Slattery Corporation Sells Widgets in Two States

question 2

Multiple Choice

Slattery Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 4% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Slattery should:

• A) Remove all stored inventory from A.
• B) Establish a personal training center in A.
• C) Move its home office from B to A.
• D) Convert to employee status the independent contractors that it uses to sell widgets in A.

---

Definitions:

Threat Of Force

The use or promise of physical power to coerce or compel action from another party.

Model Penal Code

A text designed to stimulate and assist U.S. state legislatures to update and standardize the penal law of the United States.

Corporation

A legal entity recognized by law as separate from its owners, with its own rights and liabilities, allowing it to enter into contracts, own assets, and be liable for its actions.

Criminal Offense

An act punishable by law, typically involving harm to society or a breach of public order.