ch24 - 1. Roughly forty percent of all taxes paid by...

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1. Roughly forty percent of all taxes paid by businesses in the U.S. are to state, local, and municipal jurisdictions. *a. True b. False 2. Usually a business chooses a location where it will build a new plant based chiefly on tax considerations. a. True *b. False 3. Politicians use tax devices to create economic development incentives. *a. True b. False 4. All of the U.S. states have adopted a tax based on net taxable income. a. True *b. False 5. Most of the U.S. states have adopted an alternative minimum tax, similar to the Federal system. a. True *b. False 6. States collect the most tax dollars from the corporate income tax. a. True *b. False 7. The corporate income tax provides about 5 percent of the annual tax revenues for the typical U.S. state. *a. True b. False 8. State and local politicians tend to apply new and increased taxes to taxpayers who are visitors to the jurisdiction and cannot vote to reelect the lawmaker. *a. True b. False
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9. A state or local tax on a corporation’s income might be called a franchise tax or a business privilege tax . *a. True b. False 10. Most states begin the computation of taxable income with an amount from the Federal income tax return. *a. True b. False 11. If a state follows Federal income tax rules, the state’s tax compliance and enforcement become easier to accomplish. *a. True b. False 12. A typical state taxable income addition modification is the interest income from U.S. Treasury bonds. a. True *b. False 13. A typical state taxable income addition modification is the Federal net operating loss (NOL) deduction. *a. True b. False 14. A state cannot levy a tax on a business unless the business was incorporated in the state. a. True *b. False 15. Typical indicators of nexus include the presence of employees based in the state, and the ownership or lease of realty there. *a. True b. False 16. Under P.L. 86-272, the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of in-state realty.
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a. True *b. False 17. In most states, a taxpayer’s income is apportioned on the basis of a formula measuring the extent of business contact, and allocated according to the location of property owned or used. *a. True b. False 18. All of the U.S. states use the same apportionment formula and factors. a. True *b. False 19. Nonbusiness income includes dividends received from investment securities. *a. True b. False 20. Double weighting the sales factor effectively increases the tax burden on taxpayers based in the state, such as corporations with in- state headquarters. a. True *b. False 21. An assembly worker earns a $30,000 salary and receives a fringe benefit package worth $15,000. The payroll factor assigns $30,000 for this employee. a. True
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ch24 - 1. Roughly forty percent of all taxes paid by...

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