Business_taxation_solutions_ch1

Business_taxation_solutions_ch1 - Answers to Week 1...

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Answers to Week 1 Assignment Chapter 1 1. a. The statement of facts identifies three taxpayers: Mr. JK, JK Services, and JK Realty. b. The government of the locality in which Mr. JK resides, the state government of Vermont, and the U.S. government have jurisdiction to tax Mr. JK. The local governments of the four counties in which JK Services conducts business, the state government of Vermont, and the U.S. government have jurisdiction to tax JK Services. The city of Boston, the state government of Massachusetts, and the U.S. government have jurisdiction to tax JK Realty. 3. a. The tax is $8,300 ($415,000 × 2%). b. The tax is $19,000 ([$500,000 × 2%] + [$225,000 × 4%]). 5. Jurisdiction A: Volume of sales before rate increase $800,000,000 Original tax rate .05 Revenue before rate increase $40,000,000 Volume of sales after rate increase $710,000,000 New tax rate .06 Revenue after rate increase $42,600,000 Additional revenue ($42,600,000 - $40,000,000) $2,600,000 Jurisdiction Z: Volume of sales added to tax base $50,000,000 Tax rate
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This note was uploaded on 02/18/2010 for the course ACCT 323 taught by Professor Dorothy during the Spring '09 term at Maryland.

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Business_taxation_solutions_ch1 - Answers to Week 1...

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