Question
An entity operates in a state in which it has to pay a state income tax of 10%. The entity has no permanent or
An entity operates in a state in which it has to pay a state income tax of 10%. The entity has no permanent or temporary differences. Which of the following is correct? The state income tax decreases federal income tax expense 1 and decreases total income tax expense. 2 The state income tax decreases federal income tax expense but increases total income tax expense. 3 The state income tax increases federal income tax expense and increases total income tax expense. 4 The state income tax increases federal income tax expense but decreases total income tax expense.
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