| Learning
Objectives:
Chapter 1—Introduction
• Be familiar with the various kinds of taxes.
• Be able to define state income taxes.
Chapter 2— Right to Tax: Part I
• Be conscious of the equal protection clause.
• Be aware of the States’ right to tax.
• Know the due process clause.
• Be familiar with substantial, economic presence,
and attibutional nexus.
Chapter 3—Right to Tax: Part II
• Know the auto transits’ other three requirements.
• Be familiar with Public law 86-272.
• Be familiar with the solicitation of orders per
Wrigley decision.
• Know the De minimis activities.
Chapter 4—Right to Tax: Part III
• Be familiar with Public Law 86-272 as Interpreted
by the States.
• Understand the Multistate Tax Commission and
Public Law 86-272.
• Know how to maintain an office within the state
per the MTC.
• Be familiar with independent contractors and
the MTC.
• Know how to use your own delivery vehicles per
the states and the MTC.
Chapter 5—Tax Formula and Federal Corporate Tax Base
• Understand the state tax formula.
• Know the federal taxable income is the starting
point (of sorts).
• Be aware of the State conformity with Internal
Revenue Code (IRC).
• Know the conformity with S corporation and limited
liability company rules.
• Know how to deduct federal taxes and conforming
to IRS audit adjustments.
• Be familiar with state-level adjustments: Many
Potential Scenarios.
Chapter 6—State Adjustments: Part I
• Be familiar with dividend income from United
States corporations.
• Describe the expenses related to dividend income.
• Know the dividends from foreign corporations.
• Understand the DRDs for dividends from foreign
corporations.
• Be familiar with the IRC Section 78 gross-up
and Subpart F income.
• Understand the Worldwide unitary method of taxation.
Chapter 7—State Adjustments: Part II
• Know the income from federal and state obligations.
• Be familiar with State and local income taxes
paid or accrued.
• Know the net operating loss carryforwards and
carrybacks.
• Know depreciation and depletion.
• Be familiar with the expenses directly related
to income not taxed by the state.
Chapter 8—Division of the Tax Base
• Know the division of the tax base.
• Know how to allocate and apportion Income: The
MTC Rules.
• Know the difference between nonbusiness and business
income.
• Know how to determine the separate businesses
of the taxpayer.
• Understand property, payroll, and sales.
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