1. LO.4 What is the difference between an excise tax and a general sales tax? Do all states impose a general sales tax? Does the Federal government impose a general sales tax?
2. Distinguish between an estate tax and an inheritance tax. Do some states impose both? Neither? Which, if either, does the Federal government impose?
3.LO.4 As to those states that impose an income tax, comment on the following: “Piggyback” approach and possible “decoupling” from this approach. Use of IRS audit results as part of a state tax audit. Credit for taxes paid to other states.
4.LO.4 In May 2020, Hernando, a resident of California, has his 2018 Federal income tax return audited by the IRS. An assessment of additional tax is made because he inadvertently omitted some rental income. In October 2020, California audits his state return for the same year. Explain the coincidence.
5.LO.4 Mike Barr was an outstanding football player in college and expects to be drafted by the NFL in the first few rounds. Mike has let it be known that he would prefer to sign with a club located in Florida, Texas, or Washington. Mike sees no reason why he should have to pay state income tax on his player’s salary. Is Mike under any delusions? Explain.
