Question [LO 2] {Research} Cuyahoga County, Ohio has a

1. [LO 2] {Research} Cuyahoga County, Ohio has a sales tax rate of 7.75 percent. Determine the state, local, and transit (a local transportation district) portions of the rate. You can find resources on the State of Ohio website, including the following link: http://www.tax.ohio.gov/divisions/tax_analysis/tax_data_series/sales_and_use/documents/salestaxmapcolor.pdf

1. [LO 2] Kai operates the Surf Shop in Laie, Hawaii, which designs, manufacturers, and customizes surf boards. Hawaii has a 4 percent excise tax technically paid by the seller. However, the state also allows “tax on tax” to be charged, which effectively means a customer is billed 4.166% of the sales price. Determine the sales and use tax liability the Surf Shop must collect and remit – or that the customer must pay – for each of the following orders:

a) Bronco, a Utah customer, places an internet order for a $1,000 board that will be shipped to Provo, Utah where the local sales tax rate is 6.25 percent.

b) Nick, an Alabama resident, comes to the retail shop on vacation and has a $2,000 custom board made. Nick uses the board on vacation and then has the Surf Shop ship it to Tuscaloosa, Alabama where the sales tax rate is 8.5 percent.

c) Brady, a Michigan resident, places an order for a $2,000 custom board at the end of his vacation. Upon completion, the board will be shipped to Ann Arbor, Michigan, where the sales tax rate is 7 percent.

d) Bo, a Nebraska resident, sends his current surfboard to the Surf Shop for a custom paint job. The customization services come to $800. The board is shipped to Lincoln, Nebraska, where the sales tax rate is 7 percent.

1. [LO 2] Last year, Lane, a Los Angeles, California resident, began selling autographed footballs through Trojan Victory (TV), Incorporated, a California corporation. TV has never collected sales tax. Last year TV had sales as follows: California ($100,000), Arizona ($10,000), Oregon ($15,000), New York ($50,000), and Wyoming ($1,000). Most sales are made over the internet and shipped by common carrier. How much sales tax should TV have collected in each of the following situations:

a) California treats the autographed football as tangible personal property subject to an 8.25 percent sales tax. Answer for California.

b) California treats the autographed football as part tangible personal property ($50,000) and part services ($50,000) and tangible personal property is subject to an 8.25 percent sales tax. Answer for California.

c) TV has no property or other physical presence in New York (10.25 percent) or Wyoming (5 percent). Answer for New York and Wyoming.

d) TV has Lane deliver a few balls to fans in Arizona (5.6 percent sales tax rate) and Oregon (no sales tax) while attending football games there. Answer for Arizona and Oregon.

e) Related to part d, can you make any suggestions that would decrease TV’s Arizona sales tax liability?

1. [LO 2] Armstrong Incorporated, a Texas corporation, runs bicycle tours in several states. Armstrong also has a Texas retail store and an Internet store that ships to out-of-state customers. The bicycle tours operate in Colorado, North Carolina, and Texas where Armstrong has employees and owns and uses tangible personal property. Armstrong has real property only in Texas and logs the following sales:

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