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37.  Public Law 86-272’s safe harbor may shield a taxpayer from state tax liability, even if the taxpayer has physical presence in that state.

Please use the following fact pattern to answer question 25 through 27: Vox Co., is a Utah Corporation with its main offices and production facility in Farmington, UT.  Vox manufactures and distributes electronic equipment.  While it has nationwide sales, Vox only has nexus in Utah and Nevada.  Assume that Vox is commercially domiciled in Utah and sources sales other than sales of inventory using UDITPA’s rules.  Vox’s business receipts for the last year are as follows: Sales Shipped to Customers in Utah $100,000 Sales Shipped to Customers in Nevada $150,000 Sales Shipped to Other States $350,000 Fees for services (all performed in Utah) $25,000 If Utah does not have a throwback rule, what is the total amount of “nowhere sales”?

Each of the following is an exemption from the retail sales tax except:

The RI (Refractive Index) of glass describes how fast light propagates through a glass (True/False)

Essay #3 (14 Points): John Elk is a calendar year corporation that manufactures agricultural equipment at its production facility located in Illinois. In addition, John Elk leases a distribution facility located in Indiana (annual rental of $5 million). For purposes of computing the property factor, John Elk’s January 1 and December 31 account balances are as follows: January 1 (all numbers in millions) Illinois Indiana Inventory                                225                                150 Property Plan and Equipment                             1,500                                110 Land                                300                                    –   December 31 (all numbers in millions) Inventory                                325                                200 Property Plan and Equipment                             1,600                                110 Land                                400                                    –     Please compute the property factors for Illinois and Indiana.

The most definitative way of telling that two glass fragments came from the same source is through an end match. (True/False)

Which of the following statements is true of nonbusiness income?

43.  Every sales/use-tax-imposing state’s code includes a “sale for resale” exemption from sales tax.

Essay #2 (14 Points): “Killing Me Sweetly” Corporation operates a nationwide chain of indulgent cookie retail shops. Killing is incorporated in and has several shops located in State Y.  It also has nexus in State Z.  All cookies are shipped from Killing’s industrial bakery in State Y.  State Y does not have a throwback rule.  Killing’s commercial domicile is in State Y.  States Y and Z source sales based on the income producing activity rule under UDITPA (Section 17).  The following table includes Killing’s business receipts for the current year: Sales to Y Customer $10,000,000 Sales to Z Customers $8,000,000 Sales to Customers in Other States $6,000,000 Interest income $10,000 Income from renting commercial grade industrial mixers not currently in use to user located in Z. $50,000 Royalty from copyrighted recipe licensed to Z user $25,000 Dividends paid from subsidiary  $60,000 Compute the sales factors for Y and Z.  

The value of glass evidence not only depends on how its made and its properties but also an understandign of the distribution process after it’s manufactured. (T/F)