LO.1 Complete the following chart by indicating whether each item is true or false.

Explain your answers by reference to the overlap of rules appearing in Federal and most state income tax laws.

Item True or False

a. Some states use Federal taxable income as their income tax base, while others modify this amount or create their own state taxable income. ___________

b. Federal tax accounting methods such as LIFO inventory and specific write-off of bad debts are followed for state income tax purposes. ___________

c. State rules as to which entities can join in a consolidated return match those of Federal law. ___________

d. The corporate income tax systems of most states can be described as having progressive rate structures. ___________

e. A typical state income tax credit would equal 10% of the costs incurred to purchase and install solar energy panels for an existing factory. ___________