Taxes: State & Local Taxation

Question 1

Taxes:
State & Local Taxation
Types

Answer 1

State & Local Taxation
Types
- Sales Tax
- Use Tax
- Property Tax
- Franchise Tax
- Excise Tax
- Unemployment Tax

Question 2

Taxes:
State & Local Taxation
Jurisdiction

Answer 2

State & Local Taxation
Jurisdiction
Four Tests
1. business activity has substantial nexus in state
2. tax fairly apportioned
3. tax cannot discriminate against interstate commerce
4. tax must be fairly related to service state provides
Nexus does not exist if only:
- soliciting sales of tangible personal property that is shipped out side the state
- advertising
- determining reorder needs of customers
- furnishing autos to sales staff

Question 3

Taxes:
State & Local Taxation
State Tax Computation

Answer 3

State Tax Computation
Federal Taxable Income
\+DRD
\+ Expenses for interest on US bonds
\+ State Income Tax
\+ Depreciation in excess of state allowance
\+ Municipal Interest taxed for state purposes
- Federal Income Taxes Paid
- Expense related to municipal bonds
- Interest on US bonds
- Depreciation for federal purposes