Hendricks Corporation Sells Widgets in Two States

question 21

Multiple Choice

Hendricks Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 3% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Hendricks should:

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

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Definitions:

Regulation of Emotions

The process by which individuals influence which emotions they have, when they have them, and how these emotions are experienced and expressed.

Expression of Emotions

How feelings are communicated to others, through facial expressions, voice, body language, and behavior.

Divergent Thinking

A cognitive mechanism or methodology for creating innovative concepts by considering a wide range of solutions.

Transformational Logic

A field or concept in logic that focuses on the processes and rules for transforming one logical expression or statement into another.