Chapter 23 Key Terms

Frage	Antworten
Allocation	the method of dividing or sourcing nonbusiness income to specific states.
Apportionment	the method of dividing business income of an interstate business among the states where nexus exists.
Business income	income derived from business activities.
Commercial domicile	the state where a business is headquartered and directs operations; this location may be different from the place of incorporation.
Economic income tax nexus	the concept that businesses without a physical presence in the state may establish income tax nexus in the state through an economic presence there.
Federal/state adjustments	amounts added to or subtracted from federal taxable income when firms compute taxable income for a particular state.
Income tax nexus	the connection between a business and a tax jurisdiction sufficient to subject the business to the tax jurisdiction’s income tax.
Interstate commerce	business conducted between parties in two or more states.
Nexus	the connection between a business and a tax jurisdiction sufficient to subject the business to the tax jurisdiction’s tax system. Also, the connection that is required to exist between a jurisdiction and a potential taxpayer such that the jurisdiction asserts the right to impose a tax.
Nonbusiness income	all income except for business income—generally, investment income and rental income.
Nondomiciliary business	a business operating in a state other than its commercial domicile.
Public Law 86-272	federal law passed by Congress that provides additional protection for sellers of tangible personal property against income tax nexus.
Sales tax	a tax imposed on the retail price of goods (plus certain services). Retailers are responsible for collecting and remitting the tax; typically sales tax is collected at the point of sale.
Sales tax nexus	the connection between a business and a tax jurisdiction sufficient to subject the business to the tax jurisdiction’s sales tax.
Separate tax return	a state tax return methodology requiring that each related entity with nexus must file a separate tax return.
Solicitation	selling activities or activities ancillary to selling that are protected under Public Law 86-272.
State tax base	the federal taxable income plus or minus required state adjustments.
Throwback rule	the rule that sales into a state without nexus are included with sales from the state the property was shipped from.
Trade show rule	a rule that permits businesses to have physical presence at conventions and trade shows, generally up to two weeks a year, without creating nexus.
Unitary tax return	a state tax return methodology requiring the activities of a group of related entities to be reported on a single tax return. The criteria for determining whether a group of entities must file a unitary tax return are functional integration, centralization of management, and economies of scale.
Use tax	a tax imposed on the retail price of goods owned, possessed, or consumed within a state that were not purchased within the state.

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	Erstellt von Brandie Westhart vor fast 2 Jahre