia in the MBNA case.

D) Wisconsin in Wrigley.

78) Which of the following isn't a criterion used to determine whether a unitary relationship exists?

A) Functional integration.

B) Centralized management.

C) Economies of scale.

D) Consolidated return status.

79) 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.

80) PWD Incorporated is an Illinois corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year:

PWD's federal taxable income was $100,000. Calculate PWD's Illinois state tax base.

A) $116,000

B) $130,833

C) $131,000

D) $164,333

81) 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 $50,000. Hoosier's federal taxable income was $150,300. Calculate Hoosier's Illinois state tax base.

A) $171,300

B) $173,800

C) $199,633

D) $207,133

82) 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.

83) Wacky Wendy produces gourmet cheese in Wisconsin. Wendy has sales as follows:

Wendy is a Wisconsin corporation and has the following operations:

Wendy has income tax nexus in Iowa, Minnesota, and Wisconsin. The Michigan sales are shipped from Wisconsin (a throwback state). $100,000 of the Wisconsin sales were to the federal government. What is Wendy's Wisconsin sale numerator?

A) $1,223,032

B) $1,323,032

C) $1,357,621

D) $1,457,621

84) 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.

85) Handsome Rob provides transportation services in several western states. Rob has payroll as follows:

Rob is a California corporation and the following is true:

Rob has income tax nexus in Arizona, California, Nevada, and Washington. The Washington drivers spend 25 percent of their time driving through Oregon. California payroll includes $200,000 of payroll for services provided in Nevada by California-based drivers. What is Rob's California payroll numerator?

A) $934,589

B) $1,134,589

C) $1,215,347

D) $2,657,275

86) Which of the following is not a general rule for calculating the property factor?

A) Uses the average property values for the year.

B) Values property at historical cost.

C) Excludes property in transit from the calculation.

D) Includes rented property at eight times the annual rent.

87) 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

88) What was the Supreme Court's holding in Complete Auto Transit? 

A) An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence.

B) Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers.

C) Provided four criteria for determining whether states may subject nondomiciliary companies to an income tax.

D) Defined solicitation for purposes of Public Law 86-272.

89) Carolina's Hats has the following sales, payroll, and property factors:

What is Carolina's Hats North and South Carolina apportionment factors if North Carolina uses an equally weighted three-factor formula and South Carolina uses a double-weighted sales factor formula? (Round your answers to two decimal places.)

A) North Carolina 74.03 percent, and South Carolina 19.45 percent.

B) North Carolina 74.03 percent, and South Carolina 20.22 percent.

C) North Carolina 74.28 percent, and South Carolina 19.45 percent.

D) North Carolina 74.28 percent, and South Carolina 22.51 percent.

90) Which of the following is not a general rule for allocating nonbusiness income?

A) Interest and dividends to the state of commercial domicile.

B) Rental income for investment property to state of commercial domicile.

C) Rental income for business property to state where property is located.

D) Capital gains from rental property to state where property is located.

91) 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

92) Which of the following is an income-based tax?

A) Ohio Commercial Activity Tax.

B) Texas Margin Tax.

C) Washington Business & Occupation Tax.

D) Wisconsin corporate tax.

93) Discuss the steps necessary to determine whether a sales tax applies and how the tax is collected.

94) List the steps necessary to determine an interstate business's state income tax liability.

95) Super Sadie, Incorporated, manufactures sandals and distributes them across the southwestern United States. Super Sadie is incorporated and headquartered in Arizona. It has product sales to customers in Arizona, California, Colorado, New Mexico, Oregon, Texas, and Utah. In each state it has sales of less than $100,000 on under 200 transactions. It has sales personnel in California, Colorado, and New Mexico. It also owns an office building in Arizona and a warehouse in Texas. Determine the states in which Super Sadie has sales tax nexus.

96) Super Sadie, Incorporated, manufactures sandals and distributes them across the southwestern United States. Assume that Super Sadie has sales tax nexus in Arizona, California, Colorado, New Mexico, and Texas. Super Sadie has sales as follows:

Assume the following sales tax rates: Arizona (6 percent), California (8 percent), Colorado (7 percent), New Mexico (6.5 percent), Oregon (7.25 percent), Texas (8 percent), and Utah (5 percent). What is Super Sadie's total sales and use tax liability? (Round your interim calculations to the nearest whole number.)

