General Corporation Is Taxable in a Number of States

question 155

Multiple Choice

General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a customer in B. This activity is not sufficient for General to create nexus with B. State A applies a throwback rule, but State B does not. In which state(s) will the sale be included in the sales factor numerator?

• A) $0 in both A and B.
• B) $100,000 in A.
• C) $100,000 in B.
• D) In both A and B, according to the apportionment formulas of each.

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Definitions:

Patent

Legal right granted by a government to an inventor, allowing them to exclude others from making, using, or selling their invention for a certain period of time.

Trademark

A legal designation that protects the exclusive use of a brand or product name.

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.