Happy Hippos (HH) is a manufacturer and retailer of New England crafts headquartered in Camden, Maine. HH provides services and has sales, employees, property, and commercial domicile as follows:

Happy Hippos sales of goods and services by state are as follows:

HH has federal taxable income of $282,487 for the current year. Included in federal taxable income are the following income and deductions:
€¢ $12,000 of Vermont rental income.
€¢ City of Orono, Maine, bond interest of $10,000.
€¢ $10,000 of dividends.
€¢ $2,498 of state tax refund included in income.
€¢ $32,084 of state net income tax expense.
€¢ $59,234 of federal depreciation.
Maine state depreciation for the year was $47,923, and Maine doesn't allow deductions for state net income taxes.
The employees present in Connecticut, Massachusetts, and Rhode Island are salespeople who perform only activities protected by Public Law 86-272.
Each of the states is a separate-return state.
HH's payroll is as follows:
Payroll
State Wages
Connecticut.............................$ 94,231
Maine....................................392,195
Massachusetts...........................167,265
Rhode Island.............................92,391
Vermont.................................193,923
Total....................................$940,005
HH's property is as follows:

a) Determine the states in which HH has sales and use tax nexus.
b) Calculate the sales tax HH must remit assuming the following sales tax rates:
€¢ Connecticut (6 percent)
€¢ Maine (8 percent)
€¢ Massachusetts (7 percent)
€¢ New Hampshire (8.5 percent)
€¢ Rhode Island (5 percent)
€¢ Vermont (9 percent)
c) Determine the states in which HH has income tax nexus.
d) Determine HH's state tax base for Maine, assuming federal taxable income of $282,487.
e) Calculate business and nonbusiness income.
f) Determine HH's Maine apportionment factors using the three-factor method (assume that Maine is a throwback state).
g) Calculate HH's business income apportioned to Maine.
h) Determine HH's allocation of nonbusiness income to Maine.
i) Determine HH's Maine taxable income.
j) Calculate HH's Maine net income tax liability assuming a Maine income tax rate of 5 percent.

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Happy Hippos In-State Activities Commercial Domicile Employees Property Services State Sales Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont Happy Hippos Sales Goods State Services Total $ 78,231 292,813 90,238 129,322 98,313 $ 52,321 81,313 Connecticut Maine Massachusetts New Hampshire Rhode Island $130,552 374, 126 90,238 129,322 98,313 147,856 23,942 Vermont Totals 123,914 $812,831 $157,576 $970,407