[LO 1] Why do states and local jurisdictions assess taxes?
[LO 1] Compare and contrast the relative importance of judicial law to state and local and federal tax law.
[LO 1] Describe briefly the nexus concept and explain its importance to state and local taxation.
[LO 1] What is the difference, if any, between the state of a businesss commercial domicile and its state of incorporation?
[LO 1] What types of property sales are subject to a sales tax and why might a state choose to exclude the sales of certain types of property?
[LO 1] In what circumstances would a business be subject to income taxes in more than one state?
[LO 1] Describe how the failure to collect sales tax can result in a larger tax liability for a business than failing to pay income taxes.
[LO 2] Discuss reasons why restaurant meals, rental cars, and hotel receipts are often taxed at a higher rate than the average sales tax rate.
[LO 2] Compare and contrast the difference between general sales tax nexus and the new Amazon rule creating nexus in New York.
[LO 2] What is the difference between a sales tax and a use tax?
[LO 2] Renée operates Scandinavian Imports a furniture shop in Olney, Maryland. Scandinavian Imports ships goods to customers in all 50 states. Scandinavian Imports also appraises antique furniture. Recently in-home appraisals have been done in the District of Columbia, Maryland, Pennsylvania, and Virginia. Online appraisals have been done for customers in California, Minnesota, New Mexico, and Texas. Determine where Scandinavian Imports has sales and use tax nexus.
[LO 2] Web Music, located in Gardnerville, Nevada, is a new online music service that allows inexpensive legal music downloads. Web Music prides itself in the fact that it has the fastest download times in the industry. Web Music achieved this speed by leasing server space from 10 regional servers dispersed across the country. Discuss where Web Music has sales tax nexus.
[LO 2] Discuss possible reasons for why the Commerce clause was included in the U.S. Constitution.
[LO 2] Describe the administrative burden that businesses face in collecting sales taxes.
[LO 3] Compare and contrast the rules for where domiciliary and non-domiciliary businesses must file state income tax returns.
[LO 3] Lars operates Keep Flying, Incorporated, a used airplane parts business, in Laramie, Wyoming. Lars employs sales agents that visit mechanics in all 50 states to solicit orders. All orders are sent to Wyoming for approval. All parts are shipped via common carrier. The sales agents are always on the lookout for wrecked, abandoned, or salvaged aircraft with rare parts because they receive substantial bonuses for removing these parts and shipping them to Wyoming. Discuss the states where Keep Flying has income tax nexus.
[LO 3] Explain changes in the U.S. economy which have caused P.L. 86-272 to become partially obsolete and provide an example of a company that P.L. 86-272 works well for and an example of a company that it does not work well for.
[LO 3] Climb Higher is a distributor of high end climbing gear and is located in Paradise, Washington. Climb Highers sales personnel regularly perform the following activities in an effort to maximize sales:
· Carry swag (free samples) for distribution to climbing shop employees.
· Perform credit checks on new customers to reduce delivery time the first time merchandise is ordered.
· Check customer inventory for proper display and proper quantities.
· Accept returns of merchandise for defective goods.
Discuss Climb Highers sales activities that are protected and unprotected under the Wrigley Supreme Court decision.
[LO 3] Describe a situation where it would be advantageous for a business to establish income tax nexus in a state.
[LO 3] States are arguing for economic nexus; provide at least one reason for and against the validity of economic nexus.