Question

In: Finance

Your client is forming a new internet business and wants advice as to which state they...

Your client is forming a new internet business and wants advice as to which state they should base their business in.

S'AMATTA-U, INC. will be a limited internet seller. Their projected sales for the coming year by state, along with additional by-state information is as follows:

Sales Throwback? Factor State Tax Rate

State A 1,500,000 yes Sales only 4.00%

State B 3,000,000 no 3 Factor 5.00%

State C 2,000,000 no 3 Factor with double weighted sales 5.00%

State D 3,500,000 no Sales only 9.00%

10,000,000

S'AMATTA-U, INC projects it will have property of $5.0 million, annual payroll of $2.0 million, and annual taxable income of $4 million. All property and payroll will be located in the base state. The clients want to base all of their operations in a single state. They do not anticipate having nexus in any other state other than the base state.

Which state would result in the lowest state income tax and therefore be the state you advise your client to base their business in?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

You are a tax advisor; and your client wants to open a new business. Provide an...
You are a tax advisor; and your client wants to open a new business. Provide an example of a hypothetical business that the client wants to start. Explain the different business formation options to your client, recommend the optimal choice, and explain the tax advantages of your recommendation. Assume the client in the scenario above has significant investments in the stock market. Discuss the impact of the investments in the stock market on the initial business formation selection. Support your...
Your client is looking to start a plumbing and heating business and is looking for advice...
Your client is looking to start a plumbing and heating business and is looking for advice on how to structure this new business entity. He will be the only employee and plans to purchase a van and basic tools to get started. What questions do you need to ask, and what are the major considerations that the client should make with respect to tax, ease of operation, future additional owners, and liability protection? Be sure to include which business form...
As a small business owner or an accountant providing advice to your client, please discuss at...
As a small business owner or an accountant providing advice to your client, please discuss at least three primary factors you would consider in the identification of a suitable entity for a new business enterprise.
As a small business owner or an accountant providing advice to your client, please discuss at...
As a small business owner or an accountant providing advice to your client, please discuss at least three primary factors you would consider in the identification of a suitable entity for a new business enterprise.
1. Your client comes to you and tells you she wants to start a new business....
1. Your client comes to you and tells you she wants to start a new business. She said that she has read that being taxed as a partnership is the way to go, but is not sure why.  What are the benefits of being taxed as a partnership? Do you agree with her assessment?She is not sure what type of partnership her business should be. 1a) She has two businesses that her and her partners want to start and they want...
A new client has asked for advice on the documentation that will be required for the...
A new client has asked for advice on the documentation that will be required for the preparation of their tax return in PNG? What advice would you provide and what value documents would be needed. (250-260 words)
A new business client comes to your office. There are three owners of the business. The...
A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within...
A new business client comes to your office. There are three owners of the business. The...
A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within...
A new business client comes to your office. There are three owners of the business. The...
A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within...
Your client wants to invest to current investments, your client wants ask you to find out...
Your client wants to invest to current investments, your client wants ask you to find out the next 5 years expected rate of return. 1R1 = 1.50% E(2r1) = 2.5% E(3r1) = 3.0% E(4r1) = 3.5% E(5r1) = 4.5% Instructions: 1] Please using the Unbiased Expectation Theory of the Term Structure of Interest Rates.   2] Please provide a clear calculation and brief explanation to support your calculation.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT