CH 23-State and Local Taxes

Discussion
Questions

1.
[LO 1] Why do states and local
jurisdictions assess taxes?

2.
[LO 1] Compare and contrast the
relative importance of judicial law to state and local and federal tax law.

3.
[LO 1] Describe briefly the
nexus concept and explain its importance to state and local taxation.

4.
[LO 1] What is the difference,
if any, between the state of a business’s commercial domicile and its state of
incorporation?

5.
[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?

6.
[LO 1] In what circumstances
would a business be subject to income taxes in more than one state?

7.
[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.

8.
[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.

9.
[LO 2] Compare and contrast the
difference between general sales tax nexus and the new “Amazon” rule creating
nexus in New York.

10. [LO 2] What is the difference between a sales tax and a use tax?

11. [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. 1.
[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.

2.
[LO 2] Discuss possible reasons
for why the Commerce clause was included in the U.S. Constitution.

3.
[LO 2] Describe the
administrative burden that businesses face in collecting sales taxes.