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Happy Hippos ( HH ) is a manufacturer and retailer of New England crafts headquartered in Camden, Maine. HH provides services and has sales, employees,
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 InState Activities
State Sales Employees Property Services Commercial Domicile
Connecticut
Maine
Massachusetts
New York
Rhode Island
Vermont
HHs sales of goods and services by state are as follows:
Happy Hippos Sales
State Goods Services Total
Connecticut $ $ $
Maine
Massachusetts
New York
Rhode Island
Vermont
Totals $ $ $
HH has federal taxable income of $ for the current year. Included in federal taxable income are the following income and deductions:
$ of Vermont rental income.
City of Orono, Maine, bond interest of $
$ of dividends.
$ of state tax refund included in income.
$ of state net income tax expense.
$ of federal depreciation.
Other relevant facts include:
Assume that the New York sales are to a single customer who is a retailer and can provide a valid New York reseller's certificate.
Maine state depreciation for the year was $ and Maine doesn't allow deductions for state income taxes.
The employees present in Connecticut, Massachusetts, and Rhode Island are salespeople who perform only activities protected by Public Law
Assume that each of the states is a separatereturn state.
HHs payroll is as follows:
Payroll
State Wages
Connecticut $
Maine
Massachusetts
Rhode Island
Vermont
Total $
HHs property is as follows:
Property
State Beginning Ending Rented
Maine $ $
Vermont $
Total $ $ $
Note: Leave no answer blank. Enter zero if applicable. Except as directed, round your final answers to the nearest whole dollar amount.
a Determine the states in which HH has sales tax nexus, assuming these states have passed Wayfair legislation.
b Calculate the sales tax HH must remit assuming the following hypothetical sales tax rates:
Connecticut percent
Maine percent
Massachusetts percent
New York percent
Rhode Island percent
Vermont percent
c Determine the states in which HH has income tax nexus and an income tax filing requirement.
d Determine HHs state tax base for Maine, assuming federal taxable income of $
e Calculate business and nonbusiness income.
f Determine HHs Maine apportionment factors using the threefactor method assume that Maine is a throwback state
g Calculate HHs business income apportioned to Maine.
h Determine HHs allocation of nonbusiness income to Maine.
i Determine HHs Maine taxable income.
j Calculate HHs Maine income tax liability, assuming a Maine income tax rate of percent.
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