Please use the following fact pattern to answer question 25 through 27: Vox Co., is a Utah Corporation with its main offices and production facility in Farmington, UT.  Vox manufactures and distributes electronic equipment.  While it has nationwide sales, Vox only has nexus in Utah and Nevada.  Assume that Vox is commercially domiciled in Utah and sources sales other than sales of inventory using UDITPA’s rules.  Vox’s business receipts for the last year are as follows: Sales Shipped to Customers in Utah $100,000 Sales Shipped to Customers in Nevada $150,000 Sales Shipped to Other States $350,000 Fees for services (all performed in Utah) $25,000 If Utah does not have a throwback rule, what is the total amount of “nowhere sales”?

37.  Public Law 86-272’s safe harbor may shield a taxpayer from state tax liability, even if the taxpayer has physical presence in that state.

PriceCo operates a nationwide chain of warehouse stores and has several warehouses located in Arizona, which taxes corporate income at a rate of 5%.  PriceCo operates as a single corporate entity.  Its federal taxable income is $100 million.  Under Arizona tax law, PriceCo has $5 million in addition modifications and $4 million in subtraction modifications.  PriceCo has $10 million of nonbusiness income, all of which is allocable to the State of Washington.  PriceCo’s apportionment percentage in Arizona is 7.5% and it is not entitled to any Arizona tax credits.  What is PriceCo’s Arizona tax liability?

26.  Please use the following fact pattern to answer question 25 through 27: Vox Co., is a Utah Corporation with its main offices and production facility in Farmington, UT.  Vox manufactures and distributes electronic equipment.  While it has nationwide sales, Vox only has nexus in Utah and Nevada.  Assume that Vox is commercially domiciled in Utah and sources sales other than sales of inventory using UDITPA’s rules.  Vox’s business receipts for the last year are as follows: Sales Shipped to Customers in Utah $100,000 Sales Shipped to Customers in Nevada $150,000 Sales Shipped to Other States $350,000 Fees for services (all performed in Utah) $25,000 If Utah does not have a throwback rule, what is the Utah sales factor?

Essay #2 (14 Points): “Killing Me Sweetly” Corporation operates a nationwide chain of indulgent cookie retail shops. Killing is incorporated in and has several shops located in State Y.  It also has nexus in State Z.  All cookies are shipped from Killing’s industrial bakery in State Y.  State Y does not have a throwback rule.  Killing’s commercial domicile is in State Y.  States Y and Z source sales based on the income producing activity rule under UDITPA (Section 17).  The following table includes Killing’s business receipts for the current year: Sales to Y Customer $10,000,000 Sales to Z Customers $8,000,000 Sales to Customers in Other States $6,000,000 Interest income $10,000 Income from renting commercial grade industrial mixers not currently in use to user located in Z. $50,000 Royalty from copyrighted recipe licensed to Z user $25,000 Dividends paid from subsidiary  $60,000 Compute the sales factors for Y and Z.  

The most definitative way of telling that two glass fragments came from the same source is through an end match. (True/False)

Ruth’s Candy Inc., a North Carolina Corporation, recently disposed of 1,000 shares of stock, realizing a capital gain of $1 million.  Taking the position that the capital gain was business income, Ruth’s Candy included the gain in its apportionment base for each of the 15 states with which it has nexus.  After review, the North Carolina Department of Revenue recalculated the North Carolina State Tax by allocating the entire capital gain to North Carolina on the premise that the capital gain was allocable nonbusiness income.  A North Carolina deficiency was assessed.  Ruth’s Candy is adamant in its position that the capital gain was business income and threatens to sue the State of North Carolina, “in the highest court in the land.”  What should be your next step as Ruth’s Candy’s tax adviser?

Which of the following statements regarding Public Law 86-272 is correct?

The value of glass evidence not only depends on how its made and its properties but also an understandign of the distribution process after it’s manufactured. (T/F) 

Based on what the Supreme Court has held regarding nexus in Wayfair, using the South Dakota statute as a template, which of the following companies would likely be required to collect State A sales tax?  A company located in State B sells products to customers in State A at the company’s retail outlet in State A. Gross receipts of $500,000 came from 2,000 transactions with State A customers. A company located in State B sells products to customers in State A through its mail-order catalog. Gross receipts of $25,000 came from 125 transactions with State A customers. A company sells products from its store in State B to State A residents who visit State B. Gross receipts of $25,000 came from 125 transactions with State A customers. A company located in State B sells products over the Internet to customers in State A. Gross receipts of $500,000 came from 2,000 transactions with State A customers.