Under _____________________, a State Is Prohibited from Taxing a Business

question 26

Short Answer

Under _____________________, a state is prohibited from taxing a business if the only connection with the state is the solicitation of orders for sales of tangible personal property that are sent outside the state for approval or rejection and, if approved, are filled and shipped by the business from a point outside of the state.

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Definitions:

Unadjusted Trial Balance

A financial document listing all the accounts and their balances at a particular date, before any adjustments are made.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, or obsolescence.

Accrued Revenues

Revenues earned in an accounting period that have not yet been received in cash or recorded at the statement date.

Unearned Rent

Income received for rent before the rental period has occurred, classified as a liability until the services (rental period) are performed.