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Exam 12: State and Local Taxes

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Question 31

Multiple Choice

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

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Question 32

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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

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Question 33

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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: State depreciation expense was $51,300. Hoosier's federal taxable income was $151,600. Calculate Hoosier's Indiana state tax base.

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

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

Which of the items is correct regarding a use tax?

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

The payroll factor includes payments to independent contractors.

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

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

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?

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.)

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.)

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.)

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

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

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

Which of the following is incorrect regarding nondomiciliary businesses?

Nondomiciliary businesses are subject to tax everywhere they do business.

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