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CHAPTER 24 - T F questions

CHAPTER 24 - T F questions - CHAPTER 24 MULTISTATE...

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CHAPTER 24 MULTISTATE CORPORATE TAXATION TRUE/FALSE 1. Roughly two-thirds of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions. ANS: F About forty percent of all business taxes are paid to state and local agencies. PTS: 1 REF: p. 24-2 2. Usually a business chooses a location where it will build a new plant based chiefly on tax considerations. ANS: F Nontax considerations usually prevail. PTS: 1 REF: p. 24-2 3. Politicians use tax devices to create economic development incentives. ANS: T REF: p. 24-3 4. A few states have not adopted a tax based on net taxable income. ANS: T REF: p. 24-3 5. Only a few states have adopted an alternative minimum tax system. ANS: T REF: p. 24-3 6. Some states enforce their tax laws more aggressively than do others. ANS: T REF: p. 24-3 7. In some states, the “business privilege” tax is based on net taxable income. ANS: T REF: p. 24-3 8. Most businesses can use the Federal tax year end for the state income tax. ANS: T REF: p. 24-4
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9. A few states have delegated the collection of their income taxes to the IRS. ANS: F No state has done this, although legislation allowing full piggybacking already exists. PTS: 1 REF: p. 24-4 10. Most states begin the computation of taxable income with an amount from the Federal income tax return. ANS: T REF: p. 24-5 11. If a state follows Federal income tax rules, compliance and enforcement become easier to accomplish. ANS: T REF: p. 24-5 12. A typical state taxable income addition modification is the interest income earned on bonds issued by another state. ANS: T REF: Exhibit 24-1 13. A typical state taxable income addition modification is the income tax paid to the state for the year.
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