Question

The city of Springvale levies a tax on the value of real property located within its city limits. The tax equals 2 percent of the property’s assessed value up to $500,000 plus 4 percent of the value in excess of $500,000.

Compute the tax on real property valued at $492,000.

Compute the tax on real property valued at $802,500.

Firm H operates its business in State H, which levies a 6 percent sales and use tax. This year, the firm purchased a $685,000 item of tangible property in State K and paid $20,550 sales tax to the state. It also purchased a $927,000 item of tangible property in State L and paid $58,401 sales tax to the state. Firm H transported both items of property into State H for use in its business.

Compute the use tax that Firm H owes to State H for the property purchased in State K.

Compute the use tax that Firm H owes to State H for the property purchased in State L.

Firm H operates its business in State H, which levies a 6 percent sales and use tax. This year, the firm purchased a $685,000 item of tangible property in State K and paid $20,550 sales tax to the state. It also purchased a $927,000 item of tangible property in State L and paid $58,401 sales tax to the state. Firm H transported both items of property into State H for use in its business.

Compute the use tax that Firm H owes to State H for the property purchased in State K.

Compute the use tax that Firm H owes to State H for the property purchased in State L.

Firm H operates its business in State H, which levies a 6 percent sales and use tax. This year, the firm purchased a $685,000 item of tangible property in State K and paid $20,550 sales tax to the state. It also purchased a $927,000 item of tangible property in State L and paid $58,401 sales tax to the state. Firm H transported both items of property into State H for use in its business.

Compute the use tax that Firm H owes to State H for the property purchased in State K.

Compute the use tax that Firm H owes to State H for the property purchased in State L.

Ms. SP, who lives in California, traveled to Oregon to purchase gold jewelry for $24,000. California has a 7.5 percent sales and use tax, while Oregon has no sales and use tax.

Compute the use tax that Ms. SP owes to California on the jewelry purchased in Oregon.

Compute the use tax that Ms. SP owes to California if she purchased the jewelry in New Mexico and paid that state’s 6.85 percent sales tax on the transaction.

Ms. SP, who lives in California, traveled to Oregon to purchase gold jewelry for $24,000. California has a 7.5 percent sales and use tax, while Oregon has no sales and use tax.

Compute the use tax that Ms. SP owes to California on the jewelry purchased in Oregon.

Compute the use tax that Ms. SP owes to California if she purchased the jewelry in New Mexico and paid that state’s 6.85 percent sales tax on the transaction.

Ms. SP, who lives in California, traveled to Oregon to purchase gold jewelry for $24,000. California has a 7.5 percent sales and use tax, while Oregon has no sales and use tax.

Compute the use tax that Ms. SP owes to California on the jewelry purchased in Oregon.

Compute the use tax that Ms. SP owes to California if she purchased the jewelry in New Mexico and paid that state’s 6.85 percent sales tax on the transaction.

Ms. SP, who lives in California, traveled to Oregon to purchase gold jewelry for $24,000. California has a 7.5 percent sales and use tax, while Oregon has no sales and use tax.

Compute the use tax that Ms. SP owes to California on the jewelry purchased in Oregon.

Compute the use tax that Ms. SP owes to California if she purchased the jewelry in New Mexico and paid that state’s 6.85 percent sales tax on the transaction.

Firm Q and Firm R conduct business in a foreign country that imposes a 3 percent VAT. Firm Q produces entertainment videos at a $8.0 material cost per unit and sells the videos to Firm R for $11.3 per unit. Firm R sells the videos at retail for $13.1 per unit. This year, the combined efforts of Firm Q and Firm R resulted in sales of 10.4 million videos to the public. Compute the VAT for each firm. (Enter your answers in dollars not in millions of dollars.)

Answer 1

Solution:

1) a) Since $492,000 is not greater than $500,000, the tax will be equal to just 2 percent of the $492,000.

That is $492,000 * 2% = $492,000 * 0.02 = $9,840.

b) Since $802,500 is not greater than $500,000, the tax will be equal to just 2 percent of the $802,500.

That is $802,500 * 2% = $802,500 * 0.02 = $16,050

2) a) The use tax that Firm H owes to State H for the property purchased in State K = (6% * $685,000) - $20,550 = $20,550

b) The use tax that Firm H owes to State H for the property purchased in State L = (6% * $927,000) - $58,401 = NIL

3) a) Since Oregon state has no sales and use tax tax owed by Ms.SP, on purchase made in Oregon, to California state is = 7.5% of $24,000 = $1,800. (Apply the tax rate of California state)

b) As New Mexico has a sales tax (6.85%) , Ms.SP needs to pay the diffenrece (7.5% mnus 6.85%) of the value of purchase to California state.

Tax payable to California state =(7.5%-6.85%) of $24,000 = 0.65% of $24,000 = $156.

4) VAT component included in sales price of Firm Q = ($11.3 /103%) *3% = $0.3291 per unit

VAT component included in sales price of Firm R = ($13.1 /103%) *3% = $0.3816 per unit

VAT for Firm Q = $0.3291 per unit * 10.4 million videos = $3.42264 million

VAT for Firm R = $0.3816 per unit * 10.4 million videos = $3.96864 million