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:

Chapter 13

A form of U.S. bankruptcy allowing individuals earning regular income to develop a plan to repay all or part of their debts over time.

Debtor

A party that has a financial obligation or debt to another party, referred to as the creditor, within a commercial transaction.

Automatic Stay

A legal provision that halts proceedings and lawsuits against a debtor immediately upon the filing of a bankruptcy petition.

Chapter 7

A provision of the United States Bankruptcy Code dealing with asset liquidation for the debtor to pay off creditors.