Question

1. Firm L, which operates an internet clothing business, is located in State L. This year, the firm shipped $18 million of merchandise to customers living in State R. State R imposes a six percent sale and use tax on the purchase and consumption of retail goods within the state. 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 internet sales made to residents of the State, how much additional revenue would the state collect?

Answer 1

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