Northeastern University ,Graduate School of Professional Accounting, M. of Taxation Program State and Location Taxation Course Instructors: Richard...

In answering the following questions, you do not need to know any specific rules of the applicable states involved – just follow the assumptions given.  Also assume generally that no state’s laws attempt to impose nexus based solely on “factor presence” (i.e., nexus created by a threshold amount of sales into the state).  All questions pertain to Rizzo’s 2014 tax year.

Nexus/Jurisdiction:

Which states are permitted to impose a net income tax on Rizzo, Inc.?  Please explain your analysis.

Which states are permitted to require Rizzo, Inc. to collect sales/use tax from its customers?  Explain your answer.

For Illinois, what is Rizzo’s:

apportionable income (i.e., income to be apportioned)?

apportionment percentage, assuming that Illinois uses a standard three-factor apportionment formula (no extra weight for sales factor) and applies the throwback rule?  Show how you arrive at each of the payroll, property and sales factors.

apportioned income (income after apportionment)?

total state taxable income?

For Missouri, what is Rizzo’s:

apportionable income (i.e., income to be apportioned)?

apportionment percentage, assuming that Missouri uses a three-factor apportionment formula with sales double weighted and applies the throwback rule?  Show how you arrive at each of the payroll, property and sales factors.

apportioned income (income after apportionment)?

total state taxable income?

For Tennessee, what is Rizzo’s:

apportionment percentage, assuming that Tennessee uses a three-factor apportionment formula with sales double-weighted sales and with no sales throwback?