97) Mighty Manny, Incorporated, manufactures and services deli machinery and distributes it across the United States. Mighty Manny is incorporated and headquartered in New Jersey. It has product sales in all 50 states. New Jersey is the only state in which Mighty Manny exceeds the Wayfair sales thresholds. Mighty Manny's service employees work in Connecticut, New Jersey, New York, Pennsylvania, and Rhode Island. Mighty Manny also has an executive training seminar each year in South Carolina. Determine the states in which Mighty Manny has sales tax nexus.

98) Mighty Manny, Incorporated, manufactures and services deli machinery and distributes it across the United States. Mighty Manny is incorporated and headquartered in New Jersey. It has sales tax nexus in Connecticut, New Jersey, New York, Pennsylvania, Rhode Island, and South Carolina. Mighty Manny has sales as follows:

Assume the following sales tax rates: Connecticut (6.75 percent), New Jersey (7.5 percent), New York (8.5 percent), Pennsylvania (6.5 percent), Rhode Island (7.25 percent), and South Carolina (5.5 percent). Assume that Connecticut also taxes Mighty Manny's services. What is Mighty Manny's total sales and use tax liability?

99) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The shop sells, manufactures, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Tennessee has a 4 percent sales tax. Determine the sales and use tax liability that the shop must collect and remit if it sells a $500 racquet to a Tennessee resident that purchases the merchandise in the Virginia retail store?

100) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The shop sells, manufactures, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Arizona has a 6 percent sales tax, but Arizona sales thresholds don't exceed the Wayfair limits. Determine the sales tax liability that the shop must collect and remit if it sells a $1,000 racquet order to an Arizona customer (assume the shop has no sales personnel or property in Arizona) that purchases the merchandise from the Virginia store over the internet?

101) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. The shop sells, manufactures, and customizes tennis racquets for serious amateurs. Virginia has a 5 percent sales tax. Assume that a District of Columbia customer picks up a $2,000 racquet order in the Blacksburg store and drives it back to the District of Columbia (where the sales tax rate is 8.5 percent). Determine the sales and use tax liability of the customer. (Assume the shop has no sales personnel or property in District of Columbia, and District of Columbia sales don't exceed the Wayfair thresholds.)

102) Moss Incorporated is a Washington corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year:

Moss's Oregon depreciation was $145,500. Moss's federal taxable income was $549,743. Calculate Moss's Oregon state tax base.

103) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro sells, manufactures, and customizes tennis racquets for serious amateurs. Tennis Pro's business has expanded significantly over the last few years. Currently, it has sales personnel in 9 states (Virginia, North Carolina, South Carolina, Georgia, Tennessee, Kentucky, Ohio, Maryland, and New Jersey) and the District of Columbia. All sales activity in all of these states is limited to solicitation. Orders are taken by the sales team and forwarded to Blacksburg for approval. All orders are sent by common carrier to customers. Tennis Pro owns retail and warehouse space in Virginia and has another warehouse in Kentucky. Where does Tennis Pro have income tax nexus?

104) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro decides to expand into Pennsylvania during the current year and try some new sales techniques. Tennis Pro advertises on local radio and television as well as in national tennis magazines sent into Pennsylvania. Salespeople give away promotional materials and occasionally sell demonstration models to local shop employees to build goodwill for Tennis Pro. Tennis Pro holds sales meetings at rented space in local hotels. Personnel occasionally fix minor problems such as tape and strings without charge. One employee performed a credit check for a major account that needed merchandise immediately. Each salesperson is allowed an allowance for a car and office equipment to be maintained in an in-home office. Do any of Tennis Pro's activities have the potential to create income tax nexus?

105) Big Company and Little Company are both owned by Mrs. Smith. Big and Little file a consolidated federal tax return. Big manufactures office paper and other paper supplies and is based in Washington. Little operates a logging operation in Montana. Sixty percent of Little's sales are made to Big. Ten percent of Big's raw materials come from Little. There are no common officers or board members. There are no common service providers. What are the factors for and against filing a unitary tax return?

106) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro sells, manufactures, and customizes tennis racquets for serious amateurs. Tennis Pro's business has expanded significantly over the last few years. Currently, it has sales personnel in 9 states (Virginia, North Carolina, South Carolina, Georgia, Tennessee, Kentucky, Ohio, Maryland, and New Jersey) and the District of Columbia. All sales activity in all of these states is limited to solicitation. Orders are received by the sales team and forwarded to Blacksburg for approval. All orders are sent by common carrier to customers. Tennis Pro owns retail and warehouse space in Virginia and has another warehouse in Kentucky. Is Tennis Pro subject to Ohio's Commercial Activity Tax (a nonincome-based tax)?

107) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has sales as follows:

Assume that Tennis Pro's other sales include $150,000 of sales to a federal government entity that were shipped from Virginia to Maryland. What is Tennis Pro's Virginia sales numerator and sales factor? (Round the sales factor to two decimal places.)

108) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has payroll as follows:

The other total includes $10,000 of salary of a Virginia employee that works part time in another state. What is Tennis Pro's Virginia payroll numerator and payroll factor? (Round the payroll factor to two places.)

109) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows:

What is Tennis Pro's Virginia property numerator and property factor? (Round the property factor to two places.)

110) Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows:

Tennis Pro also rents Virginia property at an annual rent of $24,000. What is Tennis Pro's Virginia property numerator and property factor? (Round interim calculations to the nearest whole number and the property factor to two decimal places.)

111) Tennis Pro has the following sales, payroll, and property factors:

What are Tennis Pro's Virginia and Maryland apportionment factors if both states use an equally weighted three-factor formula?

112) Tennis Pro has the following sales, payroll, and property factors:

What would Tennis Pro's Virginia and Maryland apportionment factors be if Virginia used a double-weighted sales four-factor method and Maryland used a single-factor sales formula?

113) Tennis Pro, a Virginia corporation domiciled in Virginia, has the following items of income: $5,000 of dividend income, $15,000 of interest income, $10,000 of rental income from Georgia property, and $30,000 of royalty income for an intangible used in Maryland (where income tax nexus exists). Determine how much income is allocated to Virginia.

114) Tennis Pro is headquartered in Virginia. Assume it has a state income tax base of $200,000. Of this amount, $60,000 was nonbusiness income. Assume that Tennis Pro's Virginia apportionment factor is 73.28 percent. The nonbusiness income allocated to Virginia was $23,000. Assuming a Virginia corporate tax rate of 5.5 percent, what is Tennis Pro's Virginia state income tax liability? (Round your answer to the nearest whole number.)

115) Tennis Pro is headquartered in Virginia. Assume it has a Kentucky state income tax base of $220,000. Of this amount, $40,000 was nonbusiness income. Assume that Tennis Pro's Kentucky sales, payroll, and property apportionment factor are 12, 5, and 3 percent, respectively. Assume that Kentucky uses a single-factor sales formula apportionment method. The nonbusiness income allocated to Kentucky was $1,000. Assuming Kentucky's corporate tax rate is 6 percent, what is Tennis Pro's Kentucky state income tax liability?

116) Assume Tennis Pro attends a sports equipment expo in Washington state. Assume this activity creates nexus for the Business & Occupation (B&O) tax. Assume the tax is 0.5 percent of gross receipts for retailers and 1.5 percent of gross receipts on services. If Tennis Pro has $20,000 of Washington retail sales and $2,000 of services performed, calculate Tennis Pro's B&O tax.

117) Assume Tennis Pro discovered that one salesperson has gone into Arkansas once each year for the past four years and performed activities that create both sales tax nexus and income tax nexus. Assume that Arkansas sales were $25,000 each year. Assume that Arkansas business income would be $200,000 each year and that Tennis Pro's Arkansas apportionment percentage would be 1 percent. Assume there would be no Arkansas nonbusiness income. Assume that Arkansas sales and use tax rate was 6.5 percent and corporate income tax rate was 5 percent. What would Tennis Pro's Arkansas sales and use tax and income tax liability be, ignoring any possible penalties and interest?