State Tax
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Generally speaking, use tax rates may not constitutionally exceed sales tax rates. True or False?Short Answers Questions (2 sentences each!)HelpMe, Inc. (HM) is a start-up company that intends to sell medical alert devices. The devices are worn around the neck like a necklace. If there is a medical or other emergency the customer pushes a button on the device which alerts an HM representative who arranges for emergency police, fire, or medical assistance. Assume that states only tax sales of tangible personal property. How might HM try to structure its affairs to avoid sales and use taxes? What are its chances of success? (No word limit for this question.)Same facts as in question 2 above. Assume also that for income tax purposes some states required combined reporting and some states do not. How might HM structure its affairs to avoid state income taxes? What are its chances of success? (No word limit for this question.)Video Depot (VD) sells video games and video game equipment. VD also “buys” used video games and equipment from its customers for resale in its used games and equipment department. Customers “selling” the used items receive a credit that may be applied toward the purchase of new games and equipment. How should the transfer/sale of the used items to the store be taxed under a normative sales tax system (under which the objective is to only tax consumption)? Please address only the sale to the store. The use of the credits is the subject of the next question. Explain briefly.Same facts as in question 4 above. How should the use of the credits received by customers to buy new games be taxed under a normative sales tax system? Explain briefly.The State A legislature adopted a single sales factor apportionment regime that provides that the denominator of the sales factor shall be receipts from sales everywhere, and that the numerator shall include receipts from sales for which either title or possession transfers in the state. Is this legislation constitutional? Explain briefly.You are the elected Cane County Assessor, and this is an election year. The Cane County Journal has report that you intentionally assigned a zero property tax value to the polo field located within the Highbrow Homes planned community. Your opponent has demanded that the State Attorney General initiate a criminal investigation into your allegedly corrupt practices. Can you explain yourself? What proof would you offer to justify your position?Law Professor (LP) in State A teaches online to students in States B. LP earns $100. The State A income tax rate is 5%, and the State B income tax rate is 6%.(4 points.) Under what theory might State B impose its income tax on LP? Explain briefly. (4 points.) Assuming that State A generally allows an “other state” income tax credit, what do we need to know in order to determine whether LP may take a credit in State A for taxes paid to State B? Explain briefly.Assuming that a credit is properly allowed by State A, what will be the amount of the credit? Explain briefly.Softco, Inc. (S) develops and sells financial management software for use by large law and accounting firms. State A is a large state without an income tax in which many of S’s customers have branch offices. Whenever S sells to a customer with an office in State A, it suggests that the customer take delivery at that office, noting that the software then can be distributed companywide by the customer by electronic means. S offers a modest discount if the customer agrees, and most do agree. Otherwise, S simply follows the customer’s delivery instructions.You are a State B attorney general. The State B Department of Revenue is currently auditing S and believes that S is “underreporting” it income to the state. What do you advise the Department?
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