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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, $30,000 of royalty income for an intangible used in Maryland (where income tax nexus exists). Determine how much income is allocated to Virginia.

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$20,000.
$5,000 of d...

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Gordon operates the Tennis Pro Shop in Blacksburg, Virginia. Tennis Pro has property as follows: 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? What is Tennis Pro's Virginia property numerator and property factor?

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$1,385,179 and 87.47 percent.
...

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

A) True
B) False

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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.

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

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Wyoming imposes an income tax on corporations.

A) True
B) False

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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 Incorporated is a Washington corporation. It properly included, deducted, or excluded the following items on its federal tax return in the current year: Moss' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base. Moss' Oregon depreciation was $145,500. Moss' Federal Taxable Income was $549,743. Calculate Moss' Oregon state tax base.

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$571,743.
$549,743 +...

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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) B) and C)
F) None of the above

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State tax law is comprised solely of legislative authority.

A) True
B) False

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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 headquartered.
C) A business can be nondomiciliary in only one jurisdiction.
D) Subject to tax only where a sufficient connection exists.

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

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

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$260,000 and 55.85 percent.
$2...

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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.

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

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

A) True
B) False

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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) B) and C)

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Physical presence does not always create sales tax nexus.

A) True
B) False

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

A) True
B) False

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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 $50,000. Hoosier's Federal Taxable Income was $150,300. Calculate Hoosier's Illinois state tax base. A) $171,300 B) $173,800 C) $204,633 D) $207,133 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) $204,633
D) $207,133

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

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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.

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

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

A) True
B) False

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

A) True
B) False

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

A) True
B) False

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