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Sagot :
Yes, State R residents who purchased Firm L merchandise owe use tax on their purchases.
The state would collect $1,080,000 additional state revenue.
Following is the respective explanation for the given answers -
1. Yes, use tax must be paid on purchases made by residents of State R from Firm L (located outside of State R).
Retail purchases and consumption inside State R are subject to a 6% sales and use tax.
In State R, the cost of items to customers is $18 million.
For State R, Correll might receive $1,080,000 ($18 million * 6%).
2. For State R, Correll might receive $1,080,000 ($18 million * 6%).
State R would earn $1,080,000 more in revenue ($18 million * 6%) if Correll was required to collect the use tax at the moment of sale and then pay the tax earned to it.
Complete Question -
Correll Company, which operates a mail-order clothing business, is physically located in State L. This year, the firm shipped $18 million of merchandise to customers in State R. State R imposes a 6 percent sales and use tax on the purchase and consumption of retail goods within the state.
Required:
a. Do State R residents who purchased Firm L merchandise owe use tax on their purchases?
b. If State R could legally require Firm L to collect a 6 percent tax on mail-order sales made to residents of the state, how much additional revenue would the state collect? Explain the reasoning behind your answer.
To learn more correll company from given link
https://brainly.com/question/24228245
